January 24, 2019

RALPH B. VANCE v. UNITED STATES POSTAL SERVICE

PSBCA Nos. 6654 and 6655

APPEARANCE FOR APPELLANT:
Robert H. Garfield, Esq.

APPEARANCE FOR RESPONDENT:
Richard Y. Rho, Esq.
United States Postal Service Law Department  

OPINION OF THE BOARD

The United States Postal Service and Ralph B. Vance were parties to a transportation contract.  The Postal Service denied Mr. Vance access to its facilities based on his conduct, and later terminated the contract with notice after Mr. Vance stopped performing.  Mr. Vance claims that he is entitled to $35,950.22 in damages because the denial of access breached the contract.  He also challenges the termination, although he does not identify any resulting damages.  The Postal Service mistakenly paid Mr. Vance $7,157.11 for work he did not perform and claims entitlement to that money.  We rule in favor of the Postal Service.

FINDINGS OF FACT

The Contract

1. The Postal Service and Mr. Vance were parties to a firm, fixed-price, mail transportation contract, HCR 636B8, with a performance period of July 1, 2014, through June 30, 2018.  The annual payment rate was $99,627.77.  (AF 1 at 8, 32, 43-44; AF 30 at 156).
2. The contract required two trips each day between Fredericktown, Missouri, and Bunker, Missouri, with seven stops in between.  Trip 1 originated in Fredericktown at 6:45 a.m. and arrived at Bunker at 9:25 a.m.  Trip 2 was the return trip from Bunker which departed at 9:30 a.m. returning to Fredericktown at 12:45 p.m.  (AF 1 at 9, 15; AF 35 at 176, 180).
3. The trips were required to be made using a truck with a minimum length of 20 feet and a maximum length of 32 feet.  Mr. Vance’s two trucks complied with this specification.  (AF 1 at 17-18; Tr. 59).
4. The contract included a schedule with time to “LOAD/UNLOAD/CASE” the mail at each location.  The contract also identified the time for “DOCK SORTATION AND LOADING” at each location.  Initially, these tasks were scheduled from 5:30 a.m. to 6:05 a.m. at the Fredericktown Post Office (AF 1 at 9-10, 15-16; AF 35 at 176; Tr. 27, 30).  The schedule was changed in August 2014, due to the closing of the Cape Girardeau, Missouri, Processing and Distribution Center, which caused mail to arrive later at Fredericktown from St. Louis.  As revised, the schedule included thirty-five minutes for these tasks from 6:10 to 6:45 each morning at Fredericktown.  While the duration remained the same, the mail from St. Louis required more sorting.  (Tr. 27-29, 200-01; AF 1 at 15, 16; AF 35 at 176-80).
5. The contract identified 1,995 hours as the estimated number of hours to perform the contract.  The contract does not define the terms “case” or “dock sortation,” but provides:  “The estimated annual hours are approximately the number of hours needed to operate the trips as they are shown in the schedule.  Also included in the total estimated annual hours are the number of hours needed for dock sortation, loading and unloading.”  (AF 1 at 16).
6. The contract allowed the Postal Service to order extra trips, at an additional cost, from Mr. Vance.  The contract required Mr. Vance to provide an extra truck and driver for these trips within four hours of receiving notice.  (AF 1 at 19, 33; Tr. 61-62, 90, 226, 333, 470).
7. Except for fuel costs, the fixed, monthly payments under the contract were “computed by dividing the annual rate stated in the contract by 365 (or 366 for a leap year), and multiplying that result by the number of days in that month.”  (AF 1 at 32, ¶ 2.1.1; AF 29 at 150-51; AF 51; Tr. 437-38).
8. The Postal Service compensated Mr. Vance for a specified amount of fuel, but the compensation was adjusted monthly based on a fuel price index set by the Department of Energy (AF 1 at 8, 38; AF 29 at 150-51; AF 51; Tr. 437-38 ).
9. The contract required Mr. Vance to “promptly . . . refund . . . any payment for service not rendered.”  (AF 1 at 46).  In addition, Section 2.3.14 Forfeiture of Compensation (Clause B-79) of the contract states: If the supplier fails to perform a trip for any reason, the supplier shall forfeit the compensation otherwise due for that trip.  If the supplier fails to perform a trip, and such failure is due to the fault or negligence of the supplier or its subcontractors, the supplier shall be liable for all damages actually suffered by the Postal Service by reason of such failure.
   (AF 1 at 47).
10. The contract allowed the Contracting Officer to deny access to the mail to any of the supplier’s employees or personnel (AF 1 at 20-21, § B.3(h)).
11. The contract’s Claims and Disputes Clause provided, in relevant part:
    b. Except as provided in the Act, all disputes arising under or relating to this contract must be resolved under this clause.
    . . .
    j. The supplier must proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the contracting officer.
    (AF 1 at 44, § 2.3.6 (Clause B-9)).
12. The contract included a Termination with Notice clause, which states, “The contracting officer or the supplier, on 60 days written notice, may terminate this contract or the right to perform under it, in whole or in part, without cost to either party.”  (AF 1 at 8, 42-43, § 2.3.3a).

Contract Performance

1. Mr. Vance normally performed the contract by driving his truck himself, but he employed a substitute driver who performed the contract when he was unavailable (Tr. 332-34).  If the Postal Service needed an additional trip, Mr. Vance could use the substitute driver and the second truck (Tr. 268-70).
2. The Postmaster at the Fredericktown Post Office served as the contract’s Administrative Official designated by the Contracting Officer to supervise and administer the contract (AF 1 at 34; Tr. 22, 24).
3. At Fredericktown, loading the large, rolling cages containing mail into the truck for delivery to the downstream post offices took five to ten minutes (Tr. 483).  This left twenty-five to thirty minutes to sort mail.  Postal Service employees usually helped with the mail sortation each morning.  If it took more than the allotted time to sort and load the mail, Mr. Vance could, under the terms of the contract, request additional compensation for the extra time.  When he made such requests, the Postal Service compensated him.  (Tr. 115, 275, 483-84).
4. Mr. Vance frequently complained about sorting the mail, asserting that it was not required by the contract.  In response to those complaints, the Postmaster and other Postal Service employees repeatedly asserted that it was required by the contract.  (AF 3 at 65; AF 5 at 72; AF 6 at 73-74; AF 7 at 76; AF 11 at 93-96; Tr. 70-72, 82, 88, 109, 222, 277, 296).
5. In 2015, Mr. Vance became frustrated with administration of the contract and complained that:  (1) his monthly payments were being miscalculated, (2) the contract price was being improperly adjusted for fuel indexing, and (3) the Postal Service was requiring him to sort mail at the Fredericktown Post Office (AF 2 at 62-63; Tr. 222, 225, 391-93, 471).
6. The Postal Service issued a Postal Service Form 5500, Contract Route Irregularity Report, ¹ for events that occurred on March 2, 2016 (AF 3 at 65-66).  On that day, Mr. Vance arrived in Fredericktown ahead of schedule at the end of Trip 2.  Upon arrival, Mr. Vance refused to unload the mail, claiming he was not feeling well and needed something to eat (Tr. 259).  He then left his truck unattended in the Post Office parking lot for approximately thirty-five to forty-five minutes.  On his return, Mr. Vance helped unload the truck.  (AF 3 at 65-66; Tr. 43, 46-48).
7. On April 25, 2016, the Postmaster provided a completed Supplier Rating Questionnaire about Mr. Vance to the Contracting Officer.  The Postmaster characterized Mr. Vance’s performance as “poor,” citing a lack of contract management and supervision, and a poor history of “being reasonable and cooperative with customers.”  The evaluation mentioned the incident on March 2 and Mr. Vance’s failure to run a second truck when necessary, as required by the contract.  The report also incorrectly faulted Mr. Vance for using a truck that was too long.  (AF 4 at 70; Tr. 52-55).
8. The Postal Service conducted a route survey on April 26, 2016, to check the number of miles driven by Mr. Vance each day.  The route survey resulted in a reduction of 1,303.1 miles per year (AF 4 at 71; AF 5 at 72; AF 28 at 150-51).  Although the Postal Service changed the mileage effective May 12, 2016, it did not change the contract payment rate (AF 28 at 150-51).
9. On April 27, 2016, Mr. Vance contacted the Contracting Officer to complain about contract payments and fuel adjustments.  Mr. Vance said he could not successfully perform the contract with the money being paid by the Postal Service.  The Contracting Officer explained that payments were being made in accordance with the contract.  He reminded Mr. Vance that adjustments for fuel pricing were being made based on changes in the fuel index.  When the contract was renewed in 2014, the price of diesel fuel had been approximately $4 a gallon.  Two years later the price was approximately $2 a gallon.  These changes resulted in Mr. Vance’s fuel reimbursement being adjusted downward by approximately $12,000 a year.  (AF 5 at 72; Tr. 440-41, 438-64).
10. The parties also discussed the route survey performed the previous day.  Mr. Vance pointed out that, according to the survey, the Postal Service believed the daily mileage for his route was about five miles less than shown in the contract.  Mr. Vance was concerned that the survey result might be used to reduce his payments, but he did not state that concern to the Contracting Officer.  The discussion ended with the Contracting Officer reminding Mr. Vance that he could terminate the contract with 60-days’ notice if he wanted to end his contractual relationship with the Postal Service.  (AF 5 at 72; Tr. 228, 245, 294-95, 349).
11. The Postal Service issued a second Form 5500 on April 28, 2016, when Mr. Vance refused to perform mail sortation.  Mr. Vance responded on the Form 5500 by stating that he was only required to “load/unload/case” during that time, not sort the mail.  He also complained that the Postmaster did not respond to his repeated requests for proof that he was required to sort the mail.  (AF 6).
12. On the morning of April 30, 2016, a conflict arose between Mr. Vance and the Fredericktown Postmaster.  Mr. Vance called the Postmaster at home at 6:15 a.m. complaining about the limited number of Postal Service employees working at the Fredericktown Post Office.  (AF 7 at 76; Tr. 79-80).  Mr. Vance previously had made several similar calls.  On occasion, Mr. Vance had been so upset about this situation that he had stopped sorting the mail.  (AF 7 at 76).
13. Later on April 30, two Postal Service employees were sorting mail at the Fredericktown Post Office.  The Postmaster was not working that day, but went to the Post Office to direct Mr. Vance to sort the mail.  Instead of sorting the mail, Mr. Vance dropped to the ground in an exaggerated manner stating, “I fell, I fell, and I don’t have insurance.”  He then looked at the Postmaster and laughed.  (AF 7 at 76; AF 9 at 86-87; AF 31; Tr. 81, 83-84, 109-16, 180, 183).
14. Mr. Vance then called the police.  When a police officer arrived, Mr. Vance did not give a statement, but instead left to begin his route.  The Postmaster reported this incident to the Contracting Officer the same day, and issued a Form 5500 for these events.  (AF 7 at 75-76; AF 9 at 86-87).
15. On May 7, 2016, Mr. Vance told the shift supervisor working at the Fredericktown Post Office that he did not have to sort the mail between 6:10 and 6:45 a.m.  Mr. Vance again refused to sort the mail on May 9 and 10.  (AF 11 at 93, 100).
16. On May 10, the Postal Service learned that a truck from St. Louis would be arriving late at Fredericktown.  Mr. Vance was scheduled to leave before that truck would arrive and he would not be able to take that mail with him when he left at his normal departure time.  To keep the late-arriving mail moving through its delivery system, around 6:30 a.m., the Postal Service ordered Mr. Vance to provide a second truck by 8:30 a.m.  (Tr. 62, 90).  This truck essentially would follow behind Mr. Vance’s truck with the late-arriving mail.  Mr. Vance, however, would not provide the second truck.  (Tr. 268-70).
17. After the events on May 10, the Postmaster contacted the Contracting Officer by email saying, “[a]gain, I will stress how Ralph [Vance] is an unstable employee.  Ralph needs to be taken out of his contract before something bad happens.”  The Postmaster suggested two possible replacement contractors, one of which was the substitute contractor who eventually received an emergency replacement contract.  (AF 12 at 98-100).
18. In light of these events, the Postmaster prepared a letter asking Mr. Vance to attend a meeting to discuss contract performance.  On May 10, 2016, a Postal Service employee tried to hand-deliver the letter to Mr. Vance.  Mr. Vance, however, refused to accept it, saying that the Postmaster could “wipe his ass with the envelope” if he is not “man enough to deliver it himself.”  (AF 13 at 104-05; AF 31; see also AF 12 at 100).
19. The Contracting Officer believed Mr. Vance’s behavior was erratic, unstable, and unprofessional (AF 16 at 115; Tr. 417-18, 442, 472-75).  On May 12, 2016, the Contracting Officer therefore, in accordance with clause B.3(h), issued a letter denying Mr. Vance access to the mail and Postal Service facilities pending further investigation (AF 1 at 21; AF 18 at 116; AF 30 at 161).  That same day, an inspector from the United States Postal Inspection Services (USPIS) hand-delivered the Denial of Access Letter to Mr. Vance (AF 14 at 107; AF 18 at 116; Tr. 95).  Mr. Vance did not perform after this date, either personally or through a substitute driver (Tr. 424-27; AF 25, AF 31).
20. On May 17, 2016, the Contracting Officer and Mr. Vance had a telephone discussion about the denial of access.  During the call, the Contracting Officer explained to Mr. Vance that he still was required to provide mail transportation services under the terms of the contract by using a substitute driver.  (AF 23 at 137).
21. Sometime later, the Contracting Officer had his staff contact the Fredericktown Police Department about the April 30, 2016 incident.  The Police Department had a record of the 911 call, but not a complete report.  (AF 50; Tr. 397-98).
22. Because Mr. Vance was not performing the contract, and he had not provided a substitute driver, the Contracting Officer awarded an emergency contract to a substitute contractor in late May 2016 (AF 37 at 185-86; Tr. 478-80).  The emergency contract authorized the Contracting Officer to terminate that contract with twenty-four hours’ notice if Mr. Vance provided a substitute driver to perform his contract (Tr. 478-79).
23. When Mr. Vance stopped performing and failed to provide a substitute driver, the Postal Service stopped paying him.  Inadvertently, however, the Postal Service paid Mr. Vance $7,157.11 for June 2016.  No other payments were made through the remainder of the contract.  (AF 31 at 167; Tr. 436).

Contract Termination and Claims

1. On August 11, 2016, the Contracting Officer notified Mr. Vance of the Postal Service’s intention to terminate the contract with notice effective October 9, 2016.  The contract was terminated on that date.  (AF 30 at 158; Tr. 429).
2. On September 12, 2016, Mr. Vance submitted a letter to the Contracting Officer challenging the contract’s termination and claiming entitlement to payment for the period between May 13, 2016, and August 31, 2016; and for “further deductions for September and nine days in October 2016,” which he calculated to total $35,950.33 (AF 28 at 148; AF 31 at 167; AF 32 at 170).  In this letter, Mr. Vance acknowledged receipt of the $7,157.11 payment made in June 2016, resulting in a net claim of $28,793.22 (AF 28 at 148; AF 31 at 167).
3. Mr. Vance claimed he was entitled to the compensation because he would have performed the contract but for the denial of access (AF 28).
4. Mr. Vance also claimed that the effect of the earlier denial of access “was to terminate the contract effective May 12, 2016[,] without the required notice.”  Finally, Mr. Vance claimed that his contract was reduced improperly by 1,303.1 miles per year effective May 12, 2016.  (AF 28).
5. On October 20, 2016, Mr. Vance sent the September 12, 2016 letter to the Board and requested that a new case be docketed (AF 30 at 153).   The Board docketed the appeal (PSBCA No. 6654), but stayed proceedings until the Contracting Officer issued a final decision.
6. On November 29, 2016, the Contracting Officer issued a final decision which denied Mr. Vance’s $28,793.22 claim and asserted an affirmative claim that Mr. Vance owed $7,157.11 paid by the Postal Service for work not performed in June 2016 (AF 31).
7. Mr. Vance filed a Notice of Appeal on December 3, 2016, contesting the Contracting Officer’s final decision.  We docketed the second appeal as PSBCA No. 6655, which was consolidated with PSBCA No. 6654.
8. On May 18, 2017, Mr. Vance paid the Postal Service $7,157.11 (Tr. 318).
9. Mr. Vance seeks to collect $35,950.33, the entire amount he would have been due had he performed through October 9, 2016.

DECISION

This case presents five issues.  First, did the Postal Service breach the duty of good faith and fair dealing when it denied Mr. Vance access to the mail and Postal Service facilities?  Second, did the Postal Service constructively terminate the contract when it denied Mr. Vance’s access to the mail and Postal Service facilities?  Third, did the Postal Service act in bad faith when it terminated the contract with notice?  Fourth, is Mr. Vance entitled to additional compensation because the Postal Service reduced the contract’s annual mileage by 1,303.1 miles?  Fifth, is the Postal Service entitled to retain the $7,157.11 that it inadvertently paid to Mr. Vance (which he later returned)?
Denial of Access
Mr. Vance alleges that the Postal Service breached its duty of good faith and fair dealing when it denied him access to the mail and Postal Service facilities.  That breach, he argues, was a material breach excusing his non-performance and entitling him to the contract proceeds from May 13 to October 9, 2016.  In support of this argument, Mr. Vance points to events which he alleges, when taken individually or as a whole, prove prior material breach, bad faith, or both.  Mr. Vance further argues that the contract’s Administrative Official, the Fredericktown Postmaster, systematically acted to injure him.
With regard to denial of access, the contract authorized the Contracting Officer to deny access to the mail to Mr. Vance, and the Contracting Officer is afforded discretion in making such a decision.  See Michelle R. P’pool, PSBCA No. 5294, 08-1 BCA ¶ 33,824.  In reviewing this discretionary choice, we analyze whether the Contracting Officer violated the duty of good faith and fair dealing.  See Greene v. United States PostalService, PSBCA No. 6484, 16-1 BCA ¶ 36,297; Samuel J. Hypolite, PSBCA No. 5266, 06-2 BCA ¶ 33,337, recon. den. 07-1 BCA ¶ 33,468.
The duty of good faith and fair dealing depends, in part, on what the contract promises or disclaims.  See Precision Pine & Timber, Inc. v. United States, 596 F.3d 817, 830 (Fed. Cir. 2010).  This idea draws on the concepts set out in the Restatement (Second) of Contracts § 205 (1981), which focuses on the “faithfulness to an agreed common purpose and consistency with the justified expectations of the other party.”  Restatement § 205, cmt. a.  The covenant of good faith and fair dealing imposes obligations on both parties that include the duty not to interfere with the other party’s performance and not to act so as to destroy the other party’s reasonable expectations regarding the fruits of the contract.  Metcalf Constr. Co. v. United States, 742 F.3d 984, 991 (Fed. Cir. 2014)(citing Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005)).
The Contracting Officer denied Mr. Vance access to Postal Service facilities because of his actions on April 30, 2016, his continued refusal to sort the mail, and his subsequent belligerent statements to a Postal Service employee on May 10, 2018.  Based on these actions and statements, the Contracting Officer reasonably denied access to Mr. Vance.  Because the Contracting Officer acted reasonably, and within the discretion afforded him under the contract, we hold that the Postal Service did not violate the duty of good faith and fair dealing when it denied Mr. Vance access to the mail and Postal Service facilities.  In the interests of a thorough explanation, we address each of Mr. Vance’s arguments on this issue individually.
a.   Sortation
Throughout his pleadings and at trial, Mr. Vance repeatedly argued that the contract did not require him to sort the mail, and that the Postmaster and other Postal Service officials improperly demanded that he do so.  Mr. Vance also stressed that the closure of the Cape Girardeau facility caused mail to arrive in greater quantities and in a less organized fashion, which meant that even if he were to assist in sortation, it would take longer to complete than the time allotted in the contract.
Mr. Vance is correct that in 2014, the Fredericktown Post Office began receiving one or two trucks of mail from the St. Louis Processing and Distribution Center, while the Cape Girardeau Processing and Distribution Center reduced its shipments to the Fredericktown Post Office (Finding 4).  We also believe Mr. Vance’s statement that the mail from St. Louis required more sorting than was necessary in prior years (Finding 4).
The contract does not define “case” or “dock sortation,” making the exact nature of the requirement vague.  Mr. Vance, however, is wrong about his duty once the Postmaster, serving as the contract’s Administrative Official, instructed him to do so.  The contract’s Statement of Work identifies casing the mail and dock sortation as part of the tasks performed during a thirty-five minute period every morning between 6:10 a.m. and 6:45 a.m.  (Findings 4, 5).  It took approximately five to ten minutes to roll the sorted mail carts onto Mr. Vance’s truck, leaving approximately twenty-five to thirty minutes (Finding 15).  During the twenty-five to thirty minutes, the Contracting Officer and Postmaster believed that Mr. Vance was required to sort mail.  Whether Mr. Vance believed the contract required him to sort mail during that time does not matter once he was instructed to do so.  Given that the words “case” and “dock sortation” are in the Statement of Work, his remedy if he disagreed with the Contracting Officer and Postmaster was to “proceed diligently with performance” and file a claim.  See, e.g., Murray v. United States Postal Service, PSBCA No. 6635, 18-1 BCA ¶ 37,058; M.E.S., Inc., PSBCA No. 4462, 06-1 BCA ¶ 33,184; see also Finding 11.  The Postal Service’s direction to sort mail during this time is not a prior material breach.
While Mr. Vance also acknowledges that he complained about sorting the mail, he denies that he ever refused a direction to perform.  We disagree.  On several occasions, Mr. Vance either completely refused to sort the mail or did so in such a begrudging manner that he violated the spirit of the requirement, by, for example, feigning an injury in an attempt to evade his contractual obligations (Findings 23-25, 27).  These actions went far beyond ordinary workplace complaints that might be expected.  Mr. Vance’s actions amounted to a willful refusal to perform in the face of multiple direct orders by the Postmaster to comply with the terms of the contract.  These directives by the Postmaster, and his decision to notify the Contracting Officer about them, were reasonable and in no way breached the duty of good faith and fair dealing. 
b.   Contract Irregularity Reports
Mr. Vance believes that the Form 5500s, taken together, show the Postmaster was biased and support his position that the Postal Service breached the duty of good faith and fair dealing.  We disagree.
Of the three Form 5500s, the first one (for March 2, 2016) is the least supported.  The Postal Service has not explained what particular contract requirement Mr. Vance violated, especially in light of his early arrival.  Mr. Vance, however, has not explained how this report hindered his performance or destroyed his expectations regarding the fruits of the contract.  Metcalf, 742 F.3d at 991.  The other two Form 5500s were properly issued following nonperformance (Findings 18, 23-26).  Thus, taken as a whole, the Form 5500s do not support Mr. Vance’s assertion of a prior material breach of the duty of good faith and fair dealing.
c.   April 25, 2016 Supplier Rating
Mr. Vance contends that the inaccuracies in the supplier rating contained in the report completed by the Postmaster amounted to a breach of the duty of good faith and fair dealing (Finding 19).  We agree only to the extent that the supplier report contained inaccurate information.  There was no reason for the Postal Service to fault Mr. Vance for his lack of management; Mr. Vance’s contract did not require him to manage anyone other than himself (or, on occasion, the substitute driver), and the Postal Service did not provide any specific examples to support this assertion.  Also, Mr. Vance’s truck complied with the contract requirements (Finding 3) and the Postal Service’s criticism that it was “too long” was wrong.  Nonetheless, these mistakes did nothing to hinder Mr. Vance’s performance, and nothing in the record suggests that the Postal Service took any action in response to the supplier report or that it had any effect on performance.
d.   April 27, 2016 Telephone Conference between Mr. Vance and the Contracting Officer
Mr. Vance argues that two points addressed in the parties’ April 27 telephone conversation support his position.  First, he believes that the Postal Service was not paying him properly, resulting in his inability to perform successfully.  Mr. Vance did not understand why the payments under his firm, fixed-price contract had been decreasing during performance; his confusion seems to result from his failure to understand the payment and fuel adjustment terms of the contract.  Although this was a fixed-price contract, it also provided that the price would be adjusted (upward or downward) depending on the price of fuel as established by the Department of Energy (Finding 8).  When Mr. Vance complained about these changes, the Contracting Officer (and others) explained how the fuel index fluctuates monthly, causing the changes (Findings 7, 8, 17, 21).  Mr. Vance’s dissatisfaction with, or misunderstanding of the contract, and that explanation is of no legal moment.  Except for the price adjustment for fuel, the contract price remained fixed.  Given the terms of the contract, the adjustments were proper.
Second, to the extent that Mr. Vance contends that the Contracting Officer should not have suggested that he could terminate the contract with notice if he was dissatisfied, his argument is without merit.  The Contracting Officer’s suggestion is not evidence of a breach of the duty of good faith and fair dealing.  It merely reminded Mr. Vance of his rights under the contract.
e.    April 30, 2016 Incident
The parties devoted much of the hearing to the confrontation between Mr. Vance and the Postmaster on April 30, 2016.  The witnesses have substantially different accounts of what took place that day.  Mr. Vance asserts he was bumped or shoved from behind by the Postmaster.  The Postmaster and other employees sorting mail say that the Postmaster either did not push Mr. Vance, or that they did not see anything.  Having weighed the credibility of the conflicting testimony, we find the Postmaster’s version of events more credible.
Ultimately, we agree with the Contracting Officer:  Mr. Vance’s erratic behavior justified the Form 5500 issued by the Postmaster and the Contracting Officer’s decision to deny Mr. Vance’s access to the mail.  The Contracting Officer, in large part, decided to deny Mr. Vance access to the mail based on this incident and his subsequent behavior.
f.   Trucks for Extra Trips and Substitute Driver
Mr. Vance cites the Postal Service’s demand that he occasionally use a second truck for which he was reimbursed (for example, on May 10, 2016) as evidence of a breach of the duty of good faith and fair dealing.  This argument lacks merit.  The occasional use of a second truck to deliver mail was provided for by the contract (Findings 6, 13).  The contract did, however, give Mr. Vance four hours to get a second truck, not the shorter time asked for by the Postal Service on May 10.  In reply to this request, Mr. Vance did not ask for the full four hours; he simply refused to provide a second truck (Finding 28).  Apparently, Mr. Vance either (1) wanted to wait for the truck from St. Louis, thereby delaying his departure time (AF 12 at 100), (2) hoped the Postal Service would have one of its own employees make the extra trip, or perhaps (3) allow him to do the extra trip himself instead of hiring an additional driver (Tr. 268-71).
Although the Postal Service should have given Mr. Vance four hours to provide a second truck, rather than two hours, he would not provide one (Findings 13, 28).  Viewed in context, this incident does not support Mr. Vance’s argument because it did not hinder his performance.  If, as directed, he had provided a second truck on two hours’ notice, perhaps he could have filed a claim for any increased costs he incurred.  This incident, however, does not support a conclusion that the Postal Service breached the duty of good faith and fair dealing.
In conjunction with his complaints about the events of May 10, 2016, Mr. Vance also takes issue with the Contracting Officer’s decision to open discussions for a possible replacement contractor.  Any such discussions, however, did not violate any contractual duties owed by the Postal Service to Mr. Vance, and just as importantly, those discussions were reasonable given Mr. Vance’s erratic behavior and his subsequent failure to perform.
g.   May 12, 2016 Temporary Denial of Access
The contract authorizes the Contracting Officer to deny a contractor, or any of the contractor’s employees, access to the mail (Finding 10).  That contractual right, however, has limits.  In making such a decision, the Contracting Officer may not breach the implied duty of good faith and fair dealing inherent in every contract.  Metcalf, 742 F.3d at 990.  The Contracting Officer can breach this duty by taking actions that unreasonably prevent or interfere with the contractor’s performance and destroy the contractor’s reasonable expectations regarding the fruits of the contract.  Greene, 16-1 BCA ¶ 36,297; Hypolite, 06-2 BCA ¶ 33,337; P’pool, 08-1 BCA ¶ 33,824 at 167,417.  We review the Contracting Officer’s determination in this case under that standard.
For the reasons described above, the Contracting Officer denied Mr. Vance access to Postal Service facilities and that denial was reasonable (Findings 10, 23-32).  The Contracting Officer’s denial did not breach the standard of good faith and fair dealing because of Mr. Vance’s erratic behavior.  Furthermore, the Contracting Officer’s Denial of Access Letter explained that Mr. Vance was denied access to Postal Service facilities pending the outcome of an investigation, so even if the initial denial had been unreasonable, the Contracting Officer conducted a further investigation before finalizing the denial.  (Findings 33-35).
At trial, Mr. Vance testified that he did not fully understand the Denial of Access Letter, or what it meant for his ongoing contractual obligations.  Even if that were true on May 10, it was not true as of May 17, 2016, when the Contracting Officer explained his decision along with the facts supporting it, to include concerns about Mr. Vance’s erratic, unstable, and unprofessional behavior (Findings 29-31).  Perhaps the Postal Service could have explained its rationale for the denial of access better on May 10, but that does not lead to any of the conclusions advanced by Mr. Vance—especially in light of the May 17 telephone call.  Most importantly, the Contracting Officer reminded Mr. Vance of his requirement to perform the contract with a substitute driver pending further investigation by the Postal Service.
h.   Contracting Officer Investigation<
Mr. Vance contends that the Contracting Officer failed to investigate fully the incidents which led to the improper denial of access.  The contract does not require the Contracting Officer to conduct any specific type of investigation before deciding to deny a contractor access to the mail.  Additionally, the USPIS is under no obligation to investigate this type of allegation.  Mr. Vance’s reliance on P’pool, 08-1 BCA ¶ 33,824, where the USPIS investigated a denial of access, is misplaced.  We did not set a requirement for circumstances under which such an investigation must be conducted.
Further, testimony established that the Contracting Officer attempted to explain the Denial of Access Letter and provided Mr. Vance an opportunity to explain his version of events (Finding 32).  Mr. Vance, however, was not able to provide any credible evidence showing that anything in the Postmaster’s reports summarizing the events of April 28, 2016, and later, was incorrect.  The Contracting Officer also had his staff contact the Fredericktown Police Department about the April 30, 2016 incident, but the Police Department did not have a complete report (Finding 33).
While it is true that the Contracting Officer did not contact Mr. Vance promptly with the results of the investigation, that failure did not interfere with Mr. Vance’s ability to provide a substitute driver, and thus does not support Mr. Vance’s argument that the Postal Service breached the duty of good faith and fair dealing.  Greene, 16-1 BCA ¶ 36,297.
i.   Substitute Driver
Mr. Vance believed that the Postal Service improperly was denying him access, that he was being treated unfairly by the Contracting Officer, and that his compensation was being improperly reduced.  Under these circumstances, Mr. Vance did not want to provide a substitute driver which he believed would cost him more money than he would earn under the contract.  When the Postal Service denied Mr. Vance access to Postal Service facilities, his contractual obligations were not extinguished.  He was still required to perform, albeit with a substitute driver (Findings 13, 32).  We have consistently so held.  See, e.g., Greene, 16-1 BCA ¶ 36,297 (citing Lynn Susan Mancini, PSBCA No. 4129, 99-2 BCA ¶ 30,577, recon. den., 00-2 BCA ¶ 31,078).  While nonperformance may be excused by a Postal Service prior material breach, we find no such breach here.  See P’pool, 08-1 BCA ¶ 33,824.  We have seen no evidence proving a prior material breach of the duty of good faith and fair dealing that might excuse Mr. Vance’s failure to perform.
j.   Termination with Notice
On August 11, 2016, the Postal Service notified Mr. Vance that it was terminating the contract with 60 days’ notice (Finding 36).  Mr. Vance appears to be arguing that the termination decision violated the implied duty of good faith and fair dealing.  This implied duty, however, “cannot expand a party’s contractual duties beyond those in the express contract or create duties inconsistent with the contract’s provisions.”  Metcalf, 742 F.3d at 991 (quoting Precision Pine, 596 F.3d at 831); see also Temple Contract Station v. United States Postal Service, PSBCA No. 6430, 14 BCA ¶ 174,594.
The termination with notice clause gave both parties broad discretion to terminate the contract if timely notice was given.  Here, such notice was given.  Based on the plain language of the contract (Finding 12), Mr. Vance should have understood that the contract could be terminated with notice.  A decision to exercise that express right does not demonstrate a breach of an implied duty.
k.   Errors in the Contracting Officer’s Final Decision<
Mr. Vance submitted a claim to the Contracting Officer in September 2016 (Findings 37-39), and the Contracting Officer issued a final decision denying the claim in November 2016 (Finding 41).  Mr. Vance alleges that the Contracting Officer’s final decision not only contains factual errors, but also generally establishes that the Contracting Officer never took charge of the contract and failed to administer it properly.  All of which, according to Mr. Vance, leads to the conclusion that the Postal Service breached its implied duty of good faith and fair dealing.
We agree that the final decision included some factual errors.  For example, Mr. Vance correctly notes that at worst, on March 2, 2016, he left his truck unattended for thirty-five to forty-five minutes, not two hours as described in the final decision (Finding 18).  We, however, see no problem with the Contracting Officer’s conclusion that the Postal Service could terminate the contract with notice.
Mr. Vance also argues that the Contracting Officer erred in believing the Postmaster’s version of the events which occurred on April 30, May 7, and May 10, 2016.  The Contracting Officer heard Mr. Vance’s version of the events during a telephone conference.  After weighing the conflicting accounts, the Contracting Officer came to the same conclusion we reach today:  the Postmaster provided the more credible account of the events.  We therefore see no basis to conclude that the alleged errors in the final decision support Mr. Vance’s allegations.
l.   Summary
In short, Mr. Vance believes that, when combined, the facts demonstrate that the Postal Service violated the duty of good faith and fair dealing causing a prior material breach of contract.  We do not agree.  Denying access to Mr. Vance based on his actions on April 30, 2016, his continued refusal to sort mail, and his belligerence when an employee attempted to deliver a letter to him, not only show that the Postal Service did not breach the duty of good faith and fair dealing, but the Contracting Officer was reasonable in his decision.  While the Postal Service did not administer the contract perfectly, any missteps do not prove that the Postal Service breached the duty of good faith and fair dealing.
Constructive Termination
Mr. Vance’s claim also asserts that the Postal Service constructively terminated the contract when it denied him access to the mail in May 2016. ²  He asserts that in making that decision, the Postal Service was not “acting in good faith.”  We take this argument to mean that Mr. Vance claims entitlement to breach of contract damages from May to October 2016 based on a bad faith constructive termination.
We already have addressed this issue in Section g in the context of the duty of good faith and fair dealing.  Here, we merely reiterate that, completely contrary to Mr. Vance’s allegation of a bad faith breach, the Postal Service was justified in denying Mr. Vance access to the mail.  His claim for breach of contract damages based on a constructive termination is thus without merit.
Termination with Notice
Mr. Vance’s claim also challenges the Postal Service’s actual decision to terminate the contract with notice effective on October 9, 2016.  To the extent this claim seeks termination with notice damages, it fails because Mr. Vance failed to prove that the Postal Service breached the contract.  On August 11, 2016, the Postal Service properly gave Mr. Vance 60 days’ notice of its intention to terminate with notice.  The termination then became effective 60 days later on October 9, 2016.  These actions were within the discretion of the Contracting Officer and were reasonable under the circumstances.
If Mr. Vance actually had performed (with a substitute driver) during that 60-day period, he might have been entitled to payment for that work.  He refused to perform, however; and as already discussed, his non-performance was not excused.  He therefore is not entitled to any further payments under the contract for this 60-day period.  To the extent that he might also be seeking to recover lost profits, his claim also fails.  To recover lost profits, he would have to prove the termination decision was made in bad faith or was an abuse of discretion.  Securiforce Int’l. Am., LLC v. United States, 879 F.3d 1354, 1363 (Fed. Cir. 2018); Cook Mail Carriers, Inc. v. United States Postal Service, PSBCA No. 6583, 17-1 BCA ¶ 36,692; Sasnett v. United States Postal Service, PSBCA No. 6584, 17-1 BCA ¶ 36,692.  Having already concluded that the Contracting Officer’s decision to terminate with notice was reasonable, there can be no relief for a claim based on bad faith or an abuse of discretion.
Mileage
The Postal Service conducted a route survey on April 26, 2016, which reduced the route mileage by 1,303.1 miles per year effective May 12, 2016 (Finding 20). ³  As part of his claim, Mr. Vance challenged the reduction and seeks compensation for it.  When it made this change, however, the Postal Service did not reduce the contract price (Finding 20).  Further, Mr. Vance never performed any work under the reduced mileage established by the route survey (Finding 31).
Because the Postal Service did not reduce the contract price, and because Mr. Vance never performed after the reduction, he did not incur any damages or increased costs based on the change.  This claim is denied. 
Overpayment
The Postal Service paid Mr. Vance $7,157.11 for June 2016.  Neither Mr. Vance nor a substitute driver working for Mr. Vance provided the Postal Service with services that month.  By the terms of the contract, Mr. Vance is not entitled to the money because he did not provide the required service.  (Findings 9, 31, 34).  See Murray,
18-1 BCA ¶ 37,058.  The Postal Service may retain the money repaid by Mr. Vance.

ORDER

We deny Mr. Vance’s appeal that the Postal Service breached the contract entitling him to damages.
We deny Mr. Vance’s appeal of the Postal Service’s $7,157.11 claim.  The Postal Service may retain the money Mr. Vance has repaid.

Peter F. Pontzer
Administrative Judge
Board Member

I concur:
Gary E. Shapiro
Chairman

I concur:
Alan R. Caramella
Administrative Judge
Vice Chairman