Appeal of
HUNTER L. TODD, d/b/a
COURIER EXPRESS MAIL & PACKAGE
DELIVERY SERVICE

UNDER CONTRACT NO. HCR 48160

PSBCA No. 1472

APPEARANCE FOR APPELLANT
Hunter L. Todd

APPEARANCE FOR RESPONDENT
Maria T. Robinson, Esq.

OPINION OF THE BOARD

This appeal is from a Contracting Officer's final decision terminating Appellant's highway transportation contract for default because of unsatisfactory performance.  Only the propriety of the default termination is in issue.

Finding of Fact

1.  Respondent, United States Postal Service, awarded advertised contract HCR 48160 on June 14, 1985, to Appellant, Hunter L. Todd d/b/a Courier Express Mail and Package Delivery Service, for a term from July 1, 1985, to June 30, 1989 (Appeal File (AF) Tab A, p. 4).  The contract required Appellant to furnish two single axle tractors and a minimum of three 40' tandem axle trailers with at least 2,400 cubic feet of usable space, capable of maintaining the stated schedule with maximum load (AF Tab A, p. 8).  The schedule required appellant to transport mail several times each day between Detroit and Ann Arbor, Michigan at stated arrival and departure times (AF Tab A, p. 7).  Certain trips had scheduled intermediate stops at Ypsilanti, Michigan and the Detroit Air Mail Facility (id.).

2.  The contract incorporated PS Form 7407 (Oct. 1981) titled "Basic Surface Transportation Services Contract General Provisions."  Clause 2 of those provisions contains the standard "Claims and Disputes" language (AF Tab A, p. 18);  Clause 4, "Service Requirements and Prohibitions," required the contractor to carry all mail tendered for transportation "with certainty, celerity, and security, in accordance with the operating schedule" (AF Tab A, p. 19);Clause 16, "Termination by the Postal Service for Default," authorized termination in the public interest for, inter alia, "Contractor's failure to perform service according to the terms of the contract" (AF Tab A, p. 25), and in subparagraph (c) provided that, if it is determined the contractor was not in default or the default was excusable, the parties' rights and obligations would be the same as if a termination for convenience had been issued under Clause 17 (AF Tab A, p. 26); and Clause 17, "Termination for Convenience" allows the contractor as an indemnity the liquidated damages amount specified in Clause 12 (c) (AF Tab A, p. 26).

3.  The first two days of Appellant's performance under the contract were beset with difficulties and failures (see Tr. 16, 18, 47).  Nine reports of contract route irregularities, PS Form 5500 (5500), were issued for trips on July 1, 1985, and seven were issued for July 2, 1985 (A Tab E, pp. 69-84).  For the most part, the irregularities were for late arrivals, although three of them involved omitted service (id.).  Of the various 5500s issued for July 1-2, four were erroneously issued for the reasons indicated below:

(1)       July 1, Trip 104, late, 15 minutes (AF Tab E, p. 70).
            A leeway of 15 minutes is allowable, and under existing U.S. Postal Service practices should not be the subject of a
            5500 (See Tr. 185-86, 272).

(2)       July 1, Trip 112, late, 2 flat tires (AF Tab E, p. 74).
            This duplicates AF Tab E, p. 72 for the same trip.

(3)       July 2, Trip111, late arrival at AMF (AF Tab E, p. 81).
            This is duplicative of previous 5500 (AF Tab E, p. 80).

(4)       July 2, Trip 112, omitted service at AMF (AF Tab E, p. 83).
            This is duplicative of previous 5500 (AF Tab E, p. 82).

Additionally, one of the trips (#112) on July 1, 1985, was delayed because of two flat tires, after the tires had been previously replaced the same day by a reputable tire company (See Tr. 229-30).  This delay was not due to Appellant's fault or negligence, and was excusable.

Except for those indicated above, however, the remainder of the 5500s for those two days, six for July 1 and five for July 2, were validly issued and represent serious deficiencies in contract performance.

4.  A meeting was held in the early afternoon of July 2, 1985, between Appellant and Respondent's representatives, and Appellant was advised to take immediate action to assure satisfactory service (AF Tab D, p. 55-a; Tr. 15-18, 74-75, 142-43).

5.  Performance continued to be deficient on the following days.  Appellant failed to provide service for two trips on July 3; a trip arrived two hours late, and an unsatisfactory vehicle was used on a trip on July 4; and again omitted service of a scheduled trip occurred on July 5 (AF Tab E, pp. 86-90).  Late service occurred on two trips on July 6 (AF Tab D, p. 60).

6.  On July 8, 1985, a request was made to the Contracting Officer by officials at the Detroit General Mail Facility that Appellant's contract be terminated due to unsatisfactory performance (AF Tab D, pp. 60-61; Tr. 20, 92, 159).

7.  The Contracting Officer held a formal conference with Appellant on July 9, 1985 (AF Tab D, p. 59).  Appellant was advised of the recommendation for termination and problems were discussed (id.).  Appellant was informed by the Contracting Officer that he was being allowed to continue, and was given until July 13, 1985, to correct all contract irregularities (id.).

8.  In a letter dated July 15, 1985, the Contracting Officer identified certain problems that continued to exist, including omitted service on trips occurring on July 11, 12 and 13 (AF Tab D, p. 58; see also AF Tab E, pp. 92-95, 97-99).  One of the five 5500s issued on July 11, AF Tab E, p. 96, is duplicative and will not be considered as establishing a contract irregularity.  Because of the service failures reflected in the 5500s issued on July 11-13, a formal warning was issued on July 15, giving Appellant until July 19, 1985, to perform according to the terms of the contract (AF Tab D, p. 58).  It was indicated by the Contracting Officer that continued failures could result in termination for default (id,; Tr. 81).

9.  The Contracting Officer in a final decision dated September 3, 1985, notified Appellant of his decision to terminate the contract for default, effective August 30, 1985, finding that during the period since the letter of warning of July 15, 1985, Appellant's service had not improved to a level acceptable to Respondent (AF Tab C, pp. 46-47).

10.  Following July 15, 1985, the record reveals four violations or irregularities for the remainder of the month of July, three of which involved late service of 30 minutes or less (AF Tab E, pp. 100-102, 104).  Appellant in his replies to these 5500s does not dispute their validity or offer excusable reasons for the irregularities (id., Tr. 162-65).  One of the 5500s for July 27, 1985 (AF Tab E, p. 103) represents duplication, see Tr, 164-65.  One of the 5500s for July 27, 1985 (AF Tab E, p. 103) represents duplication, see Tr, 164-65, and is not considered a violation.  During the month of August 1985, several more reports of late service were filed.  On August 4, Trip 101X is shown as 30 minutes late (AF Tab E, p. 105).  On August 9, an unidentified trip is shown on a 5500 as 20 minutes late; the driver is identified as Hines (AF Tab E, p. 106).  On August 12, late service of 40 minutes is reported respecting Trip 101X and 1 hour, 5 minutes for Trip 104 (AF Tab E, pp. 107-08).  On August 14, Trip 112 is shown as 45 minutes late (AF Tab E, p. 109).  On August 15, late service of 35 and 30 minutes, respectively, was reported for Trip 107 and Trip 108 (AF Tab E, p. 110-11).  On August 16, there were four reported occurrences of late service respecting Trip 101X (1 hour, 10 minutes), Trip 102X (1 hour, 5 minutes), Trip 105 (20 minutes), and Trip 106 (25 minutes) (AF Tab E, pp. 112-15).  On August 22, a report shows Trip 105T to have been 2 hours, 55 minutes late (AF Tab E, p. 116).  On August 16, late service of 33 minutes was reported for Trip 106 (AF Tab E, p. 118).

11.  Of the 5500s issued in August, Appellant provided a reply on the forms for only three of the fourteen issued, and responded to none after August 12, 1985 (Tr. 165-70).  The only reply that appears to raise an issue of excusable delay is found on the 5500 issued for August 4, 1985 (30 minutes late arrival), to the effect that the driver was unable to remove a BMC container that had been improperly placed in the trailer by a Postal worker (AF Tab E, p. 105; Tr. 165).  The late arrival violation was noted at the Detroit General Mail Facility, the first stop for this trip which originated in Ann Arbor (See AF Tab D, p. 62).  The delay was not excusable since the difficulty in removing allegedly improperly placed equipment would have no bearing on the arrival time at the first stop (See Tr. 197, 199).  The alleged deficiency (20 minutes late) represented by the 5500 issued on August 9, 1985 (AF Tab E, p. 106), which fails to list a trip number and carries the name of a driver not associated with Appellant, has not been established by a preponderance of the evidence (Tr. 199-201, 248-49).  The 45-minute late arrival on August 14 (Trip 112) (AF Tab E, p. 109) occurred because a rented vehicle would not reach speeds beyond 40 miles per hour (Tr. 237-38, 271-72).

12.  One of Respondent's contract administration procedures was to provide late slips to contractors for delays caused by Postal employees so that a Form 5500 (Report of Contract Route Irregularity) would not be issued against the contractor (Tr. 59, 273-74).  During the first week of contract performance Appellant complained to Respondent's Administrative Officer at the Detroit Post Office that Postal employees in Ann Arbor were improperly refusing to issue late slips to his drivers (see Tr. 58-59, 62-63, 234-235).  Corrective action was taken in the form of contacting appropriate officials at the Ann Arbor Post Office and supplying a number of late slip forms (Tr. 59, 62-63).  Thereafter, there were no further complaints from Appellant that the problem continued to exist (Tr. 62-63).  No indication of a problem with late slips appears in the contractor's reply section of any 5500 issued after July 2.  Appellant also complained to the Contracting Officer that the 5500 forms were not being properly prepared, but an investigation revealed no merit to the complaint (Tr. 100-02).  Additionally, a number of questionable 5500s issued against Appellant had been cancelled by Respondent's Administrative Officer at the Detroit Post Office (Tr. 272).

13.  The forty-one valid Form 5500s represent substantial deficiencies and irregularities in contract performance which were not excusable and adversely impacted Respondent's mail operations (Tr. 16, 22-24, 75-77, 82-85, 173-74).  Some seventeen documented deficiencies were recorded and proved for the period after the official warning of July 15, 1985.

14.  Over the past seven years Appellant was the only Black contractor to have been awarded the Detroit-Ann Arbor highway transportation contract (Tr. 93).  Appellant had been awarded two other highway transportation contracts in the Detroit area (Tr. 11, 16-18, 142, 263-64, 272).  For the most part Appellant found the Postal workers to be polite and reasonable, but problems in communications were experienced (Tr. 221, 252, 266-68, 272).  Appellant testified of unfair treatment and racial prejudice (Tr. 252, 261-63).  There is no evidence in the record, other than Appellant's unsupported allegations, that there was any racially motivated discrimination against minority owned firms or against Appellant specifically.  Moreover, there is no evidence that Respondent's representatives in administering Appellant's contract took any improper actions with the intention of hampering Appellant's performance efforts.

15.  Appellant testified that a gasoline hose on one of his vehicles while in Ann Arbor had been cut by Postal employees, which resulted in the loss of a quantity of gasoline on August 28, 1985 (Tr. 261-62, 291; see also AAF Tab E, pp. 119-20; App. Exh. No. 6).  Appellant's driver did not corroborate Appellant's contention that the gas line had been cut, but thought it had been pulled away from the tank (Tr. 240-41).  The appearance of the physical exhibit (App. Exh. No. 6) is not consistent with its being cut.  There is no credible evidence that Postal employees caused the damage (see Tr. 262).  There is no allegation by Respondent of any contract deficiencies for August 28, 1985.  The problem with the gasoline line had no effect on Appellant's performance, and if any delays resulted, they were not charged against Appellant.

16.  After Appellant's contract was terminated, the successor contractor for the Ann Arbor route was a company known as Campbell & Sons or Campbell Brothers (Tr. 93).  The Campbell Company had been awarded other contracts in the Detroit area (Tr. 111-12).  There is no evidence that the successor contractor on the Detroit-Ann Arbor route has been treated with favoritism or required to adhere to lesser performance standards.  Other than the unsupported allegations of Appellant, there is no evidence of improprieties in awarding highway transportation contracts in the Detroit area.

Decision

Respondent contends the default termination should be sustained because of the numerous incidents of inexcusable late performance and poor quality of service, as established by the evidence in the record.

Appellant seeks to have the default termination converted to a termination for convenience and to recover the liquidated damages provided in Clauses 17 and 12(c) of the General Provisions.  Appellant disputes many of the late arrivals charged against him, which he bases on the alleged failure or refusal of Respondent's employees to issue late slips.

The evidence in this appeal establishes that Appellant's performance under his contract to transport mail between Detroit and Ann Arbor was unsatisfactory and below the standard specified in the contract.  This is documented by numerous deficiencies and irregularities throughout July and August 1985, until the contract was terminated.

Appellant's performance commenced July 1, 1095, with the first two days being marred by an extremely large number of serious contract deficiencies (Finding 3).  Unsatisfactory performance continued over the first half of July 1985, during which Appellant was notified, counseled and warned through meetings and correspondence that unless improvements were made, his contract would be terminated.  Following the Contracting Officer's warning of July 15, 1985, the record establishes numerous deficiencies and irregularities in contract performance, including omitted service and late arrivals throughout the remainder of July and August 1985, until termination occurred.

In reviewing the evidence we have disregarded those seven Form 5500s that we found were of questionable validity (findings 3, 8, 10, 11).  Additionally, with respect to one other Form 5500, we have found the reported violation to be excusable (Finding 3).  We find no evidence that any of the remaining forty-one violations were excusable.  Considering the magnitude and nature of the contract deficiencies, we find that the Contracting Officer's decision terminating Appellant's contract for default was proper.

Appellant asserts that many of the late arrivals were due to the failure or refusal of Postal employees to issue late slips.  The record indicates that after Appellant had made such a complaint, Respondent's Administrative Officer investigated the complaint, cancelled certain 5500s and issued directives and forms to the Ann Arbor workers.  Thereafter, Appellant never again complained to Respondent (Finding 12).  In view of Respondent's corrective actions, we are not persuaded that Appellant was improperly charged with violations that were excusable. 

Appellant complains about his inability to question three of Respondent's employees who were not required to be available at the hearing for testimony.  The record shows that Appellant had ample notice of the hearing and of Respondent's pre-hearing statement listing its witnesses, but, nevertheless, failed to request the presence of the witnesses until the day before the hearing.  The filing of the request the day before the commencement of the hearing made it impractical for the Board to take any meaningful action.  In such circumstances there was no violation of Appellant's rights.  See National Aviation, PSBCA No. 800 (May 14, 1981); Alvin L. Taylor, PDBCA No. 33 (Oct. 22, 1963) (On recon.).

Appellant alleges unfair and discriminatory treatment.  He asserts that his attempts to prove that another contractor was shown favoritism were stymied by adverse rulings of the presiding administrative judge.

Appellant was given full opportunity during the hearing to show that questions sought to be elicited about a successor contractor's performance and award of other contracts to that contractor were material or relevant to the issues of the appeal.  Because of this inability to do so and the lack of any apparent connection to the issues to be adjudicated, the questions were disallowed.  Our review of the record indicates that the evidence sought to be established would be of no consequence in resolving the issues of this appeal.

With respect to Appellant's allegations of racial discrimination and unfair treatment, the record is devoid of any proof of such allegations.  We do not find any credible testimony or evidence of racial prejudice.  As to general allegations of unfair treatment, the record shows, despite Appellant's many and repeated deficiencies in contract performance, considerable leniency, patience and forbearance on the part of the Contracting Officer before terminating the contract.  See H.T.J Trucking, Inc., PSBCA No. 366, 78-2 BCA ¶ 13,280; Thomas M. Kemp d/b/a Fastair Freight, PSBCA No. 328 (June 10, 1977).  We find no supporting evidence of any impropriety on the part of Respondent's officials.  Bare allegations that improper actions were taken because of Appellant's race do not constitute evidence.  See Publix Delivery Service, Inc., PSBCA No.477, 79-1 BCA ¶ 13,863.  There is similarly no evidence to support Appellant's general allegations of discriminatory actions by Respondent's officials in awarding contracts in the Detroit area.  Further, such matters are outside the scope of these proceedings.  See Southeastern Airways Corp., PSBCA No. 262, 263 (Oct. 7, 1977) (On recon.), aff'd Southeastern Airways Corp. v. United States, 230 Ct. Cl. 47, 673 F.2d 368 (1982), 

Accordingly, it is concluded that Appellant's contract was properly terminated for default.  Appellant's appeal from the default termination is therefore denied.

James E. Lemert
Administrative Judge
Board Member

I concur
James A. Cohen
Administrative Judge
Chairman

I concur
James D. Finn, Jr.
Administrative Judge
Vice Chairman