Appeal of
MACK W. and MARY E. ST. CLAIR
Under Contract Nos. HCR 92263 & 92264
PSBCA No. 3472

APPEARANCE FOR APPELLANT:
Mary E. St. Clair

APPEARANCE FOR RESPONDENT:
Elena V. Alejandre, Esq.

OPINION OF THE BOARD

            Appellants, Mack W. and Mary E. St. Clair, have appealed from the denial of their claims for compensation for what they allege was an understatement of the time necessary to perform their contracts for the delivery of mail on two routes operating from the Yucca Valley, California Post Office.[1]  At the election of the parties, this appeal is being decided on the record without a hearing in accordance with 39 C.F.R. §955.12

FINDINGS OF FACT

            1.  Before 1988 Appellants operated a box delivery highway contract route out of the Yucca Valley, California Post Office.  In 1988, at the time of contract expiration, the route was divided into the two separate contract routes that are the subjects of this appeal, and both contracts were awarded to Appellants.  In 1992, Appellants negotiated renewals of the two contracts, with effective dates of July 1, 1992, and terms ending June 30, 1996.  (Respondent's Supplemental Appeal File, Tab (RSAF) 1; Respondent's Appeal File, Tab (RAF) 1).

            2.  Contract HCR 92263 required an annual payment of $28,565.00.  The contract document specified 8,546.57 miles for the scheduled annual mileage, 1,439.6 hours for the scheduled annual hours,[2] and 456 for the number of boxes to be served.  A contract "Bid or Renewal Worksheet," PS Form 7468-A, dated May 13, 1992, and submitted by Appellants before contract renewal indicated that they calculated their contract offer based on 1,591.12 hours of "Straight Time" and 167.3 hours of "Contractor's ... Personal Driving or Supervision" time.  The PS Form 7468-A was expressly not incorporated into the contract.  (RAF 1, 3, 4).

            3.  Contract HCR 92264 specified an annual rate of $23,608.00.  The contract document specified 8,728.42 for scheduled annual mileage, 1,439.6 for scheduled annual hours, and 485 for the number of boxes.  A contract "Bid or Renewal Worksheet," PS Form 7468-A, dated May 13, 1992, and submitted by Appellants before contract renewal indicated that they calculated their contract offer based on 120 hours of "Straight Time" and 1,591.12 hours of "Contractor's ... Personal Driving or Supervision" time.  This PS Form 7468-A was also expressly not incorporated into the contract.  (RAF 1, 3, 5).

            4.  Both contracts contained the following relevant provisions:

"SPECIAL NOTE:  ... THE MILES AND HOURS SHOWN IN THIS SECTION ARE THE ESTIMATED MINIMUM MILES AND HOURS NECESSARY TO OPERATE THE TRIPS AS SHOWN AND DO NOT INCLUDE WASHUP TIME, VEHICLE INSPECTION, ETC.

ADJUSTMENTS IN ANNUAL HOURS:  IF THE CONTRACTING OFFICER AND CONTRACTOR ARE UNABLE TO MUTUALLY AGREE TO AN ADJUSTMENT IN THE ANNUAL HOURS FOR A SERVICE CHANGE THE FOLLOWING FORMULA WILL APPLY.  ADJUSTMENTS IN THE ANNUAL HOURS FOR CASING AND ROUTE OPERATIONS WILL BE COMPUTED USING TWO CONSTANT FACTORS. MULTIPLY THE NUMBER OF ADDITIONAL BOXES BY 3.64 AND THE ADDITIONAL MILES BY 10.4. THE SUM OF THE TWO EQUALS THE NEW HOURS ADDED TO THE CONTRACT."

(RAF 4, 5).

            5.  Clause 11 of the general provisions applicable to both contracts provided that compensation could be adjusted by mutual agreement of the parties in accordance with the current version of Management Instruction PO-530-81-4.  The version applicable to this contract was PO-530-89-09 and provided that it was Postal Service policy to allow compensation adjustments "... when changed economic conditions or operational requirements occur over which the contractor has little or no control..." subject to the conditions of the Instruction.  However, the Instruction restricted adjustments to cost changes that occurred "during the contract term or as otherwise specified herein."  (RAF 7).

            6.  Clause II.D.10 of Postal Service Form 7469T ("Highway ... Transportation Contract Information and Instructions," dated March 1989), which was incorporated into the contract by reference, read as follows:

"Bidders/offerors submitting bids or proposals should familiarize themselves with the service to be performed, the estimated weight and volume of mail to be carried and all other circumstances affecting the cost of operation without regard to prevailing rates, so as to avoid misapprehension or cause for complaint thereafter."  (RAF 2, 6)

            7.  The claims which are the subject of this appeal were filed on or about July 27, 1993.  The claim letter addressing contract HCR 92263 read as follows:

"On renewal in 1988 my contract HCR 92264 was split and consequently this route [was formed].

There seems to be a great inequity in the hours on this route in comparison to others in the hours it takes to do this route.

Using Postal Service figures of 3.64 factor for each box and 10.4 factor per mile I come up with the following on this route.

456 boxes x 3.64 = 1659.84 hrs

28.2 miles x 10.4 =   293.12

Total                   1953.12 [sic]

This route has a total of driver hours of 1591.12.  This is 362 yearly hrs short.  We are not being paid for all the driver hours and nothing [for] the driving time.

Request is hereby made the contract hours be increased to something at least close to the 1953.12 hours above, the schedule be changed, and that we be paid retroactively to 7-1-92.

I have seen this inequity repeatedly in the bid solicitations received over the years and on our route HCR 92267 but never did anything about it.

Mary E. St. Clair..."  (RAF 12).

Appellants' claim letter on contract HCR 92264 was nearly identical and used the corresponding figures from that contract (see attachment to "Respondent's Reply to Appellant[s'] Response to Respondent's Answer").

            8.  In a final decision dated August 4, 1993, the Contracting Officer denied the claims in their entirety.  The Contracting Officer reasoned that Appellants had not described any changed conditions and were, therefore, precluded from recovering because of the language set out in clause II.D.10 of PS Form 7469T quoted in Finding 6, above.  (RAF 14).  Appellants filed a timely appeal of the Contracting Officer's decision.

DECISION

            Nearly all of Appellants' arguments[3] concern the issues that are not before the Board at this time.  However, with respect to the issue that is before us, we conclude that Appellants have not demonstrated entitlement to additional compensation.

            Appellants point out that the number of hours arrived at by using the factors in the contracts is much greater than either the number of hours stated in the contracts or the number of hours Appellants used in developing their renewal offers (see Findings 2 & 3).  Appellants take the position that this is inequitable and, accordingly, that the number of hours in the contract (and Appellants' compensation) should be raised.

            Respondent argues that Appellants are not entitled to any contract adjustments because they have not identified changes that occurred during the contract term and increased their cost of performance.  Respondent argues further that Appellants have misapplied the formula in the contract in that use of the factors specified therein was intended only for use in making adjustments in the event either the number of boxes or the distance to be traveled increased.

            We agree with Respondent that Appellants have not shown that they are entitled to a contract adjustment based only on the difference in the hours calculated using the formula and the hours they included in their renewal offer.  Appellants, as the incumbent contractors, were well aware of the route conditions and the time necessary to perform each contract.  The "factors" on which they rely to show that the current contract amount is inequitable are intended for use only in making contract adjustments to existing routes.  There is no indication that they were intended to be applied to an entire route to determine the contract price.  Rather, the contract price was determined by negotiations between the parties at the time of renewal, and Appellants do not allege that they were misled or coerced into agreeing to the payment terms in the contracts.  Further, Appellants have not shown an increase in mileage or the number of boxes since they commenced performance of the renewal contracts that would require the application of the adjustment formula.  Accordingly, Appellants have not shown that they are entitled to an increase in the contract amounts.

            The appeal is denied.

David I. Brochstein
Administrative Judge
Board Member

I concur:
James A. Cohen
Administrative Judge
Chairman

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

[1]  The record of this appeal contains documents concerning other demands made to the Contracting Officer by Appellants.  Those demands related to increased time allegedly spent casing and delivering mail because of increased mail volume (additional "coverages") and time allegedly spent doing additional work related to the process of converting addresses on the two routes from rural route box numbers to street addresses.  Although the record contains a substantial number of documents apparently related only to the additional demands, those issues are not before the Board at this time as the record contains neither contracting officer's decisions on those issues nor appeals from the failure to render contracting officer's decisions.  As noted in the Board's Order of March 15, 1994, the only issues before us are those specifically related to Appellant's claims of July 7, 1993.

[2]  Based on the time schedule stated in the contract.

[3]  Appellants' arguments are found in numerous documents filed by them in connection with this appeal, including the document designated Appellants' Complaint.  Appellants did not file a separate brief.