Appeal of
PARKS & SON TRUCKING, INC.
Under Contract No. 378DU
PSBCA No. 3479

APPEARANCE FOR APPELLANT:
Jerry G. Cunningham, Esq.

APPEARANCE FOR RESPONDENT:
Alfred J. Zwettler, Esq.

OPINION OF THE BOARD

            Appellant, Parks & Son Trucking, Inc., has filed an appeal from a contracting officer’s final decision terminating Appellant’s highway transportation contract on 24 hours notice.  Appellant contends that Respondent, United States Postal Service,  unreasonably and unfairly terminated the contract prior to giving Appellant an opportunity to comply with the equipment requirements of the contract.  Respondent contends that it was fully justified in terminating the contract on 24 hours notice when it learned that Appellant was using a nonconforming vehicle to perform service on the route.

FINDINGS OF FACT

            1.  On July 16 or 17, 1993, Respondent initiated a telephone solicitation for an emergency highway transportation contract requiring new service between Knoxville and Chattanooga, TN (Stipulation of Parties (Stip.) para 3; Tr. 31, 63).  The service to be performed was part of the Eagle Hub Express Mail transportation system which is a premium service of the Postal Service (Tr. 21-22, 129-30).

            2.  Sometime during the solicitation period, Appellant’s president Horace Parks (hereafter also referred to as Appellant) inquired about the possibility of bidding for the service and was informed by Postal Service Transportation Specialist Bobby Mays of the details of the solicitation including the requirement for a cargo van with a minimum of 130 cubic feet of cargo space (Stip. para 1; Tr. 31).

            3.  Prior to submitting a bid, Appellant and Transportation Specialist Mays had several conversations about the requirement for a cargo van and the fact that a pickup truck with a camper top did not meet the contract requirements and could not be used on the route (Tr. 30-34, 67-70).

            4.  Appellant bid on and was awarded Contract No. 378DU on July 23, 1993 (Stip. para 3; Tr 31; Appellant’s Appeal File (AAF) Tab B).  Appellant received a written copy of the contract on July 31, 1993 (Tr. 207).  The contract required Appellant to provide as a minimum a cargo van with a minimum of 130 cubic feet of usable loading space (Stip. para 4; AAF Tab A).  The vehicle specifications in addition provided:

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C.  All equipment shall be presented for inspection at the locations and time indicated by the Contracting Officer or his authorized representative.  Equipment used on the contract must at all times be maintained in a condition that reflects favorably on the Postal Service and is acceptable to the Contracting Officer or his authorized representative for the full term of the contract and any subsequent renewals that might be negotiated.

D.  The vehicle(s) must be fully enclosed, waterproof, equipped with a key-type locking device and provide sufficient cubic feet of loading capacity to accommodate all mails tendered for transportation and/or delivery” (Stip. para 5; AAF Tab A).

            5.  Although Paragraph C of the vehicle specifications required Appellant to present his vehicle for inspection as directed by the Contracting Officer, it did not require an inspection of Appellant’s vehicle in the absence of an order by the Contracting Officer (AAF Tab A; Tr. 57-58, 72-74, 170-71). 

            6.  Paragraph 4(a) of the Postal Service Basic Surface Transportation Services Contract - General Provisions (PS Form 7407, July 1992) required Appellant to “carry all mail tendered. . .whatever may be its size and weight with certainty, celerity and security.”  (Respondent’s Appeal File (RAF) Tab 6).  Under Paragraph 4(c) Appellant was required to “protect the mail from loss, depredation, or damage” and to transport the mail “in an enclosed, water-proof compartment. . . .” (Id).  Paragraph 16(a)(10) of the General Provisions provided that the Contracting Officer could terminate the contract for default “[i]f the Contractor’s transportation equipment is insufficient, inadequate, or otherwise inappropriate for the service” (RAF Tab 6).  The contract also included a provision permitting termination by the Postal Service on not less than 24 hours notice and by the contractor on 15 days notice without allowance of indemnity or extra pay (Stip. para 5; AAF Tab A). 

            7.  After award but prior to the beginning of performance, Appellant inquired about the type and size of the vehicle to be used on the route (RAF Tab 4; Tr. 132-36).  Appellant was again told that a cargo van was required and that a pickup truck was not acceptable (Id). 

            8.  Appellant began service on the route on July 31, 1993, using a pickup truck with a camper-type top (Stip. para 6; Tr. 196, 207, 223 & 225).  Appellant continued to use the pickup truck for each scheduled trip he performed (Tr. 137, 223, 227, 262).  On August 3, 1993, Appellant was observed using a pickup truck with a camper top on the route (Tr. 137, 227).  When asked by the Manager of Transportation Networks at Chattanooga whether the vehicle had been approved for use on the route, Appellant replied that it had (Tr. 137-38).  Neither the Manager of Transportation Networks at Chattanooga nor at Knoxville authorized the use of a pickup truck on the route (Tr. 133, 137-38, 155-56).

            10.  On August 4, 1993, Regina Harrington, a transportation network specialist at the Chattanooga, TN Postal facility, observed Express Mail envelopes protruding from between the tailgate and the truck bed of Appellant’s pickup truck as he backed into the Chattanooga loading dock (Tr. 112).

            11.  Ms. Harrington immediately notified the Manager of Transportation Networks in Chattanooga (Tr. 116-17) and Transportation Specialist Mays that she had seen Express Mail envelopes hanging from the tailgate of Mr. Parks’ pickup truck (Tr. 45, 117-18, 123).  She also completed and sent to Mr. Mays, by facsimile transmission, a Contract Route Irregularity Report, Form 5500, describing the problem (Tr. 45-49, 115-17, 123; RAF Tabs 4 & 10).

            12.  After being notified that Appellant was using a pickup truck to perform the contract service, and that Ms. Harrington had observed Express Mail protruding from under the tail gate, Mr. Mays attempted to contact Appellant but was only able to reach his answering machine (Tr. 45).  Mr. Mays left a message for Appellant to return his call (Tr. 45, 48-49).

            13.  Thereafter, Mr. Mays placed a call to the next lowest bidder on the original solicitation to determine if he was still interested in performing the service at his original bid price (Tr. 50, 83).  Mr. Mays did not award the contract to the next lowest bidder during this first phone call, but confirmed the contractor’s interest and bid for the service (Tr. 50, 83, 281).

            14.  When Appellant returned Mr. Mays’ call at 12:15 PM on August 4, 1993 (Tr. 50) he was informed that a conforming vehicle would be required on the next scheduled trip which was to originate in Chattanooga at 8:00 PM that evening.  Appellant was warned that the contract would be terminated if conforming equipment was not used on that trip (Tr. 51-52, 80, 234).

            15.  Appellant requested that he be given a week, or at least to the end of the week, to obtain a conforming vehicle (Tr. 51).  However, because of possible loss or weather damage to the mail, Mr. Mays insisted that a conforming vehicle be used on the next scheduled trip (Tr. 52, 81, 168).  Although Appellant mentioned the use of a larger enclosed Volvo truck (Tr. 236), he stated that if he could not have extra time the Postal Service might as well terminate the contract immediately (Tr. 52-53).

            16.  Mr. Mays then advised Appellant the contract would be terminated (Stip. para 7; Tr. 52-53) and after discussing the matter with the Contracting Officer contacted the next lowest bidder and awarded him the contract (Tr. 53-54, 169, 282).  The replacement contractor performed the next scheduled trip (Tr. 54).

            17.  After contract termination, Appellant signed and returned to the Contracting Officer a copy of Contract No. 378DU (Stip. para 8; Tr. 89; AAF Tab A).

            18.  Due to Appellant’s outstanding record of close to 20 years service on highway transportation contracts, the Contracting Officer elected to terminate the contract under the provision allowing termination on 24 hours notice, rather than under paragraph 16, the Termination for Default clause (Tr. 168-69, 178).

            19.  As the contract number 378DU had already been printed on numerous documents in both the Atlanta, GA office and Knoxville and Chattanooga, TN facilities, Transportation Specialist Mays determined that it would be administratively convenient and less confusing if the Postal Service continued to use the number 378DU on the replacement contract (Tr. 55, 89, 174).

            20.  He therefore created a new solicitation and contract number, 378IU and changed the number 378DU to 378IU on the copy of the contract which Appellant had signed and returned to the Contracting Officer (Tr. 89, 97-98).  Using the new contract number 378IU, Respondent issued a check to Appellant for his performance between July 31, 1993 and August 4, 1993, and for the service he would have performed during the 24 hour notice period (Stip. para 10).  Appellant received the check no later than October 19, 1993 (Stip. para 10; Tr. 56; RAF Tab 14).

            21.  Contract No. 378DU and Contract No. 378IU are identical except for the number (Tr. 12-13; AAF Tabs A & B).

DECISION

            Appellant contends that the contract was unreasonably and unfairly terminated prior to his being given an opportunity to comply with the vehicle requirements.  According to Appellant, Respondent awarded a replacement contract before terminating his contract and thereby deprived him of the opportunity to comply with the equipment requirements once they were understood by both parties.  Appellant also contends that there was confusion concerning the capacity of the vehicle to be used which led him to believe that a pickup truck would be satisfactory.  Appellant further argues that pickup trucks were used on other routes and his pickup truck with a camper-type top was approved for use on his route by two Postal Service officials.  Finally, Appellant contends his contract, Contract No. 378DU, was not terminated because the only termination notice he received referred to Contract No. 378IU. 

            We are not persuaded that the termination of the contract was unfair or unreasonable or that any other grounds exist to sustain Appellant’s appeal.  The evidence establishes that both before and after contract award Appellant was informed that the contract required the use of a cargo van with a minimum of 130 cubic feet of cargo capacity and that a pickup truck with a camper top did not comply with the vehicle requirements and would not be acceptable.  In addition, Appellant received a copy of the contract and read the vehicle requirements prior to the commencement of performance yet chose to use a pickup truck rather than the cargo van specified in the contract.

            Although pickup trucks with camper tops may have been used on other routes they were not specified for use in Appellant’s contract and Appellant was well aware of the contract’s requirements and Respondent’s interpretation of those requirements prior to bidding.  Appellant however contends he was confused about the vehicle and the cargo capacity required by the contract.  We can find no reasonable basis for Appellant’s confusion or his failure to provide a conforming vehicle.  The specifications and Respondent’s direction to provide a cargo van with a 130 cubic foot capacity were very clear.  Therefore, Appellant was not free to substitute the pickup truck for the required cargo van.^[1] 

            Appellant also argues that even if his pickup truck was not acceptable, he should have been allowed additional time to obtain a conforming vehicle.  However, Respondent was rightfully concerned about the safety and security of the mail.  A Postal Service representative had seen Express Mail envelopes protruding from Appellant’s pickup truck and Respondent was afraid that mail might be lost or damaged if Appellant continued to perform the service with his pickup truck.  Thus, Respondent’s requirement that Appellant have a conforming vehicle for the next scheduled trip was fully justified.

            Appellant’s contention that Respondent entered into the replacement contract before his contract was terminated, making it impossible for him to perform even though he was ready, willing and able to provide the contract service, is not factually accurate.  Although both actions were taken in a short time frame, Appellant was given an opportunity to perform with a compliant vehicle before his contract was terminated.  However, Appellant sought additional time to supply a conforming vehicle and was not ready, willing and able to perform the next scheduled trip.  The contract was then terminated and awarded to the replacement contractor who performed the next trip.  Respondent’s telephone conversation with the replacement contractor to confirm that he was available to perform the service was not inappropriate when Respondent was unable to get in touch with Appellant.  It was only prudent for Respondent to explore its alternatives while it was waiting for Appellant’s return call. 

            The use of the pickup truck in lieu of a cargo van was not approved by Postal Service officials either before or after award.  It is true that Appellant was observed using a pickup truck on the route by Postal Service officials at both Knoxville and Chattanooga.  However, neither approved the use of a pickup truck and at least one questioned its use on the route.  Respondent’s observation or questioning of the use of the pickup truck without taking remedial action in the short period Appellant performed the service on the route cannot reasonably be construed as approval for the use of a nonconforming vehicle.^[2]

            Finally, Appellant claims that the contract number was fraudulently changed after he signed the contract.  While it is clear that the contract number was changed from 378DU to 378IU, the evidence establishes that such change was purely for  administrative convenience and that the terms of the contract were not altered or the rights and responsibilities of the parties revised.  Moreover, Appellant was well aware his right to perform service on the route had been terminated after his conversation with Mr. Mays or at least as of the time the next scheduled trip was run by the replacement contractor.  Therefore, since the change to the contract number did not affect the substance of the agreement or the rights of the parties, Appellant was not damaged or otherwise entitled to any relief as the result of the change.

            Under the terms of the contract, Respondent had the right to terminate the contract on 24 hours notice.  Respondent elected to exercise that right because Appellant was using a nonconforming vehicle on the route and Respondent was concerned about the security of the mail being carried.  Respondent acted reasonably under the circumstances.  Accordingly, Appellant’s appeal from the termination is denied. 

James A. Cohen
Administrative Judge
Chairman

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

I concur:
David I. Brochstein
Administrative Judge
Board Member 

^[1]See Cresswell v. United States, 173 F. Supp. 805, 811 (Ct. Cl. 1959), (and cases cited therein), (“If one party to a contract knows the meaning that the other intended to convey by his words, then he is bound by that meaning.  The same is true if he had reason to know what the other party intended.”); Keno and Sons Construction Co., ENGBCA No. 5837, 95-2 BCA ¶27,687 (May 4, 1995); E-Systems, Inc., ASBCA No. 18,877, 76-1 BCA ¶11,797 (Feb. 23, 1976).

^[2]See Mercury Construction Corp., ASBCA No. 23156, 81-1 BCA ¶15,013 (Feb. 25, 1981); Stamell Construction Co., Inc., DOTCAB No. 68-27F, 74-2 BCA ¶10,930 (Oct. 31, 1974).