Appeal Of
TOM KIME
Under Contract Nos. 059990-91-P-0443; 059990-91-P-0881 and 059990-91-P-0708
PSBCA No. 3480

APPEARANCE FOR APPELLANT:
Tom Kime

APPEARANCE FOR RESPONDENT:
Robert E. O'Connell, Esq.

OPINION OF THE BOARD

            Appellant, Tom Kime, has timely filed an appeal from a Contracting Officer's decision which denied his monetary claim in the total amount of $49,801.31, representing  damages incurred as the result of the alleged improper termination by Respondent, United States Postal Service, of three cleaning service contracts and insufficient payment made to Appellant under one of the contracts. The appeal was submitted on the record without a hearing pursuant to 39 C.F.R. §955.12.

FINDINGS OF FACT

            1.  Appellant was awarded contract no. 059990-91-P-0443 on February 11, 1991, to perform cleaning services for Respondent at the Dillon Beach, California Post Office for an approximate four-year period ending January 21, 1994.  The annual contract price was $2,496.00 (Appeal File ("AF")-Tab 2 ("2")).

            2.  Appellant was awarded contract no. 059990-91-P-0881 on June 17, 1991, to perform cleaning services for Respondent at the Occidental, California Post Office for the period July 13, 1991, through July 8, 1994.  The annual contract price was $5,645.64 (AF-18).  Appellant was also the contractor for cleaning services at the Occidental Post Office for the term ending July 12, 1991 (Appellant's Appeal File ("AAF")-Tab 2("2"); Declaration of Suzanne C. Frank).

            3.  On July 23, 1991, Appellant was awarded contract no. 059990-91-P-0708 to perform cleaning services for Respondent at the Graton, California Post Office for the period July 27, 1991, through May 27, 1994.  The annual contract price was $6,699.12 (AF-11).

            4.  All contracts contained the following provisions:

"TERMINATION - This agreement may be terminated by either party upon thirty days written notice.  In the event of such termination neither party shall be liable for any costs, except for payment in accordance with the payment provisions of the contract for the actual services rendered prior to the effective date of the termination.  When, in the Contracting Officer's judgment, the interests of the Postal Service require such action, the contract may be terminated by the Contracting Officer, giving the Contractor one days notice thereof in writing.

 INSPECTION OF WORK - The Contracting Officer's representative (COR) shall be responsible for inspecting the cleaning service being performed to insure that it is in accordance with contract requirements.  The COR will immediately bring to the attention of the Contractor all unsatisfactory service.  If the Contractor continues to perform unsatisfactorily, the Contracting Officer will formally notify the Contractor in writing of the deficiencies, and that continued unsatisfactory performance may be cause for termination of the contract."  (AF-11, 18)

            5.  Subsequent to award of the Occidental contract Appellant had several oral confrontations with the Occidental Postmaster (Frank Declaration, para. 4, 5).

            6.  On or after August 30, 1991, Appellant was verbally abusive at least once to a Postal Service clerk, and on September 19, 1991, Appellant failed to report to perform the cleaning services for that day (id., para. 6, 7).

            7.  Appellant did not obey instructions from the Occidental Postmaster on several occasions (id., para. 8).

            8.  On September 19, 1991, based on the events described in Findings of Fact Nos. 5-7, above, the Occidental Postmaster wrote to the Contracting Officer, requesting that Appellant's contract be terminated immediately (AF-21).

            9.  On October 3, 1991, Appellant's contract for services at Occidental was terminated by the Contracting Officer, effective October 4, 1991, for Appellant's "failure to perform the duties required by the contract" (AF-23).

            10.  Appellant was paid for the contract work performed through October 4, 1991, with the exception of $21.71, which amount was withheld (AAF-4).

            11.  Subsequent to contract termination, on November 4, 1991, Appellant entered the Occidental Post Office and had an argument with the postmaster and a clerk over his contract payment under the terminated contract.  The argument escalated, and Appellant yelled obscenities, jumped over the counter and pushed and shoved both the postmaster and the clerk.  Appellant kicked down a door and chased the clerk from the building.  A three-year restraining order was thereafter obtained by the postmaster and the clerk, prohibiting Appellant from harassing them and requiring Appellant to stay at least 15 yards away from their residences and place of work (Frank Declaration, para. 11, 12, 13, 14, 15).

            12.  Performance problems likewise existed during the period of Appellant's contract for cleaning services at the Graton Post Office.  On September 5, 1991, Appellant threatened to kick in a door to the lobby.  On September 19, Appellant failed to perform the required services.  Appellant refused to trim and cut outside junipers as requested by the postmaster (Declaration of Sandra Sewell, para. 3, 4, 5).

            13.  Appellant failed to fill out his work form on a daily basis as instructed by the postmaster and on several occasions disobeyed instructions of the postmaster (id., para. 1, 6, 7).

            14.  Based on the incidents described in Findings of Fact Nos. 12 and 13, above, as well as her knowledge of the November 4, 1991, incident at the Occidental Post Office (Finding of Fact No. 11), the Graton Postmaster on November 8, 1991, wrote to the Contracting Officer and requested that Appellant's contract be terminated (AF-13; Sewell Declaration, para. 10).

            15.  A letter requesting termination of the Graton and Dillon Beach contracts was sent to the Contracting Officer by the Supervisor, Maintenance, North Bay MSC on November 14, 1991.  The termination request was based upon Appellant's altercation with the Occidental personnel on November 4, 1991 (AF-7, 15).

            16.  On November 19, 1991, Appellant's contracts for cleaning services at Graton and Dillon Beach were terminated by the Contracting Officer, effective November 20, 1991, for Appellant's "failure to perform the duties required by the contract" (AF-8, 16).

            17.  On September 30, 1992, Appellant submitted a claim to the Contracting Officer in the amount of $49,801.31.  The claim was broken down into five segments: (1) $17,197.49 for wrongful termination of the Occidental cleaning services contract; (2) $65.12 allegedly owed to him under the prior Occidental cleaning services contract; (3) $23.88 allegedly owed to him under the terminated Occidental contract; (4) $17,514.82 for wrongful termination of the Graton cleaning services contract; (5) $15,000 as "a token of apology" (AF-24).

            18.  By letter dated October 13, 1992, Appellant's claim was denied in its entirety by final decision of the Contracting Officer (AF-25).  This appeal followed.[1]

DECISION

The Occidental Contract

            Appellant contests the action of the Contracting Officer terminating his contract to provide cleaning services at the Occidental Post Office on the ground that, contrary to the terms of the Inspection of Work Provision of the contract, the Contracting Officer never notified Appellant in writing of any deficiencies in performance and never afforded Appellant an opportunity to cure such deficiencies.

            Appellant's contract provided for two alternative termination notices.  The first was a thirty-day notice, similar to a termination for convenience.  The other was a one-day notice, in effect a termination for default.  In regard to the latter, the Inspection of Work clause provided that a prior warning should be given to Appellant from the Contracting Officer if the contemplated termination was to be based on "unsatisfactory service."  Under the circumstances of this appeal however we do not deem the warning requirement of the Inspection of Work provision to be applicable.  Appellant's contract was not terminated solely for "unsatisfactory service", the operative language which would make the Inspection of Work Clause applicable, but instead, as the record indicates, for Appellant's failure to perform at all on September 19, 1991, and for abusive behavior to a clerk and to the postmaster, as well his failure to obey instructions given by the postmaster.  Under such circumstances the one-day notice of termination was not improper.

            We have held that a termination provision similar to the present one gives the Contracting Officer great latitude and discretion and the election to terminate will be upheld unless it was exercised in bad faith or constitutes an abuse of discretion.  E. Gerald Hanes, PSBCA No. 3082, 92-3 BCA ¶ 25,127, citing, Salisbury Industries v. United States, 905 F.2d 1518, 1521 (Fed. Cir. 1990).

            There is nothing in the record before us to indicate that the Contracting Officer acted in bad faith or abused his discretion in terminating Appellant's contract.  Appellant's contract performance had been documented by the Occidental Postmaster, and the Contracting Officer was well aware of Appellant's failure to perform service, and the instances of verbal abuse toward postal employees and Appellant's refusal on numerous occasions to follow the instructions of the postmaster.  The termination action thus was properly taken.

            However, Appellant is entitled to payment of $21.71, which amount was withheld from his final contract payment (See Finding of Fact No. 10).  Respondent has not demonstrated any basis for the deduction.  Appellant has withdrawn his request for reimbursement of $65.12 allegedly owed him under the prior Occidental contract.

The Graton and Dillon Beach Contracts

            Appellant challenges the termination of the Graton and Dillon Beach cleaning services contracts on the same ground as he contested the Occidental termination.  The termination actions stated they were taken due to Appellant's failure to perform the duties required by the contracts.  Appellant contends that he should have been given notification of "unsatisfactory service" and an opportunity to cure any deficiencies prior to termination actions.

            Although we reach the same result, the facts underlying the terminations of the Graton and Dillon Beach contracts are somewhat different from the Occidental termination.   Prior to the terminations the Contracting Officer had full knowledge of Appellant's assault upon the Occidental Postmaster and the postal clerk November 4, 1991.  The serious nature of that incident, as well as the distinct possibility of future incidents of a similar nature occurring, clearly warranted the Contracting Officer taking immediate action to terminate Appellant's contracts on one-days notice.  The contracts' termination provision allowed for such termination when in the Contracting Officer's judgment the best interests of the Postal Service required such action.

            It is immaterial that the Contracting Officer's termination actions cited as its basis Appellant's failure to perform his contractual duties.  A termination for default will be upheld if there are grounds that would justify the termination even though not relied upon by the Contracting Officer in his written decision.  Kelso v. Kirk Brothers Mechanical Contractors, Inc., 16 F.3d 1173, 1175 (Fed. Cir. 1994); Arthur Napier, PSBCA Nos. 3044, 3140 94-2 BCA ¶ 26,695.  Accordingly, we uphold the one-day terminations of Appellant's Graton and Dillon Beach contracts.

CONCLUSION

            Appellant's appeal of the Occidental termination action is denied.  However, Appellant is entitled to payment of the $21.71 amount withheld, as well as Contract Disputes Act interest.  The matter is remanded to the Contracting Officer for the calculation of the amount of recovery due Appellant. Appellant's appeals of the Graton and Dillon Beach terminations are denied.

James D. Finn, Jr.
Administrative Judge
Vice Chairman

I concur:
James A. Cohen
Administrative Judge
Chairman

I concur:
Norman D. Menegat
Administrative Judge
Board Member

[1]  The Contracting Officer's final decision referenced the Dillon Beach termination, as well as the other two.  Appellant's Complaint also questions the propriety of the Dillon Beach termination.  We thus also consider that issue in this Opinion.