PSBCA No. 4045
June 15, 1998
Appeal of
PEGGY J. FIELD
Under Contract Nos. HCR 89010 and 89030
PSBCA No. 4045
APPEARANCE FOR APPELLANT:
Bruce A. Spanner, Esq.
Miller, Mertens & Spanner
1319 Lee Boulevard
Richland, WA 99352-4191
APPEARANCE FOR RESPONDENT:
Robert E. O'Connell, Esq.
San Francisco Office
United States Postal Service
577 Airport Boulevard, Suite 200
Burlingame, CA 94010-2040
OPINION OF THE BOARD
Appellant, Peggy J. Field, has filed a timely appeal of the contracting officer’s final decision denying her claims for an economic price adjustment to her contracts with Respondent, United States Postal Service. Appellant claims she is entitled to the price adjustment because of the decision by Las Vegas Postal Service officials to prohibit highway transportation contractors from parking their vehicles at the postal facility when not in use. A hearing[1] was held in Las Vegas, Nevada on September 30, 1997. Both entitlement and quantum[2] are at issue in this appeal.
FINDINGS OF FACT
1. Appellant has performed mail transportation services for Respondent under Contract No. HCR 89010 and HCR 89030 since 1985. (Transcript pages (Tr.) 21, 22; Joint Stipulation (Stip.)).
2. Until June 1987, the “head out” point for these contracts was the Las Vegas General Mail Facility (GMF), located behind the Circus Circus hotel. The Postal Service allowed highway transportation contractors, including Appellant, to park their trucks at this facility while not in use. (Tr. 23, 24; Stip.).
3. In June 1987, the head out point for Appellant’s contracts was changed to the Las Vegas Processing & Distribution Center (P&DC). This change in head out point was accomplished by a negotiated service change to each contract. (Tr. 24-26; Stip.).
4. Appellant, as well as the other highway transportation contractors affected by the change in head out point, were informed at the time of the change that they could park their trucks at the Las Vegas P&DC when not in use (Tr. 25; Stip.).
5. Since parking was to be provided at the Las Vegas P&DC, Appellant did not include off-site parking costs in the negotiated service change (Tr. 26, 27).
6. HCR 89010 and HCR 89030 were renewed by Respondent, effective July 1, 1995, for a four year term (Tr. 37, 38; Appeal File Tab Nos. (AF) HCR 89010-15, HCR 89030-13). In renewing these contracts, Appellant did not include costs associated with parking her vehicles off-site when not in use (Tr. 39, 40; Stip.).
7. Paragraph 18C of each renewal contract (PS Form 7447), stated, “[t]he contract rate must include all elements of cost the contractor expects to incur in performing the service.” (AF HCR 89010-15, HCR 89030-13).
8. Each renewal contract also included Basic Surface Transportation Service Contract General Provisions (PS Form 7407, July 1992), which at clause 11 ADJUSTMENT OF COMPENSATION, provided that the contract’s “compensation may be adjusted by mutual agreement of the Contracting Officer and the Contractor in accordance with the provisions of this clause and the Management Instruction Governing Adjustments . . . which is hereby incorporated by reference.” (AF HCR 89010-15, HCR 89030-15).
9. The applicable Management Instruction, PO-530-89-09, Economic Pay Adjustments For Advertised Highway and Inland Domestic Waters Contracts (11/03/89), provided a general policy that allowed “adjustments in the rate of compensation when changed economic conditions or operational requirements occur over which the contractor has little or no control, subject to the provisions of this instruction.” The Management Instruction also provided, as a limitation, that “cost increases for items that were omitted in the original or renewal cost statement” are non-allowable increases. (Respondent’s Supplemental Appeal File Tab No. (RSAF) 1).
10. From the time of the change in head out point to the Las Vegas P&DC in June of 1987, until August 8, 1996, Appellant parked her trucks at the P&DC when not in use (Stip.).
11. As early as June 1995, (and before Appellant renewed the subject contracts), the contracting officer was aware that highway transportation contractors were permitted to park their vehicles at the Las Vegas P&DC when not in use and that, because of increased congestion, on-site parking might be eliminated in the future (Tr. 148).
12. By memorandum dated July 5, 1996, the contracting officer informed Appellant, as well as all other highway transportation contractors at the Las Vegas P&DC, that effective August 8, 1996, they could no longer park their trucks at the facility when not in use (AF HCR 89010-8A, HCR 89030-11A).
13. Appellant had no control over the change in policy concerning on-site parking. Moreover, prior to the issuance of the memorandum on July 5, 1996, Appellant was not given any notice of the change of the on-site parking policy. (Tr. 39, 161).
14. Beginning August 8, 1996, Appellant began parking the truck used in HCR 89010 at the residence of her driver, which is located 12.5 miles from the Las Vegas P&DC. Appellant parked the truck used in HCR 89030 at her residence which is 12 miles from the Las Vegas P&DC. (Tr. 94-97). Appellant investigated, but could not find any off-site parking at a closer location (Tr. 49, 97).
15. Under HCR 89010, Appellant began performance each day at 5:15 a.m. and concluded at 6:15 p.m. (AF 89010-15). The morning non-rush hour trip to the Las Vegas P&DC required 20 minutes and the afternoon return during rush hour required an average of 30 minutes (Tr. 94-96).
16. Under HCR 89030, Appellant began performance each day at 5:10 a.m. and concluded at 3:15 p.m. (AF 89030-13). The morning non-rush hour trip to the Las Vegas P&DC required 20 minutes and the afternoon return during rush hour required an average of 30 minutes (Tr. 94-96).
17. On September 2, 1996, Appellant submitted claims under both contracts for the additional costs associated with being unable to park its trucks on-site (Tr. 40; AF HCR 89010-5, HCR 89030-5). These costs included increased wages incurred as a result of her drivers traveling to and from the P&DC from her off-site parking locations, additional vehicle operational costs and parking rental costs (Stip.).
18. By final decision dated October 28, 1996, the contracting officer denied Appellant’s claims under both contracts (AF HCR 89010-4, HCR 89030-4).
19. On January 16, 1997, Appellant filed a timely appeal of the contracting officer’s decisions under HCR 89010 and HCR 89030 (AF HCR 89010-2, HCR 89030-2).
20. On March 15, 1997, an additional early morning run was added to each contract. The additional trip on each contract began at 12:00 midnight each day and ended at 4:00 a. m. (Tr. 42-44). During the layover between 4:00 a.m. and 5:15 a.m., Respondent permitted the trucks to remain at the facility (Tr. 139). However, since Appellant changed drivers for the second trip, the trucks were driven to their off-site parking locations after the first trip and a second driver returned each truck to the Las Vegas P&DC for the second trip. (Tr. 43-45).
DECISION
Entitlement
Appellant argues that, under the terms of Management Instruction PO-530-89-09, she is entitled to an economic price adjustment of her contracts because the change in parking policy was a "changed economic condition or operational requirement . . ." over which she had no control. (See Finding of Fact No. (FOF) 9). Appellant argues that she was not aware of any impending changes in the on-site parking policy at the time of renewing her contracts in July 1995, and did not, and should not have, included any costs related to having to park off-site in her renewal bids. Appellant further argues that she detrimentally relied on the assurances of Postal Service officials in 1987 that on-site parking would be available at the Las Vegas P&DC. This reliance, Appellant further argues, was reinforced by being allowed to continue to have on-site parking for over nine years after the move from the “Circus Circus” GMF.
Respondent argues that since the contracts involved in this appeal do not require the Postal Service to provide parking, Appellant is not entitled to compensation for being denied the right to park on-site. Respondent further argues that it was unreasonable for Appellant to continue to rely on the Postal Service allowing on-site parking because she had not received any assurance from the contracting officer that on-site parking would continue to be provided. Respondent points out that an economic adjustment to the contract is not allowed by the Management Instruction for bid errors or omissions from cost statements (see Finding of Fact No. (FOF) 9), and argues that allowing recovery would adversely impact the competitive bidding process.
We find no merit to Respondent’s argument that Appellant should not have relied on the continued availability of on-site parking when submitting her cost statements for contract renewals. Moreover, as explained below, we conclude that the availability of on-site parking at the Las Vegas P&DC became an implied condition of Appellant's contracts.
Since at least 1987, both at the “Circus Circus” GMF and at the Las Vegas P&DC (including at the time of the most recent contract renewal in 1995), Respondent's local officials allowed Appellant to park her contract vehicles on-site when those vehicles were not in use (FOF 1, 11). Accordingly, when pricing the contract renewals in 1995, Appellant did not expect to incur costs related to parking off-site and she properly did not include those costs (FOF 7).
However, at least as early as June 1995, and prior to the time of Respondent's most recent renewals of the subject contracts, Respondent’s contracting officer was aware that Appellant was provided on-site parking (FOF 11). Although the contracting officer was also aware that on-site parking might be eliminated in the future, he accepted Appellant's renewal contract cost statements that omitted parking related costs without advising Appellant concerning the uncertainty of on-site parking in the future. By awarding the renewal contracts without the inclusion of any costs related to parking off-site and with knowledge that on-site parking was historically provided, the contracting officer acquiesced in, and was bound by, Appellant's understanding that the contracts included the availability of on-site parking. See Fallen Trucking Co., Inc., PSBCA Nos. 3133, 3237, 93-2 BCA ¶ 25,827 (where one party to a contract knows or has reason to know what the other intends when entering into the agreement, it cannot later claim it thought something else was intended and the former is bound by the latter's intention).
Under these circumstances, the subsequent decision in July of 1996 to no longer allow Appellant to park on-site was a change to Appellant's contracts for which Appellant is entitled to compensation to reflect costs related to parking off-site.
Quantum
By stipulation, the parties have agreed to the methodology for computing quantum. The Board is to decide only whether Appellant obtained off-site parking at a reasonable distance from the Las Vegas P&DC and what are reasonable average travel times between the Las Vegas P&DC and the various off-site parking locations used by Appellant[3].
Appellant conducted a search for off-site parking before concluding that her own facility (for HCR 89030), which is 12 miles from the Las Vegas P&DC, and at her driver's residence (for HCR 89010), which is 12.5 miles from the Las Vegas P&DC, were the most reasonable locations (FOF 13). Respondent offered no contradictory evidence, and we find that the sites selected by Appellant were at reasonable distances from the Las Vegas P&DC.
The evidence offered by Appellant established that an average travel time between the Las Vegas P&DC and her off-site parking facilities is 20 minutes per trip during non-rush hour times and 30 minutes during rush hour times (FOF 14, 15).
We conclude, therefore, that a distance of 12.5 miles under HCR 89010 and 12 miles under HCR 89030, with travel times of 20 minutes per one-way trip to the P&DC and 30 minutes per trip returning to the off-site parking location during rush hour, should be used in the stipulated methodology to determine the adjustment to be made to contracts HCR 89010 and 89030.
Appellant also argues in her brief that she is entitled to compensation for a third trip under each contract. This third trip arose as a result of the addition of a second daily mail run to each contract and Appellant’s practice of changing drivers on the return portion of the first trip each day. However, this change in contract requirements occurred in March of 1997, well after the change in parking policy which was effective August 8, 1996. Thus, whatever costs are associated with this contract change was not the result of the change in on-site parking policy and should not have been unanticipated by Appellant. Any costs associated with the addition of a second run under each contract should have been included in the negotiated service change to the contract which initiated the second trip.
Accordingly, the appeal is sustained to the extent indicated and is otherwise denied.
William K. Mahn
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1] The hearing in this appeal was consolidated with the hearing in PSBCA No. 4044 and PSBCA No. 4048.
[2] The parties have entered into a stipulation as to the methodology for computing quantum. However, the Board is asked to make findings with respect to the mileage to the off-site parking facilities obtained by Appellant and the trip time necessary to travel from the off-site parking location to the Las Vegas Processing & Distribution Center. (Transcript pages (Tr.) 108-114; Joint Stipulation).
[3] Respondent argues in its brief, notwithstanding the agreed upon stipulation, that any compensation recovered by Appellant should be limited to two-thirds of the amount which would otherwise be determined from the agreed upon methodology. Respondent bases this argument on the fact that another highway transportation contractor at a San Jose, California Postal Service facility, who was granted a contract adjustment in 1976 because of being denied on-site parking, was limited to two-thirds of the costs resulting from being denied parking. (Appellant's Exhibit 1).
However, the details of the negotiation 20 years earlier that resulted in a two-thirds recovery by another contractor at a different facility are not in the record of this appeal. Moreover, the parties to this appeal have already stipulated to the manner in which compensation will be determined, should entitlement be found. Accordingly, we find no merit to this argument.