Appeal of
PETER JULIUS SCHARTZ d/b/a OKEIGH TRANS, INC.
Under Contract No. HCR 77940
PSBCA No. 4074

APPEARANCE FOR APPELLANT:
Peter Schartz
Okeigh Trans, Inc.
5123 Countryside Street
Wichita, KS  67218-4405

APPEARANCE FOR RESPONDENT:
Thomas J. Blum, Esq.
Memphis Office
United States Postal Service
225 N. Humphreys Boulevard
Memphis, TN  38166-0170

OPINION OF THE BOARD

            Appellant, Peter Julius Schartz, d/b/a Okeigh Transportation, Inc., has filed a timely appeal of the decision of the contracting officer to terminate for default his mail transportation service contract with Respondent, United States Postal Service.  The parties have elected to submit this appeal on the record in accordance with 39 C.F.R. §955.12.

FINDINGS OF FACT

            1.  On August 23, 1996, Respondent issued a solicitation for a mail transportation service contract (HCR 77940) for service between Victoria and Corpus Christi, Texas.  Included in the solicitation was a requirement that the vehicle used to transport the mail have a minimum interior cargo compartment length of 24 feet.  (Appeal File Tab (AF) 17).

            2.  On September 16, 1996, Appellant submitted a bid on HCR 77940, and on September 30, 1996, Appellant submitted a Pre-Award Questionnaire and Assets and Liabilities Statement.  The Pre-Award Questionnaire indicated that Appellant proposed to use a vehicle with a 22-foot interior cargo compartment.  (AF 16, 17).

            3.  On December 2, 1996, a Postal Service contract specialist contacted Appellant by telephone to discuss the solicitation’s vehicle requirements.  During this conversation, the contract specialist informed Appellant that the vehicle specifications required performance with a vehicle having a minimum cargo compartment length of 24 feet.  (Scott Declaration).

            4.  Appellant specifically agreed in this telephone conversation to modify his proposed vehicle to lengthen the interior to conform to the 24-foot requirement (Scott Declaration).

            5.  Based, in part, on Appellant’s assurance that he would modify the cargo compartment length of his vehicle, the contracting officer awarded HCR 77940, in the amount of $46,040 per annum, to Appellant on December 13, 1996.  Performance of the contract was required to begin on December 31, 1996, and continue until June 30, 2000.  (AF 12, 13, 17; Mills Declaration).

            6.  In awarding the contract, the contracting officer informed Appellant that he must have the vehicle he intended to use on the route inspected by the Victoria Postmaster to ensure that it met contract specifications (AF 13).

            7.  The contract included Basic Transportation Services Contract General Provisions, Postal Service Form 7407, July 1992, which in Clause 16, TERMINATION BY THE POSTAL SERVICE FOR DEFAULT, permitted the Postal Service to terminate the contract for default if the contractor failed to perform according to the terms of the contract or if the contractor’s transportation equipment was insufficient, inadequate, or otherwise inappropriate for the service (AF 14).

            8.  Paragraph 15 of the contract’s specifications required the contractor to have readily available a stand-by vehicle of the same type as specified for the primary vehicle to be used to perform extra trips, to permit vehicle maintenance, and to prevent delays in emergencies such as mechanical failures and poor weather conditions (AF 17).

            9.  Appellant presented his vehicle for inspection at the Victoria Post Office on December 31, 1996.  During this inspection, the length of the cargo compartment was measured and recorded.  However, since the inspecting official did not have a copy of the contract, he did not know whether the vehicle complied with the contract and did not inform Appellant that his vehicle satisfied contract requirements.  (Pena Declaration).           

            10.  After having the vehicle inspected, Appellant left the Victoria Post Office and did not return to begin contract performance on December 31, 1996.  Appellant did not notify any Postal Service personnel that he did not intend to perform service on December 31, 1996.   Subsequently, Appellant failed to perform the contract on January 2, 3, 4 or 5, 1997 (Declarations of Kesteron, Scott and Pena).

            11.  After Postal Service officials made several unsuccessful attempts to contact Appellant on January 2, 1997, the contracting officer sent Appellant a cure letter warning Appellant that his failure to immediately restore service on the route may result in the termination for default of his contract (AF 4; Declarations of Mills, Scott, Kesteron and Pena).

            12.  On January 3, 1997, Respondent’s contract specialist contacted Appellant by telephone and discussed his failure to perform service on the route on December 31, 1996 and January 2 and 3, 1997.  Appellant stated that he failed to perform because his driver failed the vision test for his commercial driver’s license (CDL).  Appellant agreed, however, to restore service on January 6, 1997.  (Scott Declaration).

            13.  Appellant returned to the Victoria Post Office on January 6, 1997, and commenced contract performance.  However, during this first day of performance, Respondent’s mail processing personnel were unable to load all the mail for dispatch on Appellant’s vehicle because it was too short.  After measuring the vehicle, it was determined that he had failed to modify the vehicle to increase its length to 24 feet.  (Declarations of Kesteron and Scott).

            14.  In a telephone conference with the contracting officer on January 7, 1997, Appellant requested 28 days in which to provide a vehicle with a 24-foot cargo compartment.  The contracting officer rejected this request because it would negatively impact the efficiency of mail service.  The contracting officer, instead,  gave Appellant until January 9, 1997, to provide a vehicle that conformed to the contract’s requirements.  (Declarations of Scott and Mills).

            15.  Appellant failed to provide service on January 7, 1997, and did not provide service thereafter (Declarations of Kesteron and Wasson).

            16.  On January 13, 1997, the contracting officer terminated the contract for default, effective close of business on January 7, 1997 (AF 1, 2; Mills Declaration).

DECISION

            Respondent argues that Appellant’s failure to initiate service on December 31, 1996, and his subsequent abandonment of service justifies the decision of the contracting officer to terminate the contract for default.  Appellant argues that his failure to provide service was justified by Respondent’s failure to provide notice that use of his 22-foot cargo compartment vehicle was unacceptable.  Appellant further argues that Respondent initially approved his use of the vehicle and wrongfully refused to allow him to continue using it.  In this regard, Appellant disputes that Respondent ever conducted a pre-award telephone conference in which he agreed to modify his vehicle to meet the contractually required 24-foot cargo length.

            Respondent has the burden of proving that the decision to terminate the contract for default was justified, but once having done so, the burden shifts to Appellant to present evidence of excusable causes.  Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419.  Respondent has satisfied its burden in this appeal.

            Appellant’s failure to use a vehicle with a 24-foot length cargo compartment (Finding of Fact No. (FOF) 13), his failure to initiate service on December 31, 1996 (without providing any notice to Respondent of his intent not to perform), coupled with his failure to subsequently provide service on January 2-5, 1997 (FOF 10), and his abandonment of performance on January 7, 1997 (FOF 15), justify the decision of the contracting officer to terminate the contract for default.

            Appellant has not demonstrated that these failures were excusable.  The inability of his driver to obtain a CDL license does not excuse Appellant’s failure to initiate service on December 31, 1997.  Appellant was responsible for providing service and for insuring that substitute drivers were available.  Moreover, the record does not support Appellant’s allegation that Postal Service officials approved his use of a non-conforming vehicle, and we have so found (see FOF 3-5, 9)^[1]. 

            It was Appellant’s obligation under the contract to provide mail delivery service, even if he believed the contracting officer acted improperly in directing him to modify his vehicle by lengthening the cargo compartment to 24 feet.  The correct course of action was to continue performance and submit a claim for the cost of modifying the vehicle.  See John Horsley, PSBCA No. 1464, 86-3 BCA ¶ 19,141.  Accordingly, Appellant’s abandonment of performance was unjustified.

            The appeal is 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] Appellant disputes that he agreed in a pre-award telephone conference to modify his vehicle.  However, we have found Respondent’s evidence (consisting of a declaration under penalty of perjury, with supporting documentation), of this December 2, 1996 telephone conversation to be persuasive.  Appellant also disputes the authenticity of the memorandum to record that memorialized this pre-award telephone conference.  However, here also Respondent’s evidence is supported by a declaration under penalty of perjury (see Declaration of Larry Wasson).  In contrast, Appellant did not submit a sworn affidavit or declaration under penalty of perjury.