PSBCA No. 6268
September 30, 2010
Appeal of
WAYNE L. ORR
Under Contract No. HCR 07865
PSBCA No. 6268
APPEARANCE FOR APPELLANT:
Todd M. Hooker, Esq.
Morris, Downing and Sherred, LLP
APPEARANCE FOR RESPONDENT:
Morgan E. Rehrig, Esq.
Office of the General Counsel
United States Postal Service
OPINION OF THE BOARD
Appellant, Wayne L. Orr, appeals a contracting officer’s final decision issued by Respondent, United States Postal Service, terminating for default his mail transportation and delivery contract. The default termination was based on events occurring three days apart in May 2009 involving Appellant’s use of a pocketknife to enter a locked post office in New Jersey where he worked. We sustain the appeal.
FINDINGS OF FACT
The Contract.
1. For approximately nine years, Appellant and Respondent were parties to Contract No. HCR 07865, for the transportation and delivery of mail according to a detailed schedule. The contract last was mutually renewed for a term from July 1, 2007, through June 30, 2011. (Appeal File Tab (AF) 7; Stipulations (Stip.) 1, 3; Transcript page (Tr.) 132).
2. The contract’s schedule required Appellant to arrive at the Layton, New Jersey Post Office daily at 4:45 p.m. to load and/or unload mail, and to leave the post office at 4:50 p.m. (AF 7 at pages 33, 35, 47, 53; Tr. 43).
3. The contract also involved Appellant working at the Branchville, New Jersey Post Office, and the Branchville Postmaster was designated in the contract as the Administrative Official (AF 7 at 35, 47, 53; Tr. 113). The Administrative Official was defined in the contract as the official designated by the contracting officer to supervise and administer the contract (AF 7 at 62).
4. The contract included termination for default and termination for convenience provisions. The contract also incorporated by reference Clause
B-69, Events of Default, which provided, in relevant part:
The supplier’s right to perform this contract is subject to termination under the clause entitled Termination for Default. The following constitute events of default, and this contract may be terminated pursuant to that Clause.
- The supplier’s failure to perform service according to the terms of the contract;
b. If the supplier has been administratively determined to have violated Postal laws and regulations and other laws related to the performance of the service;
- Failure to follow the instructions of the contracting officer;
* * *
- If the supplier . . . (a) has been or is, during the term of the contract, convicted of a crime of moral turpitude affecting his or her reliability or trustworthiness as a mail transportation supplier, such as any form of theft, fraud, embezzlement or assault, or (b) associates with known criminals, or (c) otherwise is not reliable, trustworthy or of good character;
* * *
o. If the supplier materially breaches any other requirement or clause of this contract.
(AF 7; Stip. 4-5; Respondent’s Exhibit 3).
5. The contract included a clause providing for liquidated damages of one-third the annual contract rate if the contract were terminated for convenience or if a termination for default were converted to a termination for convenience during the first two years of the contract (AF 7 at 72-73; Stip. 5-6). At the time of the termination (see Finding 42), the annual contract rate was $43,957.62 (Stip. 13).
6. The contract provided, at section B.3(f):
Weapons and Explosives. No person while on Postal property, or while performing services under a Postal contract, shall carry firearms, other dangerous or deadly weapons, or explosives, either openly or concealed.
(AF 7 at 38). Postal regulations provide:
Weapons and explosives. Notwithstanding the provisions of any other law, rule or regulation, no person while on postal property may carry firearms, other dangerous or deadly weapons, or explosives, either openly or concealed, or store the same on postal property, except for official purposes.
39 CFR § 232.1(l). Postal regulations applicable to post offices also provide:
Disturbances. Disorderly conduct, or conduct which creates loud and unusual noise, or impedes ingress to or egress from post offices, or otherwise obstructs the usual use of entrances, foyers, corridors, offices, elevators, stairways, and parking lots, or which otherwise tends to impede or disturb the public employees in the performance of their duties, or which otherwise impedes or disturbs the general public in transacting business or obtaining the services provided on property, is prohibited.
39 CFR § 232.1(e).
Background.
7. On September 26, 2008, Respondent moved the Layton Post Office to a new facility at its present location. At the former location, Appellant possessed a key to the post office and let himself into the building. However, he was not given a key to the new post office as keys were provided only to Postal Service employees but not to contractors such as Appellant. (Tr. 16-17, 39-41, 180-81).
8. Before the post office was re-located, the Layton Postmaster explained the change in procedure regarding access to the Layton Post Office to Appellant. The Layton Postmaster informed Appellant that, rather than let himself into the post office with a key as he had done for many years, Appellant would need to ring a bell at the side door employee entrance, and then be admitted into the post office by the postmaster or by the postmaster relief (PMR). (Tr. 17-18, 39, 162-64, 181, 184, 203). Appellant followed this procedure until the events of May 4 and May 7, 2009 (Tr. 168-69, 183-84, 189, 213).
9. The Layton Post Office typically is operated by a single employee, either the postmaster or the PMR, whoever is on duty. The Layton Post Office closes to retail customers at 4:30 p.m. (Tr. 15, 24, 42; AF 4). Between 4:30 and 5:00, when the post office closes entirely, either the postmaster or the PMR prepares cash and other deposits and receipts, and performs various administrative tasks. The deposits, including cash, are placed in a sealed Registered Mail envelope, which is then given to Appellant when he arrives at 4:45, along with other mail, for further transportation. (Tr. 42, 58-59, 62, 64-65).
10. Based upon a security review performed by the Postal Inspection Service in February 2009, Respondent’s officials had concluded that the lock on the employee side entrance door was not secure and needed adjustment. From then until after the May 4 and May 7, 2009 events described below, Respondent was working through its Facilities personnel to accomplish the lock adjustment work at the new facility, possibly under warranty. (Appellant’s Exhibits 16-17; Tr. 52-53, 84).
11. Appellant did not tell the Layton Postmaster about concerns he had regarding inadequacy of the lock on the employee entrance door, and did not mention any such concerns to the PMR prior to May 4, 2009 (Tr. 18, 208).
12. Pocketknives were routinely used by contractors and employees in the Layton Post Office to cut straps on bundles of mail, and pocketknives were kept in the post office for that purpose (Tr. 83, 159-160, 176-77). Appellant carried and used a pocketknife daily at the Layton Post Office. The postmaster and the PMR were aware of the routine use of pocketknives, and they never indicated that it was inappropriate. (Tr. 83, 179-80).
13. For several months before the termination, Respondent was considering and evaluating changes to Appellant’s contract route, which would have resulted in lower annual payments to Appellant. If implemented, such changes would have required Appellant’s agreement, and Respondent could have terminated the contract for convenience had Appellant not agreed to reduced payments and a more limited work schedule. (Appellant’s Exhibits 1-5; 7-8, 11; Tr. 116-18, 141, 143-44, 153-54).
14. Aside from the May 4 and May 7, 2009 incidents described below, there were no performance problems involving Appellant (Tr. 133, 176).
The Events of May 4, 2009.
15. After 4:30 p.m. on May 4, 2009, when the Layton Post Office was closed to retail customers, the PMR was working alone in the building (Tr. 24). While he was preparing the post office deposits, including counting cash, and at the time that Appellant was expected to arrive, the PMR heard scraping noises at the side employee entrance door, which was locked but not deadbolted. The PMR quickly pushed the money he was counting on his desk into a drawer, and opened the door to investigate the noise. (Tr. 63-65, 84).
16. He discovered Appellant in a crouched position using a pocketknife with approximately a 2-inch blade in contact with the lock. The PMR asked Appellant what he was doing. Appellant responded that he thought that he could bypass the lock, which he believed provided inadequate security for the post office, and he told the PMR that the lock should be fixed. Appellant immediately folded and placed the pocketknife in his pocket. The PMR let Appellant into the building, finished counting the deposit, prepared the Registered Mail envelope, and gave it to Appellant, who left without further incident. (Tr. 65, 83-84, 100-101, 105, 159, 177-78, 189, 191, 205, 213-14).
17. Although the PMR was upset by this incident, he did not so indicate to Appellant, and his demeanor did not alert Appellant that he considered the incident to be a serious problem (Tr. 25-26, 29-30, 66, 189, 191-92, 204).
18. After Appellant left and the post office closed, the PMR called the postmaster, and she in turn reported the incident by telephone to the Postal Inspection Service (Tr. 24-25, 27, 66).
19. From May 4 through May 7, 2009, nobody from the Postal Service reprimanded or spoke with Appellant about the May 4 incident, nor did anyone inform Appellant not to attempt to bypass the lock in the future. The investigating postal inspector instructed the postmaster not to speak to Appellant about the incident. The Layton Postmaster interacted with Appellant as usual on May 5 and 6, while the PMR was off-duty. (Tr. 44-46, 97, 107, 191-95, 204).
20. On May 6, 2009, the Layton Postmaster transmitted an email to the contracting officer recommending that it was the appropriate time to shorten the contract schedule and lower the contract price as previously discussed (Appellant’s Exhibit 7; see Finding 13).
21. Three days after the incident (on May 7, at 3:19 p.m.), the Layton Postmaster transmitted an email to the investigating postal inspector providing her understanding of the details of the incident. Her email concluded that Appellant is
Very [ ] angry, and that anger is being directed at me. I am requesting that you please treat this as a real “attempted break in” to a postal facility, and that Mr. Orr be dealt with appropriately.
(Appellant’s Exhibit 6).
The Events of May 7, 2009.
22. After 4:30 p.m. on May 7, 2009, the PMR again was working alone in the Layton Post Office (Tr. 27, 67).
23. Between 4:30 and 4:46 p.m., while the PMR was preparing the post office deposits, including counting cash, and at the time that Appellant was expected to arrive, by glimpsing movement in an adjoining work area, the PMR became aware that someone besides himself was in the post office despite the employee entrance door being locked. After a few seconds, the PMR saw Appellant, who had let himself into the post office past the locked, but not dead-bolted, employee entrance door by using his pocketknife. (Tr. 67-68, 84, 91, 101, 205).
24. Appellant told the PMR that the lock was not secure and that he easily by-passed it with his pocketknife. It took Appellant only about five seconds to open the lock. The PMR gave Appellant the Registered Mail containing the deposits and other outgoing mail, and Appellant left on-time to continue with his schedule. (Tr. 42, 68, 105, 196; but see Tr. 81).
25. Although the PMR again was upset and was angered by this incident, he did not so indicate to Appellant, and his demeanor again did not alert Appellant that the PMR considered the incident to be a serious problem (Tr. 28, 70, 74, 81, 95, 97-98, 196-98). The PMR did not reprimand Appellant for entering the post office by by-passing the lock (Tr. 98, 107, 197).
26. At 4:46 p.m., after the incident described in Findings 23-25, the PMR transmitted a previously-drafted email to an agent of the United States Postal Service Office of Inspector General who was working with the Postal Inspection Service agent investigating the May 4 incident. The PMR’s May 7 email described the May 4 incident, and concluded that the PMR was “rather uncomfortable” being around Appellant. The email did not mention the May 7 incident that had occurred moments before it was transmitted. (AF 5; Appellant’s Exhibit 18; Tr. 91, 106).
27. After closing the post office, the PMR again called the postmaster, and that day the postmaster reported the May 7 incident by telephone to the Postal Inspection Service agent (Tr. 28, 32, 70, 95, 196, 198).
28. The PMR did not see the pocketknife on May 7 (Tr. 100).
29. Appellant did not threaten the PMR on either occasion, or at any other time, and the PMR was not afraid of Appellant (Tr. 82, 100, 197; Respondent’s Exhibit 1).
30. On both occasions, the PMR was delayed by these incidents for approximately three minutes in processing the post office deposits. On both occasions, Appellant left the building with the deposits and other mail on schedule (Tr. 80-81, 92-93).
The Events of May 8, 2009.
31. Early the next morning, on May 8, 2009, after speaking with the postmaster, a postal inspector and a special agent from the Office of Inspector General contacted a New Jersey State Trooper for assistance with the investigation. They arrived outside the Layton Post Office and interviewed Appellant and the PMR, both of whom provided handwritten statements (Stip. 9; AF 5; Respondent’s Exhibit 1; Tr. 71).
32. The State Trooper prepared and issued a New Jersey State Police Investigation Report (the Police Report), which was approved the next day by two additional police officials. According to the Trooper, he was informed by the investigating agent of the Office of Inspector General that Appellant had gained access to the Layton Post Office by forcing the lock with a knife, and that Appellant subsequently had threatened the PMR with that knife. (Respondent’s Exhibit 1 at page 1; Tr. 200). The Police Report recited however, that in their separate interviews that morning, both Appellant and the PMR denied that any threat had occurred (Respondent’s Exhibit 1 at page 2, 4; see also Appellant’s Exhibit 15 at page 2). The Police Report stated that the State Trooper informed the Layton Postmaster later that day that the PMR did not feel threatened by Appellant (Respondent’s Exhibit 1 at page 3).
33. The Police Report indicated that Appellant expressed that the reason for his actions was to demonstrate the inadequacy of the lock. It also indicated that the Layton Postmaster told the State Trooper that she and the PMR would use the deadbolt on the employee entrance door to improve security. The Police Report concluded that the investigation was considered cleared and closed. (Respondent’s Exhibit 1 at pages 2-3; see also Stip. 9).
34. In the afternoon of May 8, 2009, a postal inspector required that the employee entrance door lock be adjusted and secured as an emergency matter, and also that a peep hole be installed in the door (Appellant’s Exhibit 16). The lock was thereafter secured (Complaint ¶ 17; Answer ¶ 17).
35. Also on May 8, 2009, a postal inspector informed the contracting officer about the events of May 4 and May 7 (Tr. 111-12).
36. Thereafter, on the same day, the contracting officer suspended Appellant’s right to perform the contract based upon the continuing investigation of the events of May 7 and pending anticipated receipt of an Investigative Memorandum from the Postal Inspection Service (AF 6; Tr. 112, 126).
The Termination and Events after May 8, 2009.
37. Sometime between May 8 and the May 20 termination, Appellant called the contracting officer, and they spoke about these incidents. The record does not indicate the details of that conversation, except that Appellant explained to the contracting officer that he was trying to show local post office personnel that the lock was inadequate. (Tr. 112-13, 201).
38. On May 15, 2009, the Layton Postmaster sent an email to the contracting officer and others, describing the events of May 4 and May 7. In her email the postmaster urged that Appellant be removed permanently from the Layton Post Office, and requested that her email be considered in the decision whether to terminate Appellant’s contract. Despite having been informed by the New Jersey State Police that the PMR did not feel threatened by Appellant (Finding 32), the postmaster’s email to the contracting officer described Appellant’s conduct as “harassing,” “deliberately intimidating,” and “terrorizing” the PMR. She also described herself as being frightened by Appellant, and she concluded that Appellant “got great pleasure” out of the May 7 incident “even though he clearly understood how scared and shaken up” the PMR was after the May 4 incident. (AF 4; contra Findings 14, 25).
39. On May 18, 2009, the Layton Postmaster filed a criminal complaint against Appellant for criminal trespass (Complaint ¶ 18; Answer ¶ 18; Tr. 33-34, 43-44; Respondent’s Exhibit 1 at pages 2-3).
40. On May 18, 2009, the contracting officer received an expected Investigative Memorandum, which was dated May 12, from the Postal Inspection Service concerning the May 4 and May 7 incidents (AF 5; Stip. 10).
41. The Investigative Memorandum summarized the events of May 4 and May 7. It attached the PMR’s May 7 email describing the May 4 incident referenced in Finding 26, the PMR’s May 8 handwritten statement given to the State Trooper referenced in Findings 31-33, and Appellant’s May 8 statement given to the State Trooper referenced in Findings 29-32. However, it did not attach the Police Report referenced in Findings 32-33. (AF 5; Stip. 10).
42. The Investigative Memorandum did not characterize Appellant’s motivations or the PMR’s reactions. It did note, though, that Appellant had stated that his actions were done in an effort to prove a point regarding the lack of security at the post office. The Investigative Memorandum did not mention a threat or the absence of a threat, and did not include any recommendations for appropriate action by the contracting officer. (AF 5; Stip. 10).
43. On May 20, 2009, the contracting officer issued a final decision terminating the contract for default. The termination was based on the events of May 4 and May 7, 2009, and the sole ground identified in support of the decision was a violation of the contractual and regulatory prohibitions, referenced in Finding 6, against carrying dangerous weapons on postal property. (AF 3; Stip. 11; Tr. 111, 116).
44. In reaching his decision to terminate the contract on May 20, the contracting officer relied on the Investigative Memorandum and its attachments, and on his conversation with Appellant. He also was in possession of the postmaster’s May 15 email, described in Finding 38. (Tr. 113-14, 121-22; AF 4). The contracting officer was unaware that the lock security concern expressed by Appellant in their conversation had been identified previously by postal security personnel and was in the process of being remedied (Tr. 123).
45. On May 21, 2009, a postal official involved in operations transmitted an email to the contracting officer stating that changes to the just-terminated contract could result in cost savings to Respondent. The email identified an annual saving of approximately $14,000, which was also the approximate amount of the liquidated damages that would have resulted from a termination for convenience of Appellant’s contract. (Appellant’s Exhibit 11).
46. On June 23, 2009, Appellant timely appealed the contracting officer’s final decision referenced in Finding 43 (AF 1; Stip. 15). No monetary claims or final decisions regarding monetary claims have been issued (see Stip. 14).
47. On August 13, 2009, the Layton Postmaster voluntarily dismissed the criminal trespass complaint she had filed against Appellant, referenced in Finding 39 (Complaint ¶ 19; Answer ¶ 19; Tr. 35, 43).
48. On March 12, 2010, the Board deferred ruling on a motion for summary judgment filed by Respondent (March 12, 2010 Order).[1] A hearing was conducted on April 15, 2010, in Newark, New Jersey.
DECISION
Respondent bears the burden of proving that the default termination was justified. See Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987). Although the contracting officer recited only one ground to support his termination decision (Finding 43), Respondent correctly notes that it is well-established that a default termination may be upheld by the Board on grounds other than that cited by the contracting officer as the basis for termination of the contract. See Joseph Morton Co., Inc. v. United States, 757 F.2d 1273, 1277 (Fed. Cir. 1985). Accordingly, Respondent presents four arguments in an effort to satisfy its burden.
First, Respondent argues that the ground recited in the contracting officer’s termination decision justifies the default. That ground asserts that Appellant violated the contract’s prohibition against carrying dangerous or deadly weapons on postal premises and a postal regulation’s prohibition against carrying dangerous or deadly weapons on postal property, except for official purposes (Finding 6). Respondent argues that Appellant’s possession and use of a pocketknife at the Layton Post Office violated these prohibitions, and constituted an event of default cognizable by the Events of Default clause, at section a (for the contractual violation), and section b (for the regulatory violation) (Finding 4). It argues that these violations materially breached the contract, justifying its termination for default decision.
Second, Respondent argues that Appellant’s actions on May 4 and May 7, 2009 demonstrate that he is not trustworthy or of good character, in material violation of section g of the Events of Default clause (Finding 4).
Third, Respondent argues that Appellant’s actions on May 4 and May 7, 2009 impeded or disturbed the PMR’s performance of his duties, in violation of postal regulatory proscriptions (Finding 6), sufficient to constitute a material breach of the contract justifying its termination for default (Finding 4).
Fourth, Respondent argues that Appellant’s failure to follow the instructions of the Layton Postmaster regarding ringing the buzzer to gain entry to the post office justifies the default termination.
Appellant’s responses to each of these theories will be addressed within the analysis sections below.
Dangerous or deadly weapons.
Postal regulations prohibit carrying dangerous or deadly weapons on postal property except for official purposes, while the contract prohibits carrying dangerous or deadly weapons while on postal property, or while performing services under a postal contract (Finding 6).
Respondent argues that Appellant’s carrying of the pocketknife and his use of that pocketknife to attempt and eventually to bypass the lock on the employee entrance door of the Layton Post Office violates both prohibitions and justifies the termination of Appellant’s contract for default as a material breach of contract. Indeed, this ground was central to the contracting officer’s decision to terminate as it was the only ground cited in his final decision (Finding 43).
Appellant responds that the 2-inch pocketknife he carried every day was not a dangerous or deadly weapon, that he used it routinely as a tool for official purposes in the Layton Post Office, that the Layton Postmaster and the PMR were aware of such routine use, that Appellant had a legitimate rather than an illicit purpose for routinely using the pocketknife as he did, and that he was not warned or instructed not to carry a pocketknife on postal property.
Neither the contract nor the postal regulation at issue define dangerous or deadly weapons. However, federal law also prohibits the knowing possession of a firearm or “other dangerous weapon” in a federal facility. 18 USC § 930(a). That statute defines the term “dangerous weapon” specifically to exclude “a pocket knife with a blade of less than 2 ½ inches in length.” 18 USC § 930(g)(2). As we find the postal regulation and the contract provision, neither of which define the term, to be ambiguous with regard to a pocketknife, the statutory definition’s explicit exclusion of pocketknives like the 2-inch blade pocketknife here at issue from constituting a dangerous weapon, is persuasive edification on the issue.
Moreover, the context in which the matter is raised must be considered. See, e.g., Thon Ngot Sang v. Scribner, 2008 WL 2053941 (E.D. Cal. May 13, 2008) (discussing recognition by the courts of the distinction between inherently deadly weapons and instruments that constitute deadly weapons only because of the way they are used). Here, there is no suggestion that Appellant used or intended to use his pocketknife as a weapon. In any event, we have found an absence of malicious intent in Appellant’s admittedly ill-advised use of his pocketknife to by-pass the lock. Pre-trial characterizations by the Layton Postmaster notwithstanding (see Findings 19, 32, 38, 39), we have found Appellant’s testimony credible that his intent was to alert Respondent to the inadequacy of the security of the lock (Findings 16, 24, 33, 37, 42). Our determination of Appellant’s credibility in this regard is based on the absolute consistency of his position in various statements and testimony, his demeanor at the hearing, and other corroborating evidence.
Moreover, we find it particularly persuasive that Respondent did not consider pocketknives, which were routinely used in the Layton Post Office with the knowledge of and without the objection of postal officials there (Finding 12), to have constituted dangerous or deadly weapons within the meaning of these prohibitions. In this regard, prior to this controversy, Respondent interpreted its own regulation and the contract provision it drafted in the same manner as we do here.[2]
Accordingly, based upon the unique circumstances presented in this appeal, we find that Appellant’s carrying of the pocketknife at issue and his use of the pocketknife other than as a weapon in the context presented did not violate the regulatory or contractual prohibitions against carrying deadly or dangerous weapons on postal property, and may not serve as the basis of the default termination.
Trustworthy or of good character.
Respondent next argues that Appellant violated section g of the Events of Default clause. That clause establishes an event of default where the contractor is convicted of a crime of moral turpitude affecting his or her reliability or trustworthiness as a mail transportation supplier; associates with known criminals; or otherwise is not reliable, trustworthy or of good character (Finding 4).
Respondent does not assert that Appellant was convicted of a crime, associates with known criminals, or is not reliable. Rather, it argues that the events of May 4 and May 7, 2009, alone demonstrate that Appellant is not trustworthy and does not possess good character. Appellant counters that his intentions were laudable and that even if his actions on the days in question represented poor judgment, it was isolated conduct not reflective of a lack of good character or a lack of trustworthiness. We agree with Appellant.
The Board explored the good character and trustworthiness ground for a default termination in Lee Aron Vandyke, PSBCA No. 6150, 09-2 BCA ¶ 34,291. In Vandyke, 09-2 BCA at 169,410, the Board rejected the position that a default termination was justified where a contractor engaged in an abusive, profane, rude and inexcusable exchange with a postal official where the isolated incident was out of character with the contractor’s satisfactory contract performance and did not constitute an actual threat.
Also, in Banks Trucking, PSBCA No. 3528, 96-1 BCA ¶ 28,132, the Board overturned a default termination argued to be justified on the good character provision. The Board there concluded that Appellant’s aggressive, profane outburst was not typical of his behavior, and we emphasized that he did not threaten anyone. Here, we find that Appellant’s ill-advised actions are not typical of his otherwise unblemished behavior as a long-time postal transportation contractor (Findings 14, 45-46). Similarly, we have found in this appeal that there was no threatening behavior involved (Finding 31). We think that Appellant’s motivation, in these incidents relied upon exclusively by Respondent, must be considered in determining his trustworthiness or good character. We have found a lack of an illicit motivation (see Findings 16, 24, 33, 37, 42).
Further, had Respondent reprimanded Appellant for the May 4 incident, directed him not to repeat it, or demonstrated its view of the seriousness of the issue, there is no evidence indicating that the May 7 incident or the resulting termination would have occurred. Although we certainly do not condone Appellant’s actions, Respondent easily could have avoided this result. See O. Gary Bollschweiler and Anna Marie Bollschweiler, PSBCA Nos. 3844, 3852, 96-2 BCA ¶ 28,536.
Respondent’s position is not based upon a pattern of conduct or on anything other than the related May 4 and May 7 incidents, which were not typical of Appellant’s conduct. Respondent also acknowledges that Appellant’s performance as a mail contractor was without incident prior to the events of May 4 and May 7. We conclude that there is insufficient evidence of a lack of good character or a lack of trustworthiness to support the default termination. See Banks Trucking, supra; Vandyke, supra.
Impeding or disturbing PMR’s duties.
Respondent’s next theory is that Appellant impeded or disturbed the PMR in the performance of his duties, in violation of 39 CFR § 232.1(e), which it argues justifies the default termination based on section b of the Events of Default clause. Respondent correctly notes that a material violation of this regulation can justify a termination. See Eddy M. Acevedo, PSBCA No. 3217, 93-1 BCA ¶ 25,493.
However, not every contract violation justifies the drastic sanction of a default termination, see Mike L. Noble, PSBCA No. 5046, 04-2 BCA ¶ 32,727, and this is especially so where there is no effect on contract performance. See Carla Martin, PSBCA No. 4157, 00-1 BCA ¶ 30,592; see also Sunbelt Properties, Inc., HUDBCA No. 94-G-121-C1, 99-1 BCA ¶ 30,255 (termination of a service contract for default will be sustained if the performance failure is more than de minimis and is reasonably substantial).
Here the effect of Appellant’s actions on the only postal employee alleged to have been hindered in the performance of his official duties – the PMR – was minimal. The PMR was delayed by no more than three minutes on two occasions, and Appellant left on time according to the contract schedule in both instances (Findings 16, 25, 32). Without more,[3] we do not consider three minutes of delay which did not affect the timeliness of the mail to constitute a material violation of this regulation sufficient to support the ultimate sanction of a default termination. See Banks Trucking, supra; Douglas Cremer, PSBCA No. 3108, 93-2 BCA ¶ 25,565. Respondent’s argument is rejected.
Failure to follow postmaster’s instructions.
Respondent’s final argument in support of its default termination is that Appellant’s failure twice to have followed the Layton Postmaster’s instructions to ring the buzzer to gain entry to the post office at the appointed time is a material breach of contract justifying the default. The Events of Default clause at section 3, identifies failure to follow the instructions of the contracting officer as a ground for default (Finding 4). However, here the contracting officer did not issue the instruction that was violated, and was not even aware of the issue until after the events had occurred (Finding 35).
The Board also has upheld default terminations where instructions given by the contract’s Administrative Official, designated by the contracting officer to supervise and administer the contract, were disobeyed in material violation of the contract. See Christine M. Sheets, PSBCA No. 4034, 99-2 BCA ¶ 30,414. However, the Layton Postmaster, whose instruction was not followed by Appellant, was not the Administrative Official for this contract (Finding 3), and there is no evidence in the record that the Administrative Official had issued any such instruction. This is also not a case where the Administrative Official or the contracting officer instructed Appellant to comply with particular instructions of another postmaster, where the failure to do so also may justify a default. See Frank Baiamonte, PSBCA No. 5297, 08-1 BCA ¶ 33,852, recon. denied, 08-2 BCA ¶ 33,925, appeal dismissed, 345 Fed. Appx. 561 (Fed. Cir. May 5, 2009), recon. denied, 348 Fed. Appx. 571 (Fed. Cir. October 9, 2009).
Respondent argues, however, that a postal handbook[4] requires Appellant to follow the directions of on-site postal management or risk termination, implicitly asserting that this is so regardless of whether such personnel are designated as responsible for administration of the contract. There is no evidence that Appellant knew about the handbook on which Respondent relies, that the handbook was published in the Federal Register, or that the handbook was made a part of Appellant’s contract. Accordingly, any violation of the provision relied upon by Respondent does not, of itself, justify the default. See Robert B. Joy, PSBCA Nos. 938, 979, 1981 WL 7678 (September 30, 1981).
There may be circumstances under which a contractor’s failure to follow significant and specific instructions from a postmaster who has not been designated as the administrative official could constitute conduct serious enough to breach a contract in a material way, but that is not the case here. Respondent does not argue that Appellant repeatedly refused to follow the Layton Postmaster’s instructions and we note that Appellant routinely rang the buzzer to be let into the post office from September, 2008 until May, 2009 (Finding 8). Respondent does not identify any other instructions that Appellant did not follow, and as previously described, Appellant failed to follow the postmaster’s instructions on a single occasion without illicit motive and without significant consequence. We believe under the circumstances presented, that Respondent was required to take further steps to communicate its view regarding the May 4 failure to follow instructions prior to terminating the contract for similar conduct on May 7. Because Respondent failed to do so before terminating, and therefore did not provide Appellant with an opportunity to correct that behavior, the default was not warranted under the circumstances. See O. Gary Bollschweiler and Anna Marie Bollschweiler, supra; Arthur Napier, PSBCA Nos. 3044, 3140, 94-2 BCA ¶ 26,695.[5]
In his opposition to Respondent’s motion for summary judgment, Appellant argued that the termination of his contract for default was a pretext and represented a bad faith action by the contracting officer to rid Respondent of the contract without having to pay the required liquidated damages that would be due if the contract were terminated for convenience. Because we sustain the appeal, and overturn the default termination, we need not rule on this defense, regardless of whether we possess jurisdiction to do so. See M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1330-32 (Fed. Cir. 2010). Further, Appellant has not presented his own claim, monetary or otherwise, to the contracting officer concerning bad faith (Finding 46). Accordingly, the issue is not affirmatively before us. See R & W Transportation, Inc., PSBCA No. 5413, 09-2 BCA ¶ 34,197.
CONCLUSION.
Although we certainly do not condone Appellant’s actions, Respondent easily could have avoided this result, and we view the default termination as unjustified. The termination for default is converted to a termination for convenience. The parties shall calculate the amount of liquidated damages payable to Appellant under the termination for convenience clause.
The appeal is sustained.
Gary E. Shapiro
Administrative Judge
Board Member
I concur:
William A. Campbell
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1] This Opinion considers the arguments presented in Respondent’s motion for summary judgment and Appellant’s opposition thereto.
[2] We acknowledge Respondent’s argument that regardless of whether pocketknives may have been used in the Layton Post Office for official purposes, the termination decision was based on Appellant’s use of the pocketknife for an unofficial purpose – bypassing the lock. However, because we find that, under the present circumstances, the pocketknife was not a dangerous or deadly weapon within the meaning of the regulation and contract, we need not decide whether it fell within the regulatory exception of “except for official purposes.”
[3] See Pascal Redfern, PSBCA No. 1512, 87-1 BCA ¶ 19,646, recon. denied, 87-3 BCA ¶ 19,983 (unauthorized entry after working hours to postal property coupled with a fistfight with a postal employee which Appellant could have avoided are sufficient to constitute a violation of this regulation justifying termination).
[4] A minimal excerpt from this handbook, Handbook P-5, Highway Contract Routes, Box Delivery Services, October 2004, was provided by Respondent and introduced into the record (Respondent’s Exhibit 4).
[5] Respondent relies heavily on Napier for the principle that failure to follow direct instructions from a postmaster justifies a default termination. However, in Napier, unlike here, Appellant was made “well aware of his precarious status,” was “given ample direction as to what was expected of him,” was provided “many opportunities to correct his offending conduct,” and was given an “unequivocal warning that termination action would be taken” if his conduct did not change. Napier, 94-2 BCA at 132,778. We do not believe that Napier supports Respondent’s argument.