PSBCA No. 6906

OPINION OF THE BOARD

Maxway, Inc. appeals the United States Postal Service’s decision upholding the prior offset of $100,975.06 from contract payments for 21 mail transportation contracts. The deductions from the contracts were for 709 alleged omitted trips. Maxway elected to proceed under the Board’s Small Claims (Expedited) procedures.¹ 39 C.F.R. § 955.13(a). A hearing was held on February 8 and 9, 2023. As explained below, the Postal Service failed to carry its burden that the trips had not been performed. The appeal is granted.

SUMMARY FINDINGS OF FACT

The 21 contracts at issue are Highway Contract Route (HCR) Nos. 85210, 85235, 852F4, and 852M0, which were administered at the Phoenix, Arizona Processing and Distribution Center (P&DC), and HCR Nos. 841DD, 841L3, 846AJ, 846BJ, 84116, 84120, 84122, 84123, 84125, 84126, 84131, 84132, 84134, 84135, 84140, 84146, and 84190, which were administered at the Salt Lake City, Utah P&DC (Tr. 1 at 17-18, 177-78; AF 1, 4, 7, 10, 13, 16, 19, 22, 25, 28, 31, 34, 37, 40, 43, 46, 49, 52, 55, 58, 61, 82, 83). Jeanne Pearcy and Timothy Stephan were the Postal Service administrative officials for the contracts administered at the Phoenix P&DC and the Salt Lake City P&DC, respectively (Tr. 1 at 17-18, 177-78).
Section B.3(a) of each contract’s Statement of Work (SOW) required Maxway to transport mail “in accordance with the operating schedule and between the points fixed in the schedule.” The schedules in the SOW show the outbound and inbound trips. (Tr. 1 at 19-20; AF 1, 4, 7, 10, 13, 16, 19, 22, 25, 28, 31, 34, 37, 40, 43, 46, 49, 52, 55, 58, 61, 70-81). Before Maxway’s trucks left the P&DC loading dock on outbound trips and when they returned on inbound trips, a Postal Service expediter was supposed to scan the truck’s barcode, and the scan would be recorded in the Postal Service’s Surface Visibility system (Tr. 1 at 25-28).
The 709 alleged omitted trips at issue were supposed to be performed from August 1, 2021 to January 31, 2022. Each of these trips did not have a departure or arrival scan, which resulted in the issuance of electronic PS Form 5500s alleging omitted service. (Tr. 1 at 32-33, 62-63, 185; AF 2, 5, 8, 11, 14, 17, 20, 23, 26, 29, 32, 35, 38, 41, 44, 47, 50, 53, 56, 59, 62, 68, 69, 82, 83).
Generally, after allowing Maxway to respond to the PS Form 5500s, Ms. Pearcy and Mr. Stephan investigated the PS Form 5500s before determining if those trips were chargeable, i.e., subject to a deduction for non-performance, to Maxway (Tr. 1 at 32-33, 37, 184-87). Ms. Pearcy called Maxway or the West Valley facility in Phoenix for potential explanations for the missing scans and checked to see if there were emails or telephone calls reporting a missing trip (Tr. 1 at 32-33, 37). Mr. Stephan talked to expediters and checked sign-in sheets at downstream facilities (Tr. 1 at 184-87). Despite those efforts, the Postal Service did not produce any evidence tying them to a specific trip.
Ms. Pearcy and Mr. Stephan found the PS Form 5500s at issue chargeable against Maxway (AF 2, 5, 8, 11, 14, 17, 20, 23, 26, 29, 32, 35, 38, 41, 44, 47, 50, 53, 56, 59, 62, 68, 69, 82, 83). Between January 1, 2022 and March 24, 2022, the Postal Service therefore issued PS Form 7440s deducting a total of $100,975.06 from the 21 contracts at issue (AF 3, 6, 9, 12, 15, 18, 21, 24, 27, 30, 33, 36, 39, 42, 45, 48, 51, 54, 57, 60, 63). The deductions were offset from subsequent monthly contract payments (AF 64, 67).
Following the offsets, Maxway submitted a claim to the contracting officer on August 19, 2022, demanding the return of the withheld payments (AF 64). On September 29, 2022, the contracting officer issued her final decision upholding the $100,975.06 offset (AF 67). Maxway filed a notice of appeal with the Board, and the appeal was docketed as PSBCA No. 6906.

DECISION

This is a Postal Service monetary claim, and the Postal Service has the burden of proof on whether Maxway failed to provide the required service. Patrick M. Murray v. United States Postal Service, PSBCA No. 6635, 18-1 B.C.A. ¶ 37,058; JM Carranza Trucking Co. v. United States Postal Service, PSBCA No. 6354, 14-1 B.C.A. ¶ 35,776. Here, the Postal Service has not met that burden.
To attempt to meet that burden, the Postal Service presented testimony generally describing what the administrative officials did to confirm whether a trip had been performed when there was a missing scan. For starters, Ms. Pearcy and Mr. Stephan investigated Maxway’s responses to the PS Form 5500s (if any).
In addition, Ms. Pearcy may also have checked with Maxway and other Postal Service facilities for potential explanations for the missing scans and checked to see if there were emails or telephone calls reporting a missing trip. Mr. Stephan may have checked with expediters and checked sign-in sheets at the downstream facilities. (Tr. 1 at 32-33, 37, 184-87). These actions, however, were not tied to any particular missing trip. There was no testimony, notes, logs, checklists, or line-item summaries showing what was specifically checked by Ms. Pearcy or Mr. Stephan to validate the missed scan for each alleged omitted trip. ² Rather, the testimony consisted of sweeping, general assertions. A missed scan without the evidence of what was specifically checked to validate that the trip was not performed fails to meet the burden of proof.

CONCLUSION AND ORDER

Maxway’s appeal is granted. The Postal Service must repay the $100,975.06 that it offset from payments owed under the 21 HCR contracts, and it must pay Contract Disputes Act interest starting from the date the contracting officer received Maxway’s claim until the date of payment.