What’s more likely to sustain the default termination of your government contract—poor performance on your current contract or omitting a fact about your prior employment? According to a recent decision by the Postal Service Board of Contract Appeals, the latter is enough. A contractor’s omission of key prior employment history was, by itself, a sufficient basis to terminate the contract for default.
The case, Roger W. Holcombe, PSBCA No. 5365 (Apr. 1, 2011), found its way to the PSBCA after Holcombe’s contract was terminated for default. The $36,000 contract was for the delivery of mail to 330 mail boxes along a roundtrip distance of 89 miles between Wellington and Lazy S Ranch, Nevada.
Five months after beginning performance, Holcombe received performance deficiency notices (5500s) for three instances of failing to deliver mail properly and three instances of improperly placing non-bulk mail in the bin reserved for undeliverable bulk mail. Over the following three months, he received 14 additional 5500s for similar infractions.
Believing that the 5500s were not justified, Holcombe confronted the agency administrative official in a loud voice. When she confirmed that his performance had indeed been deficient, he threw a deficiency notice at her. The next day, Holcombe was advised that he was no longer permitted access to the post office because of his conduct. Holcombe’s wife performed the contract instead, and Holcombe was later allowed to perform the delivery portion of the work.
Holcombe continued to receive 5500s for deficient performance and his contract was eventually terminated for default. According to the contracting officer’s final decision, the termination was based on the contractor’s “poor performance, failure to follow instructions, and belligerent attitude while on postal premises.”
Holcombe appealed the default termination to the Postal Service Board of Contract Appeals. During the discovery process, the agency learned that Holcombe had failed to disclose his full employment history on a pre-award information form. Holcombe had omitted his previous employment with the Nevada Department of Corrections and the fact that he had been discharged from that position because he had “participated in a conspiracy to commit forgery, forgery, uttering a forged document, forging the signature of a public officer, and stealing, altering or defacing records, documents, or instruments.” The agency then identified Holcombe’s omission as an additional ground for the default termination.
The Board upheld the default termination based solely on Holcombe’s failure to disclose his prior employment. Given the serious nature of the discharge, the Board concluded that Holcombe’s omission must have been intentional. The fact that it was not discovered until after the contracting officer’s final decision terminating the contract on other grounds did not prevent the agency from asserting it as a basis for sustaining the termination.
Of course agencies may not always rely on newly-discovered facts to justify a termination for default. A performance deficiency that could have been cured with a timely notification cannot be raised as a post hoc rationalization for a defualt termination.