Claim asserting bad faith in contract negotiations is denied. The contractor, who was a mail carrier, claimed that the Postal Service discriminated against him based on his age when negotiating a contract renewal. The PSBCA disagreed, finding that the Postal Service did not mistreat the contractor. Importantly, the PSBCA found that the agency did not engage in age discrimination when it reduced the contractor’s rate in the renewed contract. The rate reduction was simply due to a decrease in the volume of work.
Patrick Murray had a contract to deliver mail with the Postal Service. When that contract came up for renewal, the Postal Service reduced Murray’s annual rate by $5,700. The Postal Service claimed that it reduced the rate because Murray was working fewer hours per day. Murray accepted the contract, but he then filed a claim, alleging that the Postal Service had acted in bad faith while negotiating the renewal by discriminating against him based on age. The Postal Service denied the claim, and Murray appealed to Postal Service Board of Contract Appeals.
The board noted at the outset that age discrimination could amount to bad faith and thus support contract reformation. The question was whether Murray could show by clear and convincing evidence that the Postal Service acted with malice or specific intent to harm.
Murray first alleged that the Postal Service acted in bad faith because it mistreated him during renewal negotiations. He claimed that the contracting specialist spoke gruffly to him and used the phrase “take it or leave it,” which showed disrespect due to his age. The board agreed that the negotiations my have been gruff and curt, but it also found that they were reasonable under the circumstances and did not evince an intent to harm Murray because of his age. The Postal Service was hard bargaining due to a reduced a mail volume and time needed to compete Murray’s route. The agency was merely trying to get the best possible deal under the circumstances.
Murray also complained that he was mistreated because the contracting officer never responded to his request for a telephone conference during negotiations. But at the time, the contracting officer was covering ten different states in an understaffed office; he was busy. The record did not show that the contracting officer refused to speak with Murray because of his age.
Murray further alleged that the Post Service acted in bad faith by failing to review his contract file carefully. The board found no evidence to support this allegation, and, in any event, the failure to review a contract file did not establish specific intent to harm Murray because of his age.
Murray argued that the Post Service provided him false and fabricated information in a route survey used to justify the rate reduction. The board found that Murray had not presented any evidence to support this assertion.
Murray then argued that an email in the record from the Postal Service’s contracting specialist indicated mistreatment. In that email, the contracting specialist told the contracting officer that Murray thought his rate reduction was unfair and that “He has a point!” The board did not find this persuasive. While that may have been the contracting specialist’s opinion, it did not demonstrate bad faith.
Aside from mistreatment, Murray also alleged that the Postal Service acted in bad faith by failing to consider his excellent past performance. But the board reasoned that the issue here did not really implicate Murray’s past performance. Murray did not allege that the Postal Service was legally required to consider past performance. Absent such a requirement, the failure to consider past performance was not bad faith.
Finally, Murray asserted that the Postal Service engaged in age discrimination because younger mail carriers in Murray’s region had their rates reduced less than Murry’s. But the board found the differences in rate reductions was not based on age.
For instance, one contractor had her contract cut by 323 hours yet her annual rate remained the same. The board noted that even with the reduced hours, her rate was competitive with mail carriers handling similar miles and mailboxes. When the Postal Service ran the same survey of Murry’s route, however, it found that his rate was too high.
Murray also pointed to another contract with a father and son team of mail carriers. The father was over 80 years old. The rate for that the father and son contract had been cut by $6,000, which was similar to the reduction in Murray’s contract. Murray argued that the reduction in a contract with an 80 year old carrier indicated that the Postal Service was discriminating based on age. But the 80 year old father had retired by the time the contract was renewed, so the Postal Service only renewed the contract with the son. Thus, the Postal Service actually cut the rate of someone much younger than Murray, which undermined his age discrimination theory.
Patrick Murry appeared on his own behalf. The Postal Service is represented by Peter J. McNulty of the Postal Service Law Department.
