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Default Termination Overturned: Pocketknife Not a Dangerous Weapon, National Star Route Mail Contractors Association Newsletter

November 01, 2010

The Postal Service Board of Contract Appeals (PSBCA) has overturned the default termination of an HCR contractor who used his pocketknife to pick open a locked post office door. In a recently issued decision, Wayne L. Orr, PSBCA No. 6268, September 30, 2010, the PSBCA found that the contractor's pocketknife, similar to those used openly by other contractors and postal employees to cut mail straps, was not a "dangerous weapon."

Wayne Orr had been operating the same HCR contract in rural New Jersey for nine years, with an annual rate of approximately $44,000. Among other scheduled runs, the contract required that he arrive at the Layton Post Office at 4:45 pm to collect mail and take it to another post office. Previously, he had been given a key so he could enter the post office. But when the post office moved to another location he was told to ring the buzzer and he would be let in. Orr followed this new procedure for about eight months, until the events arose which gave rise to the termination.

The first incident

In February 2009, a security review by the Inspection Service concluded that the lock on the employee side entrance door was not secure and needed adjustment. While the USPS Facilities department was assigned this task, it was not accomplished. Several months later, in May 2009, Orr used his pocketknife to open the door and gain access for his scheduled 4:45 delivery. The postmaster relief (PMR) heard the scraping noises and asked Orr what he was doing. Orr said he thought he could bypass the lock, which he believed provided inadequate security, and he told the PMR that the lock should be fixed.

The PMR was upset by this incident, but did not say anything to Orr about it. Instead, he let Orr into the building, gave Orr the mail that was to be delivered to the next post office, and both parties went about their normal business. After Orr left the building, the PMR called the Postmaster, who reported the incident to the Postal Service Inspection Service. The postal inspector told the Postmaster not to speak to Orr about the incident.

Author's note: This advice from the postal inspector to the Postmaster was pretty typical advice: don't tell the subject of a criminal investigation that we are investigating him. But in this case, and in every other case where the activity involved turns out not to be a crime, it is bad advice. As will be seen here, it resulted in the Postal Service losing the case at the Board.

The second incident

Three days later, at the same time of day, the PMR became aware that Orr had let himself into the post office past the locked, but not dead-bolted, employee entrance door by using his pocketknife. Once again, Orr told the PMR that the lock was not secure and he easily by-passed it with his pocketknife in just a few seconds. While the PMR later told investigators that he was upset and angered by the incident, the PMR neither voiced an objection to Orr about his actions nor showed that he was upset by it.

Immediately after this second incident, the PMR sent an email to a Postal Service Office of Inspector General (OIG) agent who had been investigating the first incident. The email described the first incident and the PMR said he was "rather uncomfortable" being around Orr. The email did not mention the second incident, which had occurred moments before. The PMR also called the Postmaster, who reported the second incident to the Inspection Service.

The investigations

The next day, the USPS OIG agent contacted a New Jersey State Trooper for assistance, and they interviewed Orr and the PMR outside the post office. Orr and the PMR provided handwritten statements. According to the Trooper, he was initially informed by the OIG investigating agent that Orr had picked the locked and "subsequently had threatened the PMR with that knife." But the Trooper's report noted that both Orr and the PMR denied that any threat had occurred. The report also stated that the PMR did not feel threatened by Orr. The report said that Orr had picked the lock to demonstrate its inadequacy. The report concluded that the investigation was considered cleared and closed.

Notwithstanding the Trooper's Report, the contracting officer suspended Orr's right to perform based on upon the pending Inspection Service investigation. While waiting for that report, the Postmaster urged the contracting officer to permanently remove Orr. Despite having been informed by the New Jersey State Police that the PMR did not feel threatened by Orr's activities, the Postmaster's email to the contracting officer incorrectly described Orr's conduct as "harassing," "deliberately intimidating," and "terrorizing" the PMR. The Postmaster also filed a separate criminal complaint against Orr for criminal trespass (which she later withdrew).

The Inspection Service's report summarized the incidents involving Orr's picking the lock and the statements given to the Trooper. The Inspection Service report, however, left out the findings by the Trooper that the PMR denied any threat had occurred and that the Trooper considered the investigation cleared and closed. The report did not include any recommendations for appropriate action by the contracting officer. Soon after receiving the report, the contracting officer terminated Orr's contract for default.

PSBCA decision

Orr appealed the action to the PSBCA, which held a hearing on the matter. At the hearing, the Postal Service contended the default termination was justified on various grounds, each of which the Board ultimately rejected.

Dangerous or deadly weapons

First, and foremost, the Postal Service contended that Orr violated the contract's prohibition against carrying dangerous or deadly weapons on postal premises. Orr's contract provided that: "No person while on postal property … shall carry … deadly or dangerous weapons." In addition, postal regulations at 39 CFR § 232.1(l) provide that "no person while on postal property may carry … dangerous or deadly weapons … except for official purposes."

The Board found that neither the contract nor the regulations defined "dangerous or deadly weapons," so the Board consulted a different federal statute that did. And that statute specifically excluded from the definition a pocket knife with a blade less than 2 1/2 inches in length. Orr's pocketknife was only 2 inches in length, and thus specifically excluded from the definition of dangerous or deadly weapon. Moreover, the Board held that the context in which the matter is raised must be considered. And here, the Postal Service plainly did not consider pocketknives to be dangerous or deadly weapons as they were routinely used inside the post office with the knowledge of postal officials.

Trustworthy or of good character

The Postal Service next asserted that Orr violated section g of the Events of Default contract clause. This section established 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. While the Board did not condone Orr's activities, it found that this isolated conduct was not reflective of a lack of good character or trustworthiness. The Board noted that in previous cases it had overturned default terminations where a contractor had aggressive, profane, or rude outbursts that were not typical of its previous behavior. In addition, there was no finding of threatening behavior in this case.

Key to the Board's holding here was that the Postal Service had not reprimanded Orr for the first incident. Following the postal inspector's advice, the PMR and Postmaster did not mention to Orr its discontent over the first incident, tell him their view of the seriousness of the matter, or instruct him not to repeat it. The postal officials "easily could have avoided this result" if they had mentioned the incident to Orr.

Impede or disrupt a postal official

Next, the Postal Service sought to justify the termination on the grounds that it impeded or disturbed a postal official (the PMR) in the performance of his duties, which is an article of default in the Events of Default clause. The Board noted that not every contract violation justifies the drastic sanction of a default termination, particularly where there is no effect on contract performance. Orr's lock-picking incident caused no more than three minutes of delay in the PMR's activities and did not delay the delivery of the mail. Thus, it did not constitute a material violation of this clause sufficient to support the ultimate sanction of a default termination.

Failure to follow official instructions

Finally, the Postal Service argued that termination was justified on the basis that Orr had failed to follow the Postmaster's instruction to ring the buzzer to gain entry to the post office. In this regard, the Events of Default clause identifies failure to follow the instructions of the contracting officer as a ground for default. But here the contracting officer did not issue the instruction that was violated -- indeed, she did not even know it was an issue until after the events occurred.

The Board noted that default terminations have been upheld when a contractor failed to follow the instructions given by the contract's designed Administrative Official. Neither the Postmaster nor the PMR was the designated Administrative Official for Orr's contract. The Postal Service cited to Handbook P-5, "Highway Contract Routes, Box Delivery Services, October 2004" as authority for the proposition that Orr should have followed the directions on on-site postal management. The Board rejected this argument, finding that the Handbook was neither published as a binding regulation nor made part of Orr's contract.

The Board stated there may be circumstances under which a contractor's failure to follow significant and specific instructions from a non-authorized postal official could constitute conduct serious enough to breach a contract in a material way. But that was not case here. Orr failed to follow the Postmaster's instructions on a single occasion without illicit motive and without significant consequence. Orr had complied with the "ring the buzzer" instructions except for two occasions, and he had not violated any other instructions.


The Board therefore overturned the default termination and converted it to a convenience termination, entitling Orr to liquidated damages. Unmentioned in the decision, but perhaps an influencing factor, is that Orr is a 64 year old man with a limp, who is about one foot shorter than the PMR. Orr's lock-picking incident did not threaten the PMR, nor could it reasonably have done so. In addition, postal officials had an ulterior motive for terminating the contact -- before the incident occurred they believed the contract schedule could be shortened, resulting in a lower price if re-procured on that basis. The decision implies that this may have played a part in the decision to terminate the contract.

Even though Orr's claim succeeded, the Board did not have the power to restore him to the contract. So Orr's remedy in this action is limited to the contract indemnity. However, Orr may have other legal actions he could pursue that could prove more fruitful. At the criminal trespass hearing brought by the Postmaster, she apparently testified that she had accomplished her purpose of getting rid of the contractor. That kind of comment could establish bad faith, which would potentially entitle Orr to a greater recovery.

David P. Hendel
Husch Blackwell LLP
750 17th Street, NW, Suite 1000
Washington, D.C. 20006-4607
Direct Phone: 202.378.2356
Direct Fax: 202.378.2319


David P. Hendel