In July 2021, the United States Postal Service awarded Big Will Trucking, LLC a four-year contract to transport mail between designated Postal Service facilities. The contract required delivery from the North Houston Central Postal and Distribution Center and carried an annual rate of approximately $2,002,664.55 by August 2023.
The agreement included two termination provisions: a Termination with Notice clause and a Termination for Default clause. The Termination with Notice provision allowed either party to terminate the contract on 60 days’ written notice if the annual rate was below $2,500,000. The contract also made the supplier strictly liable for actual damages if mail was lost or stolen and permitted deductions from payments otherwise due.
In October 2022, the Postal Service notified Big Will Trucking of suspected discrepancies involving missing or stolen registered mail. Big Will Trucking prepaid $5,847.00 based on its estimate while disputing wrongdoing. In February 2023, Contracting Officer Raphette Alston requested adequate assurances of future performance and repayment of $21,537.70 for additional alleged losses. The Postal Service later deducted that amount from monthly payments.
Big Will Trucking disputed the accusations and the deduction in correspondence to the Postal Service. The record reflected further communications but no reversal of the penalty.
On August 18, 2023, Raphette Alston issued written notice terminating the contract pursuant to the Termination with Notice clause. The notice stated termination would be effective October 21, 2023. The Postal Service formally terminated the contract sixty-four days after issuing written notice.
Henderson Grover, owner of Big Will Trucking, requested an explanation for the termination. The Postal Service later invited Big Will Trucking to bid on a replacement contract. The replacement contract was ultimately awarded to Thunder Ridge Trans, Inc.
In September 2024, Big Will Trucking submitted a certified request seeking $3.16 million in compensation for early termination. The request asserted the termination was without cause and sought damages. The Contracting Officer denied the claim in November 2024, explaining the termination complied with the contract’s express notice provision and that the compensation request lacked supporting substantiation.
Big Will Trucking filed suit in the United States Court of Federal Claims, alleging wrongful termination, breach of the duty of good faith and fair dealing, improper imposition of penalties, and improprieties in the award of the replacement contract.
The Court first addressed jurisdiction under the Contract Disputes Act. It determined that the wrongful termination claim had been adequately presented to the Contracting Officer and therefore fell within its jurisdiction. However, the Court found that allegations concerning breach of the duty of good faith and fair dealing had not been properly presented in a certified claim and dismissed those allegations for lack of jurisdiction.
Turning to the merits of the termination claim, the Court interpreted the Termination with Notice clause according to its plain language. The clause permitted termination on 60 days’ written notice without cost to either party. The record showed that written notice was issued on August 18, 2023 and that termination became effective more than 60 days later.
The Court explained that, absent specific factual allegations demonstrating bad faith or abuse of discretion, exercising a contractual termination right does not constitute breach. The allegations did not establish bad faith. As a result, the wrongful termination claim failed to state a claim upon which relief could be granted.
The Court also rejected any bid protest theory. The pleadings did not properly articulate a procurement protest under the Court’s rules and did not provide sufficient factual detail regarding the evaluation or award process. Any such claim was dismissed.
The Court deferred ruling on claims related to the monetary penalties and ordered supplemental briefing addressing whether those issues had been properly presented to the Contracting Officer under the Contract Disputes Act.
The Court granted the motion to dismiss in part, dismissed the good faith and bid protest claims, dismissed the wrongful termination claim for failure to state a claim, and deferred ruling on the penalty-related issues pending supplemental briefing.
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