BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
VENTURE, LTD. ) Docket No. GPOBCA 01-96
Jacket No. 676-382 )
Purchase Order M-4152 )
For the Appellant: Venture, Ltd., Baltimore, Maryland, by Chris
Cabello, pro se.
For the Government: Kerry L. Miller, Esq., Associate General
Counsel, U.S. Government Printing Office.
Before FOSS, Administrative Judge.
DECISION AND ORDER
I. STATEMENT OF THE CASE
By letter dated December 28, 1995, Venture, Ltd. (Appellant or
Contractor),1 920 West Patapsco Avenue, Baltimore, Maryland
21230, filed a timely appeal of the final decision of Contracting
Officer Raymond Macdonald, dated September 27, 1995,2 of the U.S.
Government Printing Office's (Respondent or GPO or Government),
Denver Regional Printing and Procurement Offices, Denver Federal
Center, Building 53, Room D-1010, Denver, Colorado 80225-0347,
terminating the Appellant's contract, identified as Jacket No.
676-382, Purchase Order M-4152, for default, and assessing excess
reprocurement costs in the amount of $4,987.00 (R4 File, Tabs I
and M).3 See Board Rules, Rules 1(a) and 2. For the following
reasons, the Contracting Officer's final decision is hereby
AFFIRMED, and the appeal is DENIED.
II. BACKGROUND
1. This dispute involves a small purchase contract for 2,000
cover and tab divider sets for a publication entitled "JTAO
Handbook" which GPO procured for the Defense Printing Service
(DPS) (R4 File, Tab C). Under the contract, the sets were to be
delivered complete to the DPS by August 18, 1995. Id.
2. The contract incorporated by reference both GPO Contract
Terms, Solicitation Provisions, Supplemental Specifications, and
Contract Clauses, GPO Pub. 310.2, Effective December 1, 1987
(Rev. 9-88) (GPO Contract Terms), and GPO Contract Terms, Quality
Assurance Through Attributes Program for Printing and Binding,
GPO Pub. 310.1, Effective May 1979 (Revised November 1989)
(QATAP) (R4 File, Tab C). Insofar as QATAP applied, the cover
and tab divider sets were a Quality Level 2 job. Id.
3. On August 11, 1995, after completing its small purchase
procedures,4 the Respondent issued Purchase Order M-4152,
awarding the contract to the Appellant for $3,150.00 (R4 File,
Tab C).
4. On August 15, 1995, the Contractor telephoned GPO and said
that its Heidelberg press had broken down during the printing
process after only 500 sets had been run, and it could not be
fixed until August 22, 1995 (R4 File, Tab D). Based on this
telephone call, the Respondent extended the delivery date to
August 25, 1995. Id.
5. On August 24, 1995, GPO telephoned the Appellant to check on
its progress, and was told that the Contractor thought the new
delivery date was August 28, 1995 (R4 File, Tab D).
6. When the sets were not delivered by September 1, 1995, the
Contracting Officer sent the Appellant a "Show Cause Notice"
warning of a possible default unless the Appellant could show, in
writing, extenuating facts proving that it was not at fault (R4
File, Tab E). Again, the only reason given by the Appellant for
the delay was the problem with its press (R4 File, Tab H).
7. The Respondent took no further action, and the Appellant
eventually delivered the cover and tab divider sets. The DPS
inspected the sets, and discovered two major defects under QATAP;
i.e., trim size (F-1) and color match (P-9) on both the covers
and tabs (R4 File, Tab F). GPO's own evaluation of the sets
confirmed these findings, and the product was determined to be
rejectable (R4 File, Tab G).
8. On September 18, 1995, the Contracting Officer sought the
concurrence of GPO's central office Contract Review Board (CRB)
to terminate the contract for default (R4 File, Tab H).5 See GPO
Contract Terms, Contract Clauses, � 20 (Default). The CRB gave
its approval on September 21, 1995, and on September 27, 1995,
the Contracting Officer issued a "Notice of Termination
Complete," defaulting the contract because of a "failure to
deliver an acceptable quality product in a timely manner" (R4
File, Tabs H and I).
9. Thereafter, on September 29, 1995, following the same small
purchase procedures used to make the original award, the
Respondent issued Purchase Order M-4432, reprocuring the contract
from Seagull for $7,900.00 (R4 File, Tabs J, K, and L). On
October 2, 1995, the Contracting Officer notified the Office of
the Comptroller of the reprocurement, and asked that $4,987.00 in
excess costs be recovered from the Appellant (R4 File, Tab M).
The record shows that Seagull completed the work, and was paid
$7,742.00 ($7,900.00 minus the 2% prompt payment discount) by
Check No. 30,750,454 on November 1, 1995. See Jones Declaration,
� 3. Furthermore, excess reprocurement costs of $4,987.00
($4,750.00 plus a 3% or $237.00 rush surcharge on $7,900.00) were
assessed against the Contractor. Id.
10. The Contractor timely appealed the Contracting Officer's
final decision on December 28, 1995 (R4 File, Tab N).
III. ISSUES PRESENTED
1. Could the Respondent properly hold the Appellant responsible
for producing Quality Level 2 work under QATAP since it was known
that the Appellant was only a Quality Level 4 contractor?
2. Did the Contracting Officer properly default the Appellant
for failure to deliver an acceptable quality product in a timely
manner? Stated otherwise, is the Appellant's reason for not
meeting the delivery schedule, namely that its press broke down
and took time to fix, such an excuse as would forgive its failure
to perform?
3. Assuming that the default termination was not erroneous, is
the Respondent also entitled to reimbursement of excess
reprocurement costs from the Appellant in the amount of
$4,987.00?
IV. SUMMARY POSITIONS OF THE PARTIES6
A. Appellant
The Appellant does not dispute the Respondent's finding that the
product it delivered had quality defects. See SRPTC, at 4. Nor
does the Contractor deny that it delivered the job late. Id.
Nonetheless, the Appellant claims that it was without fault for
two reasons. First, the Heidelberg press which was used to
produce the cover and tab dividers developed a problem with the
ink ductor system after about 500 sets had been run. See SRPTC,
at 4-5. Since the manufacturer's service personnel told it that
to fix the press would take five to seven workdays, the
Contractor asked GPO to take the job back because it was apparent
that the sets could not be delivered within the tight schedule
established by the agreement. See SRPTC, at 5. However, the
Respondent insisted that the Appellant finish the contract, which
it eventually did. Id. Second, the Contractor alleges that GPO
made a mistake in its award because the covers and tab sets were
a Quality Level 2 job and it only had a Quality Level 4 rating.
Id. Indeed, the Appellant's charge that the Respondent "forced a
level two job down a level four contractor's throat," amounts to
an allegation of bad faith. Id. The Contractor also objects to
GPO's assessment of excess reprocurement costs on the ground that
the repurchase price, which was 135% more than the original
contract price, is unreasonable. Id. Finally, the Appellant
alleges that since the 2,000 sets it delivered were not returned
despite the fact that it twice asked for them back, and thus most
likely the sets have been used by the DPS, it is entitled to be
paid for the original contract. Id. Accordingly, the Appellant
requests that the default action be set aside, and that it be
excused from any liability for excess reprocurement costs. Id.
The Contractor also asks compensation for the cost of producing
the job. Id.
B. Respondent
The Respondent believes that the default was justified in this
case. See SRPTC, at 5. GPO notes that the Appellant admits that
its delivery of the cover and tab sets was untimely (over two
weeks late), and that the product failed to measure up to QATAP
standards for trim size and color match. See Res. Brf., at 3;
SRPTC, at 3. Indeed, the Respondent says that the Contractor
delivered late despite the fact that it had already been given
one extension for its press problems. Id. GPO believes that
neither of the excuses offered by the Appellant-equipment
breakdown and misaward-have merit. First, the Government states
that it is well-settled that the breakdown of machinery is not an
acceptable excuse under the "Default" clause. See Res. Brf., at
5 (citing Fulton Shipyard, IBCA No. 735-10-68, 71-1 BCA � 8,616;
Rex Systems Corp., ASBCA No. 11327, 66-1 BCA � 5,597; Gillespie,
Inc., IBCA No. 415, 65-1 BCA � 4,756; Meyer Machine, Inc., IBCA
No. 593-10-66, 68-1 BCA � 6,770. SRPTC, at 3. Similarly, a
contractor is not entitled to additional time to cover a period
of delay caused by repair of equipment due to the unavailability
of repair parts, see Res. Brf., at 5-6 (citing Netz Glove &
Mitten Co., ASBCA No. 23275, 82-1 BCA � 15,664; Volco Brass &
Copper Co., P.O.D. BCA No. 161, 67-1 BCA � 6,290; Universal Steel
Strapping Co., ASBCA No. 10673, 65-2 BCA � 5,066; Aero Space Co.,
ASBCA Nos. 19047, 19048, 75-1 BCA � 11,040; Schultz Construction
Co., AGBCA No. 455, 79-2 BCA � 13,890), even if the breakdown
occurs at a subcontractor's plant, see Res. Brf., at 6 (citing
Utopia Precision Machine Service, ASBCA No. 11177, 67-1 BCA �
6,100).
As for the quality defects in the delivered sets, the Respondent
states that they showed that the Contractor was not capable of
meeting the QATAP requirements of the contract. See SRPTC, at
5-6. In that regard, GPO rejects the Contractor's contention
that by awarding a Quality Level 4 contractor a Quality Level 2
job, the Government has lost its right to complain. See Res.
Brf., at 6. The Respondent argues that the very nature of the
Appellant's allegation amounts to an attack on the Contracting
Officer's responsibility determination, over which the Board has
no jurisdiction. See Res. Brf., at 7-9 (citing Rose Printing,
Inc., GPO BCA 32-95 (December 16, 1996), 1996 GPOBCA LEXIS 34;
Big Red Enterprises, supra; PPR, Chap. I, Sec. 5, �� 1-5; GPO
Contract Terms, Contract Clauses, � 5(a) (Disputes); Board Rules,
Preface to Rules, � I (Jurisdiction)) . Likewise, GPO asserts
that the record lacks the requisite "well-nigh irrefragable
proof" to prove the Government acted in bad faith in this case.
See Res. Brf., at 9-10 (citing Big Red Enterprises, supra; MPE
Business Forms, Inc., GPO BCA 10-95 (August 16, 1996), 1996
GPOBCA LEXIS 31; New South Press & Assoc., Inc., GPO BCA 14-92
(January 31, 1996), 1996 WL 112555; Asa L. Shipman's Sons, Ltd.,
GPO BCA 06-95 (August 29, 1995), 1995 WL 818784, reconsid.
denied, 1996 WL_____ (February 13, 1996); accord Brill Brothers,
Inc., ASBCA No. 42573, 94-1 BCA � 26,352; Karpak Data and Design,
IBCA No. 2944, 93-1 BCA � 25,360; Local Contractors, Inc., ASBCA
No. 37108, 92-1 BCA � 24,491). Thus, the Respondent says that
nothing in the record shows that the Contracting Officer
specifically set out
to harm the Appellant. See Res. Brf., at 10 (citing Big Red
Enterprises, supra; Asa L. Shipman's Sons, Ltd., supra;
Stephenson, Inc., GPO BCA 2-88 (December 20, 1991), 1991 WL
439274).
The Government relies on "black letter" law which holds that it
is entitled to strictly enforce compliance with its
specifications as the basis for its belief that the contract was
properly terminated in this case.7 See Res. Brf., at 10
(American Electric Contracting Corp. v. United States, 579 F.2d
602 (Ct. Cl. 1978); Red Circle Corp. v. United States, 185 Ct.
Cl. 1 (1968); Jefferson Construction Co. v. United States, 151
Ct. Cl. 75 (1960); Fry Communications, Inc., GPO BCA 1-87 (June
1, 1989), 1989 WL 384980; Copigraph, GPO BCA 20-86 (May 25,
1989), 1989 WL 385174; Vogard Printing, GPOCAB 7-84 (January 7,
1986), 1986 WL 181498;8 Dependable Printing Co., Inc., GPO BCA
5-84 (September 12, 1985), 1985 WL 154847). The Respondent says
that here in the quality deficiencies in the Appellant's product
are well-documented, and, in fact, unchallenged. See Res. Brf.,
at 11 (citing R4 File, Tab G). Furthermore, insofar as the
Contractor seems to raise the so-called "substantial compliance"
defense by alleging that it was not asked to reprint the cover
and tab divider sets prior to being defaulted, GPO asserts that
the so-called "substantial compliance" rule enunciated in
Radiation Technology does not apply because the sets were
untimely shipped, and the defects were not minor. See Res. Brf.,
at 11-12 (citing Radiation Technology, Inc. v. United States, 177
Ct. Cl. 227, 366 F.2d 1003 (1966)).9
Finally, the Government contends that it has satisfied the legal
requirements entitling it to excess reprocurement costs; i.e., it
repurchased the same work, the reprocurement was timely, it used
small purchase procedures for both the repurchase and the
original contract, the reprocurement price was reasonable despite
being 135% higher than the original cost, and Seagull completed
the work and has been paid. See Res. Brf., at 12-13 (citing
Univex International, supra; Asa L. Shipman's Sons, Ltd., supra;
K.C. Printing Co., GPO BCA 2-91 (February 22, 1995), 1995 WL
488531; Sterling Printing, Inc., GPO BCA 20-89 (March 28, 1994),
1994 WL 275104, reconsid. denied, 1994 WL 377592 (July 5, 1994);
R4 File, Tabs C, I, J, L; Jones Declaration); SRPTC, at 6.
Accordingly, the Respondent asks the Board to deny the appeal,
and affirm the Contracting Officer both as to the default and
excess reprocurement costs. See Res. Brf., at 14; SRPTC, at 6.
V. DECISION
In this case, it is undisputed that the Appellant failed to
perform the contract, and that there was adequate justification
for the Contracting Officer to terminate the contract for
default. The only question remaining, therefore, is has the
Contractor presented a legally sufficient excuse so that the
Board may hold it blameless for the default, and forgive its
liability for excess reprocurement costs? At the outset,
therefore, it is worthwhile to repeat the legal principles which
apply to these issues.
First, GPO's "Default" clause provides that a contracting
officer may, upon written notice of default to the
contractor, terminate a contract, in whole or in part, if
the contractor fails to: (1) deliver the supplies or perform
the required services within the time specified or any
extension which may have been granted; (2) make progress on
the work, so as to endanger performance of the contract; or
(3) perform any of the other provisions of the contract.
See GPO Contract Terms, Contract Clauses, � 20(a)(1)
(i),(ii),(iii).10 Furthermore, where a contract is
terminated for default and the work must be reprocured, the
contractor will be held responsible for excess procurement
costs and possible liquidated damages. See GPO Contract
Terms, Contract Clauses, �� 20(b), 22(d). However, the
contractor is excused from paying such reprocurement costs
or damages if the failure to perform or to deliver on time
results from causes beyond its control and without its fault
or negligence.11 See GPO Contract Terms, Contract Clauses,
�� 20(c), 22(e), 23. Such causes include, but are not
limited to, acts of God or of the public enemy, acts of the
Government in either its sovereign or contractual capacity,
fires, floods, epidemics, quarantine restrictions, strikes,
freight embargoes, and unusually severe weather-but in each
case, the failure to perform must be beyond the control and
without the fault or negligence of the contractor. See GPO
Contract Terms, Contract Clauses, � 20(c). See also Rose
Printing, Inc., supra, slip op. at 18; Gold Country Litho,
supra, slip op. at 14; A & E Copy Center, supra, slip op. at
15; Big Red Enterprises, supra, slip op. at 24; Asa L.
Shipman's Sons, Ltd., supra, slip op. at 16; Univex
International, supra, slip op. at 17; K.C. Printing Co.,
supra, slip op. at 9; Printing Unlimited, GPO BCA 21-90
(November 30, 1993), slip op. at 16, 1993 WL 516844; Chavis
and Chavis Printing, supra, slip. op. at 11. Where the
failure to perform is caused by the default of a supplier or
subcontractor, the cause of the default must be beyond the
control of both the contractor and subcontractor, and
without the fault or negligence of either, in order for the
contractor not to be liable for any excess costs for failure
to perform, unless the subcontracted supplies or services
could have been secured from other sources in sufficient
time to meet the required delivery schedule. See GPO
Contract Terms, Contract Clauses, � 20(d). See also Rose
Printing, Inc., supra, slip op. at 19; Gold Country Litho,
supra, slip op. at 14-15; A & E Copy Center, supra, slip op.
at 15; Big Red Enterprises, supra, slip op. at 24; Asa L.
Shipman's Sons, Ltd., supra, slip op. at 16; Univex
International, supra, slip op. at 17; K.C. Printing Co.,
supra, slip op. at 10; Chavis and Chavis Printing, supra,
slip op. at 11.
Second, a default termination is a drastic action which may only
be taken for good cause and on the basis of solid evidence.12
See Rose Printing, Inc., supra, slip op. at 19; Gold Country
Litho, supra, slip op. at 15; A & E Copy Center, supra, slip op.
at 16; Big Red Enterprises, supra, slip op. at 24; Asa L.
Shipman's Sons, Ltd., supra, slip op. at 16; Univex
International, supra, slip op. at 17; K.C. Printing Co., supra,
slip op. at 10; Shepard Printing, GPO BCA 23-92 (April 29, 1993),
slip op. at 10, 1993 WL 526848; R.C. Swanson Printing and
Typesetting Co., GPO BCA 31-90 (February 6, 1992), slip op. at
25, 1992 WL 487874, aff'd, Civil Action No. 92-128C (U.S. Claims
Court, October 2, 1992) (unpublished); Stephenson, Inc., supra,
slip op. at 20 (citing Mary Rogers Manley d/b/a Mary Rogers Real
Estate, HUDBCA No. 76-27, 78-2 BCA � 13,519; Decatur Realty
Sales, HUDBCA No. 75-26, 77-2 BCA � 12,567). Consequently, the
Government has the burden of proving the basis for the default,
while the contractor has the burden of showing that its failure
to perform was excusable. See Rose Printing, Inc., supra, slip
op. at 19; Gold Country Litho, supra, slip op. at 15; A & E Copy
Center, supra, slip op. at 16; Big Red Enterprises, supra, slip
op. at 25; Asa L. Shipman's Sons, Ltd., supra, slip op. at 16-17;
Univex International, supra, slip op. at 18; K.C. Printing Co.,
supra, slip op. at 10; Shepard Printing, supra, slip op. at 11;
R.C. Swanson Printing and Typesetting Co., supra, slip op. at 28;
Chavis and Chavis Printing, supra, slip op. at 11. Accord Lisbon
Contractors v. United States, 828 F.2d 759 (Fed. Cir. 1987));
Switlik Parachute Co. v. United States, 216 Ct. Cl. 362 (1978);
J.F. Whalen and Co., AGBCA Nos. 83-160-1, 83-281-1, 88-3 BCA �
21,066; B. M. Harrison Electrosonics, Inc., ASBCA No. 7684, 1963
BCA � 3,736. A failure by the Government to meet its burden of
proof converts the default into a termination for convenience,
and the contractor is allowed to recover for the work performed.
See GPO Contract Terms, Contract Clauses, � 20(g). See also Rose
Printing, Inc., supra, slip op. at 20; Gold Country Litho, supra,
slip op. at 16; A & E Copy Center, supra, slip op. at 16-17; Big
Red Enterprises, supra, slip op. at 25; Asa L. Shipman's Sons,
Ltd., supra, slip op. at 17; Univex International, supra, slip
op. at 18; K.C. Printing Co., supra, slip op. at 11; Graphics
Image, Inc., GPO BCA 13-92 (August 31, 1992), slip. op. at 24-28,
1992 WL 487875; Stephenson, Inc., supra, slip op. at 17-18;
Chavis and Chavis Printing, supra, slip op. at 9.
Third, where the default termination is based on untimely
performance, the contractor's burden of proof is four-fold: (1)
to prove affirmatively that the delay was caused by or arose out
of a situation which was beyond the contractor's control and that
it was not at fault or negligent; (2) to show that performance
would have been timely but for the occurrence of the event which
is claimed to excuse the delay; (3) to show that it took every
reasonable precaution to avoid foreseeable causes for delay and
to minimize their effect; and (4) to establish a precise period
of time that performance was delayed by the causes alleged. See
Rose Printing, Inc., supra, slip op. at 20; Gold Country Litho,
supra, slip op. at 16; Big Red Enterprises, supra, slip op. at
26; Asa L. Shipman's Sons, Ltd., supra, slip op. at 17; Univex
International, supra, slip op. at 18-19; K.C. Printing Co.,
supra, slip op. at 11; Chavis and Chavis Printing, supra, slip
op. at 12. This burden must be carried by substantial evidence-
unsupported reasons by way of explanation are not enough-and the
contractor must also show that the delay in contract performance
was due to unforeseeable causes beyond its control and without
any contributory negligence on its part. See Rose Printing,
Inc., supra, slip op. at 21; Gold Country Litho, supra, slip op.
at 16-17; Big Red Enterprises, supra, slip op. at 26; Asa L.
Shipman's Sons, Ltd., supra, slip op. at 18; Univex
International, supra, slip op. at 19; K.C. Printing Co., supra,
slip op. at 11; Chavis and Chavis Printing, supra, slip op. at
12-13.
Finally, a default termination is a discretionary act which can
be challenged on an abuse of discretion standard. See Rose
Printing, Inc., supra, slip op. at 21; Gold Country Litho,
supra, slip op. at 17; A & E Copy Center, supra, slip op. at 17;
Big Red Enterprises, supra, slip op. at 26; Asa L. Shipman's
Sons, Ltd., supra, slip op. at 18; Univex International, supra,
slip op. at 19; K.C. Printing Co., supra, slip op. at 12;
Graphics Image, Inc., supra, slip op. at 24-25; Shepard Printing,
supra, slip op. at 12. Accord Darwin Construction Co., Inc. v.
United States, 811 F.2d 593 (Fed. Cir. 1987); Quality Environment
Systems v. United States, 7 Cl. Ct. 428 (1985); Jamco
Constructors, Inc., VABCA Nos. 3271, 3516T, 94-1 BCA � 26,405,
reconsid. denied, 94-2 BCA � 26,792; Walsky Construction Co.,
ASBCA No. 41541, 94-1 BCA � 26.264, reconsid. denied, 94-2 BCA �
26,698. The burden is on the contractor to prove abuse of
discretion. See Rose Printing, Inc., supra, slip op. at 21; Gold
Country Litho, supra, slip op. at 17; A & E Copy Center, supra,
slip op. at 18; Big Red Enterprises, supra, slip op. at 26; Asa
L. Shipman's Sons, Ltd., supra, slip op. at 18; Univex
International, supra, slip op. at 19; K.C. Printing Co., supra,
slip op. at 12; Shepard Printing, supra, slip op. at 12. Accord
Kit Pack Co., Inc., ASBCA No. 33135, 89-3 BCA � 22,151; Lafayette
Coal Co., ASBCA No. 32174, 89-3 BCA � 21,963.
Applying these principles to this record, the Board reaches the
following conclusions:
A. The Board has no jurisdiction over the Appellant's challenge
to the Contracting Officer's "responsibility" determination that
a Quality Level 4 contractor was capable of producing Quality
Level 2 work. Moreover, the Contractor has not shown that the
Contracting Officer was acting in bad faith when he awarded the
contract.
Aside from its allegations concerning the actual merits of the
default action, the Appellant has raised two ancillary matters
which need to be addressed beforehand because they relate to the
Board's jurisdiction. The first is triggered by the Contractor's
contention that the Contracting Officer's "responsibility"
finding was erroneous, and therefore, his award of the contract
to it was improper. Specifically, from the very outset the
Appellant has maintained that the Contracting Officer knew, or
should have known, that it only had a Quality Level 4 rating, and
therefore, it should not have been awarded the contract, which
required Quality Level 2 work. In effect, the Contractor is
challenging the Contracting Officer's responsibility
determination in this case. However, the Board believes that it
has no jurisdiction to decide such pre-award determinations. Id.
See PPR, Chap. I, Sec. 5, �� 1-5; GPO Contract Terms, Contract
Clauses, � 5(a) (Disputes); Board Rules, Preface to Rules, � I
(Jurisdiction).
The Appellant's "responsibility" claim is not novel or unique.
The lead case is Big Red Enterprises, cited by the Respondent in
its brief, which is factually similar to this dispute. In Big
Red Enterprises, a "Quality Level 4" contractor bid on and was
awarded a "Quality Level 3" job, which it ultimately could not
produce, and was defaulted. On appeal from the termination
decision, it argued, inter alia, that as "Quality Level 4"
contractor, it could not be held liable for its inability to
produce "Quality Level 3" work. The Board found the contractor's
position "easily disposed of." See Big Red Enterprises, supra,
slip op. at 36. In rejecting the contractor's contentions, the
Board reasoned:
. . . [T]he Contractor is basically asking the Board to review
the Contracting Officer's responsibility determination. Stated
otherwise, the Appellant is in effect protesting its own award.
However, Federal Government contract appeals boards, as a rule,
have no jurisdiction over bid protests, but rather are limited to
hearing post-award and not pre-award disputes. [Footnote
omitted.] See Carolina Oil Distributing Co., Inc., ASBCA No.
48093, 95-2 BCA � 27,797; Dill's Star Route, Inc., PSBCA No.
3699, 95-2 BCA � 27,608; C & J Associates, VABCA No. 3924, 94-2
BCA � 26,628. This is especially true in this case because the
Board is not
a creature of statute, but rather derives all of its powers
from the "Disputes" clause of the contract itself, and thus its
jurisdiction is narrowly defined. See Graphicdata, Inc., [GPO
BCA 35-94 (June 14, 1996)], slip op. at 57; R.C. Swanson Printing
and Typesetting Co., GPO BCA 15-90 (March 6, 1992), slip op. at
26-27, 1992 WL 382924; The Wessel Co., Inc., GPO BCA 8-90
(February 28, 1992), slip op. at 32, 1992 WL 487877; Automated
Datatron, Inc., GPO BCA 20-87 (March 31, 1989), slip op. at 4-5,
1989 WL 384973; Bay Printing, Inc., GPO BCA 16-85 (January 30,
1987), slip op. at 9, 1987 WL 228967; Peak Printers, Inc., GPO
BCA 12-85 (November 12, 1986), slip op. at 6, 1986 WL 181453.
See generally, Matthew S. Foss, U.S. Government Printing Office
Board of Contract Appeals: The First Decade, 24 PUB. CONT. L. J.
579, 584-85 (1995) (hereinafter Foss, The First Decade).
Specifically, as the Board interprets GPO Instruction 110.10C,
Subject: Establishment of the Board of Contract Appeals, dated
September 17, 1984-its "enabling statute"-and the jurisdictional
provisions of its rules of practice and procedure, see Board
Rules, Preface to Rules, � I (Jurisdiction), it sees its
authority as purely derivative and contractual, and has
consistently confined the exercise of its remedial powers to the
contract before it. See GraphicData, Inc., supra, slip op. at
57; Shepard Printing, Inc., supra, slip op. at 9, fn. 8; R.D.
Printing Associates, Inc., GPO BCA 2-92 (December 16, 1992) slip
op. at 9, 13, fns. 9, 15, 1992 WL 516088; Peak Printers, Inc.,
supra, slip op. at 6. See also Automated Datatron, Inc.,supra,
slip op. at 4-5 ("The Public Printer has not under the provision
of paragraph 5 of GPO Instruction 110.10C delegated authority to
this Board to consider legal questions existing outside the
contract itself."). Accord Wehran Engineering Corp., GSBCA No.
6055-NAFC, 84-3 BCA � 17,614. See generally, Foss, The First
Decade, at 585-86. Furthermore, the Respondent's printing
regulations clearly state that protests of GPO contracts must be
taken to either the agency's Office of the General Counsel or
General Accounting Office-the Board has been assigned no role in
this process. See PPR, Chap. X, Sec. 2, �� 1.(b), 2-3.
. . . [T]o the extent that it can be said that the Appellant's
allegation may be "related to" the contract, much like a "mistake
in bid" claim, see e.g., Web Business Forms, Inc., GPO BCA 16-89
(September 30, 1994), slip op. 27,1994 WL 837423; Peak Printers,
Inc., supra, slip op. at 6; Great Lakes Lithograph Co., GPO BCA
18-84 (May 22, 1985), slip op. at 18, 1985 WL 154849, the well-
settled rule is that if a determination with respect to a
contractor's reliability and dependability is made in good faith
and is reasonable under the applicable law and regulations, it
should be upheld. See Wright Industries, Inc., ASBCA No. 18282,
78-2 BCA � 13,396, at 65,492 (citing Warren Brothers Roads Co. v.
United States, 173 Ct. Cl. 714, 720-21 (1965); Coastal Cargo Co.,
Inc. v. United States, 173 Ct. Cl. 259 (1965); Brown & Son
Electric Co. v. United States, 163 Ct. Cl. 465 (1963)). It has
also been held with respect to determinations of responsibility
and responsiveness that a contracting officer has authority, when
acting in good faith and in a manner reasonable under the
circumstances, to make a valid award to an otherwise unqualified
bidder. See Wright Industries, Inc., supra, 78-2 BCA at 65,492
(citing John Reiner & Company v. United States, 163 Ct. Cl. 381
(1963), cert. denied, 377 U.S. 931 (1964); 46 Comp. Gen. 275
(1966); 44 Comp. Gen. 221 (1964)). The Board has just found that
the record in this case contains no evidence of bad faith on the
part of the Respondent in its dealings with the Contractor. Nor
can it be said, under all of the circumstances in this appeal,
that the Contracting Officer was arbitrary or capricious in
deciding that the Appellant was qualified for award of the
contract. Accordingly, for these reasons, the Board agrees with
the Government that once the Contractor submitted its offer and
accepted the contract, which clearly showed that it was expected
to produce a Quality Level 3 product, it was obligated to perform
in accordance with the specifications, and it is no excuse for
the Appellant to now claim that it was only a Quality Level 4
contractor.
See Big Red Enterprises, supra, slip op. at 37-39. [Emphasis
added.] See also RIM Advertising, GPO BCA 38-94 (September 24,
1997), slip op. at 7, n. 8, 1997 WL_____; Rose Printing, Inc.,
supra, slip op. at 23-25. For the reasons stated in Big Red
Enterprises, the Board's limited
jurisdiction prevents it from reviewing the Contracting Officer's
determination that the Appellant was a responsible contractor in
this case.
Similarly, the Board also finds nothing in this record which
would support the conclusion that the Respondent acted in bad
faith in dealing with the Contractor, or that the Contracting
Officer arbitrarily or capriciously decided that the Appellant
was qualified for award of the contract. In that regard, the
Board has said on numerous occasions that an allegation of bad
faith must be established by "well-nigh irrefragable proof"
because there is a strong presumption that Government officials
properly and honestly carry out their functions.13 See Rose
Printing, Inc., supra, slip op. at 25; Big Red Enterprises,
supra, slip op. at 36-37; MPE Business Forms, Inc., supra, slip
op. at 27-28, fn. 34; New South Press & Assoc., Inc., supra, slip
op. at 36; Asa L. Shipman's Sons, Ltd., supra, slip op. at 12,
fn. 16; Professional Printing of Kansas, Inc., GPO BCA 2-93 (May
19, 1995), slip op. at 43, fn. 58, 1995 WL 488488; Universal
Printing Co., GPO BCA 09-90 (June 22, 1994), slip op. at 24, fn.
24, 1994 WL 377586; B. P. Printing and Office Supplies, GPO BCA
14-91 (August 10, 1992), slip op. at 16, 1992 WL 382917;
Stephenson, Inc., supra, slip op. at 54; The Standard Register
Co., GPO BCA 4-86 (October 28, 1987), slip op. at 12-13, 1987 WL
228972. Accord Brill Brothers, Inc., supra; Karpak Data and
Design, supra; Local Contractors, Inc., supra. As the Respondent
indicates, the key to such evidence is that there must be a
showing of specific intent on the part of the Government to
injure the Contractor. See Rose Printing, Inc., supra, slip op.
at 26; Big Red Enterprises, supra, slip op. at 37; MPE Business
Forms, Inc., supra, slip op. at 27-28, fn. 34; New South Press &
Assoc., Inc., supra, slip op. at 36, fn. 52; Stephenson, Inc.,
supra, slip op. at 54. Accord Claude R. Smith v. United States,
34 Fed. Cl. 313, 322 (1995); Kalvar Corp. v. United States, 211
Ct. Cl. 192, 199, 543 F.2d 1298, 1302 (1976), cert. denied, 434
U.S. 830, 98 S.Ct. 112, 54 L.Ed.2d. 89. See also Solar Turbines,
Inc. v. United States, 23 Cl. Ct. 142 (1991). In the Board's
view, no such "irrefragable proof" of the Respondent's bad faith
exists in this record. Certainly, there is absolutely no
evidence which would show that GPO by itself, or in concert with
the DPS, specifically set out to harm the Appellant. See Rose
Printing, Inc., supra, slip op. at 26; Big Red Enterprises,
supra, slip op. at 37; Asa L. Shipman's Sons, Ltd., supra, slip
op. at 12, fn 16; Stephenson, Inc., supra, slip op. at 57.
Accordingly, the Board finds no merit in the Contractor's
assertion that the Contracting Officer's decision to award it the
contract was erroneous, or made in bad faith.
B. The Contractor has not shown that its failure to perform arose
from causes beyond its control and without its fault or
negligence, or beyond the control and without the fault or
negligence of its press manufacturer. The Appellant's reason for
not meeting the delivery schedule, namely that its press broke
down and took time to fix, is not such an excuse as would forgive
its failure to perform. Therefore, the Contracting Officer's
decision to terminate the contract for default was not in error.
In this case, the basis for default-the Appellant's failure to
deliver an acceptable quality product in a timely manner-is not
in question. Instead, the Contractor advances as the reason for
excusing the default the ink ductor problem with the Heidelberg
press which was used to produce the cover and tab dividers. See
SRPTC, at 4-5. However, the Appellant has misinterpreted the law
in this regard.
It is "black letter" law that a contractor is responsible for
having the labor, plant, equipment, material and finances
adequate for contract performance prior to making a contract
commitment with the Government. See Gold Country Litho, supra,
slip op. at 22-23; K.C. Printing Co., supra, slip op. at 15; R.C.
Swanson Printing and Typesetting Co., supra, slip op. at 33;
Chavis and Chavis Printing, supra, slip op. at 13-14; Scanforms,
Inc., (GPOCAB, September 24, 1975), slip op. at 4, 1975 WL 22916
(citing Woodhull Construction Co., ASBCA No. 3628, 57-1 BCA �
1,260; First Dominion Corp., GSBCA No. 2659, 69-1 BCA � 7,488).
Indeed, as a general rule the unexplained breakdown of machinery
is not excusable per se; in fact, the difficulty attending the
performance of a contract is not an excusable cause of delay.
See R.C. Swanson Printing and Typesetting Co., supra, slip op. at
33; Chavis and Chavis Printing, supra, slip op. at 14. Accord
Fulton Shipyard, supra; Rex Systems Corp., supra; Meyer Machine,
Inc., supra. The reason for these rules is simple-implicit in a
contractor's promise to perform is its assurance that it has the
ability to perform. See Gold Country Litho, supra, slip op. at
23; K.C. Printing Co., supra, slip op. at 15; R.C. Swanson
Printing and Typesetting Co., supra, slip op. at 33; Chavis and
Chavis Printing, supra, slip op. at 14. That means that the
contractor must have the available machinery and replacement
parts so that performance will not be delayed because of an
equipment failure. See R.C. Swanson Printing and Typesetting
Co., supra, slip op. at 33; Chavis and Chavis Printing, supra,
slip op. at 14; Jomar Enterprises, Inc., supra, slip op. at 3.
Therefore, the mechanical break down of the Appellant's
Heidelberg press in this case is not an acceptable excuse which,
under the law, would allow the Appellant to escape the
consequences of its lack of performance under the contract. See
R.C. Swanson Printing and Typesetting Co., supra, slip op. at 35.
Similarly, although the Appellant blames Heidelberg's service
personnel for the delivery delay because they could not make the
repairs on the press any sooner, it has offered no evidence which
would show that the manufacturer's failure was due to its
negligence or reasons beyond its control. See R.C. Swanson
Printing and Typesetting Co., supra, slip op. at 35. Cf. Loose
Leaf Devices Co., (GPOCAB, June 30, 1977), slip op. at 7, 1977 WL
25619 (citing Williamsburg Drapery Co. v. United States, 177 Ct.
Cl. 776, 799, 369 F.2d 729 (1966)). In the Board's opinion, the
Appellant's reliance on the delay of Heidelberg's repair
personnel to excuse its own failure to perform under Purchase
Order M-4152, affords it no protection under the law. The
Appellant had an obligation under the contract to plan for its
performance, including, prior to submitting its bid and binding
itself to the delivery terms of the contract, assuring that
essential materials and machinery would be available, and in
proper condition. In the absence of any evidence from the
Appellant that the Heidelberg press broke down because of the
negligence on the part of the manufacturer, the Board must
conclude that the untimely delivery of the ordered sets under the
disputed contract was attributable to the Appellant's own failure
to properly plan for its performance. See R.C. Swanson Printing
and Typesetting Co., supra, slip op. at 35-36.
The Appellant has the burden of proof to demonstrate that its
failure to perform was due to causes beyond its control and
without its fault or negligence. However, in the Board's
opinion, the reasons offered by the Appellant to excuse its delay
were not unforeseeable and beyond its control and without its
fault or negligence. Accordingly, as to this aspect of its
defense, the Appellant has not met its burden of proof with
respect to excusing its failure to make timely shipments under
Purchase Order M-4152. See R.C. Swanson Printing and Typesetting
Co., supra, slip op. at 36. Therefore, the Contracting Officer's
termination of the contract for default was not in error.
C. Since the default termination was not erroneous, the
Respondent is entitled to reimbursement of excess reprocurement
costs from the Appellant. Moreover, the Government has proved
its claim in the amount of $4,987.00.
In K.C. Printing, Co., the Board summarized the legal principles
governing questions concerning excess reprocurement costs:
The assessment of excess reprocurement costs is considered a
Government claim. See Sterling Printing, Inc., supra, [slip op.]
at 50-51 (and cases cited therein). [Sterling Printing, Inc, GPO
BCA 20-89 (March 28, 1994),1994 WL 275104, reconsid. denied, July
5, 1994, 1994 WL 377592.] Consequently, the Government has the
burden of demonstrating the propriety of the repurchase and
proving its entitlement to the amount of excess costs it claims.
Id., [slip op.] at 51 (and cases cited therein). In doing so,
the Government must satisfy five criteria to establish an
entitlement to recovery against a defaulting contractor, namely,
it must show that: (a) the reprocurement contract was performed
under substantially the same terms and conditions as the original
contract; (b) it acted within a reasonable time following default
to repurchase the supplies; (c) it employed a reprocurement
method which would maximize competition under the circumstances;
(d) it obtained the lowest reasonable price; and (e) the work has
been completed and final payment made so that the excess costs
assessment is based upon liability for a sum certain. [Footnote
omitted.] Id., [slip op.] at 52-53 (and cases cited therein).
Furthermore, the Government claim must be supported by evidence
in the record as to each element of the claim. Id., [slip op.]
at 53 (and cases cited therein). Failure to satisfy even one
criterion may result in a reduction of the excess costs claimed.
Id., [slip op.] at 53-54 (and cases cited therein).
See K.C. Printing, Co., supra, slip op. at 18-19. [Original
emphasis.] Whether the Government's repurchase was improper, and
if so, what is the amount of reasonable excess costs under the
circumstances, are questions of fact. See Rose Printing, Inc.,
supra, slip op. at 43; Gold Country Litho, supra, slip op. at
26-27; A & E Copy Center, supra, slip op. at 27; Big Red
Enterprises, supra, slip op. at 41; Asa L. Shipman's Sons, Ltd.,
supra, slip op. at 28; Univex International, supra, slip op. at
33; K.C. Printing Co., supra, slip op. at 19, fn. 20; Sterling
Printing, Inc, supra, slip op. at 50 (citing Cable Systems and
Assembly Co., ASBCA No. 17844, 73-2 BCA � 10,172, at 47,892).
The Board finds that the Respondent has satisfied all of the
necessary elements in this case.
There is no question that GPO has met is evidentiary burden with
respect to the matter of "timeliness;" i.e., the repurchase
contract was awarded within two days of the default action. See
Rose Printing, supra, slip op. at 43; Gold Country Litho, supra,
slip op. at 29; Big Red Enterprises, supra, slip op. at 43;
Univex Supp., supra, slip op. at 6; Asa L. Shipman's Sons, Ltd.,
supra, slip op. at 29-30; K.C. Printing Co., supra, slip op. at
20; Sterling Printing, Inc., supra, slip op. at 63-65. Accord
Astro-Space Laboratories, Inc. v. United States, 200 Ct. Cl. 282,
470 F.2d 1003 (1972); Puroflow Corp., ASBCA No. 36058, 93-3 BCA �
26,191; John L. Hartsoe, AGBCA No. 88-116-1, 93-2 BCA � 25,614;
Sequal, Inc., ASBCA No. 30838, 88-1 BCA � 20,382; Disan Corp.,
ASBCA Nos. 21297, 22221, 79-1 BCA � 16,677. Nor is there any
doubt that the reprocurement is "finalized;" i.e., the work has
been completed and paid for (Jones Declaration, � 3). See Rose
Printing, Inc., supra, slip op. at 44; Gold Country Litho, supra,
slip op. at 35; Big Red Enterprises, supra, slip op. at 49-50;
Univex Supp., supra, slip op. at 13; Asa L. Shipman's Sons, Ltd.,
supra, slip op. at 37; K.C. Printing Co., supra, slip op. at 26.
Cf. Sterling Printing, Inc., supra, slip op. at 83. Furthermore,
the repurchase was for exactly the same product as the original
contract (R4 File, Tabs C and L). See Rose Printing, Inc.,
supra, slip op. at 45; Gold Country Litho, supra, slip op. at 28;
Big Red Enterprises, supra, slip op. at 42; Univex Supp., slip
op. at 5-6; Asa L. Shipman's Sons, Ltd., supra, slip op. at 29;
K.C. Printing Co., supra, slip op. at 19; Sterling Printing,
Inc., supra, slip op. at 62-63. Accord B & M Construction, Inc.,
AGBCA No. 90-165-1, 93-1 BCA � 25,431; Zan Machine Co., ASBCA No.
39462, 91-3 BCA � 24,085; Boston Pneumatics, Inc., ASBCA Nos.
26188, 26190, 26825, 26984, 27605, 27606, 87-1 BCA � 19,395.
Moreover, the Board believes that the Contracting Officer's
decision to follow the same small purchase procedures for
repurchasing the defaulted contract was reasonable under the
circumstances. See Rose Printing, Inc., supra, slip op. at 46;
Gold Country Litho, supra, slip op. at 33; Big Red Enterprises,
supra, slip op. at 43; Univex Supp., supra, slip op. at 6-7; Asa
L. Shipman's Sons, Ltd., supra, slip op. at 30; K.C. Printing
Co., supra, slip op. at 20-23. Cf. Sterling Printing, Inc.,
supra, slip op. at 73.
The only open question relates to the matter of a "reasonable
price." In the Board's view, the Respondent has successfully
carried its burden on that element, as well. The Government is
also required to show that it obtained the lowest reasonable
reprocurement price-the lowest reasonable price for the
Government under circumstances, not the defaulted Contractor.14
See Rose Printing, Inc., supra, slip op. at 49; Gold Country
Litho, supra, slip op. at 33; Big Red Enterprises, supra, slip
op. at 46; Univex Supp., supra, slip op. at 10; Asa L. Shipman's
Sons, Ltd., supra, slip op. at 35; K.C. Printing Co., supra, slip
op. at 23-24. Accord Barrett Refining Corp., supra; Scalf
Engineering Co. & Pike County Construction Co., Joint Venture,
IBCA No. 2328, 89-3 BCA � 21,950; Sequal, Inc., supra. The
record in this case reveals that the Respondent's estimated cost
for the original contract was $3,150.00 (R4 File, Tab C). On
repurchase, the work was secured from Seagull for $7,900.00 (R4
File, Tab L). After the Respondent took the prompt payment
discount, it assessed excess reprocurement costs against the
Appellant in the amount of $4,987.00. See Jones Declaration, �
3. By the Board's calculations, that means the repurchase
contract cost approximately 135% more than the original
agreement. See SRPTC,, at 5. However, it is well-settled that
even a significant price increase in the reprocurement does not
render it unreasonable in the face of Government due care and
diligence. See Rose Printing, Inc., supra, slip op. at 50; Gold
Country Litho, supra, slip op. at 34; Big Red Enterprises, supra,
slip op. at 47; Univex Supp., supra, slip op. at 11; K.C.
Printing Co., supra, slip op. at 23. Accord Futura Systems,
Inc., ENG BCA No. 6037, 95-2 BCA � 27,654; Foster Refrigerator
Corp., ASBCA No. 34021, 89-2 BCA � 21,591; Boston Pneumatics,
Inc., supra. There is no evidence in the record that the
Contracting Officer, acting in the Government's best interest,
failed to act with such care and due diligence in repurchasing
the cover and tab sets from Seagull. Accordingly, the Board
finds that GPO has carried its evidentiary burden and shown that
the excess reprocurement costs assessed in this case mitigated
the Appellant's liability and represented the lowest reasonable
price for the Government under the circumstances. See Rose
Printing, Inc., supra, slip op. at 50; Gold Country Litho, supra,
slip op. at 34; Big Red Enterprises, supra, slip op. at 48;
Univex Supp., supra, slip op. at 12; Asa L. Shipman's Sons, Ltd.,
supra, slip op. at 36; K.C. Printing Co., supra, slip op. at 25.
Cf. Sterling Printing, Inc., supra, slip op. at 77. Therefore,
the Contractor is obligated to the Government for excess costs
in the total amount of $4,987.00.15
ORDER
Considering the record as a whole, the Board finds and concludes
that: (1) it lacks jurisdiction over the Appellant's challenge to
the Contracting Officer's "responsibility" determination; (2) the
default was not in error because the Appellant has not shown that
its failure to perform arose from causes beyond its control and
without its fault or negligence, or beyond the control and
without the fault or negligence of Heidelberg; and (3) the
Respondent has sustained its burden of proof with regard to the
Contractor's liability for excess reprocurement costs.
THEREFORE, the Contracting Officer's default termination
decision, and his assessment of excess reprocurement costs in the
amount of $4,987.00, are hereby AFFIRMED, and the appeal is
DENIED.
It is so Ordered.
September 26, 1997 STUART M. FOSS
Administrative Judge
_______________
1 During the prehearing conference held by the Board on June 17,
1997, Counsel for GPO noted that while the contract was awarded
to "Venture, Ltd.," the Appellant's post-appeal documents carried
the letterhead "Classic Index & Tab Company, Inc." See Summary
Report of Prehearing Telephone Conference, dated September 19,
1997, at 1, n. 1 (hereinafter SRPTC). The Appellant's
representative explained that Classic Index & Tab Company, Inc.,
was the former name of Venture, Ltd., and it seemed to the Board
that the company was merely using its old letterheads until the
supply was exhausted. However, the Appellant's representative
confirmed that the proper name of the company at the time of
award was Venture, Ltd. In such cases, GPO's printing
procurement regulation requires that the parties execute a simple
change of name agreement. See Printing Procurement Regulation,
GPO Publication 305.3 (Rev. 10-90), Chap. XII, Sec. 3, � 3
(hereinafter PPR). The Board assumes that such an agreement is
on file with the Respondent. In any event, the Board's
jurisdiction is certain because, despite the name change, there
is no doubt but that the appeal was filed by the same entity with
which the Government had contracted. See Professional Printing
of Kansas, Inc., GPO BCA 28-93 (September 16, 1997, slip op. at
3, n. 3, 1997 WL_____ (citing Plum Run, Inc. d/b/a Plum Run
Corp., ASBCA Nos. 46091, 49203, 49207, 97-1 BCA � 28,770;
Adelaide Blomfield Management Co., GSBCA No. 13125, 95-2 BCA �
27,865).
2 At first, the Board had doubts about the timeliness of the
appeal. See Order Directing Appellant to Show Cause Why Appeal
Should Not Be Dismissed for Failure to Prosecute or as Untimely
Filed, dated September 5, 1996, at 4 (Show Cause Order).
However, the Appellant proved to the Board's satisfaction that
the appeal was, in fact, timely filed. See Letter dated
September 25, 1996, from John Dietrich, President, to Hon. Stuart
M. Foss, Administrative Judge. Therefore, the Board vacated the
Show Cause Order and scheduled at prehearing telephone
conference. See Order to Vacate Rule to Show Cause Why Appeal
Should Not Be Dismissed and to Schedule a Prehearing Telephone
Conference, dated June 4, 1997, at 2.
3 The Contracting Officer's appeal file was assembled pursuant to
Rule 4 of the Board's Rules of Practice and Procedure, and
delivered to the Board on February 5, 1996. See GPO Instruction
110.12, Subject: Board of Contract Appeals Rules of Practice and
Procedure, dated September 17, 1984, Rule 4(a) (Board Rules). It
will be referred to hereafter as the R4 File, with an appropriate
tab letter also indicated. The R4 File contains 14 documents,
identified as Tabs A-N. See SRPTC, at 2, n. 2. In addition, the
Appellant supplemented the appeal file on March 3, 1996, by
providing the Board with a set of the tab dividers produced under
the contract. Board Rules, Rule 4(b). Thereafter, by letter
dated July 3, 1997, the Contractor summarized its position for
the Board. Furthermore, by Notice of Filing dated July 2, 1997,
Counsel for GPO provided the Board with a declaration from Philip
L. Jones, Chief, Examination & Billing Branch, Procurement
Accounting Division, Office of the Comptroller, and supporting
documentation, regarding the payment history of the reprocurement
contract (hereinafter Jones Declaration).
4 See PPR, Chap. VII, Sec. 4, �� 1-4. Among other things, the
Respondent's small purchase procedures require that "three or
more quotations" be solicited to ensure adequate competition.
Id., at � 2.b(5). In this case, GPO solicited bids from 11
printing firms, and received offers from two-the Appellant and
Seagull Printing Services (Seagull) (R4 File, Tabs A and B).
5 Under the Respondent's printing procurement regulation, the
Contracting Officer must submit a proposal to terminate a
contract for default to the CRB for its review and concurrence.
See PPR, Chap. I, Sec. 10, � 4.b.(i). See also Questar Printing,
Inc., GPO BCA 14-94 (June 12, 1997), slip op. at 21, n. 35, 1997
WL_____; Gold Country Litho, GPO BCA 22-93 (September 30, 1996),
slip op. at 8, n. 5, 1996 WL 812956, vacated in part, 1997 WL
_____ (March 17, 1997); A & E Copy Center, GPO BCA 38-92
(September 26, 1996), slip op. at 6, n. 10, 1996 WL 812881; Big
Red Enterprises, GPO BCA 07-93 (August 30, 1996), slip op. at 16,
n. 15, 1996 GPOBCA LEXIS 26; Univex International, GPO BCA 23-90
(July 31, 1995), slip op. at 9; n. 12, 1995 WL 488438, reconsid.
denied, 1996 WL 112554 (February 7, 1996), 1996 WL 812959 (July
5, 1996), Supplemental Decision on Excess Reprocurement Costs and
Order (hereinafter Univex Supp.); Hurt's Printing Co., Inc., GPO
BCA 27-91 (January 24, 1994), slip op. at 7, n. 10, 1994 WL
275098.
6 Only the Respondent filed a brief in this case. The brief was
submitted to the Board on August 4, 1997, an shall be referred
hereinafter as "Res. Brf.," with an appropriate page citation
thereafter.
7 The Respondent asserts that one of the purposes of this rule is
to ensure that the integrity of the bidding system will not be
compromised. See Res. Brf., at 10-11 (citing Ideal Restaurant
Supply Co., VACAB No. 570, 67-1 BCA � 6237).
8 The Board was created by the Public Printer in 1984. See GPO
Instruction 110.10C, Subject: Establishment of the Board of
Contract Appeals, dated September 17, 1984. Before then, ad hoc
panels considered disputes between contractors and GPO. Vogard
Printing is such an ad hoc panel case. The Board cites the
decisions of these ad hoc boards as GPOCAB. While the Board is
not bound by ad hoc panel rulings, its policy is to follow them
where applicable and appropriate. See e.g. Custom Printing Co.,
GPO BCA 28-94 (March 12, 1997), slip op. at 24, n. 38, 1997 WL
_____; Big Red Enterprises, supra, slip op. at 22, n. 22; The
George Marr Co., GPO BCA 31-94 (April 23, 1996), slip op. at 50,
n. 40, 1996 WL 273662; New South Press & Assoc., Inc., supra,
slip op. at 32, n. 45; Stephenson, Inc., supra, slip op. at 18,
n. 20; Chavis and Chavis Printing, GPO BCA 20-90 (February 6,
1991), slip op. at 9, n. 9, 1991 WL 439270.
9 The "substantial compliance" doctrine is a limited exception to
the general rule applicable to situations where a contractor has
timely shipped nonconforming goods which deviate from the
specifications in only minor respects. See Radiation Technology,
Inc. v. United States, supra. Under the doctrine a defaulting
contractor is afforded an opportunity, by operation of law, to
correct minor defects in shipments to the Government. Cf. Big
Red Enterprises, supra, slip op. at 28, n. 27; Hurt's Printing
Co., Inc., supra, slip op. at 17; Stephenson, Inc., supra, slip
op. at 24, 48-54. For the "substantial compliance" rule to apply
to a particular shipment of nonconforming goods, the contractor
must show that: (a) a timely delivery of goods was made; (b)
he/she reasonably believed, in good faith, that the supplies
conformed to the contract when shipped and that they would be
acceptable; and (c) the defects are minor in nature and capable
of correction within a reasonable period of time. See Radiation
Technology, Inc. v. United States, supra. See generally John
Cibinic, Jr. and Ralph C. Nash, Jr., Administration of Government
Contracts, 912-17 (3d ed., 1995) (citing Kain Cattle Co., ASBCA
No. 17124, 73-1 BCA � 9,999) (hereinafter Cibinic & Nash). A
contractor who ships nonconforming goods is only protected by the
Radiation Technology rule to the extent that he/she can satisfy
all elements of the test. See Univex International, supra, slip
op. at 21, fn. 21; Stephenson, Inc., supra, slip op. at 51, fn.
55 (citing Norwood Precision Products, Textron, Inc., ASBCA Nos.
38095, 38196, 90-3 BCA � 23,200; Introl Corp., ASBCA No. 27,610,
85-2 BCA � 18,044 at 90,578; Environmental Tectonics Corp.,ASBCA
No. 20340, 76-2 BCA � 12,134). The Radiation Technology doctrine
is clearly an encroachment on the Government's right to
terminate. Finally, whether a defect is minor is a question of
fact, based upon a consideration of: (a) whether the items are
usable; (b) the nature of the product; (c) the urgency of the
Government's needs; and (d) the extent of repair and adjustment
necessary to produce a fully conforming product. See Cibinic &
Nash, at 915 (citing Kain Cattle Co., ASBCA No. 17124, 73-1 BCA �
9,999).
10 Clauses such as � 20(a)(1)(i), the operative clause in this
case, have uniformly been held to apply not only to late
deliveries of the contracted goods, see Big Red Enterprises,
supra, slip op. at 27, n. 26; Stephenson, Inc., supra, slip op.
at 19; Chavis and Chavis Printing, supra, slip op. at 12-15;
Jomar Enterprises, Inc., GPO BCA 13-86 (May 25, 1989), slip op.
at 3-5, 1989 WL 384979, but also to the timely delivery of
nonconforming supplies, see Big Red Enterprises, supra, slip op.
at 27, n. 26; Stephenson, Inc., supra, slip op. at 19 (citing
KOPA Kopier Produckte, ASBCA No. 29,471, 85-3 BCA � 18,367; Meyer
Labs, Inc., ASBCA No. 18,347, 77-1 BCA � 12,539). See also Delta
Industries, Inc., DOT BCA No. 2601, 94-1 BCA � 26, 318;
Industrial Data Link Corp., ASBCA No. 31570, 91-1 BCA � 23,382.
The rationale for this dual application of the default clause is
simple. As explained in a leading text on the subject of public
contracts: "While these clauses explicitly make untimely
performance the basis for the default action, it is important to
recognize that nearly every Government contract spells out the
contractor's required performance in terms of the nature of the
product or service which is to be delivered or performed as well
as the time by which this performance is to be completed. Thus,
in order for the contractor to render 'timely performance,' two
basic requirements must be satisfied: (1) the product, service or
construction work must conform to the required design/performance
specifications, and (2) the product must be delivered or the work
completed by the specified due date. Citing Radiation
Technology, Inc. v. United States, supra; Nash Metalware Co.,
GSBCA No. 11951, 94-2 BCA � 26,780; Air, Inc., GSBCA No. 8847,
91-1 BCA � 23,352." See Cibinic & Nash, at 908.
11 While the excusable events listed in the "Default" clause, all
of which must be beyond the control and without the fault or
negligence of the contractor, are set forth in the context of
relieving the contractor from responsibility for excess
reprocurement costs, it is well-settled that the same occurrences
extend the time available for performance and make termination
prior to that time improper. See e.g., FKC Engineering Co.,
ASBCA No. 14856, 70-1 BCA � 8,312.
12 Default terminations-as a species of forfeiture-are strictly
construed. See D. Joseph DeVito v. United States, 188 Ct. Cl.
979, 413 F.2d 1147, 1153 (1969). See also Murphy, et al. v.
United States, 164 Ct. Cl. 332 (1964); J. D. Hedin Construction
Co. v. United States, 187 Ct. Cl. 45, 408 F.2d 424 (1969);
Foremost Mechanical Systems, Inc., GSBCA Nos. 12335, 12384, 95-1
BCA � 27,382.
13 "Irrefragable" proof simply means evidence which is incapable
of being refuted; i.e., indisputable evidence. See Stephenson,
Inc., supra, slip op. at 54 (citing Webster's New World
Dictionary, 714 (3d coll. ed., 1988).
14 In fulfilling the obligation to secure the best price for the
Government, a contracting officer must follow the same standard
of reasonableness and prudence under the circumstances which
he/she exercised in the timing and selecting of the method of
reprocurement. See William A. Hulett, AGBCA Nos.
91-230-3,92-133-3, 92-196-3, 93-1 BCA � 25,389, reconsid. denied,
93-2 BCA � 25,888; Barrett Refining Corp., ASBCA Nos. 36590,
37093, 91-1 BCA � 23,566; Mid-America Painters, Inc., ENG BCA No.
5703, 91-1 BCA � 23,367. However, the Government's obligation to
mitigate costs "is not one of perfection, but one of
reasonableness and prudence under the circumstances." See
Barrett Refining Corp., supra, 91-1 BCA at 118, 145; Mid-America
Painters, Inc, supra, 91-1 BCA at 117, 232. This duty is to be
carried out within the confines of Federal procurement statutes,
regulations, policies and directives, and in pursuit of the
Government's own best interests, whether or not that results in a
lower price for a defaulted contractor. See Barrett Refining
Corp., supra, 91-1 BCA at 118,145.
15 The Board notes that the Respondent did not reduce the
Appellant's excess reprocurement cost liability by the amount of
the prompt payment discount. However, the general rule, which
the Board follows, is that the defaulted contractor is entitled
to the benefit of the prompt payment discount taken on the
repurchase contract. See Questar Printing, Inc., supra, slip op.
at 74-75; Gold Country Litho, supra, slip op. at 36. Accord
Futura Systems, ENG BCA Nos. 6037, 6058, 6099, 95-2 BCA � 27,654,
at 137,874; Professional Window & House Cleaning, Inc., GSBCA
Nos. 8268, 8775, 90-3 BCA � 22,982, at 115,402; Aerospace
Components, Inc., ASBCA No. 28606, 84-3 BCA � 17,536, at
87,339-40; Industrial Fasteners of North America, GSBCA No. 3634,
72-2 BCA � 9761, at 45,581. On the other hand, the Board sees
that the difference between the undiscounted and discounted
excess cost figures is only $158.00. Therefore, the legal maxim
de minimis non curat lex (the law does not take notice of
trifles) clearly covers this situation, and the Board will leave
the Respondent's figures undisturbed. See Big Red Enterprises,
supra, slip op. at 48, n. 41; Univex Supp., supra, slip op. at
12, n. 8.