ALLEN WAYNE, LTD. GPO BCA 6-87 November 20, 1987 Michael F. DiMario Administrative Law Judge Opinion This appeal, timely filed by Allen Wayne, Ltd., 5404A Port Royal Road, Springfield, VA 22151 (hereinafter "Appellant"), is from the final decision of Jack Scott, Contracting Officer, United States Government Printing Office, Washington, DC 20401 (hereinafter "Respondent" or "GPO"), dated November 20, 1986, denying Appellant's request for payment for certain typesetting work it performed but which was not expressly ordered by any print order issued pursuant to GPO contract Purchase Order 82942, Jacket No. 181-217, Program C504-S, dated March 18, 1986. (Rule 4 File, hereinafter "R4 File," Tab D.) The appeal is granted for the reasons set forth hereinbelow. Background Appellant, by GPO Purchase Order 82942 dated March 18, 1986, was competitively awarded a requirements type, single award contract by Respondent for the production of certain Federal Energy Regulatory Commission (hereinafter "FERC") Management Reports as might be directly ordered printed from time to time by FERC during the period April 1, 1986 through March 31, 1987. The award was made in strict accordance with Appellant's bid of February 25, 1986, and Respondent's specifications of February 4, 1986. (Id. at Tab D, sheet 2; and Tab B, respectively.) The specifications, among other things, stated that the Government was to furnish "[c]amera copy consisting of line art, with marked up printed copy showing typographical changes to be corrected and reproduced at various focuses. . . . [and] Typewritten and handwritten manuscript copy." The contractor was to furnish all other materials and operations necessary for "[t]he production of perfect bound publications . . ." including such operations as composition, making reproducibles, printing, binding, packing, and distribution. Occasional orders might be placed for composition only. The specifications anticipated that one management report known as the "Red Book" would be ordered monthly and might include as many as 5 publications at any one time. Another report known as the "Executive Summary Report" was to be ordered quarterly. Typical examples of products to be produced were attached as exhibits to the specifications with the caveat that no guarantee was given that future orders would correspond exactly to the exhibits. (Id. at Tab B, page 4 of 12.) The specifications also stated that: During the term of this contract publication pages may require resetting, however, the majority of composition will consist of setting various "spots" and incorporating them into the artwork which will be held by the contractor throughout the term of this contract. Updating of artboards will be accomplished by using actual copy used to make reproducibles. Pages from a previously printed publication will not be an acceptable means of updating. Exhibits G and H represent up to 50% of the pages on some orders. Graphic changes will be required on these pages on most orders and resetting entirely may be required. If it is not possible to match either the size or weight of the existing type, the contractor shall select the size and weight which best suits the area being revised and shall set the entire block of contiguous reading matter to achieve a consistent appearance within the revised area. Id. at Tab B, page 5 of 12. The general terms and conditions of the contract (Id. at Tab B, page 2 of 12) specified that: POSTAWARD CONFERENCE: In order to insure that the contractor fully understands the total requirements of the job as indicated in these specifications, Government representatives will conduct a conference with the contractor's representatives at the GPO, Washington, D.C., immediately after award. Id. at Tab B, page 2 of 12. Additionally, the general terms and conditions provided: ORDERING: Items to be furnished under this contract shall be ordered by the issuance of print orders by the Government. . . . REQUIREMENTS: This is a requirements contract for the items and for the period specified herein. Shipment/delivery of items or performance of work shall be made only as authorized by orders issued in accordance with the clause entitled "Ordering." Id. at Tab B, page 3 of 12. The post-award conference was held at GPO on April 9, 1986, and was attended by GPO, FERC, and contractor personnel. At such time discussion of the parties centered on the fact that FERC was not pleased with the work of the previous contractor during the preceding term of the program, and that there was a desire in FERC to have all of the textual material (left-hand pages) as well as artwork (right-hand pages) reset, although it was of primary importance to do the artwork. Certain work done by the previous contractor was shown to Appellant to illustrate the problem. Moreover, Appellant had been the program contractor for the term immediately preceding the unfavorably perceived contract. At that time, because of problems with the quality of materials, it had undertaken the recomposition of all program materials. Subsequent to the meeting, Appellant began receiving print orders from FERC commencing with Print Order No. 40000 dated April 11, 1986. Almost from the beginning, Appellant undertook the resetting of text material whether or not such work was specified in the orders. Appellant claims to have periodically made inquiries of Ms. Jewel Poore, the FERC representative with whom it most often dealt, respecting when it would receive print orders covering this work. None were forthcoming, however, as a result, Appellant's Production Manager, Kathleen E. Kevlin, by letter of June 4, 1986, wrote to FERC (Attn: Ms. Jewel Poore) stating: The following print orders are still to be issued: Volume I: text - due June 24 art - due June 24 Volume II: text - due June 4 (?) (or whatever date you wish as this is complete) Volume III: text - due June 30 Volume IV: text - due June 4 (?) (also complete) art - due June 12 . . . . Official File, Tab 13, page 2. The print orders requested by Appellant were never issued, although it performed all the text resetting work. Accordingly, by letter of November 6, 1986, to which was attached its own Invoice No. 17968 and Government Voucher No. 17963 both dated November 7, 1986, Appellant requested payment as follows: "Allen Wayne, Ltd. is herewith submitting an invoice for services rendered, namely the retyping of all text pages (left-hand pages) for the four volumes of the FERC Red Book series." (Id. at Tab A, page 2 of November 6, 1986.) By that time Appellant had received some 33 print orders from FERC. Four additional print orders were issued to Appellant on November 14, 1986. On November 17, 1986, the GPO Contracting Officer, Jack Scott, requested that a meeting be set up between FERC, GPO Customer Service, GPO Procurement, and Appellant's personnel to try to resolve the problem. The following day, however, the Customer Service representative advised the Contracting Officer that Mr. Hargrove, the FERC authorized representative, would not meet with Appellant "because [FERC] never authorized the contractor to set the left-hand pages, and would not authorize any payment for this service." This information was telephonically conveyed to Appellant's Kevlin by the GPO Contracting Officer. Kevlin said her firm would appeal and asked the Contracting Officer for a final decision letter which such letter was issued on November 20, 1986. The letter addressed to Appellant's Mr. Dan W. Kilcup in pertinent part states: Your exception arose as a result of being unable to get authorization in the form of a print order or contract modification for typesetting your firm did on program C504-S to improve the quality of the text pages (left hand pages) in the publications. Due to the fact that a print order or modification has never been issued to cover this performance, and the Department's statement that they never authorized you to do this typesetting, your request for payment is denied. Id. at Tab A, page 2. This letter was followed by another letter from the Contracting Officer dated December 19, 1986, which advised Appellant the Government was terminating the entire contract effective that date for the convenience of the Government. (Id. at Tab G.) In response to such termination letter, Kilcup, by letter of January 15, 1987, stated the following pending claims: a. Excess cover stock (ordered specifically for this contract) 1,500 sheets, 23 x 55 cover stock (prorated per attached invoice) $ 345.63 b. Resetting text matter to meet standards required by FERC - prior claim [see attached copy of invoices] $ 5,922.68 c. Delivery charges (return of materials) $ 15.00 d. Re-scheduling/training of personnel assigned specifically to contract C-504-S due to interruption of requirements [average 320 hours/per month x 4 months remaining = 1,280 hours of anticipated labor x 15 percent factor for terminations/retraining/rescheduling = 192 hours] 192 hours x 12.00/hour (no overhead) $ 2,304.00 Official File, Tab 4, page 5. In addition, in reply to Scott's final decision letter of November 20, 1986, Kilcup, by letter of February 18, 1987, gave this Board notice of its appeal stating in pertinent part that: "Our specific objection is to the denial by the Department that the typesetting authorization would be forthcoming." (Official File, Tab 1.) Subsequently, by letter of March 9, 1987, Appellant perfected its complaint, asking that its appeal be expedited as a small claim pursuant to GPO's Board of Contract Appeals Rule 12.1(a). On July 28, 1987, a prehearing conference was held at which time testimony was taken to clarify the parties' positions respecting the effect of the post-award conference on the their rights and liabilities. The essence of the testimony is set forth in a Prehearing Conference Report dated August 17, 1987, a copy of which is attached hereto. The sum and substance of the matter is that the parties have differing stated views respecting the central issue of whether or not the Appellant was led to believe that it would need to reset the entire product, including text pages. The Appellant believes that the intent expressed in the contract and at the post-award conference was that the left- as well as right-hand pages needed to be reset, although the right-hand pages were of greater importance and that without so doing, it would have been impossible to give the requesting agency the quality it demanded. To reinforce this position, Appellant pointed to the fact that the Government by its figures on page 9 of 12 of the specifications; namely, items "I. (b) 1,499" and "I. (d) 4,801," indicated that it anticipated the resetting of substantially all the text. Items I. (b) and (d) correspond with item I. (b) and (d) of Section 4 Schedule of Prices of the specifications (page 11 of 12). The numbers 1,499 and 4,801 are the Government's estimated one year production requirements for tabular matter per 1,000 ems and page make-up per page, respectively. Appellant pointed to the fact that the specifications on page 4 of 12 estimate 24 to 470 pages per publication per order, and that the tabular matter included the setting of vertical rules. Page 5 of 12 of the specifications specifies after the caption "Vertical Rules" that: "Each vertical rule appearing in tabular matter will be measured as if.it were one horizontal type line within the table. For purposes of this contract a vertical rule is defined as any rule which could be drawn along a guide edge, without moving the guide edge, regardless of how often the ruling pen must be lifted." The Respondent, on the other hand, took the position that (1) the specifications required a print order be issued before any work was to be performed; (2) that only one FERC employee, Mr. Hargrove, was authorized to issue such orders; (3) that Mr. Hargrove did not issue any print orders for the work in dispute; (4) that the FERC representatives at the prehearing conference were not empowered to change the terms of the specifications; and (5) that the FERC employees, while discussing the future importance of redoing text pages, were not empowered to nor did they in fact, expressly or impliedly authorize such work to be done without the issuance of definite print orders for the same. Discussion The issue presented by this appeal is whether or not the Appellant is entitled to be paid for work it undisputedly performed for the benefit of the Government. In addressing the issue we note that the contract provisions, supra, provide in pertinent part that (1) "performance of work shall be made only as authorized by orders issued in accordance with the clause entitled "Ordering." (page 4, supra); (2) such clause provides that "[i]tems to be furnished . . . shall be ordered by the issuance of print orders by the Government." (page 3, supra); (3) "the majority of composition will consist of setting various 'spots' . . . incorporating them into the artwork . . . ." (page 3, supra); (4) although occasionally "[d]uring the term of this contract pages may require resetting." (Page 3, supra) (Emphasis added.) The clear, unambiguous, plain meaning of such language is that only certain portions of the publications would be reset; that the work to be done would be expressly ordered by issuance of a print order; that the majority of such work would be "spots" to be "incorporat[ed] . . . into the artwork," but occasionally entire "publication pages" might require resetting; and lastly, that no work should be done unless expressly authorized by a duly issued print order. No other reading of the contract is reasonable notwithstanding Appellant's assertion that Respondent's estimate of work reflects the contemplation of resetting all the text as well as artwork pages. The next question to be addressed is whether these contract terms were modified by the parties during the post-award conference in some legally enforceable way. Turning first to the contract itself, we note that the stated purpose of the conference was "to insure that the contractor fully understands the total requirements of the job as indicated in these specifications." The clear sense of the provision is that the conference not change the specifications but rather that discussion be held to assure that the contractor fully understood how the specifications were to be followed. Needless to say, this goal was not achieved. From the factual testimony of the various witnesses, we find that FERC's Ms. Poore, with whom Appellant dealt on its previous contract, denies that she in any way authorized Appellant to reset the text material not authorized by print order. Moreover, Ms. Poore was not the FERC printing officer's principal representative. Additionally, no express statements directly or indirectly contradictory of the specifications were made by other FERC or GPO personnel. Indeed, viewing the evidence in a light most favorable to Appellant, the most that the testimony established is that Appellant perceived that Poore was the principal spokesperson for the Government and that she desired that all the text pages, as well as art pages, be reset during the term of the contract. We conclude from these facts that no legally binding modification was in any way proffered by the Government, nor do we believe that it was reasonable for the Appellant to have concluded that any legally enforceable right sprang from this meeting. We nevertheless are confronted with the fact that Appellant did produce the work for which it seeks payment, and FERC received such work from time to time without rejection, although it was in noncompliance with the work orders issued. Adding to this dilemma is the fact that the evidence supports a conclusion that FERC failed to give any effective notice to Appellant to cease and desist from producing such nonconforming work once FERC. knew of such deviation. The Appellant instead was left to produce some 33 print orders before such effective notification was given by way of Respondent's rejection of its invoiced claims. Such egregious nonfeasance by public officials cannot be allowed to work a financial hardship upon a contractor, no matter how unreasonable the contractor's own conduct, especially when, as here, the result of such nonfeasance is the enrichment of the Government. Accordingly, the Board expressly holds, as a finding of fact, that FERC's Hargrove, the Government official holding delegated Contracting Officer's authority to deal directly with Appellant, acquiesced in Appellant's unauthorized action by failing to give Appellant adequate notice that it was in noncompliance once such information was brought to his attention by Poore; and that such action, when coupled with the acceptance of the product by FERC without rejection, created a legally binding obligation upon the Government to pay Appellant for typesetting the left-hand as well as right- hand pages of the publications. 1/ We thus grant the appeal and remand the case back to the Contracting Officer for appropriate settlement of Appellant's claims for work actually performed; such settlement to be made an integral part of the Government's termination for its own convenience. Appellant's claim for compensation for "rescheduling/training of personnel due to interruption of requirements" is disallowed and should not be included within the settlement. The appeal is granted. _______________ 1/ In general, where compensation is sought for unauthorized work, such as here, Boards of Contract Appeals have held that the burden is upon the contractor to show that an authorized Government official acquiesced in the unauthorized action. See Globe Construction Co., GSBCA 2197, 67-2, BCA � 6,478 (1967). Acquiescence, however, may be implied from the actions or inactions of authorized officials, even though they do not, or even refuse to, expressly ratify the unauthorized acts. See 1 Nash & Cibinic, Federal Procurement Law, note 3, at 70.