Fry Communications, Inc. - InfoConversion Joint Venture
GPO BCA 8-84
PRINT ORDER 33846
JACKET NO. 878-84-2395
May 19, 1986
Michael F. DiMario, Administrative Law Judge
Opinion
This appeal, timely filed by Fry Communications, Inc. -
InfoConversion Joint Venture (hereinafter "Appellant"),.is
from the final decision of R. E. Lee, Jr., Contracting
Officer, U.S. Government Printing Office (hereinafter "GPO" or
"Respondent"), dated September 18, 1984, denying Appellant's
request to be paid for certain proofs it had made in
conjunction with its execution of Print Order 33846 under a
certain contract between the parties identified as GPO Program
400-S, Jacket No. 878-84-2395. The appeal arises under Article
2-3 entitled "Disputes" of United States Government Printing
Office Contract Terms No. 1 (GPO Publication 310.2 - Revised
October 1, 1980) which was incorporated into and made a part
of the said contract by reference therein. The decision of the
Contracting Officer is affirmed for the reasons hereinafter
set forth.
Facts
On February 9, 1984, Appellant, a joint venture between Fry
Communications, Inc., Mechanicsburg, PA 17055, and
InfoConversion, a division of Grumman Data Information
Services, Inc., Woodbury, NY, was awarded a requirements type
single award term contract by Respondent for data capture,
printing, binding, and distribution of "Army Update
Publications" as required by the Department of the Army
through July 31, 1984, and extending one year at a time up to
1988 as funds are available. The procurement was undertaken by
two-step formal advertising wherein prospective bidders were
requested under Step One to furnish technical proposals
without pricing. Thereafter, if their proposal was deemed
acceptable, they were invited under Step Two to formally bid
with price quotations. Four prospective bidders were so
invited, Appellant among them. Thereafter, Appellant was
awarded the contract as low bidder.
Various documents from this process, including the Request for
Technical Proposals/Specifications and the Invitation for Bids
as each was amended; Appellant's Technical Proposal, and the
bid, itself, comprise the contract between the parties.
The contemplated scope of the contract at the outset of the
solicitation was "data capture resulting in approximately
30,000 output pages, database maintenance, photocomposition,
printing, binding, and
distribution." (Appeal File, hereinafter "R4 File", Tab 1, page 5
of 20, dated May 4, 1983) The product itself was described as:
"(1) Complete database file on full text database tapes at
completion of contract. . . . (2) Publications which will have
varying numbers of pages. . . . [M]inimum number of pages . . .
48, and the maximum 1,500 in any one week." (R4 File, Tab 1, page
7 of 20, dated May 4, 1983)
The contract required the Government among other things to
furnish Appellant: "For composition - Unprepared manuscript
copy . . . , material typed on word processors that will have
to be accepted without rekeying, some reprint copy, and IBM
compatible magnetic tapes. Approximately 600 to 3600 pages of
manuscript copy . . . weekly . . . .. (R4 File, Tab 1, pages 7
and 8 of 20, dated May 4, 1983)
In turn the Appellant was to furnish, among other things, "[t]
wo sets of page proofs [and] [w]hen requested, one set of page
proofs on updated pages only." (R4 file, Tab 1, page 11 of 20,
dated May 4, 1983) Moreover, the contract stipulated that "[i]
f any contractor's errors are serious enough in the opinion of
the GPO to require revised proofs, the revised proofs are to
be provided at no expense to the Government." (R4 File, Tab 1,
page 11 of 20, dated May 4, 1983 (emphasis added))
The contract with respect to "ORDERING" provided that "[i]tems
to be furnished under this contract shall be ordered by the
issuance of print orders by the Government." (R4 File, Tab 1,
Part Two, page 4 of 18, dated January 9, 1984)
In accordance therewith Appellant was issued Print Order No.
33846 for certain work to be performed by Appellant under the
contract. Upon completion of the work Appellant submitted its
voucher to Respondent for payment. Thereafter Appellant was
advised by Respondent that it would not be paid for its
separate line item charge for copies of page proofs. By letter
of Donald B. Mandery dated September 13, 1984, Appellant took
issue with Respondent's position in this matter.
Respondent, by letter of R. E. Lee, Jr., Contracting Officer,
dated September 18, 1984, replied to Mandery stating that:
It was our intent that page proofs for initial data capture
were to be provided at no separate cost to the Government.
Initial proofing charges, like proofreading and other
ancillary costs incurred in initial data capture are
considered as part of the initial data capture and
photocomposition charges (item 8 and 11).
Our intent concerning proofs was clearly spelled out in the
contract as follows:
a. Page 11 of.20. Proofs: Two sets of page proofs.
b. Page 10 of 18. I. File creation and maintenance - *** two
sets of page proofs of all initial data capture,
photocomposition, ***
c. Page 12 of 18. Item 13 additional electrostatic page proofs
... per page ... $____
By design no line item appeared in the basis of award for
proofs of initial data capture.
Therefore, Line 13 items on vouchers requesting payment for
proofs of initial data capture will not be honored.
R4 File, Tab 3.
Appellant treated this response by Mr. Lee as a Final Decision
of the Contracting Officer concerning a "Dispute" arising
under the contract and appealed to this Board by letter of
December 14, 1984, and Complaint filed February 25, 1985.
The Complaint substantially alleged the facts previously cited
hereinabove and then beginning with numbered paragraph 7
argued that:
7. The G.P.O.'s May 4, 1983 letter, together with the General
Terms and Conditions and amendments thereto, contain all of the
technical requirements for.the subject contract. (Appeal Exhibit
3). Page 11 of 20 of that document contains the only reference in
that document to page proofs. The only information apropos to
relevant to [sic] this complaint reads:
"Two sets of page proofs. When requested, one set of page proofs
on updated pages only."
This language has no bearing on how the Appellant will get paid
for page proofs.
8. The Invitation For Bids revised January 9, 1984, contains the
only information about how the Appellant is to be paid for
electrostatic copies of page proofs. It reads, on page 10 of 18,
as follows:
I. FILE CREATION AND MAINTENANCE. Prices quoted must be all
inclusive and include all data system charges, including
programming and testing, all telecommunication functions (with
the exception of actual telephone line charges), and all
operations and materials necessary for capturing and coding data,
creating and maintaining files, masterfile tapes, two sets of
page proofs of all initial data capture, photocomposition, and
camera copy charges as necessary in accordance with the
specifications.
Immediately following this. statement is a list of some thirty-
four line items. While the above quoted statement says that the
charge for two sets of page proofs is required to be included in
the price, it says nothing about the line item in which the
charge for sets of page proofs. should be included. The only line
item which mentions page proofs is line item 13. It reads:
Additional electrostatic page proofs per proof $___
9. The Appellant's reasonable interpretation of the Invitation
for Bids was that the most logical place to insert its charge for
all copies of the page proofs was in line item 13.
10. In fact, when Appellant submitted its bid, the only line item
in which Appellant included any charge for sets of page proofs
was line item 13. That amount was $.51 per proof.
11. The final decision of the Contracting Officer denying
Appellant payment for page proofs pursuant to line item 13
constitutes a breach of the subject contract, which breach has
caused money damages to Appellant in an amount exceeding
$14,500.00. In addition, Appellant continues and will continue
throughout the life of the subject contract to be damaged as it
continues to supply page proofs to the G.P.O. without being paid
for them.
WHEREFORE, Appellant respectfully demands that this tribunal
grant this appeal, reverse the decision of the Contracting
Officer dated September 18, 1984, and order that the G.P.O. pay
Appellant for each copy of page proofs delivered to date and in
the future at the contract rate of $.51 per page. Appellant
further demands a hearing and oral argument on the issues
presented herein.
Official Record, Tab 5.
Respondent, by formal Answer filed April 3, 1985, admitted the
allegations of Appellant's Complaint except sentence 2 of
paragraph 2, and paragraphs 7, 8, 9, and 11 which were denied
and paragraph 10 wherein it was asserted that Respondent had
"no information upon which to admit or deny . . ." the
allegation. The response to paragraph 2 crystalizes
Respondent's position respecting Appellant's claim stating in
pertinent part that:
The contracting officer does not deny the payment for page
proofs. Step Two-Invitation for Bid provides in Section I. File
creation and maintenance: "Prices quoted must be all inclusive .
. ., including . . . two sets of page proofs of all initial data
capture, . . .. " etc. When proofs are ordered in addition to
these two sets included with all initial data capture, they may
be charged as "additional electrostatic page proofs", under line
item I.13.
Official Record, Tab 9.
The admission to paragraphs 3, 5, and 6 were qualified by
"additional clarifications." The clarification of paragraph 3
is not germane to the instant issue. The response to paragraph
6 is by way of a clarification of what constitutes the
contract documents. The clarification of paragraph 6 and the
denials of the allegations in paragraphs 7 and 8 are as
follows:
6. Paragraph 6 admitted but with additional clarification. It is
to be noted that the appellant was awarded the contract only
after it had been requested to review its bid and confirm the
prices, and had indicated that it had done so.
7. Paragraph 7 is denied. All the documents contained in Exhibit
1 taken as a whole contain the requirements of the contract. The
Step Two-Invitation for Bids contains information on how proofs
are to be paid for. Since the first part of a Two-Step
procurement concerns only technical acceptability on the part of
the proposals submitted, it would have been improper to have
included the question of method of payment in the original
solicitation. (Reference to Exhibit 3 in this paragraph should be
Exhibit 1.)
8. Paragraph 8 is denied. Since the paragraph quoted here states
that two sets of page proofs are to be included for all initial
data capture, then the charges for these proofs should be
included in the line items for initial data capture. The line
item I.13 is only for "additional" proofs, or those proofs not
included, such as (1) any amount over two sets for initial data
capture, (2) proofs required because of author's alterations made
after initial data capture, or (3) any proofs required on updated
pages "when requested." This is made further apparent by the fact
that line item I.13 is not a basis of award item, which would
have been necessary had it included those proofs required under
the contract.
Official Record, Tab 9.
Subsequent to the filing of the Answer, a Prehearing
Conference was held at which time cross motions for summary
judgment were made. Thereafter, the parties submitted briefs.
setting forth their points and authorities in support of and
in opposition to such respective motions.
Appellant's Brief contends in principal argument that:
[I]t was clearly the Government's burden to set forth in its
Invitation for Bids what it wanted. [T]he government failed to
meet that burden . . . .
. . . .
. . . .
. . . .
While the language . . . [concerning FILE CREATION AND
MAINTENANCE, supra] is arguably susceptible to the
interpretation urged by the Government, the language is in no
way such that it compels that interpretation. It is an
extremely poor attempt by the Government to convey its alleged
intention to prospective bidders. Thus, if Appellant's
alternative construction is within the zone of reasonableness,
then it must be adopted by the Board.
[T]he instructions just following the heading, "FILE CREATION
AND MAINTENANCE", consist of general instructions concerning
how the bidder should price the 34 line items in the 14
subsections immediately following the instructions. These
instructions, . . . advis[e] the bidder that . . . prices for
such items as "capturing and coding data, creating and
maintaining files, and two sets of page proofs of all initial
data capture" must be inclusive of "data systems charges,
including programming and
testing, all telecommunication functions . . ., and all
operations and materials necessary for" performing those tasks. .
. .
None of the language . . . directs the bidder to place his
price for a particular item . . . . Thus, the bidder was left
to logic in determining . . . which line item he would put his
costs for certain items. . . . [T]here is no mention of page
proofs in the line item under [consideration] . . . .
[E]ight of the ten line items under initial data caputre [sic]
are to be priced "per 1,000 characters." A prudent bidder
would not assume that the Government was directing that it
make a guess as to the number of characters on a page,
therefore, he. logically would look to other line items . . .
for . . . page proofs . . . .
[T]he only line item which mentions page proofs in [sic] line
item 13. . . .
. . . .
[T]he meaning of "Additional" is left to the bidder's
imagination.
Official Record, Tab 15.
The Government's Brief in turn argues that Appellant's
position "strains credibility" because it disregards the
elementary rule that all of the parts of a contract must be
read and interpreted together and that "the entire writing
that embodies the agreement of the parties, not individual
sections or clauses." (Official Record, Tab 13, page 3) The
Government also points out that the law holds that "[a]n
interpretation will generally be rejected if it leaves
portions of the contract language meaningless, useless,
ineffective or superfluous., (Official File, Tab 13, page 4)
and that "[w]hen a contract is read as a whole, the provisions
should, if possible, be interpreted so.as to be in harmony
with each other." (Official
File, Tab 13, Page 6)
Discussion
We agree with the Appellant that "it was clearly the
Government's burden to set forth in its Invitation for Bids
what it wanted" but disagree with the contention that "the
Government failed to meet that burden." (Official Record, Tab
15, page 4)
We have reached this conclusion by carefully reviewing each
and every part of the contract taken as a whole as the
Respondent rightly suggests must be done.
We have rearranged and edited the pertinent contract
provisions hereinbelow in order to crystalize their meaning.
(THE CONTRACT)
"The prospective contractor must furnish all services, equipment
and materials necessary to do the photocomposition, printing,
binding, distribution, and related services necessary and
required to produce the Army Regulations as a complete product."
(R4 File, Tab 1, Page 5 of 20, dated May 4, 1983)
V. ESTIMATE OF 5-YEAR PRODUCTION REQUIREMENTS
The following is intended as an estimate of the data capture and
printing requirements expected for the term of the contract. This
is given as a guide to the scope of the contract. It is
reasonable to expect that, even though every effort has been made
to determine ranges in numbers of pages and quantities, there may
be occasions when variances may occur outside the ranges
originally specified. In such cases, adequate notice will be
given to the contractor of these unusual circumstances.
1. Masterfile. - It is anticipated that the maximum of the
30,000-output-page data base will be completed within 2 years
at the rate of approximately 15,000 pages in each of the first
2 years. The rate of updating/editing is expected to be
approximately 25 percent per year. In each of the third,
fourth, and fifth years of the contract, the rate of
updating/editing can be expected to remain at the
approximately 25 percent level. In addition, there may be
approximately 5,000 output pages per year in these 3 years of
new data capture. These pages would not necessarily increase
the total number of pages in the masterfile, but would more
likely be replacement pages.
R4 File, Tab 1, Amendment Number 3 to Request for Technical
Proposal, page 6 of 8, dated September 9, 1983.
Approximately 600 to 3600 pages of manuscript copy will be
furnished to the contractor on a weekly basis. Each six pages
of manuscript copy will make approximately one photocomposed
page.
For graphics (these must be digitized) - Reprint copy, line
illustrations, monochromatic slides, and prints. Most are line
illustrations and range in size from full page to one-eighth
of a page.
R4 File, Tab 1, Attachment I, page 8 of 20, dated May 4, 1983.
"PROOFS:
Two sets of page proofs. When requested, one set of page proofs
on updated pages only." (R4 File, Tab 1, Attachment I, page 11 of
20, dated May 4, 1983)
"*Contractor submit page proofs . . . ."
"*The contractor will be required to deliver approximately 500
output pages per week, . . . . (R4 File, Tab 1, Attachment I,
page 16 of 20, dated May 4, 1983)
"METHOD OF DETERMINING AWARD: The Government will determine the
lowest offer by applying the prices quoted in the "Schedule of
Prices" to the following listed units. The usage and volume used
for evaluation purposes represents that which is estimated to be
ordered during a typical year. For items in Sections I and II,
these units are an averge [sic] of the first three years'
estimated production (with the exception of the first two items
in section I, which are allowed only once in the 5-year term of
the contract). . . .
The responsive, responsible bidder with the lowest aggregate
cost will be declared the low contractor and award will be
made accordingly."
R4 File, Tab 1, Part Two, IFB, page 7 of 18, dated January 9,
1984 (emphasis added).
"Measurement and Payment for Data Capture: Initial data capture
will be measured and payment will be made on the basis of output
character count for text and tabular matter, and per illustration
(either line or halftone) for digitizing of illustrations." (R4
File, Tab 1, Part Two Invitation for Bids, page 6 of 8, dated
September 9, 1983)
Thereafter, page 8 of 18 on both the January 9, 1984 and January
13, 1984 revision advises that "[t]he item designations used
herein correspond to those used in the schedule of prices." Items
1 to 12 are listed seriatim followed by a conspicuous skip to
item 14, thus omitting any corresponding reference to item "13.
Additional electrostatic page proofs" from the "Schedule of
Prices."
The item designations used herein correspond to those used in
the schedule of prices. The brief explanation preceding [sic]
the unit multiplers [sic] for sections I and II, and the
column headings and explanations given with sections III, IV,
and V, are intended merely as a reference to what each unit
represents. For the complete description of these units, refer
to the "Schedule of Prices". (Abbreviations used in column
headings: MR - makeready; M's - Running per thousand copies")
Unit
Multiplier
8. (a) (1) 39,905,000 text characters 39,905
(2) 5,179,000 tabular characters 5,179
(b) (1) 2,698,000 Text characters 2,698
(2) 358,000 tabular characters 358
(c) (1) 8,482,000 text characters 8,482
(2) 1,236,000 tabular characters 1,236
(d) (1) 11,860,000 text characters 11,860
(2) 1,572,000 tabular characters 1,572
(e) (1) 692 line illustrations 692
(2) 7 halftone illustrations 7
. . . .
. . . .
. . . .
12. 868 pages camera copy 868
14. One duplicate tape per month 12
R4 File, Tab 1, Amendment 4, page 8 of 18, dated January 13,
1984.
Under "The Schedule of Prices" on page 10 of 18 revised January
9, 1984, is the language shown, supra page 8, for "I. FILE
CREATION AND MAINTENANCE. Prices quoted must be all inclusive and
include . . . two sets of page proofs of all initial data
capture, . . . charges as necessary in accordance with the
specifications."
NOTE: The per 1,000 character measurement for all data capture
will be based on output characters.
8. Initial data capture:
(a) From manuscript or reprint copy:
(1) Text matter per 1,000 characters $___
(2) Tabular matter per 1,000 characters $___
(b) From word processing media:
(1) Text matter per 1,000 characters $___
(2) Tabular matter per 1,000 characters $___
(c) From magnetic tapes:
(1) Text matter per 1,000 characters $___
(2) Tabular matter per 1,000 characters $___
(d) Through teleprocessing:
(1) Text matter per 1,000 characters $___
(2) Tabular matter per 1,000 characters $___
(e) Digitizing illustrations:
(1) Line per illustration $___
(2) Halftone per illustration $___
(All halftones are to be a minimum 100-line screen.)
. . . .
. . . .
. . . .
12. Camera copy (for covers and stop press pages) $___
13. Additional electrostatic page proofs per proof $___
15
14. Duplicate tapes per tape $___
R4 File, Tab 1, pages 11 and 12 (Amendment 4) of 18, dated
January 9, 1984, and January 13, 1984, respectively.
The Board believes that the rearranged language and the bid
abstract (R4 File, Tab 1) fully support Mr. Lee's contention
that "[b]y design no line item appeared in the basis of award
for proofs of initial data capture."
In the Board's view, the language unambiguously states that
the contract was to be awarded to the bidder whose price
was.lowest based upon a comparison of each bidder's aggregate
price quotation which Respondent would derive by applying the
appropriate unit multiplier from numbered lines 1 through 12,
and 14 of the "Basis of Award" clause to the unit price given
by each bidder for the corresponding numbered lines of the
"Schedule of Prices."
The language further states that the price the bidder was to
quote on each line of the "Schedule of Prices" was to be an
all-inclusive unit price quotation per thousand output
characters or per illustration, as applicable, and must
include the bidder's contemplated charges for providing the
required two sets of page proofs. The anticipated workload
volume furnished in the "Statement of Work" was more than
adequate for bidders to estimate such page proof costs and to
convert the same to a cents per 1,000 character basis for
inclusion with other costs associated with data entry.
A bidder's contemplated charges for providing the one set of
page proofs for updated pages as required from time to time,
and for providing any other additional page proofs required by
the Government, except where such requirement arose because of
serious contractor error as
determined by the Government, were to be quoted on the "Schedule
of Prices" on line 13 "[a]dditional electrostatic page proofs" on
a "per proof" basis.
The Board believes any other reading of the contract would
unjustly strain its language and result in a gross unfairness
to other bidders in the competitive process.
Decision
The decision of the Contracting Officer is affirmed.