U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
B & B REPRODUCTIONS ) Docket No. GPO BCA 09-89
Program 1446-S )
Purchase Order F-0869 )
DECISION AND ORDER
This appeal, timely filed by B & B Reproductions, 51 North
Orlando Avenue, Cocoa Beach, Florida 32931 (hereinafter
Appellant or Contractor), is from the final decision of
Contracting Officer Douglas M. Faour, of the U.S. Government
Printing Office's (Respondent or GPO or Government) Atlanta
Regional Printing Procurement Office (ARPPO), 1888 Emery
Street NW., Suite 110, Atlanta, Georgia 30318-2536,1 dated
March 7, 1989, reaffirming the Government's position that it
had overpaid the Appellant $16,380.00 for certain folding and
stitching work on its contract identified as Program 1446-S,
Purchase Order F-0869 (R4 File, Tab H).2 For the following
reasons, the Contracting Officer's decision is hereby
AFFIRMED.
I. FINDINGS OF FACT3
1. This dispute arises from a single-award term contract
awarded to the Appellant on April 29, 1987, to print a
biweekly newsletter entitled the "Spaceport News" for the
National Aeronautics and Space Administration's (NASA),
Kennedy Space Center, Florida (R4 File, Tab C).4 The contract
ran for one year, from May 1, 1987, to April 30, 1988, and the
estimated contract price was $52,342.00 (R4 File, Tabs A, pp.
1 and C).
2. As stated in the specifications, the work covered by the
contract consisted of ". . . the production of a newsletter-
type publication requiring such operations as composition,
furnishing proofs, film-making, printing, binding and
delivery." See R4 File, Tab A, p. 4. Among other provisions,
the contract specified, in pertinent part:
ORDERING: Items to be furnished under this contract shall
be ordered by the issuance of print orders by [NASA].
Orders may be issued under this contract from date of award
through April 30, 1998. All print orders issued hereunder
are subject to the terms and conditions of this contract.
This contract shall control in the event of conflict with
any print order. When mailed a print order shall be
"issued" for the purposes of this contract at the time the
Government deposits the order in the mail.5
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." The quantities of items
specified herein are estimates only, and are not purchased
hereby. Except as may be otherwise provided in this
contract, if the Government's requirements for the items
set forth herein do not result in orders in the amounts or
quantities described as "estimated", it shall not
constitute the basis for an equitable price adjustment
under this contract.
* * * * * * * * * *
Subject to any limitations elsewhere in this contract, the
contractor shall furnish to the Government all items set
forth herein which are called for by print orders issued in
accordance with the "Ordering" clause of this contract.
The contractor is cautioned not to perform any operation(s)
or produce any product(s) for which a price has not been
quoted under this contract.
* * * * * * * * * *
FREQUENCY OF ORDERS: Bi-weekly (every two weeks), plus one
special issue (27 orders).
QUANTITY: Approximately 11,750 to 13,000 copies per order
with an average of 12,000 copies per order.
NUMBER OF PAGES: Approximately 20 issues of eight pages, 2
issues of six pages, and 5 issues of 4 pages.
TRIM SIZE: 9-1/2 x 12".
* * * * * * * * * *
PRINTING: Print head-to-head in black ink. The contractor
will be required to make on additional plate for the last
page of each issue. Approximately 1,250 copies will print
with "Postage and Fees Paid" mailing indicia on the last
page.
MARGINS: Head 1/2", bind 1/2".
BINDING: Fold, inset (as necessary), and trim three sides
to 9-1/2 x 12". Approximately 1,250 copies will fold again
to 9-1/2" x 6" with mailing indicia out and stitch one time
along the 9-1/2" edge.
* * * * * * * * * *
SECTION 3.-DETERMINATION OF AWARD
The Government will determine the lowest bid by applying
the prices offered in the "Schedule of Prices" to the
following units of production which are the estimated
requirements to produce one year's orders under this
contract. . . .
The following item designations correspond to those listed
in the "Schedule of Prices".
(1) (2)
I. (a) 192 2,304
* * * * * * * * * *
III. (a) 34
SECTION 4.-SCHEDULE OF PRICES
* * * * * * * * * *
I. COMPLETE PRODUCT: Prices shall include the cost of all
required materials and operations necessary for the
complete production and distribution of the product listed
in accordance with these specifications.
* * * * * * * * * *
III. ADDITIONAL OPERATIONS: Prices quoted shall include the
cost of all required materials and operations necessary for
folding from 9-1/2 x 12" to 9-1/2 x 6" and stitching with
one wire stitch.6
* * * * * * * * * *
See R4 File, Tab A, pp. 3, 4, 6, 9, 12).7 [Emphasis added.]
3. There is no dispute that the Appellant performed all
aspects of the contract to the satisfaction of NASA. Rather,
this controversy concerns the Contractor's charges for
additional folding and stitching work.
4. The Appellant states that while preparing its bid, it
noticed that the "Schedule of Prices" provision for additional
work did not include pricing for the initial folding operation
in the "BINDING" specification, namely "Fold, inset (as
necessary), and trim three sides to 9-1/2 x 12," which was
necessary on all newsletters. See Complaint, � 2; Draft
Report, pp. 3-4. Therefore, on or about April 14, 1987, the
Contractor telephoned the ARPPO and spoke to someone regarding
the omitted line item.8 See Complaint, � 3; Draft Report, p.
4. The Appellant claims that during this conversation it was
informed that the specifications could not be changed at that
point, but if the Contractor's bid was accepted, the
Respondent would modify the contract to include pricing for
that folding operation. Id. Accordingly, the Appellant
revised its offer for makeready and/or setup from $243.87 per
page to $135.00 per page, its running charges from $10.92 per
page for 1,000 copies to $10.50 per page, and the price for
the additional folding and stitching work from $32.50 to
$60.00 per 1,000 copies.9 Id., � 4. See also R4 File, Tab
B.
5. Over the life of the contract, the Appellant received and
invoiced work for 27 print orders. See Complaint, � 5;
Answer, � 5. See also Letter from Charles V. Kessel, Jr.,
Appellant's Counsel, to the GPO Board of Contract Appeals
(Board), dated June 16, 1989, enclosing "Appellant's Exhibits
A-F" (hereinafter cited as "App. Exh." with an appropriate
letter thereafter). See Board Rules, Rule 4(b). Each of the
Contractor's voucher's charged the Government for folding and
stitching all newsletters at the rate of $60.00 per 1,000.10
See Complaint � 5; Answer, � 5. See also Draft Report, p. 5.
Furthermore, these invoices were paid in full by the
Respondent as they were submitted. See Complaint � 6; Answer,
� 6.
6. Shortly after the end of the contract term, GPO's Office of
the Comptroller, Financial Management Service (hereinafter
FMS) reviewed all of the Appellant's invoices and determined
that the Government had been overcharged for the folding and
stitching operations under the contract, and had made excess
payments in the amount of $16,380.00 (R4 File, Tab E).11 In
that regard, the Respondent's calculations were as follows:
Purchase Order Invoice12 Billed Should have been
Overpaid
60101 8889 $708.00 $96.00 $612.00
60102 8986 708.00 96.00 612.00
60103 9069 708.00 96.00 612.00
60104 9188 708.00 96.00 612.00
60105 9370 708.00 96.00 612.00
60106 9470 708.00 96.00 612.00
60107 9570 708.00 96.00 612.00
Purchase Order Invoice Billed Should have been
Overpaid
60108 9666 708.00 96.00 612.00
60109 9774 708.00 96.00 612.00
60111 9979 708.00 96.00 612.00
60112 10092 780.00 96.00 684.00
60113 10182 780.00 96.00 684.00
60114 10268 780.00 96.00 684.00
60115 10345 780.00 96.00 684.00
60116 10461 780.00 96.00 684.00
60117 1038 780.00 96.00 684.00
60118 1081 780.00 96.00 684.00
60119 1196 780.00 96.00 684.00
60120 1297 780.00 96.00 684.00
60121 1390 780.00 96.00 684.00
60122 1510B 780.00 96.00 684.00
60123 1619 780.00 96.00 684.00
60124 1739B 780.00 96.00 684.00
60125 1829 780.00 96.00 684.00
60126 1941B 780.00 96.00 684.00
Total Overcharges $16,380.00
See R4 File, Tab E; App. Exh. A-F. Accordingly, on July 15,
1988, the Respondent sent a "Bill for Collection" to the
Appellant to recover $16,380.00 in alleged overpayments made
under the contract (R4 File, Tab E).13 See RTSC, p. 3; Draft
Report, p. 2.
7. On July 28, 1988, after the Appellant received this
collection notice, its President, Robert Hyman, telephoned the
ARPPO and spoke to Ms. Pace about the matter (R4 File, Tab D).
See Draft Report, p. 2. The record indicates that when Mr.
Hyman raised the subject of their April 14, 1987, conversation
concerning the absence of a line item for pricing initial
folding operations, Ms. Pace claimed that she had "no
recollection" of the telephone call (R4 File, Tab D).14 With
respect to the substance of the parties dispute, the record
memorandum of the telephone call prepared by Ms. Pace states:
[Mr. Hyman] said who-ever [sic] he spoke with [& he isn't
sure] lead [sic] him to believe "III" was where to charge
for all the folding. I explained that "I" was COMPLETE
PRODUCT & should have included [initial] folding (all
operations necessary . . . ) and there is no way that I
would have told him otherwise. Item "III" was just for
[additional] fold as reflected on [page] 6 (Binding) of the
contract.
See R4 File, Tab D. [Original emphasis.]
8. Thereafter, by letter dated August 4, 1988, Counsel for the
Appellant wrote to the Respondent objecting to GPO's attempt
to recoup the alleged overcharges. See R4 File, Tab E (Letter
from Charles V. Kessel, Jr. to U.S. Government Printing
Office, dated August 4, 1988) (hereinafter Kessel Letter). In
the Contractor's view, the collection effort was unjustified
because it had been given assurances by an ARPPO employee that
the Government would modify the contract to allow billing for
folding and stitching operations on all newsletters under
"SECTION 4.-SCHEDULE OF PRICES; III. ADDITIONAL OPERATIONS"
(hereinafter "ADDITIONAL OPERATIONS") (R4 File, Tab A, p. 12).
See R4 File, Tab E (Kessel Letter, p. 1). Counsel believed
that the recoupment action was particularly unfair because:
During the period of time the above referenced Program and
Purchase Order were in effect, each invoice to the U.S.
Government Printing Office itemized the cost for each run
reflecting that folding and stitching for all newsletters
were billed at $60.00 per 1,000 copies.
My Client's would not have submitted this bid had it not
been for the representation that it was understood that
such bid would be followed by a clarification to the
Contract reflecting that Paragraph III. ADDITIONAL
OPERATIONS, pertained to all copies and not just those
intended for mailing.
Moreover the U.S. Government Printing Office had an
obligation to inform my Client in a timely manner of the
alleged ambiguity between the contract bid and the Invoices
being submitted to the GPO. To be informed of this matter
after completion of the contract puts my client at a
disadvantage. Any such ambiguity should be resolved
against the GPO.
* * * * * * * * * *
See R4 File, Tab E (Kessel Letter, p. 2). [Original emphasis.]
9. The record discloses no further communication, either oral
or written, between the parties regarding this dispute for
seven months. Then, on February 10. 1989, the Respondent
wrote a "dunning" letter to the Appellant, which stated, in
pertinent part:
. . . [Y]our debt of $16,380.00, according to our records,
has never been liquidated. . . .
Due to the time period involved, it is imperative that
immediate action be taken to settle this matter. Please
forward to us within 15 days of the date of this letter,
the amount due, or if you have previously paid this debt,
please send a copy of the front and back of the canceled
check. Otherwise, this debt will be referred to the
Department of Justice for legal action. . . .
See R4 File, Tab E Letter (Letter from Joseph F. Johnson,
Operating Accountant to Mr. Robert Hyman, dated February 10,
1989).
10. By letter dated February 21, 1989, Counsel for the
Appellant responded to the above request by the Respondent for
payment by referring to his letter of August 4, 1988, and
indicating that the Contractor's position remained unchanged
(R4 File, Tab G).
11. On March 7, 1989, the Contracting Officer wrote a letter,
expressly designated his "final decision," to the Appellant,
which stated, in pertinent part:
Our records do not indicate that there was any conversation
with you and Dorothy Proctor, or any other employee of the
Atlanta Printing Procurement Office prior to bid opening of
Program 1446-s concerning any question on the
specifications.
Our specifications were explicit and required no
clarification. Therefore, I must conclude that B & B
Reproductions has been overpaid on Program 1446-S by the
amount of $16,380.00.
Immediately upon receipt of this notice you must reimburse
the Government in the amount of $16,380.00. . . .
See R4 File, Tab H.
12. By letter dated March 23, 1989, the Appellant filed its
timely appeal from the Contracting Officer's decision with the
Board.
II. ISSUES PRESENTED
1. Do the terms of the Program 1446-S, taken as a whole,
support the Contracting Officer's interpretation that the
contract specifications were unambiguous and did not allow
the Appellant to charge for folding and stitching
operations on all newsletters at the additional rate? Or,
to the contrary, has the Contractor shown that the disputed
specifications are ambiguous by advancing an interpretation
falling within the "zone of reasonableness," thus entitling
it to the benefit of the doctrine of contra proferentem,
which construes ambiguous language against the drafter?
2. Assuming that the contract unambiguously told potential
bidders that the rate for additional folding and stitching
would only apply to approximately 10 percent of the
newsletters ordered, under the circumstances present in
this case is the Respondent nonetheless estopped from
recovering the overpayments made to the Appellant for
folding and stitching operations on all publications?
III. POSITIONS OF THE PARTIES15
The Appellant opposes the Respondent's recoupment claim
basically on two grounds. First, the Contractor argues that
the key contract provision in dispute-"ADDITIONAL OPERATIONS"-
is ambiguous, and under settled principles the ambiguity must
be resolved against GPO. App. Brf., p. 4 (citing, American
Agronomics Corp. v. Ross, 309 So.2d 582 (Fla.3d DCA 1975);
Shaw v. Bankers Life Co., 213 So.2d 514 (Fla.3d DCA 1968)).
Contending that the pricing specification at issue was not
clear as to whether it included all folding and stitching
operations, the Appellant believes that its interpretation
that all folding operations were encompassed therein, and its
bid conforming to that view, were reasonable under the
circumstances. App. Brf., pp. 4, 5; App. R. Brf., p. 2; RTSC,
p. 4. In that regard, the Contractor relies on the "TRIM
SIZE" and "BINDING" specifications (R4 File, Tab A, pp. 4, 6),
to support its position that the language of the "ADDITIONAL
OPERATIONS" clause was intended to provide bidders with a
compensation mechanism not only for the extra folding step
required for the approximately 1,250 mailing copies per order,
but for all folding and trimming operations involved in
producing the newsletter as well. App. R. Brf., p. 1.
Furthermore, the Appellant states that since the Respondent
withdrew its challenge to the charges for folding all
newsletters on revised Invoice No. 8889, and thereafter paid
the Contractor's vouchers billing for folding operations in
the same way, the Government's conduct is tantamount to an
admission that the Appellant's interpretation of the contract
language is correct.16 App. Brf., pp. 4-5 (citing, Vans Agnew
v. Ft. Myers Drainage District, 69 F.2d 244 (5th Cir. 1934),
cert. denied, 292 U.S. 643 (1934); Fauld & Coleman
Construction Co. v. B.B. McCormick & Sons, 151 F.Supp. 206
(D.C. Fla. 1957)).
Second, the Contractor contends that because it developed its
bid on the advice of an ARPPO employee who said that the
Appellant's interpretation of the contract would be confirmed
by a subsequent contract modification, the Respondent should
now be estopped from recovering the alleged overcharges which
were billed with that understanding in mind. RTSC, pp. 3, 4;
Draft Report, p. 7. The Appellant states that while, in
retrospect, it should have not changed its bid structure,
nonetheless it substantially rearranged its offer based on
this conversation by shifting the cost of folding in the
pricing schedule from "COMPLETE PRODUCT" to "ADDITIONAL
OPERATIONS." Draft Report, p. 12. Accordingly, since the
Respondent paid the folding and stitching charges billed by
the Contractor pursuant to its successful offer, the Appellant
believes that it is appropriate to apply the principles of
equitable estoppel here, and deny the Government's recoupment
claim. Draft Report, p. 13.
The Respondent, on the other hand, believes that there is
nothing ambiguous about the disputed language of the contract.
Contrary to the Appellant, GPO asserts that the contract's
provisions are clear and susceptible of only one meaning.
RTSC, p. 4. In that regard, the Government contends that the
"ADDITIONAL OPERATIONS" provision is intended to cover the
extra costs for the folding and stitching of the approximately
1,250 copies of the newsletters which were to be mailed.
Draft Report, pp. 12-13. The Respondent argues that its
position is consonant with the "BINDING" specification of the
contract which speaks in terms of folding all newsletters to
9-1/2 x 12" and then folding the mailing copies, amounting to
about 10 percent of the average order, a second time to 9-1/2
x 6". Draft Report, pp. 14, 17. GP0 also contends that the
cost of the folding operation which was common to all
newsletters (9-1/2 x 12") should have been included in the
pricing for "COMPLETE PRODUCT." Draft Report, pp. 12-13, 17.
As for the Appellant's estoppel argument, the Respondent first
observes that there is no credible evidence to support the
Contractor's assertion that it had a conversation with any
ARPPO employee prior to bid opening about including all
folding costs under "ADDITIONAL OPERATIONS," or that it was
promised a contract modification if it won the contract. Res.
Brf., p. 5. Indeed, the only two employees identified by the
Appellant-Pace and Proctor-have expressly denied talking to
the Contractor at any time about the matter, and indicated
that they lacked authority to do anything about the
Appellant's concerns in any event.17 Id. See also, RTSC, pp.
3-4; R4 File, Tabs D and F. Secondly, GPO says that even if
the pre-bid conversation took place, the Appellant cannot rely
on any purported statements or commitments because neither
Pace nor Proctor possessed the requisite authority to bind the
Respondent. Res. Brf. p. 6. In that regard, GPO relies on
"black letter" principles of Federal procurement law which
hold that in order to bind the Government, the employees who
act as its agents must have actual authority; apparent
authority is insufficient. Id. (citing, Robert P. Lewis, Sr.
v. United States, 231 Ct.Cl. 799 (1982); Jackson v. United
States, 216 Ct.Cl. 25, 41, n. 2, 573 F.2d 1189, 1197, n. 2
(1978); Johnson, Drake & Piper, Inc., ASBCA Nos. 9824 and
10199, 65-2 BCA � 4,868). As the Respondent observes, one of
the essential elements of equitable estoppel is that the
Government representative must be shown to have been acting
within the scope of his or her authority specifically with
regard to the matter in question.18 Id. (citing, Alabama
Rural Fire Insurance Co. v. United States, 215 Ct.Cl. 442,
458-59, 572 F.2d 727, 736 (1978); United States v. Fox Lake
State Bank, 225 F.Supp. 723, 724 (N.D.Ill 1963), aff'd in part
and rev'd in part, 366 F.2d 962 (7th Cir. 1966)). Finally,
the Respondent asserts that the doctrine of estoppel does not
bar the Government from recovering erroneous overpayments.19
Res. Brf., p. 7. GPO contends that the Appellant is mistaken
when it argues that estoppel prevents the Respondent from
recouping overpayments on this contract once the contract was
completed and all payments were made to Appellant, because the
Government has an inherent common law right to set off any
claim it has against a contractor. Res. Brf., pp. 7-8
(citing, United States v. Munsey Trust Co., 332 U.S. 234
(1947); Gratiot v. United States, 40 U.S. 336 (1841); Taggert
v. United States, 17 Ct.Cl. 322 (1881)). This is particularly
true in the case of illegal or erroneous payments. Res. Brf.,
p. 8 (citing, United States v. Wurts, 303 U.S. 414 (1938);
Chorpenning v. United States, 94 U.S. 397 (1876); Stone v.
United States, 286 F.2d 56 (8th Cir. 1961)). Consequently,
where, as here, a contractor receives erroneous payments, a
contracting officer has a duty to recover the monies, even if
final payment has already been made. Res. Brf., p. 8.
Accordingly, the Respondent asks the Board to deny the appeal
and affirm the decision of the Contracting Officer. Res.
Brf., p. 9.
IV. DISCUSSION20
It is "black letter" law that the Government has an inherent
right to recover erroneous or illegal overpayments. See
United States v. Wurts, supra, 303 U.S. at 415; Aetna Casualty
& Surety Co. v. United States, 208 Ct. Cl. 515, 526 F.2d 1127
(1975); Fansteel Metallurgical Corp. v. United States, 145 Ct.
Cl. 496, 172 F.Supp. 268 (1959). See also California
Inflatables Co., ASBCA Nos. 45859, 45987, 94-2 BCA � 26,877;
Decision Science Consortium, Inc., IBCA No. 1651-2-83, 85-3
BCA � 18,350. Indeed, because of the strong Government
interest in recovering overpayments of public funds, a
contracting officer has an affirmative duty to seek recoupment
of such disbursements and those receiving the erroneous
payments have a corresponding obligation to refund the money.
See Merrick Business Forms, Inc., GPOCAB 6-81 (June 30, 1981),
Sl. op. at 11, 1981 WL 95446 (where the contractor was
erroneously paid more than it was entitled to under the
contract, the appeals panel held that the contract was bound
ex aequo et bono to pay reimburse the Government for the
incorrect billing, and for it not to do so would have been
unjust enrichment).21 See also Fansteel Metallurgical Corp.
v. United States, supra, 145 Ct. Cl. at 500, 172 F.Supp. at
270; Joan C. Morningstar et al., ASBCA Nos. 41820, 41821,
41973-41990, 42031-42039, 42048, 42087, 42088, 42183, 42265,
92-3 BCA � 25,120, at 125,230 (citing DiSilvestro v. United
States, 405 F.2d 150 (2d Cir. 1968); International Harvester
Co., a Corporation v. United States, 169 Ct. Cl. 821, 342 F.2d
432 (1965); Connecticut Reliance, Inc., ASBCA No. 33281, 89-2
BCA � 21,627; Burnett Electronics Laboratory, Inc., ASBCA No.
23938, 80-2 BCA � 14,619; ). See also Affiliated Building
Maintenance, ASBCA No. 28436, 85-1 BCA � 17,863 (citing
Foreman, Industries, Inc., ASBCA No. 23948, 80-2 BCA � 14,501;
A. Padilla Lighterage, Inc., ASBCA No. 17288, 75-1 BCA �
11,406); Oakland Janitorial Services, ASBCA No. 30199, 85-2
BCA � 18,078 (citing Space Age Engineering, Inc., ASBCA No.
22981, 80-2 BCA � 14,701). Furthermore, if unjust enrichment
is to be avoided, it is no hinderance to recovery of payments
by the Government that these were made pursuant to a
contractual provision. See Fansteel Metallurgical Corp. v.
United States, supra, 145 Ct. Cl. at 501, 172 F.Supp. at 271;
Joan C. Morningstar et al., supra, 92-3 BCA � 25,120, at
125,230 (citing Heidt v. United States, 56 F.2d 559 (5th Cir.
1932), cert. denied, 287 U.S. 601, 53 S.Ct. 8, 77 L.Ed. 523
(1933); J.W. Bateson Co., Inc. v. United States, 308 F.2d 510
(5th Cir. 1962); Coral Petroleum, Inc., ASBCA No. 27888, 86-1
BCA � 18,533, at 93,106-07; Affiliated Building Maintenance,
supra. 85-1 BCA � 17,863, at 89,423. Also cf. United States
v. Systron-Donner Corp., 486 F.2d 249, 252 (9th Cir. 1973)
(Government cannot recover in restitution if the contractor is
not unjustly enriched). These fundamental principles are
unchallenged in this proceeding.
Recoupment is a Government claim, however, and thus in this
case the Respondent has the burden of proving that it is
entitled to a refund of the money it says was erroneously paid
to the Contractor. See Bruce Krick, AGBCA No. 89-110-1, 93-1
BCA � 25,502, at 127,026; Leal Petroleum Corp., ASBCA No.
36047, 92-1 BCA � 24,719, at 123,380. Indeed, the question of
entitlement frames all of the issues in dispute. In that
regard, the parties are divided over: (1) whether the
Appellant's charges for folding and stitching all newsletters
and the Government's payment of the amounts so invoiced, is
supported by general principles of contract interpretation;
and (2) in any event, whether the Government should be
estopped from recouping the alleged overpayments because its
agents had misled the Contractor in the preparation of its
bid. Given this posture of the case, the Board's first task
is to determine if the Respondent's voucher payments were, in
fact, erroneous, and that depends on the meaning of the
disputed contract language. Clearly, if the Appellant's
interpretation of the contract is correct, or at least within
the "zone of reasonableness," then the payments were proper,
and the Government's attempt to recover the alleged
overcharges was unwarranted. On the other hand, if the
meaning ascribed to the specifications at issue by the
Contractor is incorrect or unreasonable, then GPO could recoup
the erroneous payments.
From its careful review of the documentary record and the
parties' briefs, the Board has reached the following
conclusions:
A. Contrary to the Appellant's belief, the disputed
"ADDITIONAL OPERATIONS" provision is not ambiguous, and
when properly interpreted does not authorize charges for
folding and stitching all of the newsletters produced under
the contract.
From the outset, this dispute has centered on the "ADDITIONAL
OPERATIONS" specification in the contract. In a nutshell, the
Appellant's position has been that the contract provision is
vague and ambiguous, while the Respondent has insisted
throughout that the language in the specification is "as clear
as a bell." See RTSC, p. 4; Draft Report, pp. 12-13, 14, 77;
App. Brf., pp. 4, 5; App. R. Brf., p. 2. The ambiguity issue
arises because the Appellant says that the "ADDITIONAL
OPERATIONS" provision, when read in conjunction with the "TRIM
SIZE" and "BINDING" specifications, allows it to charge for
the extra folding step on all newsletters produced, not just
the approximately 1,250 mailing copies. See RTSC, p. 4; App.
R. Brf., pp. 1, 4; App. R. Brf., p. 2. The Respondent, on the
other hand, believes that the contract language is not
ambiguous, but rather has only one meaning, namely, that when
the "BINDING" specification is taken into consideration, the
"ADDITIONAL OPERATIONS" clause merely covers the extra costs
for the folding and stitching of the approximately 1,250
mailing copies of the newsletters; i.e., about 10 percent of
the average order. See RTSC, p. 4; Draft Report, pp. 12-13,
14, 17. Since the parties have drawn different meanings from
the disputed specification, the Board's task is simple-it must
decide which of the two conflicting interpretations is
correct, or whether both readings may be reasonably derived
from the contract terms; in other words, is the contract
ambiguous? As the parties recognize, the answer to that
question essentially involves an interpretation of the
contract by the Board.22 See Professional Printing of Kansas,
Inc., GPO BCA 02-93 (May 19, 1995), Sl. op. at 46; Web I,
supra, Sl. op. at 16-17; McDonald & Eudy Printers, Inc., GPO
BCA 25-92 (April 11, 1994), Sl. op. at 13, 1994 WL 275093;
Shepard Printing, GPO BCA 37-92 (January 28, 1994), Sl. op. at
15-16, 1994 WL 275098.
The focus of inquiry in this case is confined to the contract
itself. See Professional Printing of Kansas, Inc., supra, Sl.
op. at 46; Web I, supra, Sl. op. at 17; Universal Printing
Co., supra, Sl. op. at 26, fn. 27, 1994 WL 377586; RD Printing
Associates, Inc., supra, Sl. op. at 9, 13, fns. 9 and 15; B.
P. Printing and Office Supplies, GPO BCA 14-91 (August 10,
1992), Sl. op. at 15, 1992 WL 382917. Therefore, certain
legal principles should be kept in mind at the outset. First,
when the parties confront the Board with two different
interpretations of the same contract language they raise the
possibility that the specifications may be ambiguous. See
Professional Printing of Kansas, Inc., supra, Sl. op. at 47;
McDonald & Eudy Printers, Inc., supra, Sl. op. at 13; R.C.
Swanson Printing and Typesetting Co., supra, Sl. op. at 41.
Second, contractual language is ambiguous if it will sustain
more than one reasonable interpretation.23 See Professional
Printing of Kansas, Inc., supra, Sl. op. at 47; Web I, supra,
Sl. op. at 17; R.C. Swanson Printing and Typesetting Co.,
supra, Sl. op. at 41, fn. 22; General Business Forms, Inc.,
supra, Sl. op. at 16. See also Neal & Co. v. United States,
19 Cl. Ct. 463, 471 and fn. 4 (1990), aff'd 945 F.2d 385 (Fed.
Cir. 1991); Edward R. Marden Corp. v. United States, 803 F.2d
701, 705 (Fed. Cir. 1986); Sun Shipbuilding & Drydock Co. v.
United States, 183 Ct. Cl. 358, 372 (1968). Third, in
analyzing disputed contract language, the courts and contract
appeals boards place themselves in the shoes of a reasonably
prudent and intelligent contractor, and give the language of
the contract that meaning which such a person acquainted with
the circumstances surrounding the contract would give it. See
Professional Printing of Kansas, Inc., supra, Sl. op. at 47;
McDonald & Eudy Printers, Inc., supra, Sl. op. at 14; General
Business Forms, Inc., supra, Sl. op. at 18 (citing, Salem
Engineering and Construction Corp. v. United States, 2 Cl. Ct.
803, 806 (1983)). See also Norcoast Constructors, Inc. v.
United States, 196 Ct. Cl. 1, 9, 448 F.2d 1400, 1404 (1971);
Firestone Tire and Rubber Co. v. United States, 195 Ct. Cl.
21, 30, 444 F.2d 547, 551 (1971).
A dispute over contract language is not resolved simply by a
decision that an ambiguity exists-it is also necessary to
determine whether the ambiguity is latent or patent. Courts
will find a latent ambiguity where the disputed language,
without more, admits of two different reasonable
interpretations.24 See Professional Printing of Kansas, Inc.,
supra, Sl. op. at 48; Web I, supra, Sl. op. at 18; Fry
Communications, Inc./InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 503 (citing, Edward R. Marden
Corp. v. United States, supra, 803 F.2d at 705); R.C. Swanson
Printing and Typesetting Co., supra, Sl. op. at 41, fn. 22.
On the other hand, a patent ambiguity would exist if the
contract language contained a gross discrepancy, an obvious
error in drafting, or a glaring gap, as seen through the eyes
of a "reasonable man" on an ad hoc basis.25 See Professional
Printing of Kansas, Inc., supra, Sl. op. at 48; Web I, supra,
Sl. op. at 19; Fry Communications, Inc./ InfoConversion Joint
Venture v. United States, supra, 22 Cl. Ct. at 504 (citing,
Max Drill, Inc. v. United States, 192 Ct. Cl. 608, 626, 427
F.2d 1233, 1244 (1970); WPC Enterprises, Inc. v. United
States, 163 Ct. Cl. 1, 6 (1963)); General Business Forms,
Inc., supra, Sl. op. at 17 (citing, Enrico Roman, Inc. v.
United States, supra, 2 Cl. Ct. at 106).
However, the rules governing ambiguous contract language come
into play only if the meaning of the disputed terms are not
susceptible to interpretation through the usual rules of
contract construction. See Professional Printing of Kansas,
Inc., supra, Sl. op. at 48; Web I, supra, Sl. op. at 19;
McDonald & Eudy Printers, Inc., supra, Sl. op. at 16; Shepard
Printing, supra, Sl. op. at 19; R.C. Swanson Printing and
Typesetting Co., supra, Sl. op. at 42. The most basic
principle of contract construction is that the document should
be interpreted as a whole.26 See Professional Printing of
Kansas, Inc., supra, Sl. op. at 49; Web I, supra, Sl. op. at
19-20; General Business Forms, Inc., supra, Sl. op. at 16.
See also Hol-Gar Manufacturing Corp. v. United States, supra,
169 Ct. Cl. at 388, 351 F.2d at 975. Hence, all provisions of
a contract should be given effect and no provision is to be
rendered meaningless. See Professional Printing of Kansas,
Inc., supra, Sl. op. at 49-50; Web I, supra, Sl. op. at 20;
General Business Forms, Inc., supra, Sl. op. at 16 (citing,
Raytheon Co. v. United States, 2 Cl. Ct. 763 (1983)). See
also, Pacificorp Capital, Inc. v. United States, supra, 25 Cl.
Ct. at 716; Fortec Constructors v. United States, supra, 760
F.2d at 1292; United States v. Johnson Controls, Inc., 713
F.2d 1541, 1555 (Fed. Cir. 1983); Jamsar, Inc. v. United
States, 442 F.2d 930 (Ct.Cl. 1971); Grace Industries, Inc.,
ASBCA No. 33553, 87-3 BCA � 20,171; In other words, a
contract should be interpreted in a manner which gives meaning
to all of its parts and in such a fashion that the provisions
do not conflict with each other, if this is reasonably
possible. See Professional Printing of Kansas, Inc., supra,
Sl. op. at 50; Web I, supra, Sl. op. at 20. Accord, Granite
Construction Co. v. United States, 962 F.2d 998 (Fed. Cir.
1992); B. D. Click Co. v. United States, 614 F.2d 748 (Ct.Cl.
1980). An interpretation which gives a reasonable meaning to
all parts of a contract will be preferred to one which leaves
a portion of it "useless, inexplicable, inoperative, void,
insignificant, meaningless, superfluous, or achieves a weird
and whimsical result."27 See Gould, Inc. v. United States,
935 F.2d 1271, 1274 (Fed. Cir. 1991) (quoting, Arizona v.
United States, 216 Ct. Cl. 221, 235-36, 575 F.2d 855, 863
(1978)). See also, ITT Arctic Service, Inc. v. United States,
207 Ct. Cl. 743, 752, 524 F.2d 680, 684 (1975) (contract
interpretation should be "without twisted or strained out of
context analysis [and without] regard to the subjective
unexpressed intent of one of the parties. . .").
In interpreting the disputed language here, the parties have
staked out positions for all practical purposes at opposite
ends of the spectrum-from the Appellant's "all newsletters"
theory to the Respondent's view that "just the mailing copies"
(10 percent of each production run at most), are encompassed
by the "ADDITIONAL OPERATIONS" language. As emphasized above,
however, for an ambiguity to exist the differing
interpretations of the contract language must be reasonable.
See Professional Printing of Kansas, Inc., supra, Sl. op. at
47; Web I, supra, Sl. op. at 17; R.C. Swanson Printing and
Typesetting Co., supra, Sl. op. at 41, fn. 22; General
Business Forms, Inc., supra, Sl. op. at 16. Against that
standard, the Appellant's "all newsletters" interpretation is
so tortured and unreasonable that the Board cannot imagine any
self-respecting contracting officer agreeing to such an absurd
proposition. See Professional Printing of Kansas, Inc.,
supra, Sl. op. at 51. Consequently, if for no other reason,
it must be rejected on that basis alone. See, Gould, Inc. v.
United States, supra, 935 F.2d at 1274; Arizona v. United
States, supra, 216 Ct. Cl. at 235-36, 575 F.2d at 863 (1978).
An examination of all the provisions of this contract reveals
a very clear and specific production scheme. In that regard,
the specifications which are relevant to this appeal tell us
that: (1) each NASA order will require production of 12,000
newsletters, on average ("QUANTITY" specification); (2) all
newsletters will be 9-1/2" x 12" ("TRIM SIZE" and "BINDING"
specifications); (3) approximately 1,250 copies will be
specially prepared for mailing and have a "Postage and Fees
Paid" mailing indicia printed on the last page ("PRINTING"
specification); and (4) while all newsletters will be folded
and trimmed to 9-1/2" x 12", the approximately 1,250 mailing
copies will receive a second fold to 9-1/2" x 6" and stitched
one time along the 9-1/2" edge ("BINDING" specification) (R4
File, Tab A, pp. 4, 6). Against these provisions, potential
bidders were asked to submit, inter alia, one price covering
all production costs for the complete production and
distribution of the newsletters ("COMPLETE PRODUCT"), and
another for the extra folding and stitching operation
("ADDITIONAL OPERATIONS") (R4 File, Tab A, p. 11, 12).
It seems to the Board that the entire framework of the
parties' contract shows that the disputed "ADDITIONAL
OPERATIONS" provision is narrowly tailored and of limited
effect. Thus, when properly read, the contract says that of
the 12,000 copies of the newsletter comprising the typical
NASA order, about 10 percent (1,250 newsletters) will be
produced for mailing, which will require an extra fold and a
stitch on those copies only. Consequently, in submitting
their offers, potential bidders were expected to provide the
Government with an overall price for the cost of producing and
distributing the newsletters, but to submit a separate price
for the cost of preparing 10 percent of the orders for
mailing. Indeed, there is no hidden meaning in the
"ADDITIONAL OPERATIONS" pricing instructions-it plainly says
that "[p]rices quoted shall include the cost of all required
materials and operations necessary for folding from 9-1/2 x
12" to 9-1/2 x 6" and stitching with one wire stitch." Thus,
for the Appellant to say that the language in "ADDITIONAL
OPERATIONS" provision is ambiguous, and that it can be
interpreted to include that all folding and trimming
operations involved in producing the newsletter, is to "twist
or strain" the plain meaning of the words "out of context" and
achieve a result which is "weird and whimsical." See Gould,
Inc. v. United States, supra, 935 F.2d at 1274; Arizona v.
United States, supra, 216 Ct. Cl. at 235-36, 575 F.2d at 863;
ITT Arctic Service, Inc. v. United States, supra, 207 Ct. Cl.
at 752, 524 F.2d at 684. In effect, the Contractor's
interpretation of "ADDITIONAL OPERATIONS" saps that pricing
instruction of all meaning in the context of the contract, and
reminds the Board of an old sports maxim which states that:
"If everyone is an all-star, no one is an all-star."
Translating that adage to this case, if, as the Appellant
suggests, all folding, trimming and stitching is encompassed
by the "ADDITIONAL OPERATIONS" provision, then there are no
"additional" operations for those tasks, and the disputed
language becomes mere surplusage as a pricing mechanism. In
short, the Contractor's interpretation effectively and
impermissibly reads the "ADDITIONAL OPERATIONS" pricing
instruction out of the contract. See Professional Printing of
Kansas, Inc., supra, Sl. op. at 53 (citing DWS, Inc., Debtor-
in-Possession, ASBCA No. 29743, 93-1 BCA � 25,404, at 126,540;
Falcon Jet Corp., DOT CAB No. 78-32, 82-1 BCA � 15,477, at
76,693).
The Respondent's interpretation of the contract, on the other
hand, relies on the "BINDING" specification exclusively to
anchor its view that the charge for the 9-1/12" x 12" fold
(which was common to all newsletters) should have been
included in the "COMPLETE PRODUCT" price, while only the cost
of the extra 9-1/2" x 6" fold and stitch required for mailing
approximately 10 percent of the average order should have been
figured under "ADDITIONAL OPERATIONS." GPO's reading is in
complete harmony with the basic principle that an agreement
should be interpreted as a whole, without negating the
language of any part of the contract. Accordingly, the Board
finds that the Government's interpretation of the contract is
the only reasonable interpretation of the contract read as a
whole, and the only one which the disputed language will
support. When a contract admits to only one construction, it
is not ambiguous. See Professional Printing of Kansas, Inc.,
supra, Sl. op. at 54; Web I, supra, Sl. op. at 21; R.C.
Swanson Printing and Typesetting Co., supra, Sl. op. at 43-48.
See also, Rainbow Construction Co., Inc., AGBCA No. 87-370-1,
92-3 BCA � 25,130 at 125,287 (citing International Business
Investments, Inc. v. United States, 17 Cl.Ct. 122 (1989),
aff'd, 895 F.2d 1421 (Fed. Cir. 1990); G.M. Shupe, Inc. v.
United States, 5 Cl.Ct. 662, 704 (1984)); Falcon Jet Corp.,
supra, 82-1 BCA at 76,693 (citing Martin Lane Co. v. United
States, 193 Ct. Cl. 203 (1970); General Dynamics Corp., DOT
CAB 76-29, 79-1 BCA � 13,858).
B. Under the circumstances of this case, the Respondent
is not estopped from recovering the overpayments
erroneously made to the Appellant.
The Appellant's estoppel defense relies on two primary
contentions: (1) its bid structure, which shifted the cost of
folding from "COMPLETE PRODUCT" to "ADDITIONAL OPERATIONS,"
was based on the pre-award advice of an ARPPO employee who
agreed with the Contractor's interpretation of the contract
and promised to modify the agreement after award; and (2) GPO
withdrew its initial objection to the Appellant's billing for
folding and stitching as "ADDITIONAL OPERATIONS" on Print
Order 60110,28 and continued to pay for those operations at
the higher rate over the rest of the contract term. See RTSC,
pp. 3, 4; Draft Report, pp. 7, 12-13. The Respondent, on the
other hand, resists estoppel in this case by essentially
interposing two "black letter" principles of Government
contract law: (1) in order to estop the Government it must be
shown that its agent was acting within the scope of his or her
actual authority on the matter at issue; and (2) in any event,
estoppel cannot be asserted against the Government's inherent
right to recoup illegal or erroneous overpayments either by
set off or otherwise. Res. Brf., pp. 5-8. It was apparent to
the Board at the prehearing conference on June 26, 1990, that
the Appellant's understanding of estoppel is derived from
private sector commercial practice. However, as the Board
indicated at that meeting, the law of estoppel is different
where a contractor is dealing with the Government. Draft
Report, pp. 7, 14-15. See Office of Personnel Management v.
Richmond, 496 U.S. 414, 419-20, 110 S.Ct. 2465, 2469, 100
L.Ed.2d 387 (1990) ("From our earliest cases, we have
recognized that equitable estoppel will not lie against the
Government as it lies against private litigants." Citing Lee
v. Munroe & Thornton, 7 Cranch 366, 3 L.Ed. 373 (1813); The
Floyd Acceptances, 7 Wall. 666, 19 L.Ed. 169 (1869); Utah
Power & Light Co. v. United States, 243 U.S. 389, 408-409, 37
S.Ct. 387, 391, 61 L.Ed. 791 (1947); Federal Crop Insurance
Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10
(1947)); Heckler v. Community Health Services of Crawford
County, 467 U.S. 51, 60-61, 104 S.Ct. 2218, 2224, 81 L.Ed.2d
42 (1984) ("When the Government is unable to enforce the law
because the conduct of its agents has given rise to an
estoppel, the interest of the citizenry as a whole in
obedience to the rule of law is undermined. It is for this
reason that it is well settled that the Government may not be
estopped on the same terms as any other litigant." Citing
Immigration and Naturalization Service v. Hibi, 414 U.S. 5, 8,
94 S.Ct. 19, 21, 38 L.Ed.2d 7 (1973) (per curiam); Federal
Crop Insurance Corp. v. Merrill, 332 U.S. 380, 383, 68 S.Ct.
1, 2, 92 L.Ed. 10 (1947)). In this case, the Respondent has
correctly stated the principles relating to Government
estoppel, and when applied to the facts of this case they
support its position.29
Estoppel is an equitable doctrine invoked to avoid injustice
in particular cases, and the party claiming its benefit must
have relied on its adversary's conduct "in such manner as to
change his position for the worse." Heckler v. Community
Health Services of Crawford County, 467 U.S. 51, 59, 104 S.Ct.
2218, 2223, 81 L.Ed.2d 42 (1984); USA Petroleum Corp. v.
United States, 821 F.2d 622, 625 (Fed. Cir. 1987); Flag Real
Estate, Inc., HUD BCA No. 84-899-C14, 88-3 BCA � 20,866, at
105,517. See also John Cibinic, Jr. & Ralph C. Nash, Jr.,
Administration of Government Contracts, 3d Ed. (1995), The
George Washington University, Washington, DC, p. 69 ("Estoppel
is a concept that prohibits a party from escaping liability
for statements, actions, or inactions if they have been relied
on by the other party.") (hereinafter Cibinic & Nash).30
Estoppel arises when the following four conditions are met:
(a) the Government knows or has reason to know the facts; (b)
the Government either intends that its conduct or statements
be acted upon or acts in such a manner as to give the
contractor that impression; (c) the contractor must not have
knowledge of the true facts known by the Government; and (d)
the contractor detrimentally relies on the Government's
conduct or statements. See Castillo Printing Co., GPO BCA
10-90 (May 7, 1991), Sl. op. at 46, fn. 30, reconsid. denied,
GPO BCA 10-90 (March 30, 1992) (citing, American Electronic
Laboratories, Inc. v. United States, 774 F.2d 1110, 1113 (Fed.
Cir. 1985); Emeco Industries, Inc. v. United States, supra,
202 Ct. Cl. 1006, 485 F.2d at 657); Professional Printing of
Kansas, Inc., supra, Sl. op. at 33, fn. 48 (citing Heckler v.
Community Health Services of Crawford County, supra; OAO Corp.
v. United States, 17 Cl. Ct. 91, 104 (1989); Granite
Construction Co., ENG BCA No. 4642, 89-3 BCA � 21,946, at
110,395 (1989)). See also Jana, Inc. v. United States, 936
F.2d 1265, 1270 (Fed. Cir. 1991); USA Petroleum Corp. v.
United States, supra, 821 F.2d at 625; American National Bank
and Trust Co. of Chicago v. United States, 23 Cl. Ct. 542, 549
(1991); Colorado State Bank of Walsh v. United States, 18 Cl.
Ct. 611, 633 (1989), aff'd, 904 F.2d 45 (Fed. Cir. 1987);
Hazeltine Corp. v. United States, 10 Cl.Ct. 417, 442 (1986),
aff'd, 820 F.2d 1190 (Fed. Cir. 1987); Pacific Gas & Electric
Co. v. United States, 3 Cl. Ct. 329, 340 (1983); Taylor & Sons
Equipment Co., ASBCA No. 34675, 89-2 BCA � 21,584, at 108,680;
Embarcadero Center, Ltd., supra, 89-1 BCA � 21,362, at
107,681-82; Flag Real Estate, Inc., supra, 88-3 BCA � 20,866,
at 105,518. Whether or not these four elements have been
satisfied is a question of fact.31 See Professional Printing
of Kansas, Inc., supra, Sl. op. at 33, fn. 48 (citing
Tidewater Equipment Co. v. Reliance Insurance Co., 650 F.2d
503, 506 (4th Cir. 1981)). However, before these estoppel
elements can come into play, the contractor must first show
that: (1) the Government representative whose statements or
conduct forms the basis for the estoppel was acting within the
scope of his or her authority; and (2) the Government was
acting in its proprietary capacity rather than its sovereign
capacity. See Castillo Printing Co., supra, Sl. op. at 43
(citing, Gordon Woodroffe Corp. v. United States, 122 Ct.Cl.
723, 104 F.Supp. 984 (1952); Federal Crop Insurance Corp. v.
Merrill, supra); Professional Printing of Kansas, Inc., supra,
Sl. op. at 34, fn. 50 (citing Manloading & Management
Associates, Inc. v. United States, supra; Federal Crop
Insurance Corp. v. Merrill, supra). See also United States v.
Georgia-Pacific Co., 421 F.2d 92 (9th Cir. 1970). Once these
threshold requirements are met, the normal common law rules of
estoppel apply. See Burnside-Ott Aviation Training Center,
Inc. v. United States, supra, 985 F.2d at 1581.
The burden of proof in Government estoppel cases is on the
contractor, and it is a substantial one. See Haber v. United
States, 17 Cl. Ct. 496 (1989), aff'd, 904 F.2d 45 (1990). See
also Heckler v. Community Health Services of Crawford County,
supra, 467 U.S. at 61, 104 S.Ct. at 2224 ("heavy burden").
Setting aside the "sovereign capacity" question, the
contractor's burden with regard to the authority of the
Government agent is to establish that the representative had
actual authority to act; e.g., to make or modify a contract-
apparent authority will not suffice.32 See Printing Corp. of
the Americas, Inc., GPO BCA 14-84 (January 28, 1985), Sl. op.
at 11, 1985 WL 154851. See also Heckler v. Community Health
Services of Crawford County, supra, 467 U.S. at 63, 104 S.Ct.
at 2225, fn. 17; Federal Crop Insurance Corp. v. Merrill,
supra, 332 U.S. at 384, 68 S.Ct. at 3; Shearin v. United
States, 25 Cl. Ct. 294, 297 (1992); Johnson v. United States,
supra, 15 Cl. Ct. at 174; Hazeltine Corp. v. United States,
supra, 10 Cl. Ct. at 440; Radioptics, Inc. v. United States,
223 Ct. Cl. 594, 612, 621 F.2d 1113, 1123 (1980); Thanet Corp.
v. United States, 219 Ct. Cl. 75, 85, 591 F.2d 629, 635
(1979); Housing Corp. of America v. United States, 199 Ct. Cl.
705, 711, 468 F.2d 922, 925 (1972). Stated otherwise, an
estoppel against the Government cannot be based on the
unauthorized actions or misrepresentations of its agents, or
acts beyond the scope of their authority.33 See Printing
Corp. of the Americas, Inc., supra, Sl. op. at 11. See also
Howard v. United States, 31 Fed. Cl. 297 (1994); New America
Shipbuilders, Inc. v. United States, 15 Cl. Ct. 141 (1988);
aff'd, 871 F.2d 1077 (Fed.Cir. 1989); Shearin v. United
States, supra; Hoskins Lumber Co., Inc. v. United States,
supra; American National Bank and Trust Co. of Chicago v.
United States, supra; Prestex, Inc. v. United States, supra.
As the Supreme Court has noted: "[t]his is consistent with the
general rule that those who deal with the Government are
expected to know the law and may not rely on the conduct of
Government agents contrary to law." See Heckler v. Community
Health Services of Crawford County, supra, 467 U.S. at 63, 104
S.Ct. 2225. It is upon this rock that the Contractor's
estoppel argument founders.
In this case, the Appellant had the burden of showing that on
April 14, 1988, as alleged, it had a conversation with either
Pace, Proctor, or some other ARPPO employee specifically
identified by the Contractor, about how to charge for folding
and stitching the newsletters. The Appellant also had to show
that the employee to whom it spoke had the authority to
confirm its interpretation of the contract that all such costs
should be included under "ADDITIONAL OPERATIONS," and to
modify the contract accordingly. The Contractor has done
neither. Even assuming arguendo that there was a pre-bid
conversation concerning the appropriate way to account for
folding and stitching costs, the Appellant has not presented
any proof whatsoever that it dealt with some ARPPO employee
who had responsibility for the contract in question or the
authority to bind the Respondent with respect to the issues
raised by the Contractor. Perhaps even more telling, inasmuch
as Pace and Proctor have denied the Appellant's claim that it
spoke one of them on that occasion, see R4 File, Tabs D and F;
Draft Report, p. 13, the Contractor's failure to specifically
identify the ARPPO employee involved raises the same doubt in
the Board's mind that it did in the Respondent's, about
whether the conversation ever took place at all. Res. Brf.,
p. 5. In any event, even if the Appellant did talk to either
Pace or Proctor, neither of them, by their own admission,
possessed the requisite authority to deal with the contract
matters raised by the Contractor. Finally, without the
"promised" contract modification or some other writing in the
record, the Appellant's case is reduced to a claim of reliance
on oral advice from an ARPPO employee, which can never support
an estoppel against the Government. See Heckler v. Community
Health Services of Crawford County, supra, 467 U.S. at 65, 104
S.Ct. at 2226-27; Prestex, Inc. v. United States, supra, 3 Cl.
Ct. at 379. See also Fletcher v. United States, 14 Cl. Ct.
776 (1988); Eastern Marine, Inc. v. United States, 5 Cl. Ct.
34 (1984), aff'd in part, rev'd in part, 765 F.2d 158 (Fed.
Cir. 1985); Flag Real Estate, Inc., supra, 88-3 BCA � 20,866,
at 105,517 (absence of written contract modification tended to
show that no modification had been agreed to orally). Thus,
as explained by the Supreme Court in Heckler:
The appropriateness of respondent's reliance is further
undermined because the advice it received from Travelers
was oral. It is not merely the possibility of fraud that
undermines our confidence in the reliability of official
action that is not confirmed or evidence by a written
instrument. Written advice, like a written judicial
opinion, requires its author to reflect about the nature of
the advice that is given to the citizen, and subjects that
advice to the possibility of review, criticism, and
reexamination. The necessity for ensuring that government
agents stay within the lawful scope of their authority, and
that those who seek public funds act with scrupulous
exactitude, argues strongly for the conclusion that an
estoppel cannot be erected on the basis of the oral advice
that underlay respondent's cost reports.
See Heckler v. Community Health Services of Crawford County,
supra, 467 U.S. at 65, 104 S.Ct. at 2226-27.
Under GPO's regulations, the only person authorized to enter
into, administer and terminate contracts, and to make related
determinations and findings, and who therefore could have done
something about the Appellant's concerns, is the Contracting
Officer.34 See, PPR, Chap. I, Sec. 2 (Definition of
"Contracting Officer"), Sec. 3, � 2(d) (Procurement Authority-
Contracting Officers). See also RD Printing Associates, Inc.,
supra, Sl. op. at 10, fn. 11 (in "direct deal" arrangements,
the Contracting Officer retains authority to interpret the
contract); Castillo Printing Co., supra, Sl. op. at 48.
However, the Appellant has not alleged that it spoke to the
Contracting Officer about how to bill for folding and
stitching under the contract, and there is nothing in the
record to indicate that the Contracting Officer delegated his
authority to deal with the Contractor to any ARPPO employee.
See Professional Printing of Kansas, Inc., supra, Sl. op. at
34, fn. 50 (Contract Administrator). Accord American
Electronic Laboratories, Inc. v. United States, supra, 774
F.2d at 1115-16 (Technical Representatives); Max Drill, Inc.
v. United States, supra, 192 Ct. Cl. at 625, 427 F.2d at 1243
(Technical Representative who also designed the project).35
Compare, Prestex, Inc. v. United States, supra, 3 Cl. Ct. at
380 (Procurement Agent was not a technical representative of
the contracting officer, nor was she the designer of the
underlying project, and her promise did not involve the
interpretation of an ambiguous provision in the contract but
rather attempted to vary a specific term in the written
agreement). Similarly, the record is devoid of evidence to
show that the Contracting Officer ratified any unauthorized
act or commitment by an ARPPO employee relating to the
Appellant. See Castillo Printing Co., supra, Sl. op. at 44,
fn. 27. Accord California Sand & Gravel, Inc. v. United
States, 22 Cl. Ct. 19, 27 (1990), aff'd, 937 F.2d 624 (Fed.
Cir. 1991); Durocher Dock & Dredge, Inc., ENG BCA No. 5768,
91-3 BCA � 24,145; Tymeshare, PSBCA No. 206, 76-2 BCA �
12,218. Cf., Allen Wayne, Ltd., GPO 6-87 (November 20, 1987)
Sl. op. at 11, 12, fn. 1, 1987 WL 228973 (acquiescence found).
When all is said and done, the Appellant has failed to
demonstrate that the Contracting Officer, or some other ARPPO
employee with delegated authority to act on his behalf,
subscribed to its view that the contract's "ADDITIONAL
OPERATIONS" provision was the proper pricing mechanism for all
folding and stitching operations, and agreed to modify the
contract to that effect. Thus, on this record, the
Contractor's case is essentially a collection of unverified
assertions amounting to little more than argument, which
standing alone cannot substitute for proof. Cf. Reese
Manufacturing, Inc., ASBCA No. 35144, 88-1 BCA � 20,358.
Indeed, the Board has never allowed such unsubstantiated
contentions to form the basis for recovery. See Hurts
Printing Co., Inc., GPO BCA 27-92 (January 21, 1994), Sl. op.
at 29, 1994 WL 275098; Printing Unlimited, GPO BCA 21-90
(November 30, 1993), Sl. op. at 12, 1993 WL 516844; Banta Co.,
GPO BCA 3-91 (November 18, 1993), Sl. op. at 52, 1993 WL
526919; Stephenson, Inc., supra, Sl. op. at 57, 1991 WL
439269; Fry Communications, Inc./InfoConversion Joint Venture,
GPO BCA No. 9-85, Decision on Remand (August 5, 1991), Sl. op.
at 33, fn. 31, (citing, Fry Communications,
Inc./InfoConversion Joint Venture v. United States, supra, 22
Cl.Ct. at 510). Accord Singleton Contracting Corp., GSBCA No.
8548, 90-2 BCA � 22,748; Tri-State Services of Texas, Inc.,
ASBCA No. 38019, 89-3 BCA � 22,064)); Gemini Services, Inc.,
ASBCA No. 30247, 86-1 BCA � 18,736. Accordingly, because the
Appellant has failed to carry its burden of proving that the
ARPPO employee to whom it spoke, whoever that might have been,
had actual authority to act on behalf of the Government, its
estoppel defense cannot cross the threshold established by
law. See Singer Co., Librascope Division, ASBCA No. 17604,
75-2 BCA � 11,401, at 54,288, aff'd, 217 Ct. Cl. 225, 576 F.2d
905 (1978)
Although further discussion of the application of estoppel is
rendered unnecessary by the above ruling, the Board feels
compelled to say something about the second ground raised by
the Appellant in this case. In that regard, the Contractor
believes that the Respondent's attempt to recover the
erroneous overpayments is unfair because GPO withdrew its
initial objection to the Appellant's billing method and
continued to pay for all folding and stitching operations at
the "ADDITIONAL OPERATIONS" rate for the remainder of the
contract. In essence, the Contractor's contention relates to
the fourth element of estoppel; i.e., detrimental reliance on
the Government's conduct or statements. However, even if the
Appellant had managed to pass the threshold test for estoppel,
the Board would still have dismissed its claim because such a
reliance argument is totally without merit in the context of
this case.
First, the Board's decision on the "ambiguity" question,
holding that the "ADDITIONAL OPERATIONS" provision only
covered the extra folding and stitching required on the
mailing copies of the newsletter, effectively invalidated any
payments made to the Appellant under that pricing mechanism
for folding, trimming and stitching all copies of the
publication on the ground that they were erroneous.
Consequently, the Respondent had a legal right to recover all
monies paid to the Contractor over and above the amount due
for that additional folding and stitching step. See RD
Printing Associates, supra, Sl. op. at 36, fn. 34 ("However,
the Board does note its agreement with the Respondent that, as
a general rule, the Government is not estopped from rectifying
an earlier error in contract administration and may recover
funds erroneously paid. Citing, United States v. Ulvedale,
372 F.2d 31, 35 (8th Cir. 1967); Assignees for the Benefit of
Creditors of A. Hoen & Co., Inc., GPOCAB Panel 9-82 (October
21, 1983), Sl. op. at 4-5, aff'd sub nom., Tatelbaum v. United
States, 10 Cl.Ct. 207 (1986)). See also United States v.
Wurts, supra; 303 U.S. at 415; American National Bank and
Trust Co. of Chicago v. United States, supra, 23 Cl. Ct. at
550; Aetna Casualty & Surety Co. v. United States, supra, 208
Ct. Cl. at 520, 526 F.2d at 1130; Fansteel Metallurgical Corp.
v. United States, supra, 145 Ct. Cl. at 499-501, 172 F.Supp.
at 270-71.
Second, the nub of the Appellant's argument-that even if the
Respondent's payments for all folding and stitching under the
"ADDITIONAL OPERATIONS" provision was erroneous, recovery of
the excess amount is nonetheless unfair because GPO's
continued payments at the higher rate misled the Contractor
into believing that there was no dispute-is not the sort of
detrimental reliance contemplated by the estoppel rules. When
confronted by a similar claim in Heckler, the Supreme Court
stated, in pertinent part:
In this case, the consequences of the Government's
misconduct were not entirely adverse. Respondent did
receive an immediate benefit as a result of the double
reimbursement. Its detriment is the inability to retain
money that it should never have received in the first
place. Thus, this is not a case in which the respondent
has lost any legal right, either vested or contingent, or
suffered any adverse change in its status. [Footnote
omitted.] When a private party is deprived of something to
which it was entitled of right, it has surely suffered a
detrimental change in its position. Here respondent lost
no rights but merely was induced to do something which
could be corrected at a later date.
* * * * * * * * * *
A for-profit corporation could hardly base an estoppel on
the fact that the Government wrongfully allowed it the
interest-free use of taxpayers' money for a period of two
or three years, enabling it to expand its operation. No
more can respondent claim any right to expand its services
to levels greater than those it would have provided had the
error never occurred. Curtailment of operation does not
justify an estoppel when-by respondent's own account-the
expansion of its operation was achieved through unlawful
access to governmental funds. . . . Respondent cannot raise
and estoppel without proving that it would be significantly
worse off than if it had never obtained the [Comprehensive
Employment and Training Act] funds in question.
See Heckler v. Community Health Services of Crawford County,
supra, 467 U.S. at 61-63, 104 S.Ct. 2224-25. See also Chula
Vista School District v. Bennett, 824 F.2d 1573, 1583-84 (Fed.
Cir. 1987), cert. denied, 484 U.S. 1042 (1988) (no proof that
school district changed its position to its detriment because of
Government conduct); United States v. Board of Education of the
City of Union City, 697 F.Supp. 167, 178 (D.N.J. 1988) (inability
to retain money that should not have been paid is not a detriment
that gives rise to estoppel); Estate of Piper v. United States, 8
Cl. Ct. 243, 249 (1985) (redeeming unmatured bonds at par value
to pay an estate tax assessment which is later determined to be
excessive is not detrimental reliance entitling the taxpayer to a
cash refund of the full amount).
Applying the Supreme Court's logic to this case, while the
Appellant may have considered the Respondent's invoice
payments as proof that it was properly billing for folding and
stitching tasks under the contract, in fact, the Contractor
suffers no legal injury by being required to surrender monies
which it would not have received if the Government had made
the correct payments in the first instance. In short, while
there was indeed reliance of a sort here, it was not
detrimental because the Contractor has not been placed in a
worse position than it would have been otherwise. See Heckler
v. Community Health Services of Crawford County, supra, 467
U.S. at 59, 104 S.Ct. 2223; Chula Vista School District v.
Bennett, supra, 824 F.2d at 1583-84; United States v. Board of
Education of the City of Union City, supra, 697 F.Supp. at
178; Estate of Piper v. United States, supra, 8 Cl. Ct. at
249. See also Coral Petroleum, Inc., supra, 86-1 BCA � 18,533
(contractor not prejudiced by government delay and subsequent
demand for payment and formal claim assertion); Okaw
Industries, Inc., ASBCA No. 17863, 75-1 BCA � 11,321,
reconsid. denied, 75-2 BCA � 11,571 (no injury to contractor
from disallowance of settlement); Simmonds Precision Products,
Inc., ASBCA No. 18110, 74-1 BCA � 10,472 (Government not
estopped from assessing liquidated damages after two years
absent proof of prejudice from delay). Accordingly, apart
from the Appellant's failure to sustain its burden on the
threshold issue, the Board also concludes that the Contractor
has not shown that it is entitled to an estoppel on the
merits.
CONCLUSION
The Board finds that under the terms of the contract the
Appellant was not authorized to invoice, nor the Respondent to
pay, for the folding, trimming and stitching of all
newsletters as an extra operation pursuant to the contract
pricing mechanism entitled "ADDITIONAL OPERATIONS." Rather,
that provision only contemplated compensating the Contractor
for the additional folding and stitching step required on the
approximately 10 percent of each order which was destined for
mailing. Nonetheless, the record shows that GPO paid the
Appellant's folding and stitching charges in full, as billed
over the life of the contract. The Respondent's payments thus
made were in error. As a result of this mistake, the
Government wound up overpaying for the extra work and unjustly
enriching the Appellant in the amount of $16,380.00. Under
these circumstances, restitution is a proper remedy. See Joan
C. Morningstar et al., supra, 92-3 BCA � 25,120, at 125,230
(citing 3 Corbin on Contracts, sec. 617 at 758-59 (1960,
Supra. 1971); Coral Petroleum, Inc., supra, 86-1 BCA � 18,533,
at 93,107 (citing United States v. Russell Manufacturing Co.,
349 F.2d 13 (2d Cir. 1965); RESTATEMENT OF RESTITUTION �� 1,
20, 21). Consequently, the Respondent had an inherent right
to recover the erroneous overpayments; indeed, it was legally
required to do so. See United States v. Wurts, supra, 303
U.S. at 415; Aetna Casualty & Surety Co. v. United States,
supra, 208 Ct. Cl. at 520, 526 F.2d at 1130; Fansteel
Metallurgical Corp. v. United States, 145 Ct. Cl. at 500, 172
F.Supp. at 270. Corresponding, the Appellant was duty-bound
to refund the money unless it could show: (a) that its
interpretation of the contract was reasonable; or (b) the
Government's recoupment claim was estopped as a matter of
equity. It has been unable to do either. See Professional
Printing of Kansas, Inc., supra, Sl. op. at 51, 54; Web I,
supra, Sl. op. at 21; Castillo Printing Co., supra, Sl. op. at
46, fn. 30. See also Heckler v. Community Health Services of
Crawford County, supra, 467 U.S. at 63, 104 S.Ct. at 2225;
Federal Crop Insurance Corporation v. Merrill, supra, 332 U.S.
384, 68 S. Ct. 3. Therefore, GPO is entitled to recoup
$16,380.00 from the Appellant, in accordance with the
Contracting Officer's final decision.36 ORDER
Because the Board finds and concludes that the disputed
contract terms are clear and unambiguous, specifically insofar
as the "ADDITIONAL OPERATIONS" pricing provision only refers
to billing for the extra folding and stitching required for
the mailing copies of the newsletter, and since the Appellant
has not sustained its burden of proof with regard to estoppel,
the decision of the Contract Officer is AFFIRMED, and the
appeal is DENIED.
It is so Ordered.
June 30, 1995 STUART M. FOSS
Administrative Judge
_______________
1 At the time this appeal was filed, the ARPPO's address was
75 Spring Street, SW., Room 700, Atlanta, Georgia 30303-3369.
2 The Contracting Officer's appeal file, assembled pursuant
to Rule 4 of the Board's Rules of Practice and Procedure, was
delivered to the Board on May 12, 1989. GPO Instruction
110.12, Subject: Board of Contract Appeals Rules of Practice
and Procedure, dated September 17, 1984 (Board Rules), Rule
4(a). It will be referred to hereafter as R4 File, with an
appropriate Tab letter (and a page number for Tab A) also
indicated. As originally submitted, the R4 File consists of
eight documents identified as Tabs A through H. Thereafter,
pursuant to the Board's instructions at the prehearing
telephone conference held on June 26, 1990, the Respondent
augmented the R4 File with four additional documents,
identified as Tabs J through M. See, Notice of Filing, dated
July 5, 1990. By inadvertence or oversight, no exhibit has
been marked as Tab I.
3 The factual description of this case is based: (a) the
Appellant's Notice of Appeal, dated March 23, 1989; (b) the
R4 File; (c) the Appellant's Complaint, dated May 18, 1989;
(d) the Appellant's Letter, dated June 16, 1989, submitting
additional information in accordance with Rule 4(b) of the
Board Rules (Appellant's Exhibits A-F); (e) the Respondent's
Answer, dated June 26, 1989; and (f) the Report of Telephone
Status Conference, dated August 14, 1992 (RTSC). In
addition, at the status conference, which was held on August
4, 1992, the Board informed the parties that the former
Administrative Judge had prepared a draft Prehearing
Telephone Conference Report, dated June 27, 1990 (Draft
Report), of the meeting he held on June 26, 1990, but had not
issued it to them because an agency reorganization soon
afterward resulted in his reassignment to another senior
position within GPO. Since the Board believed that the Draft
Report should be included as part of the appeal record, it
told the parties that they would be provided a copy for their
comments and/or corrections. RTSC, p. 5. Although the Board
sent each party a copy of the Draft Report on August 14,
1992, neither of them submitted comments and/or corrections
for the Board's consideration. Consequently, the Board
included the Draft Report in the record as originally
written. See Order Establishing A Briefing Schedule and
Setting a Date for Settling the Record, dated September 15,
1992, p. 2. See also Web Business Forms, Inc., GPO BCA 31-89
(July 22, 1994), Sl. op. at 2, fn. 3. The facts, which are
essentially undisputed, are recited here only to the extent
necessary for this decision.
4 The record indicates that there were 33 potential
contractors on the original bid list, and that three (3)
other possible offerors asked for a copy of the invitation
for bid (R4 File, Tab J). See Draft Report, p. 10. However,
the Respondent only received three (3) responsive bids,
including the Appellant's. Id. The other two contractors
who submitted bids which GPO considered were Baker Press,
Inc. (Baker), and Susie Rittger Associates (Rittger) (R4
File, Tabs L and M). Coastal Printing, the previous
contractor, did not submit an offer. See Draft Report, p.
11.
5 The contract in question was a "direct-deal term contract."
As explained in the GPO Agency Procedural Handbook, GPO
Publication 305.1, dated March 1987 (GPO Handbook): "[d]
irect-deal term contracts allow the customer agency to place
print orders (GPO Form 2511) directly with contractors rather
than routing them through the GPO for placement." GPO
Handbook, Section IV, � 1, at 8. The purpose of this method
of contract administration is " . . . to ensure that agency
printing needs are met in the most effective and efficient
manner possible." Id. It should be noted, however, that
agency direct-deal authority ". . . extends only the
placement of print orders and to the transmission of copy and
proofs. . . . All other authority rests with GPO's
Contracting Officers." GPO Handbook, Section IV, � 2, at 9.
See RD Printing Associates, Inc., GPO BCA 02-92 (December 16,
1992), Slip op. at 6, fn. 6, 1992 WL 516088; R.C. Swanson
Printing and Typesetting Co., GPO BCA 31-90 (February 6,
1992), Slip op. at 6, fn. 4, 1992 WL 487874, aff'd on other
grounds, Richard C. Swanson, T/A R.C. Swanson Printing and
Typesetting Co. v. United States, Cl.Ct. No. 92-128C (October
2, 1992).
6 The record discloses that the previous contract did not
contain a pricing line item for "ADDITIONAL OPERATIONS." See
Draft Report, pp. 9-10.
7 The contract was also governed by the applicable articles
of GPO Contract Terms, GPO Publication 310.2 (Rev. 10-80)
(GPO Contract Terms), GPO's Quality Assurance Through
Attributes Program, GPO Publication 310.1 (Rev. 06-81), and
Department of Labor Wage and Hour Publication 1313 (R4 File,
Tab A, p. 2).
8 The Respondent denies that this telephone conversation
occurred. See Answer, � 3. In that regard, the Appellant
has identified two employees of the ARPPO as the person at
the other end of the telephone. First, the Contractor
thought that it talked to Ms. Debbie Pace, but she has no
recollection of the call, and besides says that she was not
involved with term contracts on that date (R4 File, Tab D).
Later, the Appellant claimed that it spoke to Ms. Dorothy
Proctor, a Procurement Assistant at the ARPPO, about this
matter (R4 File, Tab E). However, Ms. Proctor flatly denied
that such a conversation ever took place, and stated that if
the Contractor had telephoned she would have referred the
call to the ARPPO employees who were responsible for term
contracts (R4 File, Tab F). In the final analysis, while
Ms. Pace's lack of recollection about talking to the
Appellant is not necessarily a denial that the conversation
took place, the evidence of record is insufficient to
identify with certainty who the Appellant spoke to at the
ARPPO on April 14, 1987.
9 The record discloses that the other two responsive bidders,
Baker and Rittger, submitted bids without figures for
additional folding and stitching (R4 File, Tabs L and M).
See Draft Report, pp. 10-11.
10 The record shows that the first invoice submitted by the
Appellant, Invoice No. 8889, dated May 7, 1988, was initially
sent to GPO without any folding and stitching charge. See
App. Exh. A. However, the Contractor subsequently mailed a
corrected invoice to the Respondent showing folding and
stitching for 11,800 newsletters at the rate of $60.00 per
1,000, or a total of $708.00. Id. See also Complaint � 5;
Draft Report, pp. 4-5.
11 The Respondent's recovery claim is based on 25 print
orders; i.e., Print Orders 60101-60109, and 60111-60126,
inclusive (R4 File, Tab E). With respect to Print Order
60110, the record indicates that this was the first one in
which GPO challenged the Contractor's charges for folding and
stitching, but after discussing the matter with the
Appellant, the Respondent paid the $708.00 invoiced by the
Contractor. See Draft Report, pp. 5-6, 9. 14. See also App.
Exh. C (Invoice No. 9879, paid November 14, 1987).
Therefore, Print Order 60110 is not part of this case since
the Government has, in effect, waived its claim as to that
payment.
12 Appellant's invoice numbers 8889, 8986 and 9069,
mistakenly refer to Government print order numbers 60001,
60002 and 60003, respectively, although it is clear that the
correct print order references should be 60101, 60102 and
60103. See App. Exh. A. However, the misidentification was
quickly corrected beginning with invoice number 9188 for
print order number 60104. Id.
13 The Respondent's debt collection procedure is contained in
GPO's Printing Procurement Regulation. See Printing
Procurement Regulation, GPO Publication 305.3 (Rev. 10-90),
Chap. VIII, Sec. 3 (hereinafter PPR). The PPR gives primary
responsibility for determining the amounts of and collecting
contract debts to the agency Comptroller-i.e., FMS-the same
GPO organization designated by the contract to receive the
Appellant's vouchers. See PPR, Chap. VIII, Sec. 3 � 3.b; R4
File, Tab A, p. 3 (Payment).
14 See note 8 supra.
15 Apart from the respective positions taken by the parties
in the Complaint, the Answer, the Draft Report, and the RTSC,
each party filed a brief with the Board, and the Appellant
submitted a reply brief. The Appellant's initial brief was
filed with the Board on October 13, 1992, and shall be
referred to hereinafter as "App. Brf.," with an appropriate
page citation thereafter. The Appellant's reply brief was
submitted to the Board on October 28, 1992, and shall be
referred to hereinafter as "App. R. Brf.," with an
appropriate page citation thereafter. The Respondent's
initial brief was submitted to the Board on October 13, 1992,
and shall be referred to hereinafter as "Res. Brf.," with an
appropriate page citation thereafter. Accordingly, the
Board's understanding of the positions of the parties is
based on: (a) the Appellant's Complaint; (b) the Respondent's
Answer; (c) the Draft Report; (d) the RTSC; (d) the initial
briefs of the parties; and (e) the Appellant's reply brief.
16 At the prehearing conference on June 26, 1990, the
Appellant also argued that this same Government conduct at
the very least established a "quasi contract" between the
parties. Draft Report, p. 13. The dictionary tells us that
a "quasi contract" is "an obligation which law creates in the
absence of an agreement; it is invoked by courts where there
is an unjust enrichment. [Citation omitted.]" BLACK'S LAW
DICTIONARY 1245 (6th ed. 1990). It is sometimes referred to
as an implied-in-law contract (a legal fiction) to
distinguish it from an implied-in-fact contract (a voluntary
agreement inferred from the parties' conduct), and its
function is to create a legal duty where in fact the parties
made no promises, without regard to any apparent intention on
their part. Id. The Contractor's theory was that the extra
folding and stitching of the newsletters was a "valuable
benefit" to the Government for which it should have to pay,
and that allowing recoupment of the alleged overcharges would
unjustly enrich the Respondent. Draft Report, p. 14. The
Board rejected this notion essentially on two grounds: (a)
there was nothing in the facts presented to support a finding
that there was an implied contract in this case; and (b) the
doctrine of "unjust enrichment" would not apply to a
situation in which a contractor provides something which the
Government did not ask for. Draft Report, p. 18. In that
regard, it is settled that the jurisdiction of agency boards
of contract appeals over implied contracts is limited, and
does not extend to so-called "quasi contracts." See
Embarcadero Center, Ltd., GSBCA No. 8526, 89-1 BCA � 21,362,
at 107,681 ("The Board lacks jurisdiction over contracts that
are implied in law; i.e., that are implied as a matter of
equity to avoid injustice."). Boards do have jurisdiction
over implied-in-fact contracts because they have the same
elements as an express contract (offer, acceptance and
consideration), and the parties must engage in a pattern of
conduct that establishes a mutual intent to enter into a
binding agreement or shows a tacit understanding that such an
agreement exists. Id. (citing, Hatzlachh Supply Co. v.
United States, 444 U.S. 460, 465, fn. 5 (1980); Fincke v.
United States, 675 F.2d 289, 295 (Ct.Cl. 1987); Tree Farm
Corp. v. United States, 585 F.2d 493, 500 (Ct.Cl. 1978);
Russell Corp. v. United States, 537 F.2d 474, 481-82 (Ct.Cl.
1976), cert. denied, 429 U.S. 1073 (1977); Parking Co. of
America, Inc., GSBCA No. 7654, 87-2 BCA � 19,823, at
100,925). Although the Board rejected the Appellant's "quasi
contract" theory, it indicated that it would review the
matter under quantum meruit principles. Draft Report, p. 18.
In that regard, for quantum meruit to apply in this case, the
Appellant would have to prove that the Government received a
benefit, and that the unauthorized goods or services were
expressly or impliedly ratified by the Contracting Officer or
some other authorized contracting official. See Publishers
Choice Book Manufacturing Co., GPO BCA 4-84 (August 18,
1986), Sl. op. at 13, 1986 WL 181457 (the Board held that
compensation based on quantum meruit excludes the theory of
equitable estoppel). See also Checker Van Lines,
Comp.Gen.Dec. B-206542, 82-2 CPD � 219, reconsid. denied,
B-206542.2, 84-2 CPD � 253; Singer Co., Comp.Gen.Dec.
B-183878, 75-1 CPD � 406; Acme, Inc., Comp.Gen.Dec. B-182584,
74-2 CPD � 310; INTASA, Inc., Comp.Gen.Dec. B-180876, 74-1
CPD � 148. Accordingly, the Board suggested to the
Contractor that it review the law of Government contracts
with respect to quantum meruit and "unjust enrichment," which
it would find was "quite different from the law of contracts
generally." Draft Report, pp. 14-15. The record shows that
the Appellant did not raise this issue at the subsequent
status conference on August 4, 1992, or in its brief, and the
Board assumes that it has now abandoned quantum meruit as a
theory of relief.
17 The Respondent also believes that the Contractor's failure
to pursue the matter of a contract modification with GPO
after the contract was awarded is further evidence that the
conversation never took place. Res. Brf., p. 5 (citing,
Draft Report, p. 4).
18 During the prehearing conference, the parties also
disagreed about whether a Government employee, even if he or
she possessed the requisite contracting authority, could make
the sort of commitment the Appellant says was made to it.
Draft Report, pp. 8-9. 13. In the Respondent's view, such
special agreements with only one bidder are illegal and
unenforceable. Res. Brf., p. 7 (citing, Rogers Helicopters,
Inc., AGBCA No. 75-147, 77-2 BCA � 12,562; Ralph Rosedale,
AGBCA No. 441, 77-1 BCA � 12,344). Indeed, GPO observes that
the contract in this case contained a solicitation provision
which made clear that the Government cannot negotiate special
agreements with only one prospective bidder. Id. (citing,
GPO Contract Terms, Solicitation Instruction 1-2).
Consequently, if the sort of arrangement described by the
Appellant had been made, as alleged, it would have violated
the contract, been at odds with Government contract law, thus
null and void. Res. Brf., p. 7. Although the Board finds it
unnecessary to resolve the controversy in the context of this
decision, it does concur in the Respondent's statement of the
law. See Prestex, Inc. v. United States, 3 Cl.Ct. 373, 379
(1983), reaff'd on reconsid., 4 Cl.Ct. 317 (1984), aff'd, 746
F.2d 1489 (Fed. Cir. 1984) ("To allow oral contracts in the
pre-award stage to vary specific delivery requirements of the
solicitation, without disclosure to the other bidder(s),
would impinge on the integrity of the advertised procurement
process. [Footnote omitted.]"). Moreover, the Board notes
that the prohibition against ex parte communications with
only one prospective bidder regarding solicitation
information, is still agency policy. See, GPO Contract
Terms, Solicitation Provisions, Supplemental Specifications,
and Contract Clauses, GPO Publication 310.2, Effective
December 1, 987 (Rev. 9-88), Solicitation Provisions, � 2
(Information Furnished to Bidders).
19 As the Respondent observes, the statute of limitations on
suits for the collection of money under an express or implied
contract is six (6) years from the dated on which the cause
of action accrued. Res. Brf., p. 8 (citing, 28 U.S.C. � 2415
(1988)). Furthermore, the period for recovering on a claim
by administrative offset is ten (10) years. RTSC, p. 4. See
also, Res. Brf., p. 8 (citing, 31 U.S.C.� 3716(c)(1) (1988);
28 U.S.C. � 2415(i) (1988)). It is undisputed that the
Respondent made its recoupment claim well within the
limitations period. RTSC, p. 4.
20 The record on which the Board's decision is based consists
of: (a) the Notice of Appeal, dated March 23, 1989; (b) the
R4 File (Tabs A-H, and J-M); (c) the Complaint, dated May 18,
1989; (d) Appellant's Exhibits A-F, submitted with its
letter, dated June 16, 1989; (e) the Answer, dated June 26,
1989; (f) the draft Prehearing Telephone Conference Report,
dated June 27, 1990; (g) the Report of Telephone Status
Conference, dated August 14, 1992; (h) the Appellant's brief
filed with the Board on October 13, 1992; (i) the
Respondent's brief submitted to the Board on October 13,
1992; and (j) the Appellant's reply brief of October 28,
1992. Furthermore, although the record was mostly compiled
before the undersigned was appointed GPO's Administrative
Judge, see note 3 supra, that fact is not an impediment to
his authorship of this decision. See, Web Business Forms,
Inc., GPO BCA 16-89 (September 30, 1994), Sl. op. at 16, fn.
15 (Web I); Web Business Forms, Inc., supra, Sl. op. at 12,
fn. 18. Accord, C&L Construction Co., Inc., ASBCA Nos.
22993, 23040, 81-2 BCA � 15,373, at 76,168 (citing,
Sternberger v. United States, 185 Ct.Cl. 528, 401 F.2d 1012
(1968); Sundstrand Turbo v. United States, 182 Ct.Cl. 31, 389
F.2d 406 (1968)).
21 The Merrick Business Forms case was decided by one of the
ad hoc contract appeals panels which considered appeals from
final decisions of GPO Contracting Officers prior to the
establishment of the Board in 1984. GPO Instruction 110.10C,
Subject: Establishment of the Board of Contract Appeals,
dated September 17, 1984. Decisions of these ad hoc panels
are cited by the Board in its decisions as GPOCAB. While the
Board is not bound by the decisions of the ad hoc panels, its
policy is to follow their rulings where applicable and
appropriate. See, Universal Printing Co., GPO BCA 09-90
(June 22, 1994) Sl. op. at 11, fn. 9, 1994 WL 377586; Shepard
Printing, GPO BCA 23-92 (April 29, 1993), Sl. op. at 14, fn.
19, 1993 WL 526848; R.C. Swanson Printing and Typesetting
Co., GPO BCA 15-90 (March 6, 1992), Sl. op. at 28, fn. 30,
1992 WL 487874, Supplemental Decision (July 1, 1993), 1993 WL
526638, modified, GPO BCA 15-90 (December 20, 1993);
Stephenson, Inc., GPO BCA 2-88 (December 20, 1991), Sl. op.
at 18, fn. 20, 1991 WL 439269; Chavis and Chavis Printing,
GPO BCA 20-90 (February 6, 1991), Sl. op. at 9, fn. 9, 1991
WL 439270.
22 Contract interpretation is clearly a question of law.
See, Fry Communications, Inc.-InfoConversion Joint Venture v.
United States, 22 Cl. Ct. 497, 503 (Cl.Ct. 1991); General
Business Forms, Inc., GPO BCA 2-84 (December 3, 1985), Sl.
op. at 16, 1985 WL 154846 (citing, John C. Grimberg Co. v.
United States, 7 Ct. Cl. 452 (1985)); RD Printing Associates,
Inc., supra, Sl. op. at 13. See also, Fortec Contractors v.
United States, 760 F.2d 1288, 1291 (Fed.Cir. 1985); P.J.
Maffei Building Wrecking Co. v. United States, 732 F.2d 913,
916 (Fed. Cir. 1984); Pacificorp Capital, Inc. v. United
States, 25 Cl. Ct. 707, 715 (1992), aff'd, 988 F.2d 130 (Fed.
Cir. 1993); Ralph Construction, Inc. v. United States, 4 Cl.
Ct. 727, 731 (1984) (citing, Torncello v. United States, 681
F.2d 756, 760 (Ct.Cl. 1982)); Hol-Gar Manufacturing Corp. v.
United States, 169 Ct. Cl. 384, 386, 351 F.2d 972, 973
(1965). Any decision by this Board concerning such a matter
is reviewable by the Courts under the Wunderlich Act, 41
U.S.C. �� 321, 322. See, Fry Communications, Inc./
InfoConversion Joint Venture v. United States, supra, 22
Cl.Ct. at 501, fn. 6; General Business Forms, Inc., supra,
Sl. op. at 16.
23 It has been observed that: "[a] mere dispute over the
terms does not constitute an ambiguity, and an interpretation
which is merely possible is not necessarily reasonable."
Ceccanti, Inc. v. United States, 6 Cl. Ct. 526, 528 (1984).
An ambiguity must have two or more reasonable interpretations
and the intent of the parties must not be determinable by the
normal rules of interpretation. McDonald & Eudy Printers,
Inc., supra, Sl. op. at 14, fn. 12; R.C. Swanson Printing and
Typesetting Co., supra, Sl. op. at 42. See also,
International Business Investments, Inc. v. United States, 17
Cl. Ct. 122 (1989), aff'd, 895 F.2d 1421 (Fed. Cir. 1990)
(contract terms are not rendered ambiguous by the mere fact
that the parties disagree as to their meaning; there must be
reasonable uncertainty of meaning); Perry & Wallis, Inc. v.
United States, 192 Ct. Cl. 310, 315, 427 F.2d 722, 725 (1970)
(quoting, Bishop Engineering Co. v. United States, 180 Ct.
Cl. 411, 416 (1967)).
24 In such cases, the doctrine of contra proferentem applies
and the dispute language will be construed against the
drafter, see, Fry Communications, Inc./InfoConversion Joint
Venture v. United States, supra, 22 Cl. Ct. at 503 (citing,
William F. Klingensmith, Inc. v. United States, 205 Ct. Cl.
651, 657 (1974)); Web I, supra, Sl. op. at 18, fn. 18; R.C.
Swanson Printing and Typesetting Co., supra, Sl. op. at 41,
fn. 22, if the non-drafter can show that he/she relied on the
alternative reasonable interpretation in submitting his/her
bid, see, Web I, supra, Sl. op. at 19, fn. 18; Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl. Ct. at 510 (citing, Fruin-Colon Corp.
v. United States, 912 F.2d 1426, 1430 (Fed. Cir. 1990)); Lear
Siegler Management Services v. United States, 867 F.2d 600,
603 (Fed. Cir. 1989)).
25 Where there are such discrepancies, errors, or gaps, the
contractor has an affirmative obligation to ask the
contracting officer to clarify the true meaning of the
contract language before submitting its bid. See, Interstate
General Government Contractors, Inc. v. Stone, 980 F.2d 1433
(Fed. Cir. 1992); Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl. Ct. at 504
(citing, Newsom v. United States, 230 Ct. Cl. 301, 303, 676
F.2d 647, 650-51 (1982); Enrico Roman, Inc. v. United States,
2 Cl. Ct. 104, 106 (1983); S.O.G. of Arkansas v. United
States, 212 Ct.Cl. 125, 546 F.2d 367 (1976); Beacon
Construction v. United States, 314 F.2d 501 (Ct.Cl. 1963)).
See also, Universal Construction Co., NASA BCA No. 83-1092,
93-3 BCA � 26,173; Harwood Construction Co., NASA BCA No.
1165-45, 68-1 BCA � 6768.
26 The purpose of any rule of contract interpretation is to
carry out the intent of the parties. Hegeman-Harris & Co. v.
United States, 194 Ct. Cl. 574, 440 F.2d 1009 (1971). The
test for ascertaining intent is an objective one; i.e., the
question is what would a reasonable contractor have
understood, not what did the drafter subjectively intend.
Corbetta Construction Co. v. United States, 198 Ct. Cl. 712,
461 F.2d 1330 (1972). See also, Salem Engineering and
Construction Corp. v. United States, supra, 2 Cl. Ct. at 806.
The provisions of the contract itself should provide the
evidence of the objective intent of the parties.
27 It is unnecessary to set forth in detail the rules of
contract construction which apply when interpreting an
agreement. Suffice it to say that, within the contract
itself, ordinary terms are to be given their plain and
ordinary meaning in defining the rights and obligations of
the parties. See, Elden v. United States, 223 Ct. Cl. 239,
617 F.2d 254 (1980). Similarly, technical terms are given
their technical meaning. See, Coastal Drydock and Repair
Corp., ASBCA No. 31894, 87-1 BCA � 19,618; Industrial
Finishers, Inc., ASBCA No. 6537, 61-1 BCA � 3,091. Likewise,
terms special to Government contracts will be given their
technical meanings. See, General Builders Supply Co. v.
United States, 187 Ct. Cl. 477, 409 F.2d 246 (1969) (meaning
of "equitable adjustment"). As for extrinsic evidence of the
intent of the parties, the rules of construction allow, inter
alia, custom and trade usage to explain or define terms.
See, W. G. Cornell Co. v. United States, 179 Ct. Cl. 651, 376
F.2d 199 (1967); Harold Bailey Painting Co., ASBCA No. 27064,
87-1 BCA � 19,601 (used to define "spot painting"). However,
custom and trade usage may not contradict clear or
unambiguous terms. See, WRB Corp. v. United States, 183 Ct.
Cl. 409, 436 (1968).
28 See note 11 supra.
29 The Supreme Court has consistently refused to adopt a flat
rule that estoppel may not in any circumstances run against
the Federal Government, perferring to follow an ad hoc
approach instead. See Office of Personnel Management v.
Richmond, supra, 496 U.S. at 423, 110 S.Ct. at 2470-71;
Heckler v. Community Health Services of Crawford County, 467
U.S. 51, 60, 104 S.Ct. at 2224. Furthermore, estoppel claims
involving public funds are strictly scrutinized, and the
Supreme Court has never upheld such a claim against the
Government for the payment of money. See Office of Personnel
Management v. Richmond, supra, 496 U.S. at 426-27, 110 S.Ct.
at 2472-73; Heckler v. Community Health Services of Crawford
County, supra, 467 U.S. at 63, 104 S.Ct. at 2225. In
Richmond, the Supreme Court stressed that an estoppel against
the Government, extended to its logical conclusion in the
context of payment of money from the Treasury, could nullify
the Appropriations Clause of the United States Constitution.
See Office of Personnel Management v. Richmond, supra, 496
U.S. at 4428, 110 S.Ct. at 2473; U.S. CONST. art. I, � 9, cl.
7 ("No Money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law."). The precise
effect of the Supreme Court's Richmond decision on contract
cases is unclear, primarily because the awards sought by
Government contractors are generally based on contract
principles that do not contravene the eligibility
requirements contained in federal statutes, and thus the
lower courts tend to limit its reach to claims of entitlement
contrary to statutory appropriations. See Burnside-Ott
Aviation Training Center, Inc. v. United States, 985 F.2d
1574, 1581 (Fed. Cir. 1993); Tri-O, Inc. v. United States, 28
Fed. Cl. 463, 473 (1993); Hoskins Lumber Co., Inc. v. United
States, 24 Cl.Ct. 259, 264 (1991).
30 Estoppel is often confused with the principle of finality,
which accomplishes the same result. However, estoppel and
finality differ in two important respects: (a) only estoppel
requires detrimental reliance by the party who seeks to
invoke it; and (b) finality depends on Government statements
or conduct which is contractually binding through the
operation of legal principles such as offer and acceptance,
acceptance of goods, etc., while estoppel rests on elemental
notions of fairness without regard to the contractually
binding nature of the Government's representations or
actions. See generally Cibinic & Nash, pp. 71, 76-77
(citing, H & M Moving, Inc. v. United States, 204 Ct. Cl.
696, 499 F.2d 660 (1974); Emeco Industries, Inc. v. United
States, 202 Ct. Cl. 1006, 485 F.2d 652 (1973); Dana Corp. v.
United States, 200 Ct. Cl. 200, 470 F.2d 1032 (1972); Gresham
& Co. v. United States, 200 Ct. Cl. 97, 470 F.2d 542 (1972);
Manloading & Management Associates, Inc. v. United States,
198 Ct. Cl. 628, 461 F.2d 1299 (1972); Litton Systems, Inc.
v. United States, 196 Ct. Cl. 133, 449 F.2d 392 (1971);
Mercury Machine & Manufacturing Co., ASBCA No. 20068, 76-1
BCA � 11,809; Lockheed Shipbuilding & Construction Co., ASBCA
No. 18460, 75-1 BCA � 11,246, reconsid. denied, 75-2 BCA �
11,566; Unidynamics/St. Louis, Inc., ASBCA No. 17592, 73-2
BCA � 10,360; Peninsular ChemReseach, Inc., ASBCA No. 14384,
71-2 BCA � 9066; Fink Sanitary Service, Inc., 53 Comp. Gen.
502 (B-179040), 74-1 CPD � 36).
31 It has been suggested that aside from these four
criterion, the contractor may also have to show affirmative
misconduct by Government employees. See Howard v. United
States, 23 Cl. Ct. 432 (1991); New England Tank Industries of
New Hampshire, Inc., ASBCA No. 26474, 88-1 BCA � 20,395,
vacated and remanded on other grounds, 861 F.2d 685 (Fed.
Cir. 1988). On the other hand, it is clear that: ". . .the
[G]overnment does not engage in affirmative misconduct by
challenging the validity of its employees' acts or
agreements." Hazeltine Corp. v. United States, supra, 10
Cl.Ct. at 444 (1986).
32 As a rule, the contractor is responsible for ascertaining
the authority of the Government employees with whom it deals.
See Hoskins Lumber Co., Inc. v. United States, supra, 24
Cl.Ct. at 264; Johnson v. United States, 15 Cl.Ct. 169, 174
(1988); Prestex, Inc. v. United States, supra, 3 Cl.Ct. at
377. However, where some powers have been delegated to an
employee, the requisite authority may be implied if it is
considered as an integral part of the employee's assigned
duties. See H. Landau & Co. v. United States, 886 F.2d 322
(Fed. Cir. 1989); Sigma Construction Co., ASBCA No. 37040,
91-2 BCA � 23,926; Jordan & Nobles Construction Co., GSBCA
No. 8349, 91-1 BCA � 23,659; DOT Systems, Inc., DOTCAB No.
1208, 82-2 BCA � 15,817; Switlik Parachute Co., Inc., ASBCA
No. 17920, 74-2 BCA � 10,970.
33 Frequently, the lack of authority results from the action
being contrary to statutory requirements. In such cases,
courts will construe the authority narrowly. See Schweiker
v. Hansen, 450 U.S. 785, 101 S.Ct, 1468, 67 L.Ed.2d 685
(1981) (per curiam) (all courts have a duty to observe
conditions defined by Congress for charging the public
treasury); Office of Personnel Management v. Richmond, supra
(Government cannot be bound by a payment contravening
explicit statutory limitation); American National Bank and
Trust Co. of Chicago v. United States, supra (Government not
estopped from recovering wrongful, illegal or erroneous
payments when the conditions for payment are prescribed by
statute); Aetna Casualty & Surety Co. v. United States, supra
(Government not estopped from recovering illegal payment);
Fansteel Metallurgical Corp. v. United States, supra
(unauthorized overpayment does not bind Government). See
also Singer Co., Librascope Division, ASBCA No. 17604, 75-2
BCA � 11,401, aff'd, 217 Ct. Cl. 225, 576 F.2d 905 (1978).
The same rule applies when the Government employee is acting
contrary to delegated authority. See Atlantic Gulf & Pacific
Co. of Manila v. United States, 207 Ct. Cl. 995 (1975) (no
estoppel to disavow settlement agreement negotiated without
required advance approval). Conversely, when the Government
official is acting within the scope of his or her delegated
authority and the actions are not prohibited by statute or
regulation, estoppel will be found even though the action is
based upon a mistaken interpretation of the Government's
obligations. See USA Petroleum Corp. v. United States,
supra; Portmann v. United States, 674 F.2d 1155 (7th Cir.
1982); Kozak Micro Systems, Inc., GSBCA No. 10519, 91-1 BCA �
23,342, reconsid. denied, 91-1 BCA � 23,593.
34 It should be noted that although there is no comparable
contract clause in the earlier edition of GPO Contract Terms
incorporated in the Appellant's contract, the current version
expressly provides that: ". . . Modifications shall have no
force or effect unless addressed before the fact to and
subsequently confirmed in writing by the Contracting Officer.
. . ." [Emphasis added.]). See GPO Contract Terms,
Solicitation Provisions, Supplemental Specifications, and
Contract Clauses, GPO Publication 310.2, Effective December
1, 1987 (Rev. 9-88), Contract Clauses, � 1 (Contractual
Responsibility). See also Castillo Printing Co., supra, Sl.
op. at 45, fn. 28. In the Board's view, however, while this
language further emphasizes the authority of GPO Contracting
Officers, it adds nothing to their procurement powers, and
probably was always implied in previous versions of GPO
Contract Terms.
35 As the Claims Court explained: " When an official of the
contracting agency is not the contracting officer, but has
been sent by the contracting officer for the express purpose
of giving guidance in connection with the contract, the
contractor is justified in relying on his representations.
[Citation omitted.]" See Max Drill, Inc. v. United States,
supra, 192 Ct.Cl. at 625, 427 F.2d at 1243.
36 The record indicates that sometime after the prehearing
conference on June 26, 1990, the Appellant agreed to a
repayment schedule to liquidate its debt to the Respondent.
See Appellant's Response to Motion to Dismiss, dated April
24, 1992; Res. Brf., p. 4, fn. 1. Consequently, because of
the Board's long delay in issuing this decision, which was
the result of its own administrative oversight, see Stabbe
Senter Press, GPO BCA 13-85 and 19-85 (May 12, 1989), Sl. op.
at 55, fn. 3, 1989 WL 384977, the remedy awarded may be moot
since restitution may have already been made. However, in
light of the Board's opinion above, neither party has been
prejudiced by the delay. See Simmonds Precision Products,
Inc., supra, 74-1 BCA � 10,472.