BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
In the matter of )
)
the Appeal of )
)
IPI GRAPHICS ) Docket No. GPOBCA 11-99
)
Jacket 449-056 )
Purchase Order 75533 )
For the Appellant: Frederic G. Antoun, Jr., Esq., Chambersburg, Pennsylvania.
For the Respondent: Roy E. Potter, Esq., Associate General Counsel, U.S.
Government Printing Office.
Before KERRY L. MILLER, Administrative Judge.
DECISION
IPI Graphics (IPI) appeals the Contracting Officer's decision to terminate the
company's contract for default. The Contracting Officer concluded, after two
on-site inspections, that Appellant had failed to provide acceptable press
sheets as required by the contract. Appellant argues that the Government
inspector applied an overly stringent inspection standard, that the inspector
showed bias against Appellant and that the Contracting Officer should have paid
Appellant for certain completed items. For the reasons that follow, Appellant's
appeal is denied.
FINDINGS OF FACT
1. On March 3, 1999, after first conducting a standard sealed-bid procurement,
the U.S. Government Printing Office (GPO) Printing Procurement Department,
awarded a contract (Jacket 449-056) to IPI Graphics (hereinafter "IPI" or
Appellant") for the printing of 2,805 copies of a 156-page 4-color process[1]
publication entitled NAPAP Biennial Report to Congress: An Integrated
Assessment. Rule 4 File, Tab B at 1; Joint Stipulations 2, 3. The lump sum
contract price was $35,506. Rule 4 File, Tabs C, F.
2. Under the terms of the contract, the Government furnished a CD-ROM containing
electronic files "processed on a Macintosh [computer] using QuarkXPress 3.32,
Illustrator 6.01/7.0, and Photoshop 4.01/5.0 software. Files are in native
format and include all printer and screen fonts." The Government also furnished
"[f]ull composite laser proofs of files." Rule 4 File, Tab B at 1.
3. Appellant was required by the contract to use the Government-furnished
electronic media to output all films. Id. at 2.
4. In addition, the contractor was to produce one set of "composite Dylux or
similar proofs (in book form) plus one-piece laminated or electrophotography
color proofs" and submit them to the GPO for inspection. The contractor was
cautioned that it "must not print prior to receipt of an `OK to print.'" Id.
5. Appellant subcontracted the production of the color separations[2] to another
company. Hearing[3] Transcript (HT) 9, 69. Appellant used the separations to
produce the required set of proofs and forwarded them to the GPO. HT 69;
Hearing Exhibit A4. GPO inspected the proofs and returned them to Appellant
marked "OK to print." Joint Stipulations 5, 6.
6. The contract required all covers and text pages to be "printed on a press
capable of printing four colors in a single pass through the press (minimum four
printing units). Contractor to match the final OK's press sheets." Rule 4
File, Tab B at 2. Appellant possessed only one press capable of printing the
required material. Rule 4 File, Tab F.
7. Finally, the contract called for a press sheet inspection where printed
sheets "will be inspected and approved at the contractor's plant for the purpose
of establishing specific standards for use during the actual press run. Upon
approval of the sheets, contractor is charged with maintaining those standards
throughout the press run (within QATAP tolerances when applicable)." Rule 4
File, Tab B at 2. The Quality Assurance Through Attributes Program (QATAP)[4]
standard for printing attributes for this publication was set at Level II.[5]
Rule 4 File, Tab B at 3; GPO Contract Terms - Quality Assurance Through
Attributes Program for Printing and Binding, GPO Publication 310.1, Effective
May 1979.
8. The press sheet inspections began on March 19, 1999, with the GPO approving
covers 1 and 4. Rule 4 File, Tab F; Joint Stipulation 10; HT 47; Hearing
Exhibit A8c. The contractor's performance on one press sheet printed March 20,
1999, was unsatisfactory to the Government because of ink density and ink
coverage deficiencies. Joint Stipulation 12. The contractor agreed to re-print
the sheet. Joint Stipulation 13. Appellant spent six hours on March 22, 1999,
attempting to produce a press sheet acceptable to the GPO inspector, but was
unsuccessful to due to "ink take off & streaking." HT 82; Hearing Exhibit R2.
9. After the March 22 failure, Appellant's Vice-President, Gordon Harraway told
GPO personnel that he was suspending printing and calling in a press mechanic.
Mr. Harraway also stated that Appellant was ordering new press roller blankets.
Rule 4 File, Tab G.
10. On March 23, 1999, the Contracting Officer issued a Cure Notice informing
Appellant that he considered the company's "apparent inability to perform per
schedule on Jacket 449-056 (Purchase Order 75533), a condition that is
endangering performance of the contract . . ." The Contracting Officer gave
Appellant 2 days to present "the measures adopted which have cured such
condition." Rule 4 File, Tab H; Joint Stipulation 18. The Contracting Officer
also noted that the Government might terminate the contract for default if
Appellant failed to cure the condition. Rule 4 File, Tab H.
11. Appellant responded by letter of March 24, 1999. According to Gordon
Harraway:
We brought in our press mechanic on 3-23-99 and also we consulted with our ink
vendor, blanket vendor and roller vendor.
It was determined that the rollers in two units needed to be replaced. We
replaced them on 3-23-99 and 3-24-99. According to the roller manufacturer the
typical useful like [sic] of rollers is between 24 and 36 months. We had
replaced these rollers in May of 1997. We had no reason to think that was the
problem as we had those rollers in service for only 22 months.
We apologize for this inconvenience and will put forth all our efforts to
complete this job in a timely manner.
Rule 4 File, Tab I. Appellant installed new rollers on its press and advised
GPO that it was ready to again begin printing. Joint Stipulation 20.
12. Another press sheet inspection was conducted on March 25, 1999. Joint
Stipulation 21. After spending a day inspecting the contractor's efforts, the
inspector concluded that the product printed by Appellant was unacceptable.
Joint Stipulation 22; HT 83; Hearing Exhibit R5. According to the inspector's
March 26, 1999, memorandum:
Being on-site for press sheet inspections on 3 dates (3/19, 3-22 & 3-25).
Contractor was unable to match OK'd proofs due to roller marks & streaking and
excessive dot gain in the magenta unit. Contractor replaced rollers in the
magenta and cyan units and in the final attempt on 3-25-99 was unable to present
an acceptable press sheet for Level II Standards (Streaking and low density in
magenta unit due to excessive dot gain. A total of 18 man hours were used in
trying to get an acceptable product under Level II standards as required by this
contract.
Rule 4 File, Tab J.
13. On March 26, 1999, the Contracting Officer sought and received concurrence
from the GPO Contract Review Board to terminate Jacket 449-056 for default due
to Appellant's inability to produce acceptable press sheets. Rule 4 File, Tab
K. The Contracting Officer terminated the contract for default that same day.
Rule 4 File, Tab L. The Contracting Officer then entered into negotiations for
a repurchase contract (Jacket 450-742) with those bidders who had submitted bids
in response to the initial solicitation. Rule 4 File, Tab N. Although the
Government incurred excess reprocurement costs of $300 it chose not to assert
this claim against Appellant. HT 121.
14. In response to a letter from Appellant's counsel challenging the termination
for default, the Contracting Officer issued a final decision on April 7, 1999,
affirming his earlier decision to default the contract, writing:
This jacket was awarded to IPI Graphics on March 3, 1999, with complete delivery
by March 24, 1999.
The Contracting Officer became aware of the problems your firm was experiencing
on March 22, 1999, when the on-site Government representative was conducting the
press sheet inspection. His report states that one eight-page form which had
been run over the weekend was rejected because of poor ink density, and that
form had to be re-run. Press sheets for another full-color form was supposed to
have been ready for the inspector on the morning of March 22nd. The form was a
sixteen-page signature (8 pages over 8), but due to the heavy ink coverage, the
pressman could run only four pages of the signature at a time; this meant the
signature had to be run through the press four times. Approximately six hours
later, after numerous attempts by the pressman to overcome the inking and
density difficulties on just these four pages, the inspector finally decided to
abandon any effort to sign off on an acceptable press sheet. The inspector's
report further states: "Gordon [Haraway] said he was calling mechanic and has
pulled form off press; will call back when fixed-only press in plant that can
accomplish job."
The inspector then called the Contracting Officer to report his failure to sign
off on an acceptable press sheet and to voice his personal concerns regarding
the contractor's ability to produce this job in accordance with the
specifications.
The Contracting Officer then contacted you to discuss the concerns raised by the
GPO press inspector. You concurred with the fact that there had been
difficulties and attributed them to press mechanical problems; additionally, you
stated that new press roller blankets would be installed. All of these efforts,
hopefully, would serve to improve the press' performance. You also stated that
you hoped to meet the schedule, or, in the worst case scenario, you may need an
additional couple of days to do so. During, this conversation the Contracting
Officer offered you the opportunity to subcontract the job if that would be
helpful to you.
On March 23, 1999, the Contracting Officer issued a Cure Notice to which you
responded on March 24, 1999. In that response you confirmed that the press
mechanic had worked on the press, that new rollers had been installed, and that
you also had consulted with your blanket and ink vendors. Your letter concluded
with the statement that your firm would "...put forth all our efforts to
complete this job in a timely manner."
A second press sheet inspection was then scheduled for March 25, 1999. The
inspector's report states that the contractor was unable to get an acceptable
press sheet that would comply with quality level II standards because of ink
streaking, low ink density, and excessive dot gain. The inspector had spent
approximately 18 hours awaiting the contractor's efforts to get to this point,
without any success. The Notice of Termination for Default was issued on March
26, 1999, because of your inability to provide acceptable press sheets in
accordance with the terms of the contract.
Your attorney seems to suggest that this job was assigned an improper quality
level. The quality level is immaterial; the press sheet inspector was
evaluating this job solely on the specified criteria for quality level II
standards as set forth in the specifications and in accordance with GPO's
Contract Terms, Quality Assurance Through Attributes Program for Printing and
Binding (GPO Pub. 310.1).
The attorney believes that your firm could have produced an acceptable job had
it been given the chance to finish the work. As stated above, the Government
representative traveled to IPI's plant on several occasions and spent a total of
approximately 18 hours patiently waiting for an acceptable press sheet which
could be signed off before receiving instructions from the Contracting Officer
to quit the assignment. To further demonstrate the Government's patience in
this matter, the contractor was allowed time to make repairs and enhancements to
his printing press which was the stated reason for the unacceptable press sheets
in the Cure Notice response.
Your attorney further suggests that the Government should purchase the film that
had been produced for this job. Under a complete termination for default, it is
not GPO's policy to purchase components of a product from a defaulted contractor
for use on a subsequent reprocurement.
Rule 4 File, Tab O.
15. On May 4, 1999, the Board received a timely notice of appeal from Appellant.
Appellant seeks $14,727.34 in costs incurred while trying to perform under the
contract. Complaint at � 39. Appellant also seeks attorney fees and interest on
the claim.[6] Id at 5.
DISCUSSION
Appellant argues that the Government's press sheet inspector imposed too high a
standard on Appellant, given the design of the publication and that the
Government inspector was biased against Appellant. Finally, Appellant seeks to
be paid for color separation film and proofs that were approved by the
Government prior to the default. The Board concludes that Appellant's arguments
are not supported by the evidence of record.
A. The Termination for Default was Appropriate Given Appellant's Repeated
Failure to Produce Press Sheets Meeting the Contract's Quality Standards
The rules governing terminations of Federal Government contracts for default
emanate primarily from contract "default" clauses and applicable regulations.
The "Default" clause in the instant contract provides that the Respondent, by
written notice to the contractor, may terminate a contract in whole or in part
if the contractor fails to: (1) deliver the supplies or perform the required
services within the time specified or any extensions thereof; (2) make progress,
so as to endanger performance; or (3) perform any other contract provision. GPO
Contract Terms, Contract Clauses, � 20, GPO Publication 310.2 (Rev. 9-88)
(hereafter GPO Contract Terms).[7] A default termination, however, is a drastic
action that may be taken only for good cause and on the basis of solid evidence,
with the contracting agency having the burden of proving the basis for the
default but with the contractor having the burden of showing that its failure to
perform was excusable.[8] Venture, Ltd., GPOBCA No. 01-96 (September 26, 1997),
1997 GPOBCA LEXIS 8, 1997 WL 742427, slip op. at 13-14; Big Red Enterprises,
GPOBCA No. 07-93 (August 30, 1996), 1996 GPOBCA LEXIS 26, 1996 WL 812960, slip
op. at 24-25.
The Contracting Officer terminated Appellant's contract for default due to
Appellant's "inability to provide acceptable press sheets." Rule 4 File, Tab L.
The requirement for a press sheet inspection was contained in the contract
specifications and was to be conducted by the Government for the purpose of
"establishing specified standards for use during the actual press run." Rule 4
File, Tab B at 2.
The record shows that the contractor's performance on one press sheet on March
20, 1999, was unsatisfactory to the Government because of ink density and ink
coverage deficiencies. Joint Stipulation 12. The contractor agreed to re-print
the sheet. Joint Stipulation 13. Appellant spent six hours on March 22, 1999,
attempting to produce a press sheet satisfactory to the GPO inspector, but was
unsuccessful due to "ink take off & streaking." HT 82; Hearing Exhibit R-2.
After the March 22nd attempt, Appellant's Vice-President, believing the problem
was caused by the company's press, told GPO personnel that he was suspending
printing and bringing in a press mechanic. Rule 4 File, Tab G. This was the
only press the company owned that could print the job. Rule 4 File, Tab F.
Appellant also consulted with its ink, blanket and roller suppliers, eventually
replacing 2 roller units. Rule 4 File, Tab I.
After repairs were made to the press, the Government conducted another press
sheet inspection on March 25, 1999. Joint Stipulation 21. The inspector
ultimately concluded that the product printed by Appellant that day was
unacceptable and did not match the Government-approved proofs due to streaking
and low density. Joint Stipulation 22; HT 83; Hearing Exhibit R-5.
In arguing that the default was excusable, Appellant complains that no press can
match exactly the color of an approved proof, because press sheets are printed
with ink on paper, while proofs are produced using a thermal transfer process on
glossy paper stock. HT 28, 29. In addition, Appellant argues its production
problems were caused by the design of the publication. HT 20. According to
Appellant, the design was particularly difficult because the publication's pages
contained both 4-color process photos of foliage and a solid blue bar built from
4 colors. Appellant could obtain a color match to the approved proofs for
either the foliage or the color bar, but not both. HT 20, 26-28. While
acknowledging the deficiencies of the March 22nd press sheets, Appellant claimed
that the press sheet designated as Hearing Exhibit 7A was an acceptable quality
compromise and a good match to the approved proofs and therefore should not have
been rejected. HT 28, 36.
Thus the Board has two conflicting views of Appellant's work product, requiring
a resolution. To resolve this dispute the Board has reviewed the press sheets
produced by Appellant and inspected by GPO on March 22nd and March 25th. Those
sheets, Hearing Exhibits R-2 and 5 through R-9, contain the same defects
described by the GPO inspector. The inspector testified that his goal was not
to require Appellant to produce an exact color match, but to have Appellant
eliminate the streaking defect. HT at 79, 99. The Board finds that the main
defect in each of the inspected press sheets is an uneven application of ink
resulting in a streaked appearance. This streaking was not present in the
approved proofs. See Hearing Exhibits A-8A and A-8B. The streaking was present
in all of the press sheets entered into evidence, although the streaking was
somewhat improved by the time the final press sheet was printed at 5:00 p.m. on
March 25, 1999. See Hearing Exhibit R-5.
The Board finds that the physical defects cited by the inspector were indeed
present in the press sheets printed by Appellant on March 22 and March 25.
Those press sheets conform to the trial testimony of the inspector and to the
inspector's contemporaneous notes. Notwithstanding the testimony of Appellant's
Vice-President, that in his opinion the press sheets matched the proofs, the
physical evidence introduced at the Board's hearing showed continued ink density
and streaking problems. See, Hearing Exhibits R-2, R-5 - R-9, A-7A.
The Board concludes that Respondent has met its burden of proof that the
Appellant failed to produce press sheets that met the contract's quality
standards. This supports the Contracting Officer's decision to terminate the
contract for default because of Appellant's "inability to fulfill the
requirements of the contract." See Artisan Printing, Inc., GPOBCA No. 15-93
1998 GPOBCA LEXIS 30, 1998 WL 149001 (Feb. 6, 1998).
B. There is No Evidence of Bad Faith on the Part of the Government
Appellant complains that the GPO inspector was biased and showed bad faith when
he made a derogatory comment about Appellant's production capabilities.
Appellant alleges the inspector, upon arriving at contractor's plant for the
first press sheet inspection, stated that the contract "was out of IPI's
league." HT 26, 50. According to Appellant, the inspector made this comment
before conducting the press sheet inspection. HT 27, 50-51. The inspector
testified he commented that the job was more than IPI could handle, after
spending several days observing unsuccessful attempts by Appellant to produce a
single acceptable press sheet. HT 84-86.
In Sterling Printing, Inc., the Board addressed a contractor's allegation of bad
faith against the Government. There, a contractor alleged that the reason GPO
defaulted the contract was because the Department of Interior wanted to change
the publication's design. In rejecting the contractor's allegation, the Board
reasoned:
The Contractor's argument is, in effect, an allegation that the Respondent's
decision to cancel the contract was made in bad faith so that Interior could
make cosmetic changes to the [publication]. However, the Board has held on
numerous occasions that because of the strong presumption that Government
officials properly and honestly carry out their functions, an allegation of bad
faith must be established by "well-nigh irrefragable" proof. See, e.g., Hurt's
Printing Company, Inc., GPO BCA 27-92 (January 21, 1994), Sl. op. at 11, fn. 15;
Shepard Printing, GPO BCA 23-92 (April 23, 1993), Sl. op. at 7-8, fn. 11 . . . ;
B. P. Printing and Office Supplies, GPO BCA 14-91 (August 10, 1992), Sl. op. at
16; Stephenson, Inc., GPO BCA 02-88 (December 19, 1991), Sl. op. at 55; The
Standard Register Company, GPO BCA 4-86 (October 28, 1987); Sl. op. at 12-13.
Also see, Karpak Data and Design, IBCA 2944 et al., 93-1 BCA � 25,360; Local
Contractors, Inc., ASBCA 37108, 92-1 BCA � 24,491. The key to such evidence is
that there must be a showing of a specific intent on the part of the Government
to injure the contractor. Kalvar Corporation v. United States, 543 F.2d 1298,
1302 (Ct.Cl. 1976), cert. denied, 434 U.S. 830 (1977); Stephenson, Inc., supra,
Sl. op. at 54. In the Board's view, no such "irrefragable" proof of the
Respondent's bad faith exists in this record. Certainly, there is absolutely
nothing in the record which would show that the employees of two separate
Government entities-GPO and Interior-set out to harm the Appellant or that they
acted in concert to achieve that specific result. Id., Sl. op. at 57.
Sterling Printing, Inc., GPOBCA No. 20-89, 1994 GPOBCA LEXIS 38, 1994 WL 275104
(March 28, 1994), Sl. op. at 23, fn. 35. See also, Spiffy Enterprises, ASBCA
No. 35827, 90-1 BCA � 22,385; Arnold V. Hedberg, ASBCA No. 31747, 90-1 BCA �
22,577; WB & A, Inc., ASBCA No. 32524, 89-2 BCA � 21,736; Le-Gals, Incorporated,
NASABCA No. 1285-15, 88-2 BCA � 20,703.
Allegations of bad faith are easy to make but difficult to prove, because animus
cannot be established by evidence of Government mistake or error; i.e., proof of
specific intent to harm the contractor is needed.[9] Sterling Printing, Inc.,
supra, Sl. op. at 23, fn. 35; Stephenson, Inc., GPOBCA No. 2-88, 1991 GPOBCA
LEXIS 14, 1991 WL 439274 (December 20, 1991), Sl. op. at 54. See also,
Anderson/Donald, Inc., ASBCA No. 31213, 86-3 BCA � 19,036, at 96,146. In the
instant appeal, there is nothing in the record that would show that the
Contracting Officer or the inspector set out to harm the Appellant. See,
Sterling Printing, Inc., supra, Sl. op. at 23, fn. 35; Stephenson, Inc., supra,
Sl. op. at 57.
In the Board's opinion, the Appellant's reliance on the inspector's remark as
evidence of bad faith falls far short of the mark. The inspector's comment,
even if made prophetically at the beginning of the inspection process, is more
than offset by the fact that both the inspector and the Contracting Officer
showed patience and restraint during the lengthy inspection efforts. Two
Government employees made multiple trips to the contractor's plant and spent
many hours working with Appellant seeking acceptable press sheets. Rule 4 File,
Tabs F, G, and J. In addition, the Government withheld action while waiting for
Appellant to make repairs to its press. Rule 4 File, Tabs H, and J. Further
evidence of the Contracting Officer's patience was the Government's offer to
waive the contract's prohibition on subcontracting[10] to allow Appellant to
subcontract the printing of the more difficult press sheets. HT 102; Clause 6,
Subcontracts, GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88).
Appellant has presented no other evidence of the inspector's bias, or explained
why the inspector would have deliberately rejected acceptable press sheets in
order to injure Appellant. The end result of such a course of action would have
been to multiply the amount of work for the inspector at IPI's plant, and to
require the Government to repeat the entire inspection process at the
reprocurement contractor's plant.
On the basis of the evidence of record, the Board concludes that Appellant's
allegation of bad faith is merely an unsupported assertion that is insufficient
to meet its required burden of proof. See, e.g., Fry Communications,
Inc./InfoConversion Joint Venture, GPOBCA No. 9-85, 1991 GPOBCA LEXIS 18, 1991
WL 439272 (August 5, 1991), Sl. op. at 33, n. 31; The Standard Register Company,
GPOBCA No. 4-86, 1987 GPOBCA LEXIS 25, 1987 WL 228972 (October 28, 1987), Sl.
op. at 12-13. See also, Singleton Contracting Corp., GSBCA No. 8548, 90-2 BCA �
22,748; Tri-State Services of Texas, Inc., ASBCA No. 38,019, 89-3 BCA � 22,064;
Gemini Services, Inc., ASBCA No. 30,247, 86-1 BCA � 18,736. Accordingly, the
Board finds no merit in the Appellant's claim that the inspector acted in bad
faith.
C. The Government Is Not Obligated to Purchase Films or Approved Proofs
Appellant argues that the Government should pay for the films (color
separations) and proofs it produced prior to the termination for default.
Appellant reasons that since the Government inspected and approved the proofs
produced from the films, it "accepted" the materials. The Contracting Officer
declined to pay for the materials, claiming that it was not the agency's policy
"to purchase components of a product from a defaulted contractor for use on a
subsequent reprocurement." Rule 4 File, Tab Q.
As an initial matter, the Board notes that the films ordered under the contract
differ contractually from the proofs. The major distinction is that the proofs
were not contract deliverables, while the films were.[11] Rule 4 File, Tab B at
1, 2. The proofs were an intermediate production step, part of the inspection
process, produced for the purpose of establishing a quality standard for final
printed product. Had the contract not been defaulted, Appellant would not have
been entitled to separate payment for the costs associated with producing the
proofs.[12]
Under the terms of the instant contract, "the Government may require the
contractor to transfer title and deliver to the Government, as directed by the
Contracting Officer, any completed supplies, and partially completed supplies
and materials . . . (collectively referred to as `manufacturing materials' in
this article) that the contractor has specifically produced or acquired for the
terminated portion" of the contract. (Emphasis supplied.) Contract Term 20(e),
Default, GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88). The use of the
word "may" in this contract provision provides an option to the Contracting
Officer to purchase manufacturing materials, such as films or proofs, from a
defaulted contractor, at the Contracting Officer's discretion.
In the instant appeal, the Contracting Officer testified that he was not
interested in purchasing the film produced by Appellant because it had not
produced an acceptable press sheet. At the time of the default, the Contracting
Officer did not know if the film was a contributing factor in Appellant's
printing problems and thus declined Appellant's offer. HT 105-106. In the
Contracting Officer's view, because of the default, the quality of the films was
questionable and therefore were not usable by the customer agency for the
purpose of reprinting the publication. Indeed, since the films had never
actually been used to produce a printed product, they did not meet the
contractual requirement that "[f]ilms required to be delivered to the government
must be exactly the same as the printed product. . ." Supplemental Specification
9(b) GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88).
Given the discretion afforded the Contracting Officer by the above-quoted
contract clause and given the explanation of the Contracting Officer in
declining the proffered materials, the Board cannot say that the Contracting
Officer abused his discretion in declining to compensate Appellant for the film
and proofs.
CONCLUSION
Having considered all of Appellant's arguments, whether or not expressly
mentioned, the Board concludes that Appellant's contract was appropriately
terminated for default and that the Contracting Officer was not obligated to
purchase films and proofs produced by Appellant during Appellant's attempt to
perform the contract. Accordingly, Appellant's appeal is denied
January 23, 2004 KERRY L. MILLER
Administrative Judge
_____________________
[1] Four-color process is the printing of process color by means of color
separations corresponding to the four process colors of cyan, magenta, yellow
and black. "Combinations or overprinted dots of these four colors are what
create the wide range of colors discernable to the human eye that can be
reproduced." F. Romano, The GATF Encyclopedia of Graphic Communications 336.
[2] The term "color separation" is defined as a "means of dividing a full-color
photograph into four separate components, corresponding to the four primary
colors used in process color printing - cyan, magenta, yellow, and black.
Process color printing involves overprinting halftone dots of each of these four
colors in varying densities, the various combinations producing the wide range
of reproducible colors. Consequently, a different printing plate needs to be
made of each color, and this, in turn, requires separate negatives or
positives." F. Romano, The GATF Encyclopedia of Graphic Communications 167.
[3] The Board conducted an evidentiary hearing on October 26, 1999.
[4] The Quality Assurance Through Attributes terms were incorporated by
reference into the instant contract. Rule 4 File, Tab B at 1.
[5] This quality level was the second highest in the GPO's QATAP system. It is
described as: "Better quality, prestige quality, library quality. Fidelity of
Reproduction: Close fidelity to furnished reproducibles is required. . . .
Typical Physical Description: Overall appearance is of primary importance.
Products in this level generally have single color or multicolor subject matter.
Finishing must be held to high standards of accuracy, durability, and
appearance." GPO Contract Terms - Quality Assurance Through Attributes Program
for Printing and Binding, GPO Publication 310.1.
[6] The GPOBCA lacks authority to award attorney's fees and costs. Sterling
Printing, Inc., GPOBCA No. 29-89 (Mar. 28, 1994) footnote 72, 1994 GPOBCA LEXIS
38, 1994 WL 275104. The Board also lacks authority to award interest on claims.
Universal Printing Co., GPOBCA No. 9-90 (June 22, 1994), 1994 GPOBCA LEXIS 30,
1994 WL 377586.
[7] These standard terms and conditions were incorporated by reference into the
instant contract. See Rule 4 File, Tab A at 1.
[8] Where a default termination is based on a failure to make timely delivery,
no prior notice to the contractor is necessary. Where, like here, the
termination is based on a failure to make progress or to perform in accordance
with any other contract provision, the Respondent must notify the contractor of
the failure and allow a reasonable period for the contractor to cure the
failure. Respondent met this requirement through the issuance of a Cure Notice
dated March 23, 1999. Rule 4 File, Tab H.
[9] The theory of recovery for the contractor where the evidence is sufficient
to support a finding of bad faith on the part of a contracting officer is that
the Government has breached its implied duty of good faith and fair dealing in
contract performance and enforcement. See, United States v. Roses, Inc., 706
F.2d 1563, 1566 (Fed. Cir. 1983); Systems Technology Associates, Inc. v. United
States, 699 F.2d 1383, 1387 (Fed. Cir. 1983). See also, All-American Poly
Corporation (Park Poly Bag Corporation), GSBCA No. 7104, 84-3 BCA � 17,682; Nash
Janitorial Service, Inc., GSBCA No. 6390, 84-1 BCA � 17,135, mot. for reconsid.
denied, 84-2 BCA � 17,355; 6800 Corporation, GSBCA No. 5880, 83-2 BCA � 16,581;
Restatement (Second) of Contracts, 205 (1979). The essence of the breach is
an improper motive. See, Mutual Maintenance Co., Inc., GSBCA No. 7492, 85-2 BCA
� 17,944; Drain-A-Way Systems, GSBCA No. 7022, 84-1 BCA � 16,929.
[10] The cited clause reads: "The contractor may make contracts with any other
party for the furnishing of any part of the articles or work called for, with
the exception that the predominant production function required in the
performance of the contract shall not be subcontracted. If the predominant
production function is other than presswork, it shall be so identified in the
specifications."
[11] The contract consisted of a single line item with a lump sum price. Rule
4 File, Tab C. The product being procured was described as 2,805 copies of the
printed publication "plus one complete set of negatives." Rule 4 File, Tab B at
1.
[12] However, if the contract had been terminated for the convenience of the
government Appellant would have been able to claim the costs of producing the
film and proofs plus a fair and reasonable profit on those costs. See Clause
19(e)(2)(i), (iii), Termination for the Convenience of the Government, GPO
Contract Terms, GPO Publication 310.2 (Rev. 9-88).