PEAKE PRINTERS, INC.
GPO BCA 12-85
November 12, 1986
MICHAEL F. DiMARIO, Administrative Law Judge
This appeal, timely filed by Peake Printers, Inc. 2500
Schuster Drive, Cheverly, MO 20781 (hereinafter Peake or
Appellant), is from the final decision of Alice S. Jennings,
Contracting Officer, U.S. Government Printing Office,
Washington, DC 20401 (hereinafter GPO or Respondent), dated
July 19, 1985 (Official File, Exhibit 1), denying Appellant's
request of July 15, 1985 (Rule 4 File, hereinafter R4 File,
Tab 9), to modify certain contracts between them known as
Program 315-S, Jacket Nos. 381-611, 421-611, and 420-813. The
decision of the Contracting Officer is affirmed and the appeal
is denied for the reasons set forth hereinbelow.
BACKGROUND
Invitation for Bids (IFBs) on Program B315-S, a requirements
type term contract, to produce various booklets, guide books,
and handbooks as might be ordered by the Park Service, U.S.
Department of Interior, from time to time during the period
April 1, 1983 through March 31, 1984 (R4 File, Tab 2), were
sent by Respondent to 33 potential printing contractors with
10 responding thereto; seven with "no bids" and 3 with bids as
follows:
1. Peake Printers $172,155.30 -1%- $170,434.74
2. Waverly Press 187,709.52 -1%- 185,832.42
3. Garamond Pridemark 209,827.10 -1%- 207,728.83.
Among its requirements, the IFB specified that bidders make
their bids on a line-item basis for certain portions of the
required work. Appellant, with respect to the line-item for
work identified on the "Schedule of Prices" as:
IV. BINDING:
Per 1,000 Copies
a. . . .
b. Smyth sewing $ 210.00,
bid $210.00 (R4 File, Tab 3, page 13 of 14) as contrasted with
Waverly Press at $363.69 and Garamond at $249.00.
After bid opening, Appellant, the low bidder, was asked by
Respondent to review and confirm its bid and did so as
originally submitted. (R4 File, Tab 4) Thereafter,
Respondent, by Purchase Order No. 27459 dated April 4, 1983,
notified Appellant that it had been awarded the program
contract "[i]n strict accordance with your Quotation No.
311207 [d]ated 3-14-83 and our specifications." (R4 File, Tab
5)
Appellant was then issued several print orders under the
contract, produced the required products, and invoiced the
Respondent for the work performed. The invoices included
billing for Smyth sewing work on a per 1,000 32-page signature
basis rather than a per 1,000 copy basis. Respondent paid
Appellant for such work in accordance with 3 invoices.
However, on another of the invoices, one of Respondent's
Voucher Examiners determined that payment per 1,000 32-page
signature was not in accordance with the terms of the
contract. Thereafter, Respondent notified Appellant of the
error and Respondent's corrective action respecting the
vouchers. Appellant disagreed with such action and by letter
dated July 15, 1985, requested that Respondent issue a
contract modification making Smyth sewing billable on a "price
per thousand 32-page signatures and parts thereof" basis.
(R4 File, Tab 9) Respondent's Contracting Officer
telephonically conferred with Appellant and then in a letter
dated July 19, 1985, advised Appellant in pertinent part that:
This letter is sent to confirm our telephone conversation of
July 17, 1985 regarding Program B315-S. The contract
pricing structure is such that we asked for a binding cost
per 1,000 copies of the books, regardless of the number of
pages. For this reason, I cannot modify the contract to
allow you to bill the binding costs on a signature basis (32
pages or parts thereof). Although the first two vouchers
were billed and paid in error, this does not prohibit the
government from recovering the overpayment.
While your statement that the cost of Smyth sewing an 80
page book is less than the cost of sewing a 224 page book is
correct, it does not have any bearing on the contract (April
1, 1984 thru March 31, 1985) at hand. We have used this
pricing structure for a number of years, as well as in our
current contract which became effective on April 1, 1985 and
have had no problems in requesting prices in this format.
However, since you have raised this issue, we will certainly
give it consideration when we rewrite the contract next
time.
If I can be of any further assistance, please contact me.
Official File, Exhibit 1.
Appellant, by letter of July 29, 1985, appealed this decision
to the Board noting in pertinent part that:
By her own admission, Ms. Jennings agrees that our
interpretation on the binding clause is correct. Yet, she
maintains that past practice takes precedence over
correctness. Conversely, we don't agree. Over the years,
Peake Printers has produced a large number of contracts for
the U. S. Government Printing Office. They almost
universally allowed variable binding costs for variable page
counts. We feel very strongly that these numerous contracts
take precedence over this single Program B315-S. Therefore,
our opinion is that Ms. Jennings' interpretation is contrary
to established standards.
Official File, Tab 1.
Subsequently, a prehearing conference was held whereat it
became clear that there were no factual disputes between the
parties and that the only issue was whether or not the
contract should be modified as requested by Appellant.
Testimony was elicited from the parties respecting whether or
not a mistake in bid had occurred. Respondent indicated that,
as stated above, Appellant had been requested to review and
confirm its bid. This was done as a matter of routine and not
as a result of any indication that Appellant's bid was
disproportionately lower than other bidders. Indeed, as to
Smyth sewing, Respondent's Contracting Officer stated that it
had compared Appellant's line item entry with other bids and
with is own in-house estimate of costs for such services and
found that Appellant's bid was not out-of-line. Appellant, in
turn, stated that at the time of bid it had worked up a base
contract price and then estimated its binding costs on a per
1,000 32-page signature basis. Appellant's representative
added that he believed one of the other bidders had in fact
"padded" additional binding expenses over and above its Smyth
sewing line-item entry into other elements of its pricing but
offered no evidence to support this allegation.
At the close of the prehearing conference, Respondent, through
counsel, made a Motion for Summary Judgment stating that since
there were no factual disputes between the parties, Respondent
was entitled to a decision in its favor as a matter of law
based upon the unambiguous plain language of the contract.
Appellant did not respond to the motion by objection but did
ask that the undersigned orally rule upon the motion at that
time. The undersigned then ruled in favor of the Respondent
granting the Motion for Summary Judgment subject, however, to
modification if upon his review of the written record, such
modification was warranted.
DISCUSSION
As stated above, the Board finds that the only issue in this
case is whether or not the contract should be modified as
requested by Appellant.
The Board holds that it should not be so modified.
To properly understand the issue and decision in this case,
one must understand the nature of the authority of this Board.
The Board is not a creature of statute; thus, it has no powers
which arise under law as do courts. Instead, it derives all
its powers by virtue of the so-called disputes clause of the
contract itself. That clause, Article 2-3 of GPO Contract
Terms No. 1, gives a contractor the contractual right to
appeal any dispute with the Contracting Officer which is
"related to the contract" to the Public Printer who is in fact
the Officer of the United States authorized by statute to
contract on behalf of the United States (44 U.S.C. 502). The
disputes clause in turn gives the Public Printer the authority
to delegate his appeal authority to his designee which he has
done by GPO Instruction 110.12 dated September 17, 1984,
designating this Board his agent for that purpose. Thus, the
Board's authority is purely derivative and contractual. As
such, it is constrained by the terms of the contract itself.
Since this is the case, the Board cannot enlarge the very
agreement between the parties from which it derives its
authority merely because it deems such action to be equitable,
but will be constrained to deciding disputes within the
parameters of the contract itself.
Examining the specifications in this light, the Board finds
that while it cannot modify the contract by way of unilateral
reformation of its terms, the "Disputes Article" phrase
"related to the contract" is broad enough in its scope to give
authority to the Board to deal with questions of post-award
discovery of mistake in bid. Examining the facts of the case
respecting the question of mistake, the Board finds that this
in fact is what Appellant alleges has occurred, i.e., that
Appellant, contrary to the plain meaning of the "per 1,000
copies" language mistakenly read into that phrase a meaning of
"per 1,000 copies of 32 page signatures." Accepting that a
claim of post-award discovery of mistake in bid has been made
out, the Board next turns to the law respecting such matter.
This Board recently reviewed such law in the appeal of Valley
Forms, Inc., Docket No. GPO BCA 1-84, Jan. 15, 1986. In
Valley Forms, Inc., we cited Manistique Tool and Manufacturing
Company, ASBCA No. 29164, Aug. 13, 1984, 84-3 BCA � 17,599, as
clearly summarizing such law wherein at page 87,677 it said:
As a general rule, neither a Board of Contract Appeals or
the Claims Court is authorized to relieve a bidder from its
obligations under a contract unless it is subject to
invalidation on recognized legal grounds, such as mutual
mistake, or a mistake of which the contracting officer was
on notice or should have been on notice. Aydin Corporation
v. United States [29 CCF � 82,129], 229 Ct.Cl. 309, 669 F.2d
681 (1982); Wender Presses, Inc. v. United States [10 CCF �
72,978], 170 Ct.Cl. 483, 343 F.2d 961 (1965); Holway Oil
Company, ASBCA No. 27862, 83-2 BCA � 16,684. Moreover,
before relief by reformation or rescission is available to
relieve a contractor of the effect of its mistake, the
mistake must be a "clear cut clerical or arithmetical error,
or misreading of the specifications" and such relief does
not extend to mistakes of judgment. Aydin Corporation v.
United States, supra; National Line Co. v. United States [26
CCF � 83,394, 221 Ct.Cl. 673, 607 F.2d 978 (1979); Ruggiero
v. United States [14 CCF � 83,352], 190 Ct.Cl. 327, 420
F.2d 709 (1970); Michael Chernick v. United States [12 CCF �
80,938], 178 Ct.Cl. 498, 372 F.2d 492 (1967).
[A]ppellant is entitled to relief in contract reformation or
rescission for a unilateral mistake in bid claimed after
contract award only where the contracting officer knew or
should have known of the mistake at the time the bid was
accepted. Figgie International, Inc., ASBCA No. 27541, 83-1
BCA � 16,421; Paragon Energy Corp. v. United States [28 CCF
� 81,290], 227 Ct.Cl. 176, 645 F.2d 966 (1981).
In Valley Forms, Inc., we further cited Aerospace Components,
Inc., ASBCA No. 28606, June 27, 1984, 84-3 BCA � 17,536,
respecting the question of post-award mistake in bid wherein
at page 87,339 the ASBCA said:
[F]or a unilateral mistake in bid (discovered or alleged after
award), to be remediable, the contracting officer must have had
actual knowledge or been on constructive notice of a possible
clerical or careless error in the bid. Wender Presses, Inc.v.
United States [10 CCF � 72,978], 170 Ct.Cl. 483, 343 F.2d 961
(1965); Walter Straga, ASBCA No. 26134, 83-2 BCA � 16,611. Here,
the only potential indication would have been a substantial price
disparity between the Texas Aerospace bid and the next lowest
offers. Given that this disparity with the next lowest offer was
only 3 percent and the next two offers were 13.4 and 18.8
percent, respectively, higher than Texas Aerospace's bid, we are
unable to conclude that the contracting officer should have been
deemed to have been on constructive notice of an error.
As in Valley Forms, Inc., we believe that the facts at hand in
this case do not support a finding that the Contracting
Officer suspected or should have suspected such mistake in bid
given the history of prior use of the language, the
Respondent's own analysis of estimated costs, and the
competitive range of Smyth sewing bids between the first,
second, and third bidders. Moreover, we believe that the kind
of mistake made by Appellant in reading into the "per 1,000
copies" language the 32-page signature intention is a mistake
in judgment and not a mere misreading of the specification.
In such cases the courts, as we cited in Great Lakes
Lithograph Company, Docket No. GPO BCA 18-84, May 22, 1985,
have long held that " . . . an agreement cannot be revised to
reflect a plaintiff's subjective understanding the defendant
does not and should not know of." Benjamin v. United States,
348 F.2d 502, 172 Ct. Cl. 118 (1965).
Accordingly, this Board can find no basis for granting the
appeal. Thus, the appeal is denied and the decision of the
Contracting Officer is affirmed.