Bay Printing, Inc. GPO BCA 16-85 January 30, 1987 Michael F. DiMario Administrative Law Judge Opinion This appeal, timely filed by Bay Printing, Inc., 7677 Canton Center Drive, Baltimore, MD 21224-2084 (hereinafter "Appellant"), is from the termination for default of the contract with the U.S. Government Printing Office, Denver Regional Printing & Procurement Office, Denver, CO 80225 (hereinafter "Respondent"), identified as Purchase Order M-9031, Jacket No. 579-184, "due to your inability to provide proofs of acceptable quality and fidelity in the original, [sic] camera copy." (Official File, Tab 2.) The decision of the Contracting Officer is affirmed for the reasons stated hereinbelow. Background By Purchase Order M-9031 dated July 1, 1985, Appellant was awarded a contract to produce 1,491 copies, plus one complete set of films, of a certain publication titled "White Sands Missile Range Book", requisitioned by the Department of the Army. The contract price was $7,960 with an added rate of $310 for each 100 additional copies. Certain illustrations in the publication were to be done in 4-color process requiring the contractor to make color separations and provide the Government with proofs in advance of production. The specifications required compliance with "Government Printing Office Contract Terms No. 1 (GPO Publication 310.2 - Revised October 1, 1980; GPO Publication 310.1, 'Quality Assurance through Attributes - Contract Terms,' and MIL-STD-105, 'Sampling Procedures and Tables for Inspection by Attributes,' in effect on the date of issuance of the invitation for bid." (Rule 4 File, hereinafter "R4 File," Tab B.) In addition, page 2 of the specifications included a "Specified Standard" for halftone match (single and double impression) and for a process color match, the respective standards being to match "furnished camera copy" and "color key O.K.'d proof." Thereafter, the Appellant proceeded to perform under the contract providing Respondent with the required proofs. Respondent, after its review, returned the proofs to Appellant with corrections stating in pertinent part that: "We are concerned about the 4-color process illustrations and wish to view a press sheet in your plant prior to the full run. Such an on-sight inspection is authorized under article 2-12 in Contract Terms No. 1." (R4 File, Tab C.) Appellant, upon receipt of such written notice telephoned Respondent indicating that it would like to avoid a press sheet inspection because it did not schedule time and expense for such procedure in its bid and requested that Respondent accept a press proof instead of such inspection. Appellant was advised that such substitute procedure was acceptable "provided there's no cost and you correct the problems on the proof . . . ." (R4 File, Tab D.) Respondent's representative also indicated to Appellant that Respondent would "like to see a color bar for test, etc." (R4 File, Id.) Subsequently, on August 23, 1985, Appellant furnished corrected copies to Respondent but did not include the originals so that a comparative judgment could be made. Respondent's representative nevertheless advised Appellant that "[t]he 4-color illustrations, on a [sic] least some of them, have very serious problems. It's some of the worst 4- color work I've seen. Also, the halftones on some pages have hot spots all around them." (R4 File, Tab E.) That same day a conference call was held between the representatives of the two parties wherein they discussed "[p] roblems on press proof books . . . ." At that time Respondent advised Appellant that it needed "camera copy back ASAP. [and that] we'll review w/agency and let you know extent of disaster. Hold on to everything else until you hear from us." (R4 File, Id.) There followed a "Cure Notice" dated September 6, 1985, from the Contracting Officer to the Appellant advising that: The proofs are rejected. We find numerous problems regarding missing copy, type density, halftone quality, and the 4-color process illustrations. The extent of the problems can be seen by the fact that we are returning only one press proof copy. The color on the illustrations varied from copy to copy so much that we could not establish a standard. You will find comments on most pages regarding the various printing errors. The number of contractor errors combined with the extreme degree of quality problems convince us that performance under the contract is endangered. Therefore, unless you can provide this office with a new set of proofs free from contractor errors on or before September 23, 1985, the Government may terminate subject contract for default pursuant to the article entitled "Default", [sic] United States Government Printing Office Contract Terms No. 1. R4 File, Tab F. By letter of September 19, 1985, Appellant complied with the request by furnishing a package containing the new color separations, the old color separations, the original copy, and a proof on the referenced jacket. Respondent, after examination of these materials, telephonically advised Appellant that he was considering terminating the contract for default because "Bay submitted color match (?) proofs only, did not provide anything on B & W pages, and the color match on new proofs were off (too much yellow which was original problem)." (R4 File Tab H.) In both a subsequent conversation and in a letter the same date, October 1, 1985, Appellant advised Respondent that it was "embarrassed by the problems . . ." asserting that: Our problem started when we engaged the services of a man to do the separations. We have used this source before, and he had done satisfactory work for Level III separations. However, the separations we received were not acceptable. We returned them and he worked on them and returned them to us again, then departed on his vacation. With no other choice, our Production Department decided to use these negatives, hoping that the reproduction by the press would be satisfactory. We then sent a blueline proof and press sheets for you to check for position of pages and overall copy. When these were returned, there was some notation as to the placing of margins on the page and also the color reproduction was rejected, along with the halftone reproduction. I was not aware of the problems involved in this. After getting involved, I did agree that you were justified in rejecting that which you had received, and called your office stating that we would have color separations remade and sent these along with the original bluelines and printed page proofs, which were marked for margin changes. . . . . R4 File, Tab I. The Contracting Officer, by letter of October 4, 1985, responded to Appellant's contention that "[it] intended to perform fully and correctly on the order if given the chance." by stating that: We have reviewed this case and find that the problems to date, including those on the latest Cromalin proofs, are serious and all inclusive enough to justify termination for default. We then checked to [sic] GPO file to learn if your performance over time could demonstrate your ability to provide sustained quality work. We find that 21 orders, 4% of the work attempted, over the past year have been rejected due to quality problems. That did not provide the reassurance we needed. We have decided to proceed with the termination for default. R4 File, Tab J. There followed the "Notice of Termination" letter dated October 4, 1985, indicating that the termination for default was due to Appellant's "inability to provide proofs of acceptable quality and fidelity to the original, [sic] camera copy." (R4 File, Tab K.) The notice also advised Appellant of the potential of reprocurement from another source and the charge back to Appellant of excess costs, if any, resulting from such action. Appellant responded to the termination letter by letter of October 31, 1985, stating in pertinent part that: We feel that, on this particular project, while there may have been some reason for the contracting officer to become annoyed, as we pointed out in our letter of October 1, 1985, we should have been allowed to show another press proof to decide if the quality of the completed project would have been satisfactory. We explained the problem we were having in that letter and asked for you to reconsider your decision. The first proof, a dylux and a set of color keys, were sent to you and returned with the comment that the color reproduction of the full color photos was not acceptable. We had the color separations sent back to the separator and he worked on them and returned them to us. Running out of time, our project manager decided to go to press and print a limited number of books and submit them to you for your comment and any additional corrections. A copy was then returned with your letter of September 6, 1985, and the cure notice. We then reshot all the photos and had new separations made by one of the top quality separation firms. Being concerned with the overall quality requirements, we reviewed the complete project, making every effort to assure that the project would be completed to your complete satisfaction. In this review, there was a question of the page margins, which were not a major concern in your initial communication when the first proof was returned. In our efforts to establish these margins, your office was called and we were instructed to return the blueline and the press proof to you to answer this question. We sent along the chromalins on the new set of separations, so that you could check them before we proceeded with the printing of the complete job. We offered to deliver some books for your immediate use, while the problems on this project were being resolved. They could have been used until the job was rerun. The point is, we were all set up to go to press, and delivery could have been made. There is some question as to the fidelity of the reproduction of the color prints on the chromalin proofs that were sent to you with the bluelines on September 19, 1985. These chromalin proofs were made by Graphics, Inc. I personally, did not see these proofs, but from my past experience, they should be very good reproductions of the subject matter. . . . . R4 File, Tab L. In a final letter to this Board dated December 23, 1985, Appellant stated that: What we question is the procedure that was used in this case. Even though the Contracting Officer worked within the guidelines as dictated by the GPO regulations, we feel that there should be some interim review of the situation before going to the extreme of cancelling the contract. . . . . The problem in this area is the interpretation of the quality of the product delivered, and the steps necessary to achieve that level. The Contracting Officer must act as an intermediate between the Agency customer and the Contractor, assuring that the final product delivered is of the nature that it is able to be used by the Agency to accomplish the objective that it was supposed to accomplish. Also, the Contracting Officer must assure that the Agency Customer does not insist on increasing the quality level to the point where it is not feasible for the Contractor to achieve that level without a great overrun in cost for the Contractor. . . . . Official File, Tab 5. Appellant also stated that it had "elected not to request a formal hearing [but to] . . . submit [it's] case on the record." (R4 File, Id.) Pursuant to GPO Instruction 110.2 dated September 17, 1984, Rule 6.(b), the Board recorded a "general denial" in the record on behalf of the Government, since the Respondent had not filed a responsive pleading. Such denial procedurally puts the matter in formal controversy, thusly making it ripe for review. The case is before the Board for decision in this form. Decision The Appellant failed to state a claim for which relief can be granted. Indeed Appellant's correspondence admits fault respecting contract performance and acknowledges Respondent's right to take the default action which it in fact appeals. In fact, the only thing it questions "is the procedure that was used in this case." asserting in this regard that "even though the Contracting Officer worked within the guidelines as dictated by the GPO regulations, we feel that there should be some interim review of the situation before going to the extreme of cancelling the contract." Thus, by its own words, Appellant seeks relief not upon the contractually agreed to provisions of the contract but upon some nebulous concept of "interim review." As noted In the matter of the appeal of Peake Printers, Inc., Docket No. GPO BCA 12-85, dated November 12, 1986: 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. Thus, even if this Board were to find itself in agreement with Appellant "that there should be some interim review of the situation before going to the extreme of cancelling the contract.", it could not grant any relief to Appellant under the facts of this case since to do so would be to enlarge the terms of the contract. Accordingly, this Board affirms the decision of the Contracting Officer and denies the appeal.