BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
CUSTOM PRINTING COMPANY ) Docket No. GPO BCA 28-94
Jacket No. 547-782 )
Purchase Order G-3283 )
For the Appellant: Custom Printing Company, Owensville, Missouri,
by Frederic G. Antoun, Jr., Attorney-at-Law, Chambersburg,
Pennsylvania.
For the Government: Kerry L. Miller, Associate General Counsel,
U.S. Government Printing Office.
Before FOSS, Administrative Judge.
DECISION AND ORDER
I. STATEMENT OF THE CASE
This appeal, timely filed by Custom Printing Company (Appellant
or Contractor), 1005 Commercial Drive, Owensville, Missouri
65066, is from the final decision, dated July 14, 1994, of
Contracting Officer Thomas E. Nepi, of the U.S. Government
Printing Office's (Respondent or GPO or Government) Chicago
Regional Printing & Procurement Offices (CRPPO), 200 West Adams
Street, Suite 1460, Chicago, Illinois 60606-5299, rejecting the
pamphlet printed by the Contractor pursuant to Jacket No.
547-782, Purchase Order G-3283, and announcing the Respondent's
intention to terminate the contract for default. R4 File, Tab
F.1 Although the Government subsequently rescinded the default
when the Appellant agreed to reprint the order in its entirety,
see R4 File, Tab H, the Contractor expressly noted its
disagreement with the initial decision and retained its right to
appeal, see R4 File, Tab I. On June 6, 1995, the Board conducted
an evidentiary hearing in the appeal, in which the Appellant
appeared pro se, while the Government was represented by
Counsel.2 Board Rules, Rules 17 through 22, 24, 26 and 27.
Thereafter, both parties filed timely briefs on the issues
involved.3 Board Rules, Rule 23. Based on the record in this
case, the Contracting Officer's final decision is hereby
REVERSED, and the appeal ALLOWED to the extent of the claim for
the cost of the original printing. However, the Appellant's
claim for the increased costs incurred in the reprinting is
DENIED.
II. BACKGROUND
The relevant facts in this case are essentially uncontroverted,
and are set forth here as presented in the R4 File, and the
hearing record, including the exhibits of the parties.
1. In April 1994, the CRPPO issued an Invitation for Bid (IFB)
for the production of two saddle-stitched booklets for the
Department of Defense's U.S. Military Enlistment Processing
Command (MEPCOM);4; i.e., 650,000 copies of a 28-page plus cover
pamphlet entitled "Student and Parent Guide" (Student Guide),5
and 65,600 copies of a 24-page plus cover publication called
"Educator and Counselor Guide" (Counselor Guide). Tr. 85; R4
File, Tab A. The Student Guide was assigned Jacket No. 547-782,
while the Counselor Guide was purchased under Jacket No. 547-783.
Id., at 2. Only Jacket No. 547-782 is involved in this case.
See Report of Prehearing Telephone Conference, dated April 17,
1995, at 2, n. 2 (hereinafter RPTC).
2. Among other things, the IFB specifications provided:
GENERAL TERMS AND CONDITIONS: Any contract which results from
this Invitation for Bid will be subject to all terms and
conditions of U.S. Government Office Contract Terms (GPO Pub.
310.2, effective December 1, 1987, Rev. September 1988) and
Quality Assurance Through Attributes Program Contract Terms (GPO
Pub. 310.1, Rev. November 1989).6
* * * * * * * * * *
TRIM SIZE: 178 x 216 mm (7 x 8-1/2").
* * * * * * * * * *
PROOFS: Two sets Grey DYLUX 535-2 or equal dark image proofs in
book format.
* * * * * * * * * *
Contractor must not print prior to receipt of an "OK TO PRINT".
* * * * * * * * * *
PRIOR TO SHIPPING APPROVAL COPIES: Prior to any other shipping,
Contractor must deliver 5 copies each jacket to the North Chicago
address below. Agency will hold 2 workdays from receipt to
telephone approval/problem.
* * * * * * * * * *
PRINTING: For both jackets, text prints in blue and black (with
some screened type). Line copy with solid bands or areas of
blue, some with reverses. Colors doe not trap except small ruled
area on one page. There is one blank text page on Jacket 547-783
and 2 blanks on Jacket 547-782.
* * * * * * * * * *
BINDING: Score covers and fold with grain parallel to spine.
Separate covers wraparound. Saddle wire stitch in two places
along 216 mm (8-1/2") bind. Trim 3 sides.
* * * * * * * * * *
QUALITY ASSURANCE LEVELS AND STANDARDS: The following levels and
standards shall apply to these specifications:
Product Quality Levels: (a) Printing (page related) Attributes-
Level III . . . (b) Finishing (item related) Attributes-Level
III.
* * * * * * * * * *
Prior to any other shipping, deliver 5 approval copies each
jacket to: HQ USMEPCOM/MEPCP-PO, 2500 Green Bay Road, North
Chicago, IL 60064.
* * * * * * * * * *
SCHEDULE:
Award will be made and Government furnished material and purchase
order will be available for pickup at [the CRPPO] by May 5, 1994.
Proofs must be received by May 19, 1993. Proofs will be withheld
not more than 5 workdays , from receipt in GPO to call for
pickup.
* * * * * * * * * *
Prior to shipping approval copies must be received no later than
June 23, 1994, and will be held 2 workdays from receipt to
telephone approval/rejection.
Ship complete on or before June 30, 1994.
R4 File, Tab A, at 1-6.7 [Emphasis added.]
3. As indicated above, the IFB incorporated, by reference, GPO
Contract Terms, which contains the following provision:
Printing and binding shall be held to a high standard of
imposition; makeready; press running; clear, sharp printing;
binding; and good quality in every respect.
GPO Contract Terms, Supplemental Specifications, � 1.(b)(1)
(General: Quality).
4. The Respondent mailed the IFB to 24 potential contractors
and advertised it in the Commerce Business Daily, and received
four (4) responsive bids-from the Appellant ($105,388.00),
Gateway Press ($114,547.00), Monarch Litho ($121,121.00), and
Strathmore Printing ($141,265.00). Tr. 83, 218-19; G. Exh. No.
6. The Appellant was the incumbent contractor for the Student
Guide and the Counselor Guide.8 Tr. 50, 84, 116, 215. See Gov.
Exh. Nos. 1 and 4.
5. Since the procurement exceeded $50,000.00, the GPO's
regulations required the concurrence of GPO's Contract Review
Board (CRB) before the contract could be awarded. See Printing
Procurement Regulation, GPO Publication 305.3 (Rev. 10-90), Chap.
I, Sec. 10, � 4.a.(vii) (hereinafter PPR). Therefore, on April
29, 1994, the Contracting Officer sent a memorandum to the CRB
asking it to approve award of the contract to the low bidder, the
Appellant. Gov. Exh. No. 6. On May 2, 1994, the CRB concurred
in the award. Id. Accordingly, on May 3, 1994, the Respondent
issued Purchase Order G-3283 to the Appellant awarding it the job
to produce both the Student Guide and the Counselor Guide at its
quoted price of $105,388.00 "per specifications."9 Tr. 83; R4
File, Tab B. In that regard, the record shows that the estimated
cost of the Student Guide-the publication involved in this
dispute-was $88,701.00.10 See RPTC, at 2.
6. To produce the previous edition of the Student Guide, the
Appellant had configured its two presses as a 24-pager and a 4-
pager, which resulted in a pamphlet which had no binding stubs.
Tr. 87, 145, 213-14; Gov. Exh. No. 1. Such a setup basically
involves two operations, since the smaller press is in a separate
room at the Contractor's plant. Tr. 55, 79. In printing the
follow-up version of the Student Guide, the Contractor changed
the press configuration to a 16-pager and a 12-pager so that it
could produce the publication in a single operation. Tr. 79-80,
214. As a consequence, however, the new Student Guide had two
binding stubs or "lips" approximately 3/8" wide between pages 20
and 21 and 24 and 25. Tr. 79-80; App. Exh. No. 9. See also
RPTC, at 5. At the hearing, Cooper explained the reason for the
lips, in pertinent part:
. . . It was ran [sic] as two webs, . . . A 16-page web, which
is a 36-inch web, we call it a full web. And then in the case of
the additional pages, it was ran [sic] as a 12-pager.
The 12-page in this case is a three-quarter size web. Based on
the folding operations of those presses, . . . it not being in
increments of eight pages, you get lips because the-the way the
folding operation is on the press, when it folds down anything
that is not divisible by eight, it will create a lip.
. . . The only way that you can run a 28-pager divisible by four-
not using lips is [to] run two operations, . . . a 24 and a four,
. . .11
Tr. 79. [Emphasis added.] See also Tr. 213-14 . Furthermore, it
is abundantly clear from the record that the Contractor changed
its press configuration in order to reduce its production costs
and improve its competitive position; i.e., Cooper testified that
it cost $4,000.00 to $5,000.00 less to produce a job with a
binding stub than a complete 4-pager.12 Tr. 52, 56-57, 80,
142-43. Similarly, it is undisputed that the Appellant did not
inform the CRPPO of its intention to reconfigure its presses and
produce a pamphlet containing binding stubs prior to printing the
job-it "saw no reason to call GPO." Tr. 50-51, 91.
7. Before printing the job, the Appellant, as required by the
contract, provided the CRPPO with two (2) sets of Dylux proofs
which had been prepared by its Pre-Press Department.13 Tr. 52,
91-92, 129-30; R4 File, Tab A, at 2; Gov. Exh. No. 2. After
noting the receipt of the proofs in its records, the CRPPO
forwarded them to MEPCOM for review. Tr. 129-30. It is
undisputed that the Dylux proofs did not show the two binding
stubs as they later appeared in the final product.14 Tr. 53,
93-94. It is also uncontroverted that the Government approved
the Dylux proofs and gave the required "OK TO PRINT." Tr. 95.
8. The contract also required the Appellant, prior to shipping
the order, to send 5 copies each of the Student Guide and the
Counselor Guide to MEPCOM for approval. R4 File, Tab A, at 3, 5.
Shortly after the Contractor furnished the approval copies to the
customer agency, the CRPPO received a telephone call from
MEPCOM's Printing Officer, First Lieutenant (USAF) Mary C.
Lechner, complaining about the job. Tr. 96. As he recalled the
conversation, the Contracting Officer said that Lechner never
used the words "binding stubs" or "lips," but rather spoke in
terms of "incomplete pages." Tr. 97. She followed-up her
complaint with a memorandum (undated), which stated:
1. This letter is to inform you that the approval sample sent
to me on this job is unacceptable. The error contained therein
is visually offensive and presents a poor impression of HQ
USMEPCOM and the military services.
2. Please have the job reaccomplished. Delivery is required
not later than 15 August 1994.
R4 File, Tab C.15
9. After receiving MEPCOM's complaint, and before he actually
saw the approval copies of the Student Guide, the Contracting
Officer telephoned the Appellant to find out what the problem
was, and was told that the customer-agency was objecting to the
use of binding stubs in the product-a problem which was unique in
the Contracting Officer's experience.16 Tr. 97, 100.
Thereafter, the Contracting Officer received MEPCOM's approval
copies, examined them, and because the Contractor claimed that
the use of binding stubs in saddle-stitched publications was
routinely accepted by procurement officials at the Respondent's
main plant in Washington, DC, he telephoned the central office to
see if there was any policy or guidelines regarding this issue.17
Tr. 99, 100-01. In response to his inquiry, the Contracting
Officer was provided with a copy of a memorandum, dated December
12, 1991, from W. L. Gardner, who was the Superintendent of the
Purchase Division at the time, which states, in pertinent part:
Saddle-stitched pamphlets delivered by vendors using short pages
or "binding lips" as a production convenience are not acceptable
and shall be rejected.
Not only does the use of these lips result in an unprofessional
product, but industry standards require wire stitches in the
"center of the signature" (see attached).18 This definition
prohibits the use of short pages-or binding lips-in the
production of saddle-stitched pamphlets.
The use of SPECS language to help preclude this is acceptable and
encouraged, but failure to use the language does not obligate the
Government to accept the product.
Gov. Exh. No. 3.19 [Emphasis added.] See Tr. 102, 128, 133-34,
136. It is undisputed that this was the first time that Nepi had
learned of the Purchase Division's policy, since the memorandum
was never disseminated outside of that organization. Tr. 139,
160, 166, 203. On the other hand, the record also makes clear
that the policy was not binding on him because the CRPPO was in
the Regional Operations Office, not the Purchase Division, and
his organization had issued nothing similar.20 Tr. 139-40.
10. After considering all of the information he had gathered,
including Gardner's memorandum and the definitions of saddle-
stitching in BOOKBINDING, FUNDAMENTALS, and POCKET PAL, the
Contracting Officer determined that the Student Guide produced by
the Appellant was rejectable. Tr. 100-02, 112-13, 128, 133-34,
136. Accordingly, by letter dated July 6, 1994, addressed to
Matthew P. Lenauer, the Appellant's Customer Service Manager,
Nepi notified the Contractor that the pamphlet was defective, and
thus rejectable, and might have to be reprinted. Tr. 98; R4
File, Tab D. In that regard, the Contracting Officer explained:
Our specifications called for a saddle stitched product. A
binding "stub" of approximately 3/8" appears between pages 20/21
and 24/25, creating a very visible, objectional defect. GPO
Contract Terms (Publication 310.2) states, "Printing and binding
shall be held to a high standard of imposition . . . binding, and
good quality in every respect.
R4 File, Tab D.
11. Lenauer responded by letter dated July 8, 1994,, in
pertinent part:
We regret your disapproval of the binding style in which this
pamphlet was produced. However, for many years the GPO has set a
precedent by accepting this type of binding style. In the past,
if the GPO wanted a particular job without this type of binding
style it was clearly stated in the specs as shown in the sample
attached. Those jobs with specs not stating complete 4-page
signatures allowed the contractor to be creative in determining
competitive cost.
As to the statement in contract terms regarding printing and
binding being held to a high standard of imposition . . . [w]e
feel this product is of high standard in terms of print and bind
quality. In addition, we feel the pamphlet is perfectly usable
to the public and do not deem this product to be rejectable.
R4 File, Tab E.21 See Tr. 98. [Emphasis added.]
12. On July 14, 1994, the Contracting Officer issued his "Final
Decision," which gave the following reasons for rejecting the
Student Guide:
� The specifications required saddle stitched binding. Saddle
stitched binding, as defined in The Printing Industry, by Victor
Strauss, "is where individual signatures are fastened through the
centerfold by means of wire staples." The pamphlets produced did
not include complete signatures. Two leaves, each with a face
and back page, were inserted and held in the bind with
approximately 3/8" wide stubs. The stubs, which appear between
pages 20-21 and 24-25, are crude, objectionable, and not complete
signatures.
� Government Printing Office Contract Terms (GPO Pub. 310.2)
state[s] under quality, "Printing and binding shall be held to a
high standard of imposition; makeready; press running; clear,
sharp printing; binding; and good quality in every respect." The
stubs give the appearance of a pamphlet which has been pieced
together and not one of good quality.
� The dylux proof which your firm submitted to the Government did
not show any stubs. The Contraction [sic] Officer was never
notified either orally or in writing, of your firm's intention to
bind the pamphlets with incomplete signatures.
� The stubs are a nonspecified trim size and a major deviation
defect in accordance with the applicable Level III Quality
Assurance Through Attributes Program for Finishing (F-1).
Additionally, under Level III Typical Physical Description,
finishing must be held to above average standards or accuracy,
durability, and appearance.
� Your firm gained an unfair competitive advantage as none of the
other bidders were afforded the opportunity to formulate a bid
for a pamphlet with a binding stub option.
� Your firm produced the previous printing of this publication,
requiring the exact number of pages and cover, without this
deviation to the binding specifications.
� Saddle stitched pamphlets with binding stubs is [sic] not
an
acceptable trade practice.22
R4 File, Tab F, at 1-2. See Tr. 106-07, 121, 124-25, 128. See
also RPTC, at 5, n. 4. Accordingly, the Contracting Officer
told the Appellant that the order was rejectable for finishing
defects,23 and that the contract would be terminated pursuant to
the "Default" clause in the agreement. R4 File, Tab F, at 2.
See GPO Contract Terms, Contract Clauses, � 20 (Default).
13. Subsequent discussions between the parties resulted in the
Appellant's offer to reprint the Student Guide, while at the same
time preserving its right to appeal the rejection decision. R4
File, Tab I. Therefore, on July 15, 1994, the Contracting
Officer rescinded the termination for default, and allowed the
Contractor to reprint the order in its entirety with a promised
shipping date of August 5, 1994. R4 File, Tab H. The record
discloses that in reprinting the Student Guide, the Appellant
returned to the web press configuration which it had used for the
previous year's edition-a 24-pager and a 4-page-and produced a
stubless product.24 Tr. 214-15.
14. By letter dated July 29, 1994, the Appellant timely
appealed the Contracting Officer's final decision rejecting
the initial order of the Student Guide to the Board.25 R4
File, Tab L.
III. ISSUES PRESENTED
From the discussions during the prehearing conference, the Board
concluded that four issues were involved in this case.26 RPTC,
at 7. However, after further development of the record by the
parties, the Board believes that their dispute boils down to the
following questions:
1. Is the "BINDING" specification in the contract vague or
ambiguous with respect to the use of binding stubs in the
production of the Student Guide, and if so, was the ambiguity
patent or latent? Stated otherwise, could the Appellant
reasonably interpret the absence of language in the "BINDING"
specification expressly prohibiting the use of binding lips to
mean that a pamphlet with such stubs conformed to the contract,
thus entitling it to the benefit of the doctrine of contra
proferentem, or is that interpretation inconsistent with QATAP,
trade practice and/or an established prior course of dealings
between the
parties which governed whether or not binding stubs were
acceptable in "saddle-stitched" publications such as the Student
Guide?
2. Assuming that the contract was not ambiguous, did the
Contracting Officer properly exercise his discretion in rejecting
the original printing of the Student Guide under the provisions
of QATAP and GPO Contract Terms because the pamphlets contained
two binding stubs, or was he in error because he applied
standards which had no contractual basis? Stated otherwise, was
the Contracting Officer's decision reasonable and proper under
the circumstances, or was it arbitrary and capricious?
3. If the Contracting Officer erroneously rejected the original
version of the Student Guide, is the Contractor entitled to the
full amount of its claim for reprinting ($104,427.00), or is some
lesser amount appropriate? Specifically, is so much of the
Appellant's claim seeking reimbursement for its increased paper
and manufacturing costs in reprinting the Student Guide
($15,726.00), properly before the Board?
IV. POSITIONS OF THE PARTIES
A. The Appellant
In this case, the Appellant seeks to recover a total of
$104,427.00 from the Government on two claims: (1) $88,701.00 for
the erroneous rejection of the original printing of the Student
Guide; and (2) $15,726.00 in increased paper and manufacturing
costs incurred in reprinting the pamphlet. See App. Brf., at 11;
App. R. Brf., at 8; RPTC, at 5-6; Complaint, dated September 9,
1994, at 2. The Contractor advances four arguments in support of
its claims. First, the Appellant contends that while the
Contracting Officer rejected the Student Guide because it
contained binding stubs, the contract itself failed to provide
any specific or objective criteria regarding the use of such a
finishing method. App. Brf., at 5-6 (citing Professional
Printing of Kansas, Inc., supra; Wornick Family Foods Co., ASBCA
Nos. 41317, 41318, 41319, 94-2 BCA � 26,808; Shirley Contracting
Corp. and ATEC Contracting Corp., ENGBCA No. 4650, 85-3 BCA �
18,214); App. R. Brf., at 3; RPTC, at 6. The Contractor believes
that the absence of such standards is fatal to the Government's
position that the rejection of the product was justified. App.
Brf., at 6 (citing Professional Printing of Kansas, Inc., supra);
App. R. Brf., at 3.
Second, the Appellant says that a reasonable interpretation of
the express language of the contract itself warrants the
conclusion that the use of binding stubs was not prohibited.
App. Brf., at 7-8 (citing Professional Printing of Kansas, Inc.,
supra; Web Business Forms, Inc., GPO BCA 16-89 (September 30,
1994), 1994 WL 837423; McDonald & Eudy Printers, GPO BCA 25-92
(April 11, 1994), 1994 WL 275093). In essence, the Contractor
contends that an examination of the contract, including QATAP and
GPO Contract Terms, discloses nothing therein, one way or
another, about the use of binding lips. App. Brf., at 7; App. R.
Brf., at 3. Therefore, the meaning ascribed by the Government to
much of the Quality Level III standards which state that finished
work at that level must be of "above average . . . appearance, "
see QATAP Manual, at viii, namely that it ipso facto precludes
binding stubs, has no contractual basis whatsoever.27 App. Brf.,
at 7; App. R. Brf., at 3. Furthermore, assuming arguendo that
the language in question was ambiguous, the Appellant asserts
that any such ambiguity would be latent not patent. App. Brf.,
at 8. Besides, the Contractor believes that in light of its
experience in printing products with binding stubs for GPO "on
numerous prior occasions" in the past, e.g., the 1993 "S"
Corporation Tax Package (App. Exh. Nos. 1 and 2), its
interpretation of the contract was reasonable in this case. App.
Brf., at 8 (citing Ceccanti, Inc. v. United States, 6 Cl. Ct. 526
(1984); Professional Printing of Kansas, Inc., supra; Web
Business Forms, Inc., supra); App. R. Brf., at 7; RPTC, at 6.
Therefore, the Contractor urges the Board to resolve the
ambiguity issue in its favor. App. Brf., at 8; RPTC, at 6.
Third, the Appellant disagrees with the Respondent that it did
not produce a "saddle-stitched" pamphlet, as required by the
specifications. App. Brf., at 9. The Contractor generally
concurs with the Respondent's view that the traditional
definition of "saddle-stitching" means placing a wire staple
through the centerfold of a signature or pamphlet.28 Id.; App.
R. Brf., at 3-4. Furthermore, there seems to be no dispute that
the term "signature" refers to a folded sheet of printed paper
divisible by multiples of four.29 However, the Appellant insists
that the way it produced the Student Guide, namely as a single
28-page signature (using a 16-page full web and a 12-page 2/4 web
simultaneously on its 36 inch web press) does not violate these
precepts,30 since the wire stitches were, in fact, placed in the
center of the signature. App. Brf., at 9. Thus, the Contractor
believes that the pamphlet, as originally manufactured, satisfies
the definition of a "saddle-stitched" publication, as that term
is understood in the industry.31 App. Brf., at 9. Furthermore,
the Appellant asserts that while the Respondent may have either
intended or assumed that the Student Guide it ordered would not
be delivered with binding stubs, the simple fact is that no such
restriction was contained in the specifications. Id. Moreover,
the Contractor observes that GPO tells bidders in other contracts
that binding stubs are not allowed by including language in the
specifications expressly stating that saddle-stitched
publications must have 4-page signatures and no bindings stubs or
lips. App. Brf., at 10; App. R. Brf., at 4; RPTC, at 6. The
Appellant contends that since the disputed contract contained no
such prohibitionary language, it was allowed to use stub binding,
especially as it seems excluding such lips is a special feature
of certain jobs, and not a general proscription for all saddle-
stitched publications.32 App. Brf., at 10; App. R. Brf., at 7-8
(citing RD Printing Associates, Inc., GPO BCA 2-92 (December 16,
1992), 1992 WL 516088; Gresham & Co., Inc. v. United States, 200
Ct. Cl. 97, 470 F.2d 542 (1972)); RPTC, at 6. Thus, the
Contractor submits that the Respondent is bound by its past
interpretation of these other contracts.33 App. Brf., at 10;
App. R. Brf., at 7.
Finally, the Appellant alleges that the Respondent erroneously
applied the provisions of QATAP in rejecting the original
printing of the Student Guide. App. Brf., at 10; App. R. Brf.,
at 3. In the Contractor's opinion, the Contracting Officer
misapplied finishing attribute F-1 (Trim Size) by measuring the
individual stub, which he viewed as analogous to a "page,"
instead of evaluating the entire pamphlet, as required by QATAP.
App. Brf., at 10 (citing QATAP, at 27); App. R. Brf., at 3.
Furthermore, the Appellant asserts that the Government's logic is
doubly flawed for the simple reason that binding stubs are not
"pages," which the Contracting Officer conceded at the hearing.
App. Brf., at 10 (citing QATAP, at 27); App. R. Brf., at 3. See
Tr. 107. In essence, the Contractor believes that the
Contracting Officer evoked finishing attribute F-1 as an
afterthought in order to reject the Student Guide-a product which
met the contract specifications in all other respects. App.
Brf., at 10-11. Accordingly, the Appellant asserts that the
Respondent erroneously rejected the pamphlet, and therefore, it
is entitled to compensation of $104,427.00, as claimed. App.
Brf., at 11; App. R. Brf., at 8; RPTC, at 6.
B. The Respondent
The Respondent, on the other hand, argues that the Contractor's
claim is without merit because the Contracting Officer properly
rejected the original Student Guide. R. Brf., at 20; RPTC, at 6.
The Government contends that the first Student Guide was a
nonconforming product when measured against the contract's QATAP
standards and the supplemental specifications set forth in GPO
Contract Terms. R. Brf., at 6-13. With respect to QATAP, GPO
says that the pamphlet fails to measure up in at least two ways:
(1) the binding stubs are a major deviation from the acceptable
trim tolerance for Quality Level III products (1/8" or 3.2 mm)
warranting rejection under finishing attribute F-1 (Trim Size),
see R. Brf., at 7 (citing QATAP Manual, at 27-28); and (2) the
lips are tantamount to extra blank pages (which means that the
booklet has four blanks instead of just the two required), which
is a defect covered by finishing attribute F-15 (Blank Pages-
Other Than Specified), see R. Brf., at 8 (citing QATAP Manual, at
44).34 See also R. R. Brf., at 2. Apart from the "minimal
standards" contained in QATAP, the Respondent asserts that the
supplemental specification concerning quality in GPO Contract
Terms, which provides that "[p]rinting and binding shall be held
to a high standard of imposition; makeready; press running;
clear, sharp printing; binding; and good quality in every
respect," provides an independent basis for rejection. R. Brf.,
at 9 (citing B. P. Printing & Office Supplies, GPO BCA 22-91
(February 5, 1993), 1993 WL 311371; GPO Contract Terms,
Supplemental Specifications, � 1.(b)(1) (General: Quality); R. R.
Brf., at 2. In the Government's view, this supplemental
provision "engrafts" the industry's "high standard" for printing
and binding onto the contract, and those norms "do not allow the
use of binding stubs to affix individual leaves in a saddle-
stitched publication."35 R. Brf., at 9-13; R. R. Brf., at 3.
Therefore, GPO concludes that since the original Student Guide
did not meet these high industry standards rejection of the
product was justified. R. Brf., at 13; R. R. Brf., at 3.
The Respondent's second argument is rooted in "black letter" law
which says that the Government is entitled to strict compliance
with its contract specifications, including those of fixed-price
supply contracts.36 R. Brf., at 13-14 (citing American Electric
Contracting Corp. v. United States, 217 Ct. Cl. 338, 579 F.2d 602
(1978); Red Circle Corp. v. United States, 185 Ct. Cl. 1, 398
F.2d 836 (1968); Jefferson Construction Co. v. United States,
151 Ct. Cl. 75 (1960); Dependable Printing Co., Inc., supra).
One purpose of the rule is to protect the integrity of the
bidding system by discouraging low bids based on an intention to
provide products of lesser quality.37 R. Brf., at 14 (citing
Ideal Restaurant Supply Co., VACAB No. 570, 67-1 BCA � 6,237).
Under this principle, whenever a contractor delivers
nonconforming supplies, the Government, at its discretion, can
either accept the work at a reduced price or reject it. R. Brf.,
at 14 (citing Stephenson, Inc., GPO BCA 02-88 (December 20,
1991), 1991 WL 439274; Famous Model Co., Inc., ASBCA No. 12526,
68-1 BCA � 6902). Furthermore, the Government cannot be forced
to accept nonconforming products at a reduced price, even if the
defects are relatively minor. R. Brf., at 14 (citing Stephenson,
Inc., supra; Cherry Meat Packers, Inc., ASBCA No. 8974, 1963 BCA
� 3937). Conversely, a contractor cannot compel the Government
to accept substituted products, even if the substitutes are
superior; i.e., the Government is entitled to receive exactly
what it asked for. R. Brf., at 15 (citing Fry Communications,
Inc., supra; Copigraph, Inc., GPO BCA 20-86 (May 25, 1989), 1989
WL 385174; Vogard Printing, GPOCAB 7-84 (January 7, 1986)).38
The Respondent states that in this case the Contracting Officer,
after considering all factors including the purpose of the
product and the needs of the customer agency,39 properly rejected
the original Student Guide and ordered a reprint, and the
exercise of his discretion was reasonable under the
circumstances. R. Brf., at 15 (citing QATAP, at 2). Moreover,
the Government asserts that while the Contracting Officer's
decision is presumptively subjective, because his determination
was contractually authorized the Board may not substitute its
judgment for his. R. Brf., at 16 (citing Stephenson, Inc.,
supra; Stabbe Senter Press, supra; Fry Communications, Inc., GPO
BCA 22-84 (February 20, 1986) (hereinafter Fry II), 1986 WL
181462; Monarch Enterprises, Inc., ASBCA No. 31375, 86-3 BCA �
19,227; John T. Brady & Co., VACAB No. 1300, 84-1 BCA � 16,925;
Thomas W. Yoder Co., Inc., VACAB No. 997, 74-1 BCA � 10,424;
Henry C. Beck Co., VACAB No. 523, 66-1 BCA � 5323). Instead, the
Board's review is limited to judging whether or not the
Contracting Officer's action was unreasonable, arbitrary or
capricious, and in the absence of a "gross error" his decision
should be affirmed. R. Brf., at 16 (citing Squirrel Creek
Associates v. United States, 11 Ct. Cl. 212 (1986); John T. Brady
& Co., supra; Cleveland Electric Co. of South Carolina, VACAB No.
556, 67-1 BCA � 6293). Additionally, the Respondent contends
that the burden of proving an abuse of discretion by the
Contracting Officer was on the Appellant, since good faith on the
part of the Government is always presumed. R. Brf., at 17
(citing Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756
(1982); Solis Enterprises, Inc., VACAB No. 1576, 84-3 BCA �
17,606). GPO states that the Contractor has not provided such
evidence or met its burden, and therefore, the Contracting
Officer should be sustained. R. Brf., at 17.
Finally, the Respondent asserts that the Appellant has not proved
its allegation that GPO has a past practice of accepting
publications with binding stubs; rather, the evidence shows just
the opposite; i.e., the agency's past practice was not to accept
products with such lips. R. Brf., at 18; R. R. Brf., at 3. GPO
agrees that a prior course of dealings between the parties in
earlier contracts is relevant to interpreting their current
agreement. R. Brf., at 18 (citing RD Printing Associates, Inc.,
supra; Gresham & Co., Inc. v. United States, supra; L.W. Foster
Sportswear Co. v. United States, 186 Ct. Cl. 499, 405 F.2d 1285
(1969); Coastal States Petroleum Co., ASBCA No. 31059, 88-1 BCA �
20,468). However, the Government believes that the single item
proffered by the Appellant to prove GPO's binding stub practice-
the 1993 "S" Corporation Tax Package produced for the IRS under
Jacket No. 345-048-is inadequate to prove that the agency had a
general policy of accepting stub binding.40 R. Brf., at 18
(citing App. Exh. No. 2). On the other hand, the Respondent
states that it is entitled to the benefit of the rule of
construction which says that the meaning which the parties gave,
either by word or action, to the terms of a similar, previously
performed contract, is presumed to apply to those same terms in
later agreements, all other things being equal.41 R. Brf., at 19
(citing Cresswell v. United States, 146 Ct. Cl. 119, 173 F.Supp.
805 (1959); Benning Aviation Corp.,ASBCA No. 19850, 75-2 BCA �
11,355; Dynaport Electronics, Inc., ASBCA No. 17895, 73-2 BCA �
10,324). Since the Appellant, just a year earlier, had printed
the previous version of the Student Guide without binding stubs,
the Contracting Officer could rely on that past performance in
concluding that the disputed pamphlet was unacceptable. R. Brf.,
at 19-20 (citing Gov. Exh. No. 4); R. R. Brf., at 4-5.
Accordingly, the Respondent submits that the Contractor's claims
are without merit, and the Contracting Officer's decision should
be sustained. R. Brf., at 20; R. R. Brf., at 5; RPTC, at 6.
V. DISCUSSION42
From the detailed and well-reasoned briefs of the parties one
might think that this appeal involves complex issues of fact and
law. In reality, however, this is a very simple case.
Basically, all that is involved here are two parties to
consecutive contracts for the same pamphlet, and with the same
terms and conditions, where the Government received two different
looking products. Specifically, under the first contract, which
is not in dispute, the Appellant configured its presses to
manufacture a stub-free booklet, while it used another press
configuration for the second agreement-the one at issue-and
produced a pamphlet containing two binding lips; otherwise, the
two products were exactly the same. The Respondent, which had
accepted the first pamphlet, rejected the second on the ground
that the binding stubs violated the contract's quality assurance
standards. Therefore, the two issues confronting the Board are
simply these: (1) is there anything either in the specifications
or in the applicable rules of law, which requires the Appellant
to produce a stub-free pamphlet (by adhering to a specific method
of production) from contract-to-contract; and (2) if there are
restrictions on the use binding lips in the Student Guide, what
are the quality assurance standards against which the product can
be measured, and where are they? In short, the two questions
relate to matters of contract ambiguity and arbitrary conduct,
the first by the parties offering different interpretations of
the "BINDING" specification, and the second by the Appellant's
contention that the Contracting Officer's evaluation and
subsequent rejection of its product was not based on any standard
in the "BINDING" clause or elsewhere in the contract. Each of
these questions will be answered seriatim.
A. The "BINDING" specification at issue is clearly vague and
ambiguous regarding the use of binding stubs in the production of
the Student Guide. Furthermore, the evidence on the prevailing
trade practice concerning the use of binding stubs in saddle-
stitched publications is conflicting and insufficient, and of
little probative value as a guide to interpreting the contract.
Similarly, it cannot be said on this record that an established
prior course of dealings exists with respect to binding the
Student Guide. Moreover, the ambiguity is latent, not patent.
Therefore, under the doctrine of contra proferentem the Appellant
is entitled to recover on its claim. Finally, recovery is also
possible under the doctrine of constructive change, since the
Appellant's "single signature" press configuration is not
unreasonable under the circumstances.
Weighing the propriety of a contracting officer's
determination that a product procured for the
Government failed to meet the quality standards of the
contract and hence was rejectable-the Board's central
task in this appeal-is not unique or novel. Indeed,
the Board has observed that "QATAP questions are among
the most common issues presented to the Board for
resolution." See McDonald & Eudy II, supra, slip op.
at 17. On the other hand, this case does present a
factual matter of first impression with respect to the
application of QATAP, namely, whether finishing
attribute F-1 (Trim Size) supports the rejection of an
otherwise conforming product because the contractor
chose a production method which resulted in two
binding stubs, even though there is no express
prohibition against such lips in the contract
specifications themselves.43 However, while the Board
is in uncharted waters, the legal principles which
provide the "philosophical compass for navigating a
way through the shoals of this . . . dispute," see
Banta Co., GPO BCA 03-91 (November 15, 1993), slip op.
at 25, 1993 WL 526843, are well-known and, for the
most part, have been adequately briefed by the
parties.
The ambiguity issue in this appeal centers on the contract's
"BINDING" specification. The Appellant argues that the
Respondent's failure to use language in the "BINDING"
specification prohibiting binding stubs, similar to the
phraseology employed to proscribe such lips in other GPO
contracts, e.g., Programs A814-M and C181, means that the first
printing of the Student Guide was not rejectable simply because
it had them; i.e., the Government's silence constitutes its
consent to a pamphlet with binding stubs. App. Brf., at 7-8, 10;
App. R. Brf., at 3; RPTC, at 6. The Respondent, on the other
hand, tacitly admits that the "BINDING" specification looks
ambiguous, on its face, but says that when properly viewed
against other provisions of the contract, trade practice, and the
prior dealings between the parties, any ambiguity fades away,
leaving just one possible interpretation-the agreement called for
a Student Guide without any binding stubs whatsoever. R. Brf.,
at 6-13, 18-19; R. R. Brf., at 2-5. Since the parties have drawn
different meanings from the disputed specification, the Board
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?44
See MPE Business Forms, Inc., supra, slip op. at 42; The George
Marr Co., supra, slip op. at 40-41; Professional Printing of
Kansas, Inc., supra, slip op. at 47; Web Business Forms, Inc.,
GPO BCA 16-89 (September 30, 1994) slip op. at 17, 1994 WL
837423; R.C. Swanson Printing and Typesetting Co., supra, slip
op. at 41, fn. 22; General Business Forms, Inc., supra, slip op.
at 16.
Resolving an ambiguity is a question of contract interpretation,
and in such cases the Board confines itself to the "four corners"
of the contract. See MPE Business Forms, Inc., supra, slip op.
at 42; The George Marr Co., supra, slip op. at 41; Professional
Printing of Kansas, Inc., supra, slip op. at 46; Web Business
Forms, Inc., supra, slip op. at 17; Universal Printing Co.,
supra, slip op. at 26, n. 27; RD Printing Associates, Inc.,
supra, slip op. at 9, 13, ns. 9 and 15. Furthermore, the basic
rules followed by the Board in these sorts of cases are well-
known. They have been enunciated by the Board numerous times,
most recently in MPE Business Forms, Inc.:
First, two different interpretations of the same contract
language raise the possibility that the specifications may be
ambiguous. See McDonald & Eudy Printers, Inc., supra, slip op.
at 13; R.C. Swanson Printing and Typesetting Co., GPO BCA 31-90
(February 6, 1992), slip op. at 41, 1992 WL 487874, aff'd, Civil
Action No. 92-128C (Cl. Ct. October 2, 1992). Second,
contractual language is ambiguous if it will sustain more than
one reasonable interpretation. [Footnote omitted.] See The George
Marr Co., supra, slip op. at 41; Professional Printing of Kansas,
Inc., supra, slip op. at 47; Webb Business Forms, Inc., supra,
slip op. at 17; R.C. Swanson Printing and Typesetting Co., supra,
slip op. at 41, fn. 22; General Business Forms, Inc., GPO BCA
2-84 (December 3, 1985), slip op. at 16, 1985 WL 154846. See
also Neal & Co. v. United States, 19 Cl. Ct. 463, 471 (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 contractor, and give the language of the
contract that meaning which a reasonably intelligent contractor
acquainted with the circumstances surrounding the contract would
give it. See The George Marr Co., supra, slip op. at 41-42;
Professional Printing of Kansas, Inc., supra, slip op. at 47;
McDonald & Eudy Printers, Inc., supra, slip op. at 14; General
Business Forms, Inc., supra, slip 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. See
Fry Communications, Inc./InfoConversion Joint Venture v. United
States, 22 Cl. Ct. 497, 503 (1991) (citing Edward R. Marden
Corporation v. United States, supra, 803 F.2d at 705); The George
Marr Co., supra, slip op. at 42; Professional Printing of Kansas,
Inc., supra, slip op. at 48; Web Business Forms, Inc., supra,
slip op. at 18; R.C. Swanson Printing and Typesetting Co., supra,
slip op. at 41, fn. 22. 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)); The George Marr Co., supra, slip op. at 42, fn. 33;
Professional Printing of Kansas, Inc., supra, slip op. at 48, fn.
64; Web Business Forms, Inc., supra, slip op. at 18, fn. 18; R.C.
Swanson Printing and Typesetting Co., supra, slip 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 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)); Professional Printing of Kansas, Inc., supra,
slip op. at 48, fn. 64; Web Business Forms, Inc., supra, slip op.
at 19, fn. 18. 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. See 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 (1967); WPC
Enterprises, Inc. v. United States, 163 Ct. Cl. 1, 6, 323 F.2d
874 (1963)); The George Marr Co., supra, slip op. at 42-43;
Professional Printing of Kansas, Inc., supra, slip op. at 48;
Webb Business Forms, Inc., supra, slip op. at 19; General
Business Forms, Inc., supra, slip op. at 17 (citing Enrico Roman,
Inc. v. United States, 2 Cl. Ct. 104, 106 (1983)). 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 Fry Communications, Inc./InfoConversion Joint Venture
v. United States, supra, 22 Cl. Ct. at 504 (citing Newsom v.
United States, supra, 230 Ct. Cl. at 303); The George Marr Co.,
supra, slip op. at 43, fn. 34; Professional Printing of Kansas,
Inc., supra, slip op. at 48-49, fn. 65. See also Interstate
General Government Contractors, Inc. v. Stone, 980 F.2d 1433
(Fed. Cir. 1992); Enrico Roman, Inc. v. United States, supra, 2
Cl. Ct. at 106; 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)); 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.
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 The George Marr Co., supra, slip op. at 43;
Professional Printing of Kansas, Inc., supra, slip op. at 49;
Webb Business Forms, Inc., supra, slip op. at 19; McDonald & Eudy
Printers, Inc., supra, slip op. at 16; Shepard II, supra, slip
op. at 19; R.C. Swanson Printing and Typesetting Co., supra, slip
op. at 42. The most basic principle of contract construction is
that the document should be interpreted as a whole. [Footnote
omitted.] See Hol-Gar Manufacturing Corp. v. United States, 169
Ct. Cl. 384, 388, 351 F.2d 972, 975 (1965); The George Marr Co.,
supra, slip op. at 43; Professional Printing of Kansas, Inc.,
supra, slip op. at 49; Webb Business Forms, Inc., supra, slip op.
at 19-20; General Business Forms, Inc., supra, slip op. at 16.
Hence, all provisions of a contract should be given effect and no
provision is to be rendered meaningless. See The George Marr
Co., supra, slip op. at 43-44; Professional Printing of Kansas,
Inc., supra, slip op. at 49-50; Webb Business Forms, Inc.,
supra, slip op. at 20; General Business Forms, Inc., supra, slip
op. at 16 (citing, Raytheon Co. v. United States, 2 Cl. Ct. 763
(1983)). See also Pacificorp Capital, Inc. v. United States, 25
Cl. Ct. 707, 716 (1992), aff'd 988 F.2d 130 (Fed. Cir. 1993);
Avedon Corp. v. United States, 15 Cl. Ct. 771, 776 (1988); Fortec
Constructors v. United States, 760 F.2d 1288, 1292 (Fed. Cir.
1985); 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); Martin Lane Co. v. United States, 193 Ct. Cl.
203, 215, 432 F.2d 1013, 1019 (1970); 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
The George Marr Co., supra, slip op. at 44; Professional Printing
of Kansas, Inc., supra, slip op. at 50; Webb Business Forms,
Inc., supra, slip 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). That is, 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." See The George Marr Co., supra, slip op. at 44-45
(citing 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)); Professional Printing of
Kansas, Inc., supra, slip op. at 50-51. See also ITT Arctic
Service, Inc. v. United States, 207 Ct. Cl. 743, 524 F.2d 680,
684 (1975) (contract interpretation should be "without twisted or
strained out of context [and without] regard to the subjective
unexpressed intent of one of the parties. . ."). An
interpretation that effectively deletes a major portion of the
contract cannot and will not be sanctioned. See Avedon Corp. v.
United States, supra, 15 Cl. Ct. at 776 (citing W.G. Cornell Co.
v. United States, 179 Ct. Cl. 651, 666-67, 376 F.2d 299, 309
(1967)).
See MPE Business Forms, Inc., supra, slip op. 42-47. [Original
emphasis.] See also Graphic Communications, Inc., GPOCAB 5-83
(October 25, 1983), slip op. at 5, 1983 WL 160718 (citing WPC
Enterprises, Inc. v. United States, supra; Western Contracting
Corp. v. United States, 144 Ct. Cl. 318 (1958)).
Apart from these overarching principles, there are several
specific rules of contract construction which apply when
interpreting an agreement, one of which-"trade usage"-is
particularly relevant here.45 First, within the contract itself,
it is well-established that where the provisions of a contract
are phrased in clear and unambiguous language, "the words of
those provisions must be given their plain and ordinary meaning
by the court in defining the rights and obligations of the
parties. . . ." See MPE Business Forms, Inc., supra, slip op. 47
(citing The George Hyman Construction Co. v. United States, 832
F.2d 574, 579 (Fed. Cir. 1987), (quoting Elden v. United States,
617 F.2d 254, 260-61 (Ct. Cl. 1980), aff'g, The George Hyman
Construction Co., GSBCA No. 7913, 86-3 BCA � 19,200; Julius
Goldman's Egg City v. United States, 697 F.2d 1051, 1057 (Fed.
Cir. 1982), cert. denied, 464 U.S. 814, 104 S.Ct. 68, 78 L.Ed.2d
83 (1983); American Science and Engineering, Inc. v. United
States, 663 F.2d 82, 88 (Ct. Cl. 1981)); The George Marr Co.,
supra, slip op. at 44, n. 36; Professional Printing of Kansas,
Inc., supra, slip op. at 50, n. 67. Similarly, technical terms
are given their technical meaning. See MPE Business Forms, Inc.,
supra, slip op. 47 (citing Coastal Drydock and Repair Corp.,
ASBCA No. 31894, 87-1 BCA � 19,618; Industrial Finishers, Inc.,
ASBCA No. 6537, 61-1 BCA � 3,091); The George Marr Co., supra,
slip op. at 44, n. 36; Professional Printing of Kansas, Inc.,
supra, slip op. at 50, n. 67. Likewise, terms special to
Government contracts will be given their technical meanings. See
MPE Business Forms, Inc., supra, slip op. 47 (citing General
Builders Supply Co. v. United States, 187 Ct. Cl. 477, 409 F.2d
246 (1969) (meaning of "equitable adjustment"); The George Marr
Co., supra, slip op. at 44, n. 36; Professional Printing of
Kansas, Inc., supra, slip op. at 50, n. 67. As for extrinsic
evidence of the intent of the parties, the rules of construction
allow, inter alia, custom and trade usage to explain undefined
terms. See MPE Business Forms, Inc., supra, slip op. 47-48
(citing Moore v. United States, 196 U.S. 157, 166, 25 S.Ct. 202,
203-04, 49 L.Ed. 428 (1905); Haehn Management Co. v. United
States, 15 Cl. Ct. 50, 59 (1988); Northwestern Industrial Piping,
Inc. v. United States, 199 Ct. Cl. 540, 550-51, 467 F.2d 1308,
1314 (1972); W.G. Cornell Co. v. United States, supra; Harold
Bailey Painting Co., ASBCA No. 27064, 87-1 BCA � 19,601
(definition of "spot painting")); The George Marr Co., supra,
slip op. at 44, n. 36; Professional Printing of Kansas, Inc.,
supra, slip op. at 50, n. 67. However, custom and trade usage
may not contradict plain contractual language, or clear and
unambiguous terms. See MPE Business Forms, Inc., supra, slip op.
48 (citing Avedon Corp. v. United States, supra, 15 Cl. Ct. at
778; The George Hyman Construction Co. v. United States, 215 Ct.
Cl. 70, 81, 564 F.2d 939, 945 (1977)); WRB Corp. v. United
States, 183 Ct. Cl. 409, 436 (1968)); The George Marr Co., supra,
slip op. at 44, n. 36; Professional Printing of Kansas, Inc.,
supra, slip op. at 50, n. 67. See also R.B. Wright Construction
Co. v. United States, 919 F.2d 1569 (Fed. Cir. 1990); Chevron
U.S.A., Inc., ASBCA No. 32323, 90-1 BCA � 22,602, at 113,426
("Since the term ["FOB destination"] was clear in the contract
and defined by [the] FAR, there is no need to resort to trade
custom or practice at all." Citing Sea-Land Service, 553 F.2d
651 (Ct. Cl. 1977), cert. denied, 434 U.S. 1012 (1978)).
1. The Disputed "BINDING" Specification
Curiously, what divides the parties in this case, unlike similar
appeals considered by the Board in the past, is not what the
disputed specification actually states, but rather what it does
not say. In that regard, the provision at issue simply provides:
BINDING: Score covers and fold with grain parallel to spine.
Separate covers wraparound. Saddle wire stitch in two places
along 216 mm (8-1/2") bind. Trim 3 sides.
R4 File, Tab A, at 4. A glance at the previous contract for the
Student Guide discloses that with one minor technical change (the
disputed contract sets forth bind length in both millimeters and
inches, while the prior agreement expresses the length in inches
only), the "BINDING" specification in both contracts is exactly
the same. See Gov. Exh. No. 4, at 4. Because the Respondent is
insisting on strict compliance with the specifications, the Board
believes that it is important to take a close look at the
"BINDING" specification and understand exactly what kind of
provision we are dealing with; i.e., is it a "design" or a
"performance" specification? See Professional Printing of
Kansas, Inc., supra, slip op. at 56 (citing Aleutian Constructors
v. United States, 24 Cl. Ct. 372 (1992)).
The law makes a clear distinction between "design" and
"performance" specifications in determining the respective rights
and obligations of the parties to a Government contract.
Generally, design specifications explicitly state how the
contract is to be performed and permit no deviations, while
performance specifications focus on the results to be obtained,
and leave it to the contractor to determine how to achieve that
objective. See Professional Printing of Kansas, Inc., supra,
slip op. at 57 (citing Neal & Co. v. United States, supra;
Stuyvesant Dredging Co. v. United States, 834 F.2d 1582 (Fed.
Cir. 1990); J.L. Simmons Co., Inc. v. United States, 188 Ct. Cl.
684, 412 F.2d 1360 (1969)). As the Board has explained:
[There are] DESIGN specifications which set forth precise
measurements, tolerances, materials, in process and finished
product tests, quality control, inspection requirement, and other
specific information. Under this type specification, the
Government is responsible for design and related omissions,
errors, and deficiencies in the specifications and drawings.
PERFORMANCE specifications set forth operational characteristics
desired for the item. In such specifications, design,
measurements and other specific details are not stated or
considered important so long as the performance requirement is
met. Where an item is purchased by a performance specification,
the contractor accepts general responsibility for design,
engineering, and achievement of the stated performance
requirements. The contractor has general discretion and election
as to detail but the work is subject to the Government's reserved
right of final inspection and approval or rejection.
See Colorgraphics Corp., GPO BCA 16-87 (March 31, 1989), slip op.
at 23, 1989 WL 384970 (quoting Monitor Plastics Co., ASBCA No.
14447, 72-2 � 9,626 (1972)). [Original emphasis.] See also
Professional Printing of Kansas, Inc., supra, slip op. at 57.
This distinction is important because, while the Government is
entitled to performance in strict compliance with design
specifications, performance specifications are not as rigidly
enforced since the contractor is expected to exercise his
ingenuity and select the means for achieving the standard of
performance required. Id., slip op. at 58 (citing Centre
Manufacturing Co. v. United States, 183 Ct. Cl. 115, 392 F.2d 229
(1968); J.D. Hedin Construction Co. v. United States, 171 Ct. Cl.
70, 347 F.2d 235 (1965), Carmon Construction, Inc., GSBCA No
11227, 92-2 BCA � 25,001; Falcon Jet Corp., DOT CAB 78-32, 82-1
BCA � 15,477; R&M Mechanical Contractors, Inc., DOT CAB [No.]
75-51, 76-2 BCA � 12,084; Santa Fe Engineers, Inc., ASBCA [No.]
22950, 79-2 BCA � 14,084).
The "BINDING" provision in this case is a pure design
specification. The four sentences which comprise the
specification-"Score covers and fold with grain parallel to
spine[.]," "Separate covers wraparound[.]," "Saddle wire stitch
in two places along 216 mm (8-1/2") bind[.]," and "Trim 3
sides[.]"-are wholly design in nature and totally the
Government's responsibility; i.e., nothing in those requirements
give the Appellant any discretion in performance. See
Professional Printing of Kansas, Inc., supra, slip op. at 59
(citing Neal & Co. v. United States, supra, 19 Cl. Ct. at 468;
Falcon Jet Corp., supra, 82-1 BCA at 76,691). Accord Big Chief
Drilling Co. v. United States, 26 Cl. Ct. 1276, 1294 (1992)
("Design specifications set forth in detail the materials to be
employed and the manner in which the work is to be performed, and
the contractor is 'required to follow them as one would a road
map.' [Citation omitted.] Whereas, performance specifications
simply set forth an objective or end result to be achieved, and
the contractor may select the means of accomplishing the task.
[Citation omitted.]"). It is undisputed that the Contractor
followed and completely satisfied all of these specification
requirements in the original printing of Student Guide.
Therefore, if the Appellant delivered a pamphlet which MEPCOM
found "visually offensive" because it had two binding stubs, the
fault is the Respondent's for failing to include language in the
"BINDING" specification telling the contractor that binding lips
would not be allowed. GPO could not shift the blame to the
Appellant because, as previously indicated, the Government is
wholly responsible for "related omissions" in design
specifications. See Professional Printing of Kansas, Inc.,
supra, slip op. at 57; Colorgraphics Corp., supra, slip op. at
23. Consequently, since the only requirement placed on the
Contractor is to show that its interpretation of the "BINDING"
specification, standing alone, is reasonable, it would seem that
it has crossed that threshold to recovery in this case.46 See
MPE Business Forms, Inc., supra, slip op. at 42; The George Marr
Co., supra, slip op. at 41; Professional Printing of Kansas,
Inc., supra, slip op. at 47; Webb Business Forms, Inc., supra,
slip op. at 17; R.C. Swanson Printing and Typesetting Co., supra,
slip op. at 41, n. 22; General Business Forms, Inc., supra, slip
op. at 16. See also Great Lakes Lithograph Co., GPO BCA 18-84
(May 22, 1985), slip op. at 27-28, 1985 WL 154849 ("[W]here one
contractor has misread the intentions of the specifications to
permit production by using only one set of lithographs and the
Government has itself determined that two sets are necessary, and
the specifications are ambiguous in such regard, we believe the
Government has an affirmative duty to spell out the limitation or
method of production in unequivocal terms; i.e., by saying in
plain English, 24 color separations rather than by merely
pointing out problems in dot gain and two types of stock.");
Electronic Composition, Inc., [GPOCAB] (December 22, 1978), slip
op. 29-30, 1978 WL 22339 (". . . [I]n interpreting contracts, the
intent of the parties which is not expressed in the contract
specifications, cannot create an obligation on the part of the
contractor to comply with such intent." Citing John C. Kohler
Co. v. United States, 204 Ct. Cl. 777, 787, 498 F.2d 1360 (1974);
Dana Corp. v. United States, 200 Ct. Cl. 200, 214, 470 F.2d 1032
(1972); Elgin National Watch Co., ASBCA Nos. 10421, 10589, 10698,
10730, 11721, 67-2 BCA � 6400).
2. Trade Practice
However, it is not enough to simply look at the "BINDING"
specification in isolation. The Board's obligation is to
interpret the contract as a whole and give meaning to all of its
parts, if at all possible without causing a clash between the
provisions of the agreement. See MPE Business Forms, Inc.,
supra, slip op. at 45-46; The George Marr Co., supra, slip op. at
43-44; Professional Printing of Kansas, Inc., supra, slip op. at
49-50; Webb Business Forms, Inc., supra, slip op. at 19-20.
Accord Granite Construction Co. v. United States, supra; B. D.
Click Co. v. United States, supra; Hol-Gar Manufacturing Corp. v.
United States, supra. In that regard, setting aside for the
moment the parties' disagreement about the relationship between
the "BINDING" specification and QATAP, discussed infra, the
Respondent, who concedes the provision's silence on the matter of
binding stubs creates the appearance of an ambiguity, says that
its four sentences cannot be read without also considering: (1)
the meaning of a "saddle-stitched" publication within the
printing industry; and (2) the "prior course of dealings" between
the parties on the predecessor contract. The Government asserts
that when those two factors are taken into account, the contract
clearly and unambiguously tells the Appellant to produce a
stubless Student Guide. As a matter of fact, both parties claim
the benefit of the so-called "trade practice" and "prior course
of dealings" doctrines in this case, especially since the
contract itself does not define the critical term "saddle-
stitching." Cf. MPE Business Forms, Inc., supra, slip op. at 54.
Accord Harold Bailey Painting Co., supra.
The Board has long recognized that as an interpretative device
custom and trade usage is not only a valuable tool for
explaining undefined terms in an agreement, see e.g., MPE
Business Forms, Inc., supra, slip op. at 54 (citing Haehn
Management Company v. United States, supra; Northwestern
Industrial Piping, Inc. v. United States, supra; W.G. Cornell
Co. v. United States, supra); The George Marr Co., supra, slip
op. at 44, n. 36; Professional Printing of Kansas, Inc., supra,
slip op. at 50, n. 67, but is also useful in analyzing the
reasonableness of the parties' respective positions, id. (citing
Avedon Corp. v. United States, supra). It is also well-settled
that evidence of trade usage or practice may be used to either
expand or narrow the scope of a contractor's obligation beyond
the literal meaning of the contract language. See Hoffman
Construction Co., DOT BCA No. 2150, 93-2 BCA � 25,803, at
128,423 (citing Anthony P. Miller, Inc. v. United States, 191
Ct. Cl. 292, 422 F.2d 1344, 1352 (1970); Stoeckert v. United
States, 183 Ct. Cl. 152, 391 F.2d 639, 647 (1968); Gholson Byars
& Holmes Construction Co. v. United States, supra, 351 F.2d at
999-1000). The basis for that rule is that parties draw their
agreement in light of the trade customs and practices of the
relevant business community. See Hoffman Construction Co.,
supra, at 128,423 (citing Firestone Tire & Rubber Co. v. United
States, 195 Ct. Cl. 21, 444 F.2d 547, 551 (1971); W.H. Edwards
Corp. v. United States, 161 Ct, Cl. 322, 328 (1963)).
Furthermore, the decisions tell us that ". . . [p]roving a trade
practice or custom takes more than mere allegations or a single
statement by one supplier. A trade custom has to be something
which is well-established within a specified geographic area,"
see Bruce-Anderson Co., Inc., ASBCA No. 29460, 88-3 BCA �
20,998, at 106,091, or "has become established to the extent it
can be recognized as such" throughout the industry, see Prince
Georges Center, Inc. v. General Services Administration, GSBCA
No. 12289, 94-2 BCA � 26,889, at 133,849 (citing Davho Co.,
VACAB No. 1004, 73-1 BCA � 9848). Moreover, the existence of a
trade practice can only be proven by instances of actual
practice and not by the opinion of a witness alone. See MPE
Business Forms, Inc., supra, slip op. 49, n. 45 (citing Sinclair
Oil Corp., EBCA No. 416-8-88, 90-1 BCA � 22,462, at 112,775;
Eder Electric Co., ASBCA No. 6692, 61-1 BCA � 3096, aff'd sub
nom. Eder Electric Co. v. United States, 205 F.Supp. 305, 306
(ED Pa 1962)). Accord Geo-Con, IBCA Nos. 2195, 2196, 89-2 BCA �
21,674; Turner Construction Co., ASBCA No. 25602, 86-2 BCA �
18,966. In addition, there must be "substantial evidence that
the practice is well recognized," see J.A. Jones Construction
Co., ENG BCA No. 4635, 85-2 BCA � 17,952, at 89,945 (hereinafter
Jones I) (citing WRB Corp. v. United States, supra, 183 Ct. Cl.
at 444, 479; W.G. Cornell Co. v. United States, supra, 179 Ct.
Cl. at 670-71; Gholson, Byars & Holmes Construction Co. v.
United States, supra, 173 Ct. Cl. at 395), and be "so clear and
uncontradictory and distinct so as to leave no doubt as to its
nature," see Sinclair Oil Corp., supra, 90-1 BCA at 112,775
(quoting Eder Electric Co. v. United States, supra, 205 F.Supp.
at 306). See also J.A. Jones Construction Co., ENG BCA No.
6164, 95-1 BCA � 27,482, at 136,893 (hereinafter Jones II).
The Appellant's proof on this issue consists of Cooper's hearing
testimony and documentary evidence-the 1993 "S" Corporation Tax
Package procured for the IRS and various commercial publications
from different sources-all with binding stubs. Tr. 16-21, 23-24,
30-33, 46-47; App. Exh. Nos. 1-2, 4-8.47 The Contractor believes
that its evidence shows conclusively that absent an express
provision in the contract prohibiting binding stubs (such as in
Programs A814-M and C181), their use is perfectly acceptable in
the trade for saddle-stitched pamphlets. App. Brf., at 9-10;
App. R. Brf., at 3-4. Meanwhile, the Respondent has constructed
its "trade practice" argument from three planks: (1) the
traditional definition of "saddle-stitching" contained in three
of the printing industry's standard references-BOOKBINDING,
FUNDAMENTALS, and POCKET PAL- all of which speak in terms of
placing wire staples through the "middle fold" or "center fold"
of a pamphlet, signature, or sheet;48 (2) a 1991 memorandum, with
an attachment, issued to employees of the Purchase Division,
stating that "industry standards require wire stitches in the
'center of the signature'," and that henceforth "[s]addle-
stitched pamphlets . . . using short pages or 'binding lips' . .
. are not acceptable and shall be rejected[.]"; and (3) testimony
from the Contracting Officer, and five other witnesses who were
also long-time GPO employees.49 Tr. 77, 110-11, 158, 164,
170-71, 181-82, 184; Gov. Exh. No. 3; R4 File, Tab G. The
Government submits that its evidence proves beyond a shadow of a
doubt that where, as here, the total number of pages in a product
are divisible by four, industry practice is not to use binding
stubs, except for special jobs such as those with "tear out"
postcards and envelopes; indeed, lips are uncommon on GPO
products. R. Brf., at 10-11.
In the Board's opinion, neither party has presented the
requisite evidence of trade custom and practice to warrant a
ruling in its favor on the issue. First, the Appellant's
case is weak because Cooper's testimony about the printing
industry's usage of binding stubs was too general and
unspecific in nature, and was uncorroborated. See Sinclair
Oil Corp., supra, 90-1 BCA at 112,775; Geo-Con, supra, 89-2
BCA at 109,000; Bruce-Anderson Co., Inc., supra, 88-3 BCA at
106,091. Second, the commercial publications employed to
buttress Cooper's testimony (App. Exh. Nos. 4-8) are of
little probative value because no evidence was presented
establishing the contract specifications under which they
were produced, and thus the exhibits have little bearing on
what the Appellant was expected to provide under the
disputed contract. See Edwards & Broughton Co., GPOCAB 6-84
(March 8, 1985), slip op. at 4, n. 6, 1985 WL 154876
(magazine samples). Moreover, four exhibits as functionally
diverse as a college brochure and several television guides
would seem to be too few, and too variable, to convey a
"clear and uncontradictory and distinct" idea of the actual
trade practice. See Eder Electric Co. v. United States,
supra, 205 F.Supp. at 306; Sinclair Oil Corp., supra, 90-1
BCA at 112,775. Finally, as the Respondent suggests, the
specifications for the 1993 "S" Corporation Tax Package are
not sufficiently comparable with the requirements for the
Student Guide to support a finding that the trade practice,
and hence GPO's, is to allow binding stubs where no express
prohibition against their use exists.50 Tr. 172-75; R.
Brf., at 18-19; App. Exh. No. 2, at 9.
The Respondent's proof is equally unavailing on the "trade
practice" issue. First, GPO's reliance on the definitions of
"saddle-stitching" in BOOKBINDING, FUNDAMENTALS, and POCKET PAL
is misplaced. None of the standard references are incorporated
in the contract. Thus, the Board finds the portions of
BOOKBINDING, FUNDAMENTALS, and POCKET PAL submitted by the
Government in R4 File, Tab G to be irrelevant and not controlling
on the question concerning the meaning of the term "saddle-
stitching" in the context of this contract, generally, or "[s]
addle wire stitch" in the "BINDING" clause, specifically. See
Olympic Graphic Systems, GPO BCA 01-92 (September 13, 1996), slip
op. at 35, 1996 WL _____ (industry standard of measurement
published by the Western Reprographic Association); MPE Business
Forms, Inc., supra, slip op. at 49, n. 45 (definition of "unit
set" in excerpts from The Business Forms Handbook: An Illustrated
Guide to Business Forms and Business Systems and the Business
Forms Glossary of Design and Production Terms, two of the forms
industry's standard lexicons); Industrial Printing Co., GPOCAB
7-83 (September 16, 1986), slip op. at 6, n. 3, 1986 WL 181500 (a
document entitled "Policies, Ethics, Customs and Practices In the
Business Forms Industry" (October 10, 1983), in a dispute
involving forms burster specifications). See also Electronic
Composition, Inc., supra, slip op. at 32 (where the ad hoc panel
held that a proposal not incorporated into the formal
specifications (albeit inadvertently), was not part of the
contract. Citing Asiatic Petroleum Corp., ASBCA No. 17765, 74-2
BCA � 10,833). Accord Hogan Construction, Inc., ASBCA No. 39679,
95-1 BCA � 27, 428 (the board rejected as irrelevant portions of
two publications submitted by the parties as evidence of industry
standards for the thickness of the sand base to be used under
replacement sidewalks because the contract in question did not
incorporate those publications); Max J. Kuney Co., DOT BCA No.
2759, 94-3 BCA � 27,245, at 135,751 (the board held that the
Government could not enforce a prohibition against drilling
certain holes for support brackets because it was not published
in the agency's standard construction specifications, or
referenced in the terms of a proposed contract, or in the
subsequent supplements/modifications to the contract itself);
Oakcreek Funding Corp., GSBCA No. 11244-P, 91-3 BCA � 24,200 (the
board dismissed a contention that the term "routine" in the
context of maintaining computers meant "test software" even
though there was evidence that the term was so understood in the
industry, because there was no proof that it referred exclusively
to software in the contract). In fact, if any source outside the
contract should be referred to for the meaning of "saddle-stitch"
in the context of this contract, it would seem to be GPO's
Glossary of Graphic Arts Terms (December 1967) (hereinafter GPO
Glossary), which defines that term as "[t]o fasten a booklet by
stitching it through the spine of the pamphlet with wire." See
GPO Glossary, at 13. Practically the same definition appears in
the GPO Handbook, which says "saddle-stitch" means "[t]o fasten a
booklet by stitching it through the spine with wire staples."
See GPO Handbook, Glossary of Graphic Arts Terms, at 38. As
previously mentioned, the GPO Handbook is the agency publication
expressly designed for Federal agencies doing business with the
Respondent's regional offices such as the CRPPO.51 Taking the
meaning of "saddle-stitch" in these two publications as GPO's
"official word" on the subject, it can be seen that no mention is
made of stapling through the "centerfold" or "middle fold" of the
pamphlet.52 However, there is no indication in the record that
the Contracting Officer considered the definition of "saddle-
stitch" in the GPO Handbook when he examined the Student Guide
and found it defective.
Second, for the same reason the Board believes that the 1991
Gardner memorandum to "Contracting Officers, Purchase Division"
(Gov. Exh. No. 3) is inapposite; i.e., the memorandum's
description of "industry standards" as requiring "wire stitches
in the 'center of the signature'," and prohibiting "the use of
short pages-or 'binding lips'-in the production of saddle-
stitched pamphlets[,]" is simply not incorporated in the
contract. See Olympic Graphic Systems, supra; MPE Business
Forms, Inc., supra; Industrial Printing Co., supra. Furthermore,
the contract at issue was not issued by the Purchase Division,
and the Contracting Officer admitted that Gardner's memorandum
was not binding on him since he was in the Regional Operations
Office, a totally distinct GPO organization; i.e., it was
supplied to him for informational purposes only. Tr. 139-40.
See PPR, Chap. XIII, Sec. 1, � 4.f(1) (Assistance from other
Departments). Moreover, the Regional Operations Office has
issued nothing similar, and the Respondent called no witnesses
from that organization, other than the Contracting Officer, to
testify as to whether the Regional Operations Office placed the
same interpretation on the term "saddle-stitching" as the
Purchase Division. Indeed, the Board cannot help but notice that
when the GPO Handbook was revised in 1992, no attempt was made to
incorporate the definition of "saddle-stitch" in the 1991 Gardner
memorandum, because the revisors retained the same meaning for
that term which GPO has consistently used since the publication
of the GPO Glossary in 1967.
Lastly, it also seems that taken together the GPO Handbook and
GPO Glossary undermine the uniform testimony of the Respondent's
witnesses that trade practice does not allow binding stubs,
except in special circumstances, if the total number of pages in
a product are divisible by four. Instead, it seems that the
Appellant was not the only contractor who saw nothing in GPO's
official definition which would have precluded the use of binding
lips in a product like the Student Guide. The witnesses
mentioned two specific instances where, like here, jobs with a
total number of pages divisible by four were printed with binding
stubs-Shepard Printing and Fry Communications, Inc. Tr. 163,
166, 191-192. 163, 166.) In both of them the GPO contractor
took the same position as the Appellant; i.e., the product met
industry standards, and in Fry's case, the Respondent accepted
the job at a discount.53 Tr. 163. The Board does not doubt for
a minute that, according to the overall testimony, binding stubs
are "uncommon" (not unknown) in GPO products, or that other
contractors have accepted the Government's interpretation of a
"saddle-stitched" publication. Tr. 163-64, 166, 170-71, 191-92.
However, looking at the evidence in the light most favorable to
the Respondent, the most this proves is that it is the policy of
the Purchase Division to ban binding stubs and other GPO
procurement offices rarely approve them, but it does not show the
existence of an industry-wide custom prohibiting such lips in
printed products altogether. Consequently, the Board's position
is analogous to that of the Corps of Engineers Board of Contract
Appeals (ENG BCA) in Jones I, when it rejected the agency's
argument that ". . . there existed a '[F]ederal custom and usage'
whereby companies contracting with the Corps of Engineers
acquiesced in its interpretation of the Equipment Ownership
Expense clause." See Jones I, supra, 85-2 BCA at 89,945. In
that case, the ENG BCA reasoned, in pertinent part:
It would be truly extraordinary, however, to extend these
accepted principles [regarding trade practice as an interpretive
device] so as to create a new type of usage, requiring persons
dealing with the Corps of Engineers to accept without question
the Corps' unilateral interpretation of its own contracts merely
because others had "acquiesced" therein. There may well have
arisen a course of dealing between the Corps of Engineers and
certain contractors wherein they tacitly accepted the
Government's interpretation. . . . But unlike a trade custom, a
course of dealing affects only the parties concerned. Appellant
was not constrained to accept Respondent's construction of [the
Equipment Ownership Expense clause] merely because others had
done so.
It is noteworthy that the only witnesses to the alleged course of
dealing were employees of the Respondent. The only compliant
contractor identified by name, Pine Bluff Sand and Gravel
Company, did not testify. Respondent did not call any
representatives of the construction industry to confirm that
there was a trade practice as alleged. If it is true that
Respondent's position was accepted by some or all contractors
having knowledge thereof (and the evidence on the point is
inconclusive) this does not necessarily mean that they agreed
with Respondent's interpretation. They may have decided, for
reasons of their own, not to contest the issue.
Id. In the final analysis, the Board cannot tell from this
record precisely what the treatment of binding stubs is in the
printing industry. That is, the evidence concerning the trade
practice at issue is not "so clear and uncontradictory and
distinct so as to leave no doubt as to its nature." See Eder
Electric Co. v. United States, supra, 205 F.Supp. at 306.
Therefore, the record with respect to trade practice is of little
help to the Board in deciding whether or not the Appellant
stepped outside the "zone of reasonableness" in its
interpretation of the contract.
3. Prior Course of Dealings
Both parties also claim the benefit of the "prior course of
dealings" doctrine in this case. The Board's lead case on "prior
course of dealings" is Publishers Choice Book Manufacturing Co.,
in which it had this to say about the principle as an
interpretive device in contract interpretation cases:
On the question of the weight to be given a course of prior
dealings, Professors Nash and Cibinic in examining the principal
case of L.W. Foster Sportswear, Co. v. United States, 186 Ct. Cl.
499, 405 F.2d 1,285 (1969), tell us that in Government contract
law "[w]here the parties to an interpretation dispute have
interpreted, either expressly or by their actions, the provisions
of a similar, previously performed contract in a certain manner,
they will be presumed to have intended the same meaning for those
provisions in the disputed contract. This presumption is
rebuttable by clear evidence that the parties have changed their
intent or are in disagreement at the time they enter into the
disputed contract. See e.g., Lock[h]eed Aircraft Corp. v. United
States, 192 Ct. Cl. 36, 426 F.2d (1970)." Ralph C. Nash, Jr. and
John Cibinic, Jr., Federal Procurement Law, Third Edition, The
George Washington University, 1980, at 969 n.1 (emphasis added).
They further tell us in footnote 2 that "[w]hen the contract
language is clear and precise, the court or board will normally
give lesser weight to a prior course of dealing. [T]he governing
factor in such cases is the degree of clarity or exactness with
which the disputed term or clause is written, Robert McMullan &
Sons, Inc., ASBCA [No.] 21455, 77-1 BCA [�] 12,456 (1977) . . .
however, superficially exact language may not correctly express
the parties agreement. Generally more convincing evidence of a
course of prior dealing will be required to controvert contract
language which is stated precisely. Cf. Doyle Shirt
Manufacturing Corp. v. United States, 199 Ct. Cl. 150, 462 F.2d
1150 (1972)." Id. at 970, n.3.
In addition, they tell us that "[t]he parties may be bound by
their interpretation of prior contracts even though the language
of the disputed contract has been altered." Id. at 971, n.3.
Lastly, they tell us that "[t]he reasoning underlying the prior
course of dealing rule requires that both parties have actual
knowledge of the prior course of dealing and of its significance
to the contract. Clearly, it would be unreasonable to find that
a party had agreed to a term which he was not aware." Id. at
972, n.5 (emphasis added).54
See Publishers Choice Book Manufacturing Co., supra, slip op. at
10-11. [Original emphasis.] See also Swanson Printing Co., GPO
BCA 27-94 and 27A-94 (November 18, 1996), slip op. at 29-30, 1996
WL _____; Olympic Graphic Systems, supra, slip op. at 32; MPE
Business Forms, Inc., supra, slip op. at 59. See generally,
Cibinic & Nash, Administration, at 206-09.
Publishers Choice Book Manufacturing Co. merely reiterates the
rule established by the Court of Claims in a long line of cases
that the parties' interpretation of a previous contract
containing specifications identical to those currently in dispute
may be determinative of how the disputed specifications should be
construed. See e.g., Gresham & Co., Inc. v. United States,
supra; L.W. Foster Sportswear Co., Inc. v. United States, supra;
Franklin Co. v. United States, 180 Ct. Cl. 666, 381 F.2d 416
(1967); Greenberg Co., Inc. v. United States, 156 Ct. Cl. 434;
Cresswell v. United States, supra; Minneapolis-Moline Co. v.
United States, 137 Ct. Cl. 790, 149 F.2d 146 (1957). The rule is
held to be applicable as an aid to ascertaining the partes
intention as to the meaning of disputed contractual language even
in cases where, as here, the language appears to be clear and
unambiguous. See e.g., Gresham & Co., Inc. v. United States,
supra; L.W. Foster Sportswear Co., Inc. v. United States, supra;
Dillingham Shipyard, DOT CAB No. 76-20, 78-2 BCA � 13, 299;
Compudyn Corp., ASBCA No. 14556, 72-1 BCA � 9218. However, it is
also well-established that the basis for applying the doctrine is
a "sequence of previous conduct between the parties" relating to
their former agreements or transactions which is fairly to be
regarded as establishing a common basis of understanding for
interpreting their expressions and other conduct. See Swanson
Printing Co., supra, slip op. at 29, n. 42 (citing RESTATEMENT
(SECOND) OF CONTRACTS � 223 ("agreement"); U.C.C. � 1-205 (1977)
("transaction")); Olympic Graphic Systems, supra, slip op. at 32,
n.22; MPE Business Forms, Inc., supra, slip op. at 29, n. 35.
Accord Longmire Coal Corp., ASBCA No. 31569, 86-3 BCA � 19,110,
at 96,604-05. Essentially, what this means is that the
Government will not be allowed to suddenly change its long-
standing interpretation of contract language to the detriment or
prejudice of a contractor who has acted in reliance on that
historic definition or contractual practice. See Swanson
Printing Co., supra, slip op. at 29, n. 42 (citing Gresham and
Co., Inc. v. United States, supra; Western Avionics, Inc., ASBCA
No. 33158, 88-2 BCA � 20,662); Olympic Graphic Systems, supra,
slip op. at 32-33, n.22; MPE Business Forms, Inc., supra, slip
op. at 29, n. 35. Thus, the cases, as well as logic, tell us
that it takes something more than one or two contracts to
establish a prior course of dealings. See e.g., Gresham and Co.,
Inc. v. United States, supra (prior course of dealings found
based on 36 previous contracts with the same specifications, 15
of which were involved in the dispute); Western Avionics, Inc.,
supra (50 essentially identical prior contracts over a 16-year
period); American Forest Products, AGBCA No. 79-170-1, 85-1 BCA �
17,720 (the Government's interpretation prevailed based on
evidence of nine specific prior contracts between the parties
which had been administered in the same manner); Ambulance, Inc.,
VACAB No. 1309, 80-2 BCA � 14,555 (three prior contracts);
Dillingham Shipyard, supra (four previous contracts). But see
e.g., Kvaas Construction Co., ASBCA No. 45965, 94-1 BCA � 26,513
(no waiver found even though Government had approved a deviation
on four prior contracts); T.L. Roof & Associates Construction
Co., ASBCA Nos. 38928, 42621, 93-2 BCA � 25,895 (no prior course
of dealings even though two prior contracts were subject to the
same Corps of Engineers Safety manual, because the same agency
and the same contractor were not involved and neither party had
actual knowledge of the prior conduct); General Secretarial
Services Corp., GSBCA No. 11381, 92-2 BCA � 24,897 (no waiver
found although the Government had approved a specification
deviation on six prior contracts); Western States Construction
Co., ASBCA No. 37611, 92-1 BCA � 24,418 (no waiver by course of
dealing on two prior contracts-one with another contractor). See
also, Cibinic & Nash, Administration, at 206-07. Indeed, the
Board's settled rule is that one prior deviation from a contract
is not enough evidence to establish a prior course of dealing.
See Swanson Printing Co., supra, slip op. at 30-31; Olympic
Graphic Systems, supra, slip op. at 33; MPE Business Forms, Inc.,
supra, slip op. at 62; Publishers Choice Book Manufacturing Co.,
supra, slip op. at 11 (citing Doyle Shirt Manufacturing Corp. v.
United States, supra). Accord Longmire Coal Corp., supra, 86-3
BCA at 96,604-05 (a single prior contract which gave the
Government the option of inspecting, sampling, and analyzing all
coal deliveries to a military base or only some shipments, and it
chose to inspect all deliveries resulting in premium payments to
the contractor, did not establish a prior course of dealings and
waive the Government's right to engage in partial inspections of
coal deliveries, with no premium payments, for the second
contract with the same terms).
Apart from the disputed agreement, there are two other contracts
between the parties in this record-the 1993 "S" Corporation Tax
Package (App. Exh. No. 2) and the previous agreement for the
production of the Student Guide (Gov. Exh. No. 4). The Appellant
rests its "prior course of dealings" case on the Tax Package,55
while the Respondent says that the prior Student Guide agreement
controls. In short, each party relies on a single contract in
contravention of the Board's settled rule. See Swanson Printing
Co., supra, slip op. at 30-31; Olympic Graphic Systems, supra,
slip op. at 33; MPE Business Forms, Inc., supra, slip op. at 62;
Publishers Choice Book Manufacturing Co., supra, slip op. at 11
(citing Doyle Shirt Manufacturing Corp. v. United States, supra).
Moreover, the Respondent's reliance on Benning Aviation Corp. for
the proposition that the Appellant was obligated to produce a
stub-free Student Guide because it had done so under the previous
contract, which included essentially the same "BINDING"
specification, see App. Brf., at 19, is misplaced. In that case,
the parties had discussed the "Chief Flight Instructor" issue in
their negotiations, and the contractor was fully aware of the
Government's position prior to signing what was to be their
fourth agreement. See Benning Aviation Corp., supra, 75-2 BCA at
54,093-94. As the Armed Services Board of Contract Appeals
(ASBCA) observed in resolving the dispute:
On 28 June [the date of the final negotiating meeting between the
parties] the appellant had a choice: either it could accept the
contract knowing that the Flying Club expected the services of a
Chief Flight Instructor, or it could refuse to accept an award of
the contract until the contract language was changed in
accordance with its wishes. Appellant says it had a third
alternative namely, that because the contract did not contain a
specific reference to a Chief Flight Instructor, appellant was
free to furnish those services as a "volunteer" and was equally
free to withdraw those services at any time. In the sense used
here, "volunteer" would mean the performance of a service which
the appellant had no contractual obligation to perform. The
latter approach must fail for two reasons. First of all, if this
was in fact appellant's interpretation of the contract, it should
have communicated that interpretation to the Flying Club
representative prior to the signing of the contract. This it
failed to do. Secondly, and perhaps more importantly, appellant
was well aware that the Flying Club was interpreting the words
"flight instructors sufficient to meet the requirements of the
Club" to include a Chief Flight Instructor in accordance with the
practice of the prior three and a half years. We think that the
appellant's action in furnishing Chief Flight Instructors under
the prior contracts containing the same language is the strongest
evidence of its interpretation of the contract and takes
precedence over its undisclosed intention to perform as a
volunteer under the current contract.
See Benning Aviation Corp., supra, 75-2 BCA at 54,096. [Emphasis
added.] See also General Security Services Corp. v. General
Services Administration, GSBCA No. 11381, 92-2 BCA � 24,897 (the
contractor was obligated to continue to provide training under
its contract for guard services, even though similar requirements
in prior contracts had not been enforced by the Government,
because inquiries showed that the Government was not waiving the
training requirements in the current contract). Here, while the
Appellant was the incumbent contractor, the contract was awarded
pursuant to sealed bid procedures, this was only the second
contract between the parties, and no negotiations took place
before award. Consequently, the Contractor could not have been
aware of the Government's position that "saddle-stitched"
publications did not contain binding stubs. Accordingly, for
these reasons, the Board believes that neither party has
established a "prior course of dealings" in its favor, and their
contentions are rejected.
4. Quality Assurance Provisions
The final area of disagreement between the parties concerns the
impact of QATAP and GPO Contract Terms on the "BINDING"
specification. In arguing that binding stubs were not barred by
the contract, the Appellant observes that neither the QATAP
Manual or GPO Contract Terms says anything, one way or another,
about the subject, and therefore, it was allowed to use lips.
App. Brf., at 7-8 (citing Professional Printing of Kansas, Inc.,
supra; Web Business Forms, Inc., supra; McDonald & Eudy Printers
supra); App. R. Brf., at 3. By contrast, the Respondent contends
that the prohibition against the use of binding stubs is clear if
the "BINDING" specification is read in conjunction with the
"QUALITY ASSURANCE LEVELS AND STANDARDS" provision, establishing
the Student Guide as a Quality Level III product, as well as
QATAP and the supplemental specification regarding quality in GPO
Contract Terms. R. Brf., at 6-13 (citing B. P. Printing &
Office Supplies, supra); R. R. Brf., at 2; R4 File, Tab A, at
4-5; QATAP, at 27-28; GPO Contract Terms, Supplemental
Specifications, � 1.(b)(1) (General: Quality). The different
meanings which the parties give to the disputed contract language
are clearly at opposite ends of the spectrum. However, as
emphasized above, for an ambiguity to exist the differing
interpretations of the contract must be reasonable. See MPE
Business Forms, Inc., supra, slip op. at 42; The George Marr Co.,
supra, slip op. at 41; Professional Printing of Kansas, Inc.,
supra, slip op. at 47; Webb Business Forms, Inc., supra, slip op.
at 17; R.C. Swanson Printing and Typesetting Co., supra, slip op.
at 41, n. 22; General Business Forms, Inc., supra, slip op. at
16. Furthermore, as the Board has also noted, the Contractor's
burden is not to prove that its interpretation is more reasonable
than the Government's, only that, standing alone, its meaning is
reasonable. See George Bennett v. United States, supra, 371 F.2d
at 861 (citing Peter Kiewit Sons' Co., supra). In the Board's
view, the Appellant has met its burden.
Obviously, the quality assurance provisions of a contract,
including QATAP, can be an important clue to the interpretation
of disputed specifications. See e.g. The George Marr Co., supra,
slip op. at 45-46; Professional Printing of Kansas, Inc., supra,
slip op. at 52-53. The underlying assumption is that while ". .
. Government contracts are usually drafted in absolute terms, in
the expectation that contractors will aim for perfect performance
. . . we do not live in an ideal world, so some reasonable
allowance must be made for failure-not total failure, but some
acceptable level of imperfect performance which the parties can
live with . . .". Id., slip op. at 53-54 (citing Thermal
Electronic, Inc. v. United States, 25 Cl. Ct. 671 (1992);
Radiation Technology, Inc. v. United States, 177 Ct. Cl. 227, 366
F.2d 1003 (1966); Fry II, supra). Thus, whenever it analyzes
disputed contract language, the Board is obliged to see if there
is any relationship between the design and/or performance
specifications at issue, and the quality assurance provisions
which the Government has placed in the agreement to protect its
interest in receiving an acceptable product. The governing
rationale was set forth by the Board in Professional Printing of
Kansas, Inc., when it said:
. . . [T]he "PRINTING" specification [which the Board held to be
predominantly "design" in nature] does not stand in isolation,
but rather there is a natural transition between the requirement
for perfect performance and the contract's detailed quality
assurance provisions, especially QATAP. [Footnote omitted.] A
brief glance at the QATAP manual discloses the following
explanation, in pertinent part, about the program's evaluation
standards:
For all but four of the numbered attributes and some paper
characteristics, evaluation is made on an absolute basis, with
defects assessed on deviation from explicit or implicit nominal
values, rather than on comparisons to a specified physical object
called the specified standard. . . . Tolerances specify how far
the product may deviate from the nominal and still be acceptable.
* * * * * * * * * *
. . .[T]he evaluation for attributes P-7 through P-10, and some
paper characteristics are made relative to a specified standard
while the other attributes and paper characteristics are
evaluated on an absolute basis.
See QATAP, p. vi. [Emphasis added.] It seems to the Board that
the "PRINTING" specification sentence in controversy, which
expresses performance in absolute terms, merely echoes QATAP's
evaluation philosophy, and is capable of being read against the
contract's quality assurance provisions, taken as a whole,
without negating the language of any part of the contract.
[Citations omitted.] Thus, when properly read, the contract says
that within the tolerances allowed by QATAP for defective SPFs
[Security Prescription Forms] at the Quality Level indicated,
based on an appropriate sample, the word "VOID" must appear three
times when the forms are reproduced by electrostatic means. This
plainly advises the Contractor that while it is expected to
produce an SPF which works every time, some leeway would be
allowed because of the nature of "VOID" pantograph work, beyond
which the form would either be rejected or a discount taken. The
Respondent's interpretation is in complete harmony with this
view, while the Appellant's de minimis approach effectively reads
the quality assurance provisions out of the contract. [Citations
omitted.]
See Professional Printing of Kansas, Inc., supra, slip op. at
52-53. [Original emphasis.]
The problem with the Respondent's quality assurance argument in
this case is that, unlike the specification at issue in
Professional Printing of Kansas, Inc., which expressly set forth
the critical absolute standard to be applied ("The word 'VOID' .
. . must appear at least 3 times (vertically, horizontally and
diagonally) and must not be visible on the printed sheet, but
must appear when the sheet is reproduced by electrostatic
means."), there is no language whatsoever in the "BINDING"
specification about the use of binding stubs, which means that
the Board would have to make the requisite connection to the
quality assurance provisions by implication alone. The
Government says that it is possible to do this because the
contract incorporates both QATAP and GPO Contract Terms.
However, there is no support for GPO's position in either the
record or Board precedent.
The weakness in the Government's position based on QATAP is an
evidentiary one. Both the Contracting Officer and other
witnesses for the Respondent candidly testified that QATAP was
silent on the question of binding stubs, and that the definition
of "saddle-stitching" they espoused was nowhere to be found in
QATAP, or any other GPO publication for that matter. Tr. 60, 65,
74, 110, 120. Their testimony basically confirmed the
Appellant's reading of QATAP. Tr. 16. Consequently, the
Respondent's argument is undermined by its own admission that the
Contractor's interpretation has some validity. See RD Printing
Associates, Inc., supra, slip op. at 33-34 (the Government
admitted to all facts necessary to prove the contractor's case
that it relied on its interpretation of the contract in
submitting its bid). Also cf. McDonald & Eudy II, supra, slip
op. at 25, 32 (the contractor's admission that all of the books
in the initial shipment were undertrimmed gave GPO the right
under the contract to reject the first printing and have the
publication reprinted at no cost to the Government; it was
irrelevant whether or not the initial product was usable because
the undertrim was minor); Stephenson, Inc., supra, slip op. at
20-21, n. 24 (the contractor's concession that the 18,000 books
in question were defective obviated the need for proof that the
Government's inspection results were invalid); Eastwood Printing,
GPO BCA 3-88 (March 8, 1990), slip op. at 1 (the contractor,
inter alia, admitted "against its own interest" that it had
undertrimmed the product 1/16" from that required by the
specifications). Accord Daly Construction, Inc., ASBCA No.
32457, 87-3 BCA � 20,182 (letter from the contract administrator
constituted an admission against the interest of the Government).
Furthermore, insofar as the Contracting Officer measured the
original version of the Student Guide against QATAP's finishing
attribute F-1 and found it rejectable, it is clear that he looked
only at the binding lips themselves to reach that conclusion.
See R4 File, Tab F, at 1 ("The stubs are a nonspecified trim size
and a major deviation defect . . ."). However, the Board has
ruled that trim measurements for finishing attribute F-1 are to
be taken of the whole publication and not its component parts,
such as individual pages.56 Thus, the Board has indicated that:
Under the QATAP, finishing attributes, such as trim size, are
measured by inspecting individual copies of publications, and
classifying each deviation from specifications as either a
critical defect or major defect, in accordance with the
tolerance table for that attribute. [Footnote omitted.] See,
QATAP, p. 3 (Finishing Attributes). In that regard, QATAP tells
us that a major defect must be assessed on a Quality Level III
job if the trim size deviation is "greater than 1/8["] (3.2
mm)." Id., p. 28 (F-1. Trim Size).
See McDonald & Eudy II, supra, slip op. at 24-25. [Emphasis
added.] See also Stabbe Senter Press, supra, slip op. at 52-53
("The Government will evaluate finishing attributes by inspecting
individual copies of publications." [Emphasis added.]).
Consequently, it is apparent that the Contracting Officer
misapplied QATAP in this case.57
The supplemental specification in GPO Contract Terms is also not
helpful to the Respondent as an interpretative device. The key
to GPO's argument is that the supplemental specification places
the industry's standards for printing and binding, which it
claims are higher than QATAP, and independent of it, squarely
into the contract. R. Brf., at 9; R. R. Brf., at 3. However,
the Board has already indicated that the Government has not met
its three-fold burden of showing: (1) exactly what the trade
standard is for pamphlets like the Student Guide with regard to
their appearance; (2) in what respect the industry's standard is
higher than the expectations for Quality Level III work under
QATAP; and (3) precisely how did the original printing of the
Student Guide fail to meet the trade standards. Furthermore, the
Board agrees with the Appellant that, as a contract provision,
the supplemental specification is too general for the discrete
purpose which the Respondent has in mind for it, namely, as the
yardstick for testing a specific pamphlet at a specific quality
level. App. R. Brf., at 4. The supplemental specification has
never been capable of that sort of "heavy lifting," nor has that
provision ever been asked to play such a sweeping role. Rather,
to the extent that the supplemental specification provides that
"[p]rinting and binding shall be held to a high standard of
imposition; makeready; press running; clear, sharp printing;
binding; and good quality in every respect[,]" the Board believes
that the former ad hoc panels were correct when they said that
similar supplemental wording in prior versions of GPO Contract
Terms simply made the doctrine of "strict compliance" part of
every GPO contract. See Veitch Printing, [GPOCAB] (November 5,
1979), slip op. at 6, 1979 WL 30157; National Graphics, Inc.
[GPOCAB] (January 4, 1979), slip op. at 4, 1979 WL 28896.
Consequently, the Board has adopted their interpretation as its
own. Indeed, in B. P. Printing & Office Supplies, the decision
cited by GPO, the Board found nothing more than that because of
the supplemental specification the "substantial compliance" rule
did not apply under the circumstances in that case. See B. P.
Printing & Office Supplies, supra, slip op. at 14. No issue of
contract interpretation was involved. In fact, in B. P. Printing
& Office Supplies QATAP was not part of the contract, and the
supplemental specification was the only quality assurance
provision available to the Government. Id., at 3, n. 5.
Accordingly, the Board concludes overall that it cannot be shown
on this record in what manner the "BINDING" specification, as
written, with no language prohibiting the use of binding stubs,
adversely affected the Government's ability to administer the
express requirements of the quality assurance provisions in the
agreement. See e.g., The George Marr Co., supra, slip op. at
45-46. Professional Printing of Kansas, Inc., supra, slip op. at
53. Therefore, the Respondent's arguments to the contrary are
rejected.
5. Latent or Patent Ambiguity
All that remains for the Board to determine is whether the
ambiguity in this case is latent or patent. Since it is clear
from the record that the Appellant relied on its interpretation
of the contract in submitting its bid,58 a finding that the
ambiguity is latent will entitle it to the benefit of doctrine of
contra proferentem. See Fry Communications, Inc./ InfoConversion
Joint Venture v. United States, supra, 22 Cl. Ct. at 503, 510
(citing Fruin-Colon Corp. v. United States, supra, 912 F.2d at
1430; Lear Siegler Management Services v. United States, supra,
867 F.2d at 603; William F. Klingensmith, Inc. v. United States,
supra, 205 Ct. Cl. at 657); MPE Business Forms, Inc., supra, slip
op. at 43; The George Marr Co., supra, slip op. at 42, n. 33;
Professional Printing of Kansas, Inc., supra, slip op. at 48, n.
64; Web Business Forms, Inc., supra, slip op. at 19, n. 18; R.C.
Swanson Printing and Typesetting Co., supra, slip op. at 41, n.
22. Indeed, to the extent that the Contracting Officer also
based the rejection of the original version of the Student Guide
on his perception that the Contractor "gained an unfair
competitive advantage" over other bidders from its interpretation
of the "BINDING" specification, see R4 File, Tab F, at 1, the
simple answer is:
[C]ontractors are businessmen, and in the business of bidding on
Government contracts they are usually pressed for time and are
consciously seeking to underbid a number of competitors.
Consequently, they estimate only on those costs which they feel
the contract terms will permit the Government to insist upon in
the way of performance. They are obligated to bring to the
Government's attention major discrepancies or errors they detect
in specifications or drawings or else fail to do so at their
peril. But they are not expected to exercise clairvoyance in
spotting hidden ambiguities in the bid documents, and they are
protected if they innocently construe in their own favor an
ambiguity equally susceptible to another construction.
See Jones II, supra, 95-1 BCA at 136,892 (quoting Blount Brothers
Construction Co. v. United States, 171 Ct. Cl. 478, 496-97, 346
F.2d 962, 972-73 (1965)).
For the Board to find a patent ambiguity in this case, it must
conclude that the contract language contains a gross discrepancy,
an obvious error in drafting, or a glaring gap, as seen through
the eyes of a "reasonable man," in which event the Appellant
would have had an affirmative duty to seek a clarification from
the Contracting Officer before submitting its bid. See Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl. Ct. at 504 (citing Newsom v. United States,
supra, 230 Ct. Cl. at 303; Max Drill, Inc. v. United States,
supra, 192 Ct. Cl. at 626; WPC Enterprises, Inc. v. United
States, supra, 163 Ct. Cl. at 6); MPE Business Forms, Inc.,
supra, slip op. at 44; The George Marr Co., supra, slip op. at
42-43, n. 34; Professional Printing of Kansas, Inc., supra, slip
op. at 48-49, n. 65; Webb Business Forms, Inc., supra, slip op.
at 19; General Business Forms, Inc., supra, slip op. at 17.
However, its examination of the record convinces the Board that
nothing within the contract itself amounts to the sort of gross
discrepancy, obvious error in drafting, or a glaring gap, which
would trigger the Appellant's obligation to ask the Contracting
Officer for his opinion on whether the "BINDING" specification
precluded the use of binding stubs in the production of the
Student Guide. See RD Printing Associates, Inc., supra, slip op.
at 31 (meaning of the term "leaf" in the schedule of prices for
collating before establishing its bid price for collating "per
100 leaves"); Castillo Printing Co., GPO BCA 10-90 (May 7, 1991),
slip op. at 36-37, reconsid. denied, GPO BCA 10-90 (March 30,
1992) (whether the contractor was also required to gather and
collate under a "Binding" specification which only provided for
drilling, trimming and shrink-wrapping); General Business Forms,
Inc., supra, slip op. at 21 (contractor not responsible for
realizing the word "over" in the paper specification should
actually have been "cover"). Furthermore, to paraphrase its
decision in Castillo Printing Co., which also involved missing
language in the disputed specification, the Board notes that
there is nothing inherent in the binding process itself which
would lead a reasonable contractor, at the time it submitted its
bid, to suspect that the pamphlet would have to be stub-free in
order to satisfy the "BINDING" provision under the contract. See
Castillo Printing Co., supra, slip op. at 37. The facts in this
case support the conclusion that the Appellant did not become
aware of the Respondent's contrary view of the contract language
until it heard from the Contracting Officer that MEPCOM was
dissatisfied with the approval copies of the Student Guide. Tr.
97, 100. See General Business Forms, Inc., supra, slip op. at
21. Moreover, even if the Board agreed with the Respondent that
the Contractor should have seen that its reading of the "BINDING"
specification conflicted with the Government's interpretation of
"saddle-stitching," it cannot say that the Appellant also would
have recognized that the ambiguity which existed was so "gross,"
"glaring" or "obvious" that it had a duty to ask the Contracting
Officer to resolve it. See RD Printing Associates, Inc., supra,
slip op. at 31-32; Castillo Printing Co., supra, slip op. at
36-37. Accordingly, for these reasons, the Board concludes that
the ambiguity in this case is latent, not patent, and thus the
Appellant was under no duty to contact the Contracting Officer
for a clarification about whether the binding stubs were
prohibited in the production of the Student Guide. See RD
Printing Associates, Inc., supra, slip op. at 31-32; Castillo
Printing Co., supra, slip op. at 36-37; General Business Forms,
Inc., supra, slip op. at 21. See also WPC Enterprises, Inc. v.
United States, supra, 163 Ct. Cl. at 6. Therefore, since the
Board has already found that the Contractor relied on its
interpretation in submitting its bid, the doctrine of contra
proferentem applies, and it is entitled to payment for the first
version of the Student Guide. See RD Printing Associates, Inc.,
supra, slip op. at 36; General Business Forms, Inc., supra, slip
op. at 23.
6. Constructive Change
Before turning its attention to the second substantive issue in
this appeal, the Board is inclined to make one last observation
concerning the parties' dispute over the 'BINDING" specification.
Even without disregarded Programs A814-M and C181, the record
clearly indicates that GPO knows how to prevent a contractor from
producing a publication with binding lips-it simply tells them
not to by adding the appropriate sentence or phrase to the
specifications. Tr. 31, 158-60; R4 File, Tab E. See RD Printing
Associates, Inc., supra, slip op. at 23-24 (the Board found "not
without some significance" that the IFB failed to define the term
"leaf" in the disputed paragraph of the schedule of prices when
it was obvious that the drafter of the solicitation "went out of
his/her way to give special meanings to the word 'leaf' in those
places where it was deemed important [in the same provision],"
and thought that if the Government "wished the word "leaf' to be
synonymous with a 'fold-in' for the purpose of calculating the
charges for collating . . . the drafter could have made that
clear by adding a phrase such as 'per 100 leaves (or plies) of
fold-ins of any size,' or something equally appropriate.").59
Indeed, the Respondent's interpretation of the "BINDING"
specification in this case would render this precautionary
practice superfluous. But since the Government did not do so in
this contract, it cannot now be heard to say that the Appellant
should have known (actually guessed) that MEPCOM wanted a
pamphlet produced the same way as the previous year-without
binding lips-and that its choice of production methods was
limited. If that was GPO's wish, then it should have told the
Contractor so directly, and not left it to the Appellant to draw
that conclusion for itself. See RD Printing Associates, Inc.,
supra, slip op. at 24; Electronic Composition, Inc., supra, slip
op. at 32. Accord Max J. Kuney Co., supra, 94-3 BCA at 135,751
("Bidders are not responsible for knowing of construction
policies which a [F]ederal agency has not published . . . and
which are neither stated nor referenced in the terms of a
proposed contract. If the [Government] deemed it to be important
that contractors not drill holes for support brackets, then it
was incumbent upon the [Federal Highway Administration] to
include such a prohibition in the [Standard Specifications For
Construction of Roads and Bridges] or in the
supplements/modifications thereto in the contract itself, so that
bidders would be forewarned as to the required method to be
followed in achieving the finished product.").
In the final analysis, the Respondent's direction to the
Appellant to reprint the Student Guide without binding stubs, in
the absence of any language in the specifications precluding such
lips, is tantamount to a constructive change in the contract.60
See Graphicdata, Inc., supra, slip op. at 103 (Government changed
the contract in mid-stream by dropping the requirement for
patents produced on CD-ROMs and increasing its requirements for
paper sets); Professional Printing of Kansas, Inc., supra, slip
op. at 76 (GPO constructively changed the contract when, in the
absence of contractual standards, it rejected the contractor's
security prescription forms and requiring a reprinting with a
different "drop out" pattern). Thus, the Department of
Transportation Board of Contract Appeals states that the rule is:
Where, as here, the contract does not designate the method of
performance to be utilized, the contractor's reliance upon its
own expertise and ingenuity is particularly significant in
selecting the method of performance. It is also axiomatic that
the rejection of a method of performance selected by the
contractor, which is permitted by the contract, constitutes a
constructive change.
See Max J. Kuney Co., supra, 94-3 BCA at 135,751 (citing DOT
Systems, Inc., DOTBCA No. 1992, 82-2 BCA � 15,817, at 78,373).
[Emphasis added.] See Blake Construction Co., Inc., ASBCA No.
36651, 90-3 � 23,074 (where the contractor correctly construed
the disputed specification in light of industrywide practice to
require only carbon steel heat exchangers, the Government's
erroneous insistence on stainless steel heat exchangers being
furnished amounted to a constructive change entitling the
contractor to an equitable adjustment). This does not mean that
the Government's silence operates as a license for the contractor
to select any method it wishes, because the planned approach must
still be reasonable and consistent with the practices in the
trade. See Max J. Kuney Co., supra, 94-3 BCA at 135,751.
Accordingly, since there is nothing in the record to warrant the
conclusion that the Appellant's "single signature" press
configuration was unreasonable, the "constructive change"
doctrine provides a second ground for allowing the Contractor's
claim in this case. See Professional Printing of Kansas, Inc.,
supra, slip op. at 76.
B. The Contracting Officer's rejection of the original printing
of the Student Guide was in error. Although he concluded that
the pamphlet failed to satisfy QATAP finishing attribute F-1
(Trim Size), the parties agree that neither the contract, QATAP,
or GPO Contract Terms expressly address, or provide evaluation
standards for products which use binding stubs. In the absence
of such measurement criteria either in the contract or GPO's
regulations, the basis of the rejection cannot be established.
In light of the Board's holding on the ambiguity question, no
lengthy analysis of the second issue presented by the parties is
required. However, that question essentially comes down to an
inquiry into what standards, if any, the Contracting Officer used
in determining that the first version of the Student Guide was
rejectable, and tests the reasonableness of his decision. In
that regard, the
Board concludes from the record before it that even if it had
decided the ambiguity issue in the Respondent's favor, it
nonetheless would have still ruled against GPO on the standards
question.
At the outset, the parties should realize that in analyzing the
evidence the Board has refused to enter the arena now occupied by
their dispute over whether the Student Guide was a "promotional"
piece or not,61 although it cannot help but notice that the
rejected pamphlet does contain a "tear out" page (page 13). That
argument is basically about the appropriate Product Quality Level
(PQL) for the Student Guide. Suffice it to say, the Board
believes that the function of the booklet is irrelevant to its
decision. It is enough for the Board to know that the task of
selecting the appropriate PQL for a particular job has been
assigned to the customer-agency, with occasional assistance from
GPO. See PPR, Chap. XIII, Sec. 1, � 4.a (Initial Determination
of Required Quality); QATAP Manual, at vii; GPO Handbook, Sec. V,
� 3.a (Product Quality Level Selection). In this case, MEPCOM
determined that the Student Guide was a Quality Level III
product, the Contracting Officer obviously agreed with that
decision, and the Board will not disturb their judgment. See
Rose Printing, Inc., GPO BCA 32-95 (December 16, 1996), slip op.
at 24-25, 1996 WL _____; Big Red Enterprises, supra, slip op. at
37-39; K.C. Printing Co., GPO BCA 02-91 (February 22, 1995), slip
op. at 14, n. 19, 1995 WL 488531; Shepard Printing, supra, slip
op. at 14-15, n. 20; Stabbe Senter Press, supra, slip op. at 53;
French/Bray, Inc., GPO BCA 18-85 (October 23,, 1986), slip op. at
17, 1986 WL 181454. Besides, even if the Board thought that the
appropriate PQL for the Student Guide was something other than
Quality Level III, it has no authority to revise or tinker with
the express terms of the contract, but rather it must take the
agreement as it finds it. See Rose Printing, Inc., supra, slip
op. at 28-29; Olympic Graphic Systems, supra, slip op. at 37;
R.C. Swanson Printing and Typesetting Co., supra, slip op. at
40-41.
Like their dispute over the meaning of the "BINDING"
specification, the "standards" issue arises because the parties
disagree on the proper interpretation of so much of QATAP's
general description of finishing for a typical Quality Level III
product which says it ". . . must be held to above average
standards of . . . appearance." See QATAP Manual, at viii; GPO
Handbook, Sec. V, � 5.a (3), at 12. Thus, even though the
parties agree that there is no mention of binding lips in QATAP,
the Respondent views the words "above average . . . appearance"
as clearly prohibiting such stubs in a product at that PQL, while
the Appellant sees no such proscription in that language. In so
many words, the Contractor's assertion that the Contracting
Officer applied imprecise or indefinite standards in rejecting
the first Student Guide , and hence his action was arbitrary and
unreasonable, is just another way of saying that the decision was
too subjective.62
The law is clear that before the Government can reject a
contractor's product, either as a prelude to default or some
lesser action, it must first establish specific, quantifiable,
objective, and firm criteria indicating the level of quality
which the product is expected to meet. See Professional Printing
of Kansas, Inc., supra, slip op. at 68 (citing Wornick Family
Foods Co., supra; Shirley Contracting Corp. and ATEC Contracting
Corp., supra; John L. Hall dba Taiga Resource Consultants, AGBCA
No. 92-217-1, 93-3 BCA � 26,212; Chandler-Wilbert Vault Co.,
VACAB No. 1444, 80-2 BCA � 14,682; Mid-American Engineering and
Manufacturing, ASBCA No. 20939, 78-1 BCA � 12,870). See also
Elgin Business Forms, GPOCAB 10-84 (October 19, 1984), slip op.
at 5-8, 1984 WL 148108; Electronic Composition, Inc., supra, slip
op. at 34 (citing Elgin National Watch Co., supra; ITT Arctic
Services, Inc. v. United States, supra). Usually, such standards
are spelled out in the parties' contract. However, where the
contract fails to establish acceptance criteria, the standard
against which contract work is measured is the standard customary
within the industry. See Total Reproductions, Inc., GPO BCA
16-88 (February 2, 1990), slip op. at 17, 1990 WL 454979 ("The
Board also finds that the contract is silent respecting the
application of any special paper standard for the small poster
paper, although "Government Paper Specification Number 8," dated
April 1977, is made applicable to the white offset book paper
specified for the letter. Given this, the Board must conclude
that the parties intended sub-silentio the adoption of those
standards extant in the paper industry."). Accord WRB Corp. v.
United States, supra, 183 Ct. Cl. at 445; Max J. Kuney Co.,
supra, 94-3 BCA at 135,751; D.E.W., Inc., ASBCA No. 37232, 93-1
BCA � 25,444, at 126, 712.
On the other hand, the law also recognizes that there is always
an element of subjectivity in any product evaluation, and boards
of contract appeals will sustain the subjective findings of an
inspector or contracting officer as long as the test method used
is reasonable. See Interstate Reforesters, Dale Whitley, AGBCA
No. 87-374-3, 89-1 BCA � 21,375. In that regard, any test which
conforms to generally accepted industry practice is usually
considered reasonable. See M.J.W. Enterprises, ENGBCA No. 5813,
93-1 BCA � 25,405; DiCecco, Inc., ASBCA No. 11994, 69-2 BCA �
7821. Furthermore, the law allows the application of subjective
standards to enforce contract specifications expressing a
requirement in absolute or imprecise language because such terms
are not suited for application of the strict compliance doctrine-
absolute requirements especially cannot be literally attained.
See Mid-American Engineering and Manufacturing, supra; Canon
Construction, Inc., GSBCA No. 11227, 92-2 BCA � 25,001; Bonny
Products, Inc., GSBCA No. 4577, 76-2 BCA � 12,158; Dirigo Compass
& Instrument Co., ASBCA No. 9162, 65-2 BCA � 4938. Moreover,
Board precedent recognizes that just because a judgment is
subjective it is not necessarily invalid, since the
qualifications of the person making the evaluation is relevant
and must always be taken into consideration. See Fry II, supra,
slip op. at 17-18. Accord Interstate Reforesters, Dale Whitley,
supra. Where a contractor challenges the results of an
inspection on the ground that the test was subjective, the main
focus of the Board's inquiry is on whether or not the evaluator
applied the appropriate or correct standards, not whether his
judgment was right or wrong.63 See Fry II, supra, slip op. at
18-20. To that extent, the Board agrees with the ad hoc panel
which said that GPO's quality assurance program "was established
to reduce subjective judgments in determining the quality and
acceptability of a given product through an established system,"
see Printers II, Inc., GPOCAB 4-80 (July 8, 1980), slip op. at 6,
1980 WL 81259, and it believes that QATAP is the best check on
the subjectivity of Government officials crossing the line into
whimsy. However, the Board must also be realistic and recognize,
as the Respondent suggests, that the drafters of QATAP could not
foresee all possible problems, and hence the QATAP Manual only
deals with the most common printing and finishing defects.64 R.
Brf., at 8; R. R. Brf., at 1.
This case shows what can happen when a GPO contracting officer is
caught in the gray area between his or her own subjective
judgment and the requirements of QATAP. The Contracting Officer
has made it very clear that only a stub-free Student Guide would
have been acceptable to him; i.e., that he wanted a product with
zero defects. Therefore, the Contracting Officer instinctively
looked to the written requirements of QATAP, as well as to other
GPO procurement organizations, for guidance in helping him solve
a problem he probably never expected to face-the production of a
pamphlet which was not stub-free. However, instead of testing
the Student Guide against the question "Is this product
unacceptable?," it is apparent that the Contracting Officer
analyzed the pamphlet by asking "Why is this product
unacceptable?" Indeed, it seems to the Board that rather than
responding to MEPCOM's complaint with an open mind, what the
Contracting Officer was really after was some sort of contractual
"hook" upon which to hang his preconceived rejection of the
Student Guide. The Contracting Officer selected QATAP's
finishing attribute F-1 (Trim Size) for that purpose. See R4
File, Tab F, at 1. However, the Board has already found that in
testing the original version of the Student Guide by examining
only the two binding lips, he misapplied that QATAP finishing
attribute. See McDonald & Eudy II, supra, slip op. at 24-25;
Stabbe Senter Press, supra, slip op. at 52-53. The record fails
to disclose any other valid quantifiable, objective, and firm
criteria in the contract or GPO's regulations, which the
Contracting Officer could have used to evaluate the pamphlet.
This is precisely the same territory the Board explored not long
ago in Professional Printing of Kansas, Inc. In that case, the
Board was confronted by a contractor's equitable adjustment claim
for reprinting medical prescription forms ordered for the (then)
Veterans Administration (VA), which GPO originally rejected for
quality defects. The forms in question, which were to be shipped
in two installments, contained two main security features; i.e.,
sequential numbering and a "Void" pantograph which was supposed
to appear when the form was reproduced on a copy machine.
Although the contractor tested the copying quality of the first
installment of forms prior to shipment with satisfactory results,
the customer-agency complained that the "Void" pantograph would
not reproduce on its copiers. When GPO's test of the forms also
failed to produce the "Void" pantograph, the contracting officer
rejected the shipment and required the contractor to reprint to
order with a changed "drop out" pattern. After it had complied
with the reprint request, the contractor sought an equitable
adjustment for the first shipment. The Board found that the
contractor's claim was supported by the record evidence. First,
the Board held that an inadequate or defective Government design,
and not any deficiency in the contractor's production processes
or method of performance, was the real reason the "Void"
pantograph on the original forms would not reproduce; thus, under
the doctrine of "implied warranty of specifications" the
Government bore the responsibility for nonperformance. See
Professional Printing of Kansas, Inc., supra, slip op. at 62-63
(citing Colorgraphics Corp., supra, slip op. at 22-24). Accord
Blake Construction Co. v. United States, 987 F.2d 743 (Fed. Cir.
1993); Hol-Gar Manufacturing Corp. v. United States, supra;
D.E.W. Inc., ASBCA No. 35896, 94-3 BCA � 27,182. Second, and
most importantly for purposes of this case, the Board held that
the major problem with the Contracting Officer's rejection of the
initial forms was the fact that nothing in the record disclosed
what evaluation criteria he employed in reaching the conclusion
that they were defective, and without such standards his decision
rejecting the forms was erroneous. See Professional Printing of
Kansas, Inc., supra, slip op. at 63, 80-81.
Relying heavily on a prior decision of an ad hoc panel in Elgin
Business Forms, the Board ruled that the absence of such testing
or measurement criteria in the specifications, elsewhere in the
contract, or in GPO's quality assurance regulations, the basis
for rejection could not be established.65 Id., at 75-77 ( citing
Elgin Business Forms, supra). Accord Wornick Family Foods Co.,
supra; Shirley Contracting Corp. and ATEC Contracting Corp.,
supra; John L. Hall dba Taiga Resource Consultants, supra;
Chandler-Wilbert Vault Co., supra; Mid-American Engineering and
Manufacturing, supra. The Board's rationale, in pertinent part,
was:
The GPOCAB ad hoc panel [in Elgin Business Forms] held that GPO
had not sustained its burden of proof of showing that the
contractor's forms failed to meet the contract specifications,
and overturned the contracting officer's default determination.
See, Elgin Business Forms, supra, Sl. op. at 11. The panel used
a three-pronged rationale to explain why the default was
inappropriate under the factual situation in that case, namely:
(1) neither the contract nor the specifications provided specific
performance and testing standards or requirements; (2) a default
cannot be based on unstated specifications; and (3) the
inspection and tests conducted on the forms were not dispositive.
See, Elgin Business Forms, supra, Sl. op. at 5-10. . . .
[Extensive quotation from Elgin Business Forms, supra, slip op.
at 5-8, omitted.]
* * * * * * * * * *
The Board has no doubt that the holding in Elgin Business Forms
was correct as a matter of law. Consequently, . . . its
teachings can be applied to the facts in this case, which are
substantially similar. [Footnote omitted.] . . .
* * * * * * * * * *
In Elgin Business Forms, the GPOCAB was dealing with performance
specifications in the contract which were indefinite or vague.
Here, the Board has diligently searched the four corners of the
agreement, including QATAP and its supporting manuals and
reports, in vain for some clue as to what reasonable standard the
Contractor was expected to meet for its forms to be considered
acceptable in copying the "VOID" pantograph. The problem, as the
Board sees it, is that no QATAP category precisely fits the
alleged defect in this case. . . . In short, unless there is an
undisclosed standard somewhere which provided the yardstick for
measuring the nonappearance of the word "VOID" when the form was
photocopied, the quality problem at issue must be seen as sui
generis and one without any established norm or tolerances. . . .
Thus, the question remains-what standard did the Contracting
Officer use to reject the forms? At the hearing, the Contracting
Officer testified that he used a very simply litmus test-the word
"VOID" either appeared or did not appear when the SPF was
photocopied, was legible or not legible, was visible to the naked
eye or not visible (Tr. 267-68). The Appellant applied the same
standard in its pre-delivery tests of the forms (Tr. 126-27).
However, by definition, such a standard is not an objective one,
but rather is subjective and capable of creating great
discrepancies in test results among individual evaluators in
different locations, as occurred here. See, Wornick Family Foods
Company, supra, 94-2 BCA at 133,341; Shirley Contracting
Corporation and ATEC Contracting Corporation, supra, 85-3 BCA at
91,428-29. . . .
* * * * * * * * * *
In summary, when the Board considers the record evidence in this
case, it finds that the absence of clear and objective standards
for evaluating and measuring the copying capability of the
ordered SPFs is a fatal defect in the contract. Without such
criteria, testing performance against the specifications becomes
untrustworthy, vague and inadequate for the principle purpose of
the contract, providing the VA with a product which would meet
its particular needs. . . .
See Professional Printing of Kansas, Inc., supra, slip op. at 71,
74-77, 80-81.66 [Emphasis added.] See also Elgin Business
Forms, supra, slip op. at 5-6 ("The deficiency in the
specifications in the contract is the glaring failure of the
government to precisely state what its performance requirements
were and how it would test to determine conformity with those
requirements. While the specifications informed the Appellant
that the forms would be run on a Honeywell PRU 1200 Printer they
did not indicate the expected performance level. [Record
citation omitted.] Likewise the specifications did not contain a
performance standard for the decollator which is an integral part
of the process. Although the specifications fail to contain a
particular brand of decollating equipment, the Panel finds that
the failure to state any performance level for the decollator is
a critical deficiency on the part of the government.");
Electronic Composition, supra, slip op. at 34 ("If the Government
felt these ['production' system] capacities were critical to the
successful incorporation into GPO of the advanced software system
ECI offered, it should have made them performance requirements of
the contract. . . . We have scrutinized the subject contract in
vain for any stated requirements that [the electronic typography
system] perform 'economically', or that it have multi-reel or
automatic restart capability or that it should produce pages at a
specified rate. As we stated earlier, the contractor will not be
bound by the unexpressed intent of the Government." Citing Tecon
Corp. V. United States, 188 Ct. Cl. 15, 411 F.2d 1262 (Ct. Cl.
1969); L. Rosenman Corp. V. United States, 182 Ct. Cl. 586, 591,
390 F.2d 711 (1968); Elgin National Watch Co., supra; ITT Arctic
Services, Inc. v. United States, supra).
In the Board's view, the rule of Professional Printing of
Kansas, Inc. and Elgin Business Forms, controls the second
issue in this case. At its core, the "standards" dispute
really involves a cosmetic defect in the Student Guide-there
is no other way to interpret this sort of controversy over
the "appearance" of the pamphlet. Cf. The American Press,
GPOCAB 1-84 (September 4, 1991), slip op. at 12, 1991 WL
439269 (the contracting officer acted reasonably in rejecting
navigational charts ordered under the contract and requiring
them to be reprinted because "the defects in the product were
not merely cosmetic, but were ones that jeopardized the
safety of boaters relying on the charts' depiction of the
Ohio River channel line."). Indeed, there seems to be no
doubt on this record that but for the binding stubs, the
original version of the Student Guide would have been
accepted by the Government. No one questions the
Government's right to require complete or perfect performance
in its specifications. See Professional Printing of Kansas,
Inc., supra, slip op. at 64; McDonald & Eudy II, supra, slip
op. at 19-20; Shepard Printing, supra, slip op. at 19-20;
Stephenson, Inc., supra, slip op. at 20-21; Copigraph, Inc.,
supra, slip op. at 2. Accord Thermal Electronic, Inc. v.
United States, supra, 25 Cl. Ct. at 673. However, while the
Board does not see its role as "second guessing" the
Contracting Officer with respect to the appearance of the
pamphlet, see Professional Printing of Kansas, Inc., supra,
slip op. at 78, it cannot ignore the fact that his
determination was purely subjective. Consequently, what the
Board can require in the context of this case, as
Professional Printing of Kansas, Inc. and Elgin Business
Forms make clear, is that before the Respondent imposes its
subjective judgment regarding the looks of the Student Guide
on otherwise unsuspecting contractors, that it alert them in
the specifications that anything less than a stub-free
Student Guide would not be acceptable. Id., slip op. at 75
("If the Respondent intended the "VOID" pantograph to
reproduce on all photocopiers, it should have expressly told
the Contractor so."). See also RD Printing Associates, Inc.,
supra, slip op. at 23-24. Accord Max J. Kuney Co., supra,
94-3 BCA at 135,751.
One final observation is in order. The "standards" issue aside,
the Board strongly suspects that the Contracting Officer's
rejection of the first version of the Student Guide was
subconsciously motivated by a wish to mollify MEPCOM. Thus, the
transcript discloses the following colloquy between Government
Counsel and the Contracting Officer:
Mr. Miller: You had the option, did you not, of accepting this
product at a discount?
Mr. Nepi: Yes.
Mr. Miller: And you chose not to?
Mr. Nepi: Yes.
Mr. Miller: Could you explain to the Board why you chose that
path?
Mr. Nepi: Well, we proceed, on any complaint, based on the
customer's desires. For instance, if a product is urgently
needed, we may be forced to accept the product at a discount
because it needs to be distributed and used right away. In this
case, the agency did not want to put out this product to all
their component activities and for mass distribution because
they-they stated that it-to use their words, I think, it is
'visually offensive and presents a poor impression of the
headquarters, U.S. MEPCOM, and the military services.' That is
their words. So, based on the way the agency requested-their
request-their complaint is a [request] submitted to us, the
request is that we reject the order. We evaluated the order and
we rejected it.
Mr. Miller: Now, in making your decision, I want to make clear
whose decision this was.
Mr. Nepi: This was my decision.
Tr. 111-12. [Emphasis added.] However, the Board has never
regarded the desire to mollify a customer-agency as a valid basis
for a contracting officer's action. See e.g., Graphics Image,
Inc., GPO BCA 13-92 (August 12, 1992), slip op. at 28, 1992 WL
487875; Colorgraphics Corp., supra, slip op. 24. Accordingly,
for all of these reasons, the Board concludes that the
Contracting Officer's decision rejecting the first version of the
Student Guide was in error and should be REVERSED. C. The
Appellant's claim for additional compensation for the increased
paper and manufacturing costs incurred in reprinting the Student
Guide is properly before the Board. However, while the
Contractor is entitled to payment for the original version of the
Student Guide at the contract price, it has offered no evidence
as to its increased costs. Therefore, the Appellant's claim for
an additional $15,726.00 fails for want of proof.
The remaining matter concerns the Appellant's claim for
$15,726.00 to cover the increased paper and manufacturing costs
it incurred in reprinting the Student Guide. This claim raises
two issues for the Board's consideration, one involving the
Board's jurisdiction to entertain it, and the other a matter of
proof. Each of these questions can be quickly disposed of.
First, the appeal record discloses that the Appellant never
raised its claim for increased costs in either its initial
(albeit mistaken) protest to GAO on July 25, 1994, or its
properly filed notice of appeal to the Board on July 29, 1994.
R4 File, Tabs J and L. Both of those appeals show clearly that
the only matter being challenged by the Contractor was the
Contracting Officer's final decision rejecting the original
version of the Student Guide and directing that the pamphlet be
reprinted. Instead, the Appellant first mentioned its $15,726.00
claim in its Complaint. Board Rules, Rule 6(a). Therefore, the
issue arises whether the Contractor's demand for the additional
$15,726.00 is properly before the Board on appeal, or is it a new
claim which must be first presented to the Contracting Officer?67
Although the answer to that question is not free of doubt, the
Board believes that in the context of this case the Appellant has
not raised a new matter, but instead has merely amended its
original claim. See New South Press, GPO BCA 45-92 (November 4,
1994), 1994 WL 837425 (hereinafter New South II) (even though the
contractor asserted a new legal theory and increased the amount
of its claim on appeal to the Board, jurisdiction was asserted
because, inter alia, GPO never objected to the amendment either
at the prehearing conference or in his brief, the parties had
already briefed the threshold issue, and besides it was clear
from the record that no matter what amount the contractor claimed
the contracting officer would still have denied it because he was
acting on his understanding of the contract's "Extension of
Schedules" clause); Pikes Peak Lithographing Co., GPOCAB 77-7
(October 6, 1978), 1978 WL ______ (while there was technically
no final decision by the contracting officer, the ad hoc panel
asserted jurisdiction over a contractor's equitable adjustment
claim to cover the cost of reprinting an order of maps because
the positions of the parties were fully crystallized, and no
purpose would be served in sending the case back to the
contracting officer for a formality. Citing Conrad, Inc., ASBCA
No. 14239, 70-1 BCA � 8116 (1970)). See also Universal Printing,
supra, slip op. at 21-22, n. 20 (no need for a contractor to go
through the "charade" of filing a claim and requesting a decision
from the contracting officer where the Government has issued a
unilateral modification reducing the contract price, because that
would be an unnecessary, delaying and expensive formality.
Citing P.X. Engineering Co., ASBCA No. 38215, 89-2 BCA � 21,859).
In Shepard II, the Board adopted and applied the ASBCA's
"essential difference" test as the touchstone for deciding
whether or not it had jurisdiction over the contractor's
amended claim based on the customer-agency's failure to
place certain work under its "requirements" contract
instead of issuing new printing requisitions. See Shepard
II, supra, slip op. at 30-31 (citing Santa Fe Engineers,
Inc., supra, 86-3 BCA at 96,508).68 In essence, that test
requires the Board to determine if the pending claim is
"essentially different" from the one presented to the
contracting officer, and from which the appeal is taken.
This does not mean that evidence developed during discovery
cannot be the basis for amending an existing and valid
claim. See Graphicdata, Inc., supra, slip op. at 4, n. 4;
New South II, supra, slip op. at 1-2, n. 1; Shepard II,
supra, slip op. at 30. Rather, it is the duty of the Board
to ensure that such an amendment is not, in reality, a new
claim; i.e., a claim not previously presented to the
contracting officer for decision. See Shepard II, supra,
slip op. at 30-31 (citing J.F. Shea Co., Inc. v. United
States, supra; Santa Fe Engineers, Inc., supra). One
significant clue in identifying whether there is an
"essential difference" between two claims is the nature of
the legal theory relied on to support recovery; i.e., is it
the same theory or totally different? See Shepard II,
supra, slip op. at 32; Datagraphics Press, Inc., supra,
slip op. at 6. Another key indicator is if the claim stems
from the same set of operative facts, regardless of the
legal theory. See New South II, supra, slip op. at 1-2, n.
1.
In this case, the Board is convinced that the Appellant's claim
for increased costs in the amount of $15,726.00 is not a new
claim. Although the Contractor's appeal, as filed, only
challenged the Contracting Officer's final decision that the
first Student Guide did not satisfy the specifications for a
saddle-stitched pamphlet, and made no demand for its increased
costs, it is also clear from the record that on the date the
appeal was submitted to the Board (July 29, 1994), the revised
pamphlet had not yet been shipped; i.e., August 5, 1994 was the
new shipping date. Consequently, at the time it appealed, even
if the Appellant knew that it would incur increased paper and
manufacturing costs, in all likelihood it did not know their
exact scope and amount. Therefore, in seeking the added expenses
associated with reprinting the Student Guide under these
circumstances it cannot be said that the Contractor is changing
its legal theory of recovery. Rather, it seems to the Board that
the Appellant is merely stating its belief that it is entitled to
all costs associated with producing the second pamphlet; i.e.,
the complaint has simply been amended to include both the
original contract price and the additional costs because together
they represent the adverse financial impact of the Respondent's
decision that the first Student Guide was rejectable and should
be reprinted. See Graphicdata, Inc., supra, slip op. at 4, n. 4;
New South Press II, supra, slip op. at 1-2, n. 1. Cf. Shepard
II, supra, slip op. at 32 (contractor's amended claim was based
on a "breach of contract" theory which was totally different from
the "constructive change" theory advanced in support of its
original claim); Datagraphics Press, Inc., supra, slip op. at 6
(contractor confused the issues stemming from the contracting
officer's final decision with other questions concerning the
propriety of the subsequent termination for convenience, which
even though similar, if not identical, could not be considered by
the ad hoc panel). Moreover, even if there was a difference in
legal theory, these circumstances would fall "four square" within
the Board's rationale in New South II, where it said, in
pertinent part:
In the Board's view, the Appellant's assertion of a new legal
theory of recovery on appeal . . . does not constitute a new
claim requiring a final decision from the Contracting Officer
before the Board can exercise its jurisdiction, see, Shepard
Printing, GPO BCA 37-92 (January 28, 1994), Sl. op. at 28; Epco
Associates, GPO BCA 26-93 (November 18, 1993), Decision and Order
Granting Appellant's Motion Under Rule 1(c) and Staying
Proceedings Under Rule 1(d), Sl. op. at 3, because it is based
upon the same operative facts underlying the original claim, see,
Blaze Construction Company, Inc., IBCA No. 2863, 91-3 BCA �
24,071, at 120,503 (citing, Placeway Construction Corporation v.
United States, 910 F.2d 835, 840 (Fed. Cir. 1990); Trepte
Construction Company, ASBCA No. 38555, 90-1 BCA � 22,595, at
113,385-86; Flores Drilling & Pump Company, AGBCA No. 82-204-3,
83-1 BCA � 16,200, at 80,484). Furthermore, despite the
different approach taken by the Appellant before the Board, the
Contracting Officer certainly had no misapprehension about the
basic factual allegations in reaching his decision to deny the
claim. See, Contract Cleaning Maintenance, Inc. v. United
States, 811 F.2d 586, 592 (Fed. Cir. 1987); Paragon Energy
Corporation v. United States, 645 F.2d 966, 976 (Ct. Cl. 1981);
Cerberonics, Inc. v. United States, 13 Cl. Ct. 415, 418 (1987);
Holk Development, Inc., ASBCA Nos. 40579, 40609, 90-3 BCA �
23,086 at 115,938 . . . Moreover, no useful purpose would be
served by requiring resubmission of the claim to the Contracting
Officer and asking for his final decision, since Counsel for GPO
neither objected to the amendment at the prehearing conference
nor in his brief, the parties have already briefed the threshold
issue, and besides it is clear from the record that whether the
Appellant's claim had been for $2,000.00, $4,020.92, or 100 times
those amounts for that matter, the Contracting Officer would
still have denied it because he was acting on his understanding
that the "Extension of Schedules" clause in the contract only
authorized an adjustment of the delivery schedule for a
Government delay. See, GPO Contract Terms, Solicitation
Provisions, Supplemental Specifications, and Contract Clauses,
GPO Pub. 310.2, Effective December 1, 1987 (Rev. 9-88), Contract
Clauses, � 12(c) (Extension of schedules) (GPO Contract Terms).
See also, So-Pak-Company, Inc., ASBCA No. 38906, 93-3 BCA �
26,215, at 130,469 (citing, ACS Construction Company, ASBCA No.
365535, 89-1 BCA � 21,406; Emerson Electric Company, ASBCA No.
31184, 86-2 BCA � 18,979; cf., Continental Products, Inc., ASBCA
No. 45293, 93-2 BCA � 25,879). Thus, under the circumstances of
this case, which shows that the same or related evidence is
involved in connection with the original claim and the claim as
amended at the prehearing conference, that there is no prejudice
to the contracting officer from the Board's consideration of the
revised claim, and that no useful purpose would be served by
requiring resubmission of the claim to the Contracting Officer,
the Board concludes that it has jurisdiction to decide the issue
presented by the parties.
See New South II, supra, slip op. at 1-2, n. 1. [Emphasis added.]
Accordingly, since the Appellant's claim for additional costs in
this case stems from the same transaction as its claim for the
original contract price (the Contracting Officer's rejection of
the initial version of the Student Guide and his order to reprint
it), the Board has jurisdiction to hear the matter. See New
South II, supra, slip op. at 1-2, n. 1. Pikes Peak Lithographing
Co., supra, slip op. at 1, n. 1.
Second, even though jurisdiction is not a problem, the
Contractor, who had the burden of proving its claim both as to
entitlement and amount, has failed to do so on this record. See
Swanson Printing Co., supra, slip op. at 21; New South Press &
Associates, supra, slip op. at 49; Universal Printing Co., supra,
slip op. at 40. Accord Michael-Mark, Ltd., IBCA Nos. 2697, 2890,
2891, 2892, 2893, 2894, 2895, 94-1 BCA � 26,453; Lemar
Construction Co., ASPCA Nos. 31161, 31719, 88-1 BCA � 20,429;
Lawrence D. Krause, AGBCA No. 76-118-4, 82-2 BCA � 16,129; Onetta
Boat Works, Inc., ENGBCA No. 3733, 81-2 BCA � 15,279; Globe
Construction Co., ASPCA No. 21069, 78-2 BCA � 13,337. See
generally, Cibinic & Nash, Administration, at 698. In that
regard, although the Appellant raised the matter of additional
compensation in its Complaint, discussed it at the prehearing
conference, and mentioned it again in its post-hearing briefs,
see App. Brf., at 11; App. R. Brf., at 8; RPTC, at 5-6;
Complaint, at 2, it neglected to introduce any affirmative
evidence of its increased costs at the hearing, either by way of
actual cost figures, see Swanson Printing Co., supra, slip op. at
22; Universal Printing Co., supra, slip op. at 40-41; Banta Co.,
supra, slip op. at 37, or estimates supported by detailed,
substantiating data, see Swanson Printing Co., supra, slip op. at
23; Universal Printing Co., supra, slip op. at 41; Banta Co.,
supra, slip op. at 38. Accord Dawco Construction, Inc. v. United
States, supra, 930 F.2d at 882; American Line Builders, Inc. v.
United States, 26 Cl. Ct. 115 (1992); Cen-Vi-Ro of Texas v.
United States, 210 Ct. Cl. 684 (1976); Cherry Hill Construction,
Inc. v. General Services Administration, GSBCA No. 12087-REIN,
93-2 BCA � 25,810; R. G. Robbins & Co., ASPCA No. 27516, 83-1 BCA
� 16,420; Buck Brown Contracting Co., IBCA No. 1119-7-76, 78-2
BCA � 13,360; Engineered Systems, Inc., DOTCAB No. 75-5, 76-2 BCA
� 12,211. See generally, Cibinic & Nash, Administration, at 703.
Consequently, there is nothing in the record whatsoever to show
how much the Contractor incurred in extra costs when it reprinted
the pamphlet, or whether those additional costs were reasonable.
See Swanson Printing Co., supra, slip op. at 23; New South Press
& Associates, supra, slip op. at 49; Universal Printing Co.,
supra, slip op. at 41-42. Accord General Builders Supply Co. v.
United States, 187 Ct. Cl. 477, 409 F.2d 246 (1969); Michael-Mark
Ltd., supra; Zurfluh Enterprises, Inc., VABCA No. 1941, 85-1 BCA
� 17,789; Lawrence D. Krause, supra; Celesco Industries; ASPCA
No. 22251, 79-1 BCA � 13,604. Without such proof the Appellant's
case is essentially an unverified assertion that it incurred
certain additional in reprinting the Student Guide. Such a
contention is little more than argument, which standing alone
cannot substitute for proof. See Swanson Printing Co., supra,
slip op. at 32; Univex International, GPO BCA 23-90 (July 31,
1995), slip op. at 31, 1995 WL 488438, reconsid. denied, 1996 WL
112554 (February 7, 1996). 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 of
recovery. See e.g., Swanson Printing Co., supra, slip op. at 32;
Univex International, supra, slip op. at 31-32; B & B
Reproductions, GPO BCA 9-89 (June 30, 1995), slip op. at 39, 1195
WL 488447; Stephenson, Inc., supra, slip op. at 57. 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, the Board concludes that the Appellant's
claim for additional costs incurred in reprinting the Student
Guide must be DENIED for want of proof.
VI. ORDER
For all of the above reasons, the Board finds and concludes that:
(1) the Appellant is entitled to recover on its principal claim
of $88,701.00 for the original printing of the Student Guide
under the doctrine of contra proferentem because the disputed
"BINDING" specification is clearly ambiguous regarding the use of
binding stubs, the ambiguity is latent, and the record evidence
on prevailing trade practice and prior course of dealings is
insufficient to show that the Contractor's interpretation, which
it relied on in submitting its bid, was unreasonable; (2) the
Appellant is also entitled to recover under the theory of
constructive change, since its "single signature" press
configuration does not appear to be unreasonable under the
circumstances; (3) the Contracting Officer's decision that the
original printing of the pamphlet was rejectable was incorrect,
because without evaluation standards in the contract
specifications, QATAP, or GPO Contract Terms, or elsewhere in GPO
regulations, the basis of the rejection cannot be established;
and (4) the Contractor is not entitled to recover on its
$15,726.00 claim for the increased paper and manufacturing costs
it allegedly incurred in reprinting the Student Guide, because it
has offered no evidence to support the claim. THEREFORE, the
Board REVERSES the Contracting Officer's final decision, ALLOWS
the appeal to the extent of the Appellant's claim for the
original contract price of $88,701.00, and REMANDS the case with
instructions that appropriate arrangements be made to pay the
Contractor in accordance with this opinion. See Professional
Printing of Kansas, Inc., supra, slip op. at 87; Universal
Printing Company, supra, slip op. at 56; Banta Company, supra,
slip op. at 62; RD Printing Associates, Inc., supra, slip op. at
37. HOWEVER, insofar as the Appellant claims reimbursement for
increased costs in reprinting the pamphlet, its appeal is DENIED.
It is so Ordered.
March 12, 1997 STUART M. FOSS
Administrative Judge
_______________
1 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 September 7, 1994. GPO Instruction
110.12, Subject: Board of Contract Appeals Rules of Practice and
Procedure, dated September 17, 1984, Rule 4(a) (Board Rules). It
will be referred to hereafter as the R4 File, with an appropriate
tab letter also indicated. The R4 File contains twelve (12)
documents, identified as Tabs A-L.
2 The court reporter's transcript shall be referred to
hereinafter as "Tr." followed by a colon and an appropriate page
number thereafter. Furthermore, at the hearing both the
Contractor and the Government introduced additional documentary
evidence, which shall be referred to hereinafter as "App. Exh.
No.," and "Gov. Exh. No.," respectively, with an appropriate
number thereafter.
3 Following the hearing, the Contractor obtained the services of
Counsel for the purpose of briefing this matter. On August 24,
1995, both the "Appellant's Brief" and the "Respondent's Brief"
were filed with the Board, and shall be cited hereinafter as
"App. Brf." and "R. Brf.," respectively, followed by an
appropriate page number. Subsequently, on September 7, 1995, the
parties submitted reply briefs, which shall be referred to
hereinafter as "App. R. Brf." and "R. R. Brf.," respectively,
with an appropriate page citation thereafter. Attached to the
Appellant's initial brief was an affidavit from Ronal Cooper, the
Contractor's Director of Business Development, who also testified
at the hearing. The purpose of Copper's affidavit was to
authenticate a second attachment, namely an illustration of the
way the Contractor produced the Student Guide as a single 28-page
signature, and to have it received into evidence. The Respondent
has objected to that "construction sample" as irrelevant to the
issues in this case. R. R. Brf., at 4. The Board believes that
the Government's objection is well taken. More importantly, in
the Board's opinion, the affidavit and illustration are
objectionable on two additional grounds: (a) the information is
outside the record and is tantamount to a request for judicial
notice by the Board; and (b) the sample was not introduced during
the hearing and thus GPO had no opportunity to test the validity
of the evidence at the trial by examining Cooper about it.
Accordingly, the Board rejects both Cooper's affidavit and the
example of a 28-page signature, and has not considered them in
the context of this decision. See MPE Business Forms, Inc., GPO
BCA 10-95 (August 16, 1996), slip op. at 50, n. 47, 1996 WL
_____; Professional Printing of Kansas, Inc., GPO BCA 02-93 (May
19, 1995), slip op. at 28-29, n. 43, 1995 WL 488488; Sterling
Printing, Inc., GPO BCA 20-89 (July 5, 1994), Decision on Motion
for Reconsideration and Order, slip op. at 12, 1994 WL 377592
(hereinafter Sterling Reconsideration) (citing Goetz Demolition
Co., ASBCA Nos. 40605, 41346, 93-2 BCA � 25,886; Marshall
Logging, Inc., AGBCA No. 87-283-1, 88-2 BCA � 20,726; Pascal
Redfern, PSBCA No. 1512, 87-3 BCA � 19,983; Jim Davis, AGBCA Nos.
86-103-1, 86-104-1, 86-1 BCA � 18,634; Polarad Electronics Corp.,
ASBCA No. 20636, 79-1 BCA � 13,777; Canadian Commercial Corp.,
ASBCA No. 17187, 76-2 BCA � 12,145). Accord Preventive
Maintenance Service, Inc., ASBCA Nos. 41445, 44661, 94-3 BCA �
27,115 (revisions to spreadsheets originally submitted to
contracting officer); Lockheed Shipbuilding and Construction Co.,
DOT CAB No. 73-36C, 76-1 BCA � 116,698 (additional documents);
American Structures, Inc. and Mining Equipment Manufacturing
Corp. (A Joint Venture, ENGBCA No. 3372, 75-1 BCA � 11,284
(diagrams not presented at prior hearing). See also Board Rules,
Rule 13(b) ("Except as the Board may otherwise order in its
discretion, no proof shall be received in evidence after
completion of an oral hearing, nor in cases submitted on the
record will proof be received after notification by the Board
that the case is ready for decision." [Emphasis added.]). As the
Board has noted: "This well-established rule is really nothing
more than a judicial proscription against a party having 'two
bites at the apple.'" See Sterling Reconsideration, supra, slip
op. at 13 (citing Goetz Demolition Co., supra, 93-2 BCA at
128,768). Accord Sunshine Cordage Corp., ASBCA No. 38904, 90-1
BCA � 22,572; USD Technologies, Inc., ASBCA No. 31305, 87-2 BCA �
19,680 at 99,616, aff'd sub nom. USD Technologies, Inc. v. United
States, 845 F.2d 1033 (Fed. Cir. 1988).
4 As its name implies, MEPCOM is a joint recruiting organization
run by the Army, Navy, Air Force, and Coast Guard. Tr. 85.
5 According to the Contracting Officer, the Student Guide is a
recruitment brochure designed to encourage young men and women to
join the various armed services, primarily out of high school.
Tr. 85. The Appellant disagrees with the Respondent's view that
it was producing a "promotional piece," but rather believed it
was printing nothing more than a "test booklet for students."
Tr. 38, 44. During the hearing the Contractor introduced five
Army publications- "Opportunities & Options: U.S. Army Service of
Choice for America's Youth and Employers," (a mechanically bound
booklet), "Living with the Army," " You and the Army," "The
United States Army Reserve: Benefits," "Army Adventure, Good for
a Lifetime"-as examples of what it thought were true promotional
materials. Tr. 40-44; App. Exh. Nos. 10-14. The Board admitted
these exhibits for that limited purpose only (to illustrate the
Appellant's idea of a "promotional piece"). Tr. 43. See FED. R.
EVID. 105.
6 The complete and correct titles of these regulations are: (a)
GPO Contract Terms, Solicitation Provisions, Supplemental
Specifications, and Contract Clauses, GPO Publication 310.2,
Effective December 1, 1987 (Rev. 9-88) (hereinafter GPO Contract
Terms); and (b) GPO Contract Terms, Quality Through Attributes
Program for Printing and Binding, GPO Publication 310.1,
Effective May 1979 (Revised November 1989) (hereinafter QATAP).
7 The above specifications with respect to binding, size, page
count, and Quality Level are the same as the specifications for
Jacket Nos. 747-463 and 747-464, under which the previous
versions of the Student Guide and the Counselor Guide were
printed. Tr. 141-42, 146; Gov. Exh. No. 4.
8 The Student Guide and Counselor Guide are publications for
which MEPCOM has a recurring need. Tr. 86.
9 The Appellant's winning bid of $105,388.00 was nearly
$30,000.00 lower than its successful offer for this work the
previous year; i.e., $135,299.00. Tr. 146; Gov. Exh. No. 4.
10 The estimated cost of the Counselor Guide (Jacket No. 547-783)
was $16,687.00. See RPTC, at 2, n. 2.
11 During the hearing, one of the Respondent's employees, Patrick
Morrisey, was called as a witness by the Appellant, and disagreed
with Cooper's analysis. Morrisey testified that the number of
pages in any saddle-stitched product must be divisible by four.
Tr. 63. In his view, there was no need for the two binding stubs
in this case since the number of pages in the publication (28)
"is already divisible by four . . .". Tr. 70. See also Tr. 197
(testimony of Respondent's witness James E. Willard, who was
asked his opinion of the Student Guide printed by the Contractor
(App. Exh. No. 9): "If we were to take the number of pages here
you would find this should be produced as a 28-page document.
Now there would normally be two blanks in this, which are the two
blanks at the end of a book.").
12 Indeed, the Appellant bid on the contract with the idea of
using binding stubs. Tr. 57. In the Contracting Officer's view,
the binding lips gave the Contractor an unfair competitive
advantage because "none of the other bidders were afforded an
opportunity to submit a bid with binding stub[s]." Tr. 108-09.
Furthermore, he wondered ". . . [W]ho knows how many bidders we
could have chased away or weren't interested because of [binding
stubs] not being allowed in the specification." Tr. 118. The
scope of the potential savings was indicated by Willard, who said
that the number of copies ordered by the contract would make it
economically advantageous to use binding stubs; i.e., " . . . [Y]
ou are talking about 650,000 copies and you are taking about two
leaves, effectively, which you are not producing. That is two
sheets, four pages. Two pieces of paper times 650,000. You are
talking about over a million some leaves of paper, which is a
substantial amount of paper." Tr. 211-12.
13 At the hearing, the Contracting Officer testified that a Dylux
proof is simply a proof made " . . . from films . . . on
sensitized paper . . . [but] not [in] the ink [or] on the paper
ordered, . . ." which is supposed to represent how the final
product will look. Tr. 91-92. The Appellant added that the
purpose is to show the positioning of the pages in the
publications. Tr. 52. The parties agree that the Dylux proof
submitted by the Contractor was not a so-called "construction"
sample. Tr. 52, 54, 91.
14 The Appellant said that the lips were not on the Dylux proof
because of the way the signatures were folded. Tr. 54. The
record indicates that when the proof was received by the CRPPO no
one noticed a place for a binding lip. Tr. 93-94, 132. However,
when the Contracting Officer examined the proof at the hearing,
he saw a ragged edge where the stubs should have been, expressed
the opinion that the binding lips might have been removed at the
Contractor's plant before the proof was submitted to GPO. Tr.
95. The proofs retrieved from MEPCOM by the CRPPO showed that
the two pages which would have had binding stubs were securely
attached by some other means; e.g., by pasting-in or tipping-in.
Tr. 53-54, 131, 133. The record also indicates that lips would
have been clearly visible if the proof had been a construction
sample instead of a Dylux proof. Tr. 54.
15 The Printing Procurement Regulation requires that any
customer-agency complaint about the quality of the product
received be submitted on "Notice of Quality Defects" (GPO Form
1815). See PPR, Chap. XIII, Sec. 1, � 5(a) (Customer Agency
Quality Complaints). The same requirement is spelled out in the
GPO Agency Procedural Handbook for the Procurement of Commercial
Printing Services with the U.S. Government Printing Office
Regional Procurement Offices, GPO Publication 305.1 (Revised
January 1992), Sec. V, � 3.d, at 11 (hereinafter GPO Handbook), a
publication addressed to the "Heads of Federal Departments, Their
Printing and Publications Representatives, and Printing
Administrative Officers," and designed, inter alia, to "guide
[GPO's customer-agency's] through the laws, regulations, and
procedures that frame Federal printing policy and GPO's
procurement process, . . .". See GPO Handbook, Foreword, at i.
Thus, the GPO Handbook tells customer-agencies, in pertinent
part, that: "All complaints regarding product quality shall be
submitted on GPO Form 1815 through an authorized agency printing
representative and must be accompanied by samples . . . . This
requirement does not preclude prompt verbal notifications when
the nature of the quality problem(s) warrants immediate
attention." See GPO Handbook, Sec. V, � 3.d (Registering
Complaints), at 11. [Emphasis added.] The publication also
provides an example of a completed "Notice of Quality Defects"
form. See GPO Handbook, Sec. VI, at 27-28. There is no "Notice
of Quality Defects" from MEPCOM in the record, nor is there any
evidence in this case that the customer-agency completed one and
sent to the CRPPO; i.e., the only written notification received
by the CRPPO concerning MEPCOM's problems with the quality of the
product was Lieutenant Lechner's undated memorandum.
Nonetheless, the Contracting Officer processed the complaint in
the form submitted by MEPCOM, even though it was procedurally
defective. However, it is the Board's policy not to disturb the
procedural decisions of GPO contracting officers, in the absence
of some "compelling reason," particularly where, as here, the
contractor has not challenged the exercise of that discretion.
See Graphicdata, Inc., GPO BCA 35-94 (June 14, 1996), slip op. at
97-98; 1996 WL _____; Universal Printing Co., GPO BCA 9-90 (June
27, 1994), slip op. at 33-34, 1994 WL 377586. Accord Condor
Reliability Services, Inc., ASBCA No. 40538, 90-3 BCA � 23,254;
Goetz Demolition Co., ASBCA No. 39129, 90-3 BCA � 23,241; Kinetic
Engineering & Construction, Inc., ASBCA No. 30726, 89-1 BCA �
21,397. There is no "compelling reason" shown in this record
which would warrant review of the decision to process MEPCOM's
complaint without a "Notice of Quality Defects," effectively
waiving that procedural requirement, and the Board will proceed
on the basis that the QATAP issues are properly before it.
16 Nepi said that the neither the Appellant, nor any other
contractor, had ever provided a product with binding lips for the
CRPPO prior to this contract. Tr. 106, 111. As he recalled,
contractor's did not produce publications with binding stubs on
their own, and that contracts with such requirements were limited
to those that had "tear out" sheets or cards on paper other than
the stock specified for text pages. Tr. 106.
17 See PPR, Chap. XIII, Sec. 1, � 4.f(1) ("Assistance from other
Departments. When the Printing Procurement Department is unable
to make a proper determination as to whether items submitted, or
produced by, contractors in response to quality assurance
requirements are equal to the specifications, they shall request
assistance from other sources. However, the final determination
as to conformance with the specifications rests with the
Contracting Officer.").
18 The attachment was a single-page commentary, dated December 9,
1991, entitled "Jim Willard's Comments Regarding Saddle-Stitched
Products." The crux of his comments were that binding stubs were
contrary to the "historical common sense" definition of a saddle-
stitched product; i.e., " . . . bound in combinations of four-
page signatures, or multiples thereof, with the inner signatures
inset into the outer ones. All pages of the signatures will be
the full specified trim size; . . .". Gov. Exh. No. 3;
Attachment. Willard, who testified at the hearing, said that the
original controversy stemmed from a saddle-stitched publication
produced by Shepard Printing with two leaves (four pages) secured
by binding lips, which the customer-agency rejected, but which
the contractor insisted met the industry standards for a saddle-
stitched product. Tr. 191-92. (Another witness for the
Respondent, Jack Marken, remembered the issue being raised by a
job produced by Fry Communications, Inc. Tr. 163, 166.) Willard
argued that the traditional meaning of saddle-stitching- "the
process of securing the leaves of a section, e.g., a periodical
issue or pamphlet, through the center fold by means of 'wire
staples'" or "[fastening] a booklet by wiring it through the
middle fold of the sheets"-required all leaves in a book to be
uniform, and precluded binding stubs or lips except where there
was an insert which was not on the same paper or in the same
form; e.g., a "tear-out" reply card. Tr. 192-95 (citing Matt T.
Roberts and Don Etherington, BOOKBINDING AND THE CONSERVATION OF
BOOKS: A DICTIONARY OF DESCRIPTIVE TERMINOLOGY, at 225 (Library
of Congress 1982) (hereinafter BOOKBINDING); John E. Cogoli,
PHOTO OFFSET FUNDAMENTALS, at 309 (McKnight & McKnight, 3rd ed.,
1973) (hereinafter FUNDAMENTALS); Michael H. Bruno, ed., POCKET
PAL at 204 (International Paper Co., 14th ed., 1989). See R4
File, Tab G. See also Tr. 152 (testimony of Larry McHugh, Chief
of the Printing Procurement Department's Quality Assurance
Section: "[A saddle-stitched publication is one with] . . .
stitching through the centerfold or the middle fold." ).
Willard's view was adopted by Gardner in his memorandum of
December 12, 1991. Tr. 192.
19 Gov. Exh. No. 3 was admitted into evidence over the objection
of the Appellant. Tr. 103-04. As the Board explained, the only
basis for objecting to the memorandum would be that it is
hearsay. Tr. 104. However, the document clearly falls within
the "business records" exception to the hearsay rule. Tr. 104.
See FED. R. EVID. 803(6) (Records of regularly conducted
activity). Besides, as the Board has mentioned numerous times,
the rules of evidence are not strictly applied in administrative
proceedings such as this. See e.g., Asa L. Shipman's Sons, Ltd.,
GPO BCA 06-95 (August 29, 1995), slip op. at 12, n. 16, 1995 WL
818784, reconsid. denied, 1996 WL _____ (February 13, 1996);
Vanier Graphics, GPO BCA 12-92 (May 17, 1994), slip op. at 36, n.
29, 1994 WL 275102. Accord Southwest Marine, Inc., DOTBCA No.
1661, 93-3 BCA � 26,168; Rocky Mountain Trading Co., GSBCA No.
8671-P, 87-1 BCA � 19,406; Johnson & Son Erector Co., ASBCA No.
23689, 86-2 BCA � 18,931; Hof Construction, Inc., GSBCA No. 7012,
84-1 BCA � 17,009.
20 However, the record tells us that the policy was binding on
Purchase Division contracting officers, and non-approval of
binding lips is still the policy of that organization. Tr. 166,
183.
21 Attached to Lenauer's letter was a copy of page 11 from the
1994 specifications for Program A814-M, a GPO general usage
contract. Tr. 158-59. See New South Press & Assoc., Inc., GPO
BCA 14-92 (January 31, 1996), slip op. at 20, n. 28, 1996 WL
112555. As such it covers a variety of binding styles for
publications with a wide range of page numbers. Tr. 158-59. For
"Saddle Stitched Products" Program A814-M requires: "Saddle-wire
stitch in two places and trim three sides. Each product must
contain complete 4-page signature after trimming. Single leaves
connected with a lip (i.e., binding stub) to left or right side
of stitches will not be allowed." [Emphasis added.] See also Tr.
159-60. At the hearing, Cooper testified that the Appellant had
never bid on, or produced a job with a binding lip if the
specifications precluded the stub. Tr. 31.
22 During the hearing, both parties fully litigated the "trade
practice" issue with respect to binding stubs. The Appellant
introduced several saddle-stitched publications which it had
printed, including the 1993 "S" Corporation Tax Package it had
produced for the Internal Revenue Service (IRS) under Jacket No.
345-048, a copy of the Queensboro Community College's continuing
education course catalogue which it had also produced, and
several television guides from the St. Louis Post Dispatch, the
local newspaper, all of which contained binding lips. Tr. 17-21,
23-24, 30-31, 33, 46-47; App. Exh. Nos. 1-2, 4-8. (At the
prehearing conference the Contractor also cited the publication
printed for GPO under Jacket No. 375-005 to illustrate its point,
but did not introduce it at the hearing. See RPTC, at 6, n. 5.)
The Appellant basically argued that nothing in QATAP precludes
binding stubs, and in the absence of an express provision in the
specifications doing so, their use is perfectly acceptable in the
trade. Tr. 16, 31-32. For the Respondent, Morrisey likewise
agreed that QATAP was silent on the question of binding lips.
Tr. 60, 65, 74. However, he also said that: ". . . industry
standards . . . say that binding stubs, unless necessary, are not
used." Tr. 77. The Contracting Officer also concurred that the
definition of "saddle-stitching" he relied on is not reflected in
QATAP, or any other GPO publication for that matter, but he
testified that binding lips normally required the permission of
the customer, and added that ". . . it is not trade practice
where a contractor unilaterally makes a decision on their
customer's behalf . . . on stub binding." Tr. 110, 120. He also
stated that binding stubs were not used in the trade as the
Appellant employed them in the Student Guide. Tr. 111. McHugh
testified that for saddle-stitched products ". . . the trade
practice is clearly understood . . ." and that ". . . the only
time that you would need to go to a binding stub is if you had a
total number of pages that is not divisible by four. I think
everyone in the industry's expectation would be that you are
going to get a full, four-page signature, not a two-page tipped
[sic] in." Tr. 158. Marken also testified for the Government
that binding stubs were not commonly used on GPO products. Tr.
164. Finally, M. Clive Walker, the current Superintendent of the
Purchase Division, corroborated Marken's testimony regarding the
Respondent's policy disallowing binding stubs, and said he could
only recall their use in the private sector for special purposes;
e.g., "tear out" postcards and envelopes. Tr. 170-71. Indeed,
Walker believed that Gardner's memorandum (Gov. Exh. No. 3)
merely restated the practice in the printing industry. Tr. 184.
As for the IRS publication introduced by the Appellant (App. Exh.
No. 1), Walker said that stubs were probably allowed because it
was a QATAP Level IV job and the lips did not impair the function
of the product. Tr. 172-75. In that regard, QATAP Level IV only
requires "[b]asic quality, informational quality, and utility
quality," and includes publications such as "[t]elephone
directories, indexes, project reports . . .". Tr. 176, 182;
QATAP, at viii-ix. However, on QATAP Level III contracts, such
as the one in dispute here, which ask for "[g]ood quality, above
average quality," as would be required for "[a]nnual reports,
general process color work, court decisions, budget reports,
catalogs, textbooks . . .", Walker stated that the trade practice
is not to use binding stubs. Tr. 173, 176, 181-82; QATAP, at
viii.
23 At the hearing, the Contracting Officer also indicated that
the binding stubs could also be considered extra blank pages, and
thus rejectable under finishing attribute F-15 (Blank Pages-Other
Than Specified). Tr. 107, 125; QATAP, at 44. See also Tr.
153-54 (McHugh testimony). However, he thought that finishing
attribute F-1 (Trim Size) was most applicable. Tr. 125-26.
24 It is undisputed that the reprint met the specifications for
the Student Guide, that it was accepted by the Government, and
that the Appellant has been paid for the job. See RPTC, at 5.
25 The Contractor initially submitted its appeal to the General
Accounting Office (GAO). R4 File, Tab J. However, on July 29,
1994, GAO notified the Appellant that it was without jurisdiction
because its appeal concerned a matter of contract administration
not award. R4 File, Tab K (Custom Printing Co., GAO File No.
B-257991, dated July 29, 1994). The Contractor filed this appeal
with the Board the same day. See Board Rules, Rules 1(a) and 2.
26 Those questions, as articulated by the Board, were: (a) [w]as
the contract's "BINDING" specification ambiguous or vague
regarding the use of a binding stub in the production of the
Student Guide, and if so, was the ambiguity patent or latent; (b)
[i]f the "BINDING" specification was vague or ambiguous, was the
Contractor obligated to bring the discrepancy to the attention of
the Contracting Officer prior to performance of any work under
the contract, and if so, did the Appellant meet this duty, either
directly or when it submitted the Dylux proofs for approval; (c)
[w]as there an established prior course of dealing between GPO
and the Contractor concerning the use of binding stubs for
saddle-stitched products, which would have allowed the Appellant
to use such stubs in binding the Student Guide, notwithstanding
the absence of such language in the contract specifications; and
(d) [w]as the Contracting Officer's decision to reject the
original printing of the Student Guide improper, and if so, is
the Contractor entitled to compensation of $104,427.00 or some
other amount? RPTC, at 7.
27 The Appellant rejects as irrelevant GPO's "creative"
interpretation of the words "above average" in describing why the
original order of the Student Guide did not meet Quality Level
III standards, because the phrase it taken from a part of the
QATAP manual-the Foreword-which is expressly not part of the
contract, but rather is provided for informational purposes only.
App. Brf., at 7. Moreover, the Contractor believes that the
Respondent is overreaching in its reliance on the supplemental
specification concerning quality in GPO Contract Terms, because
that provision applies to all GPO contracts and all QATAP quality
levels. App. R. Brf., at 4.
28 The Appellant believes that the definitions of "saddle-
stitching" set forth in BOOKBINDING and FUNDAMENTALS state the
majority view, while the meaning used by POCKET PAL, which speaks
of fastening a booklet by placing a wire "through the middle fold
of the sheets", id., at 204 [emphasis added], is the minority
usage. App. Brf., at 9. See R4 File, Tab G. It is undisputed
that these reference sources or their definitions are not
incorporated in the contract, nor are they found in GPO Contract
Terms or QATAP. App. Brf., at 9. See also Tr. 119-20.
29 See BOOKBINDING, at 235 (defines a signature as "[a] section
or GATHERING of a book, either in the flat or folded state, to
which a SIGNATURE MARK has been assigned. Technically, the sets
of 4, 8, 16, 32, 64, or 128 printed pages, when folded,
constitute a 'section,' while a 'signature' is only the
sequential mark of identification printed on the initial page of
the section; today, however, little if any distinction is made
between the two expressions."); POCKET PAL, at 204 (defines a
signature "in printing and binding" as "the name given to a
printed sheet after it has been folded."). See also GPO
Handbook, Glossary of Graphic Arts Terms, at 39 (defining a
"signature" as a "printed sheet containing four pages, or
multiples of four pages, folded and numbered to form one unit of
a book or pamphlet."). The GPO Handbook definition was read
into the record by Contracting Officer Nepi during his testimony,
to which the Appellant's representative replied, "We don't
disagree with that." Tr. 139. Furthermore, it should be noted
that like BOOKBINDING, FUNDAMENTALS, and POCKET PAL, the GPO
Handbook is also not incorporated by reference in the contract.
30 During the hearing, the Appellant also stated that: "[a]
signature is a folded group of pages that come off a press-given
a 12-pager, 32-pager, 24-whatever comes off that press is
considered as a signature when it comes off in one operation.
Tr. 48. [Emphasis added.]
31 Although the Appellant agrees with the Government that for the
purposes of QATAP the signatures in saddle-stitched publications
must be in increments of four pages, see App. R. Brf., at 3-4 and
note 11 supra, it challenges that proposition as a general rule,
essentially on the ground that the Respondent failed to support
it with any relevant or cogent evidence, see App. Brf., at 10.
32 In that regard, the Contractor relies on Program A814-M (as
well as Program C181) for the proposition that GPO will prohibit
binding lips in its specifications if it does not want them;
otherwise a product is not necessarily rejectable if the product
has stubs. App. Brf., at 10. See note 21 supra. The
Respondent, however, points out that these Programs are
"requirements" term contracts covering publications with varying
page counts, and not a one-time purchase with a fixed page count,
such as here, so the Appellant's examples are inapposite. R. R.
Brf., at 2.
33 The Government, on the other hand, argues that the language in
other contracts, particularly agreements involving different
parties, cannot be used to interpret the terms of the disputed
contract. R. R. Brf., at 1.
34 The Respondent rejects the Appellant's argument that just
because QATAP omits mentioning binding stubs they are therefore
allowed. R. Brf., at 8; R. R. Brf., at 1. In GPO's view, the
attributes published in the QATAP Manual only address the most
common printing and finishing problems, and are not intended to
be exhaustive. R. Brf., at 8, (citing McHugh's testimony, Tr.
150-51); R. R. Brf., at 1. Therefore, the Government's consent
to the use of binding stubs cannot be drawn from the mere absence
of a QATAP attribute concerning them. R. Brf., at 8.
35 As indicated previously, much of the Respondent's evidence is
not challenged by the Appellant. See notes 28 and 29 supra.
Similarly, the Government's description of the differences
between its evidence and the Contractor's regarding industry
practice with respect to the use of binding stubs, see R. Brf.,
at 10-13; R. R. Brf., at 3, has already been summarized. See
note 22 supra. Suffice it to say, the crux of GPO's argument is
that the 28-page Student Guide was an ideal publication for
saddle-stitching because its page count was divisible by four,
but in producing the pamphlet as a single signature product which
resulted in two binding lips in addition to the contract
specification's two blank pages at the end of the booklet, the
Appellant did not furnish a "saddle-stitched" publication, as
that process is understood in the industry; i.e., in the trade
such stubs are typically used only to affix "odd" pages, inserts,
reply cards, tear out pages, envelopes of similar items. R.
Brf., at 10-11. In that regard, the Government says that where,
as here, a contract between two parties in the same trade or
business is silent about technical details, the law holds that an
implied agreement exists that the usual and customary trade
practices will apply. R. Brf., at 11, n. 6 (citing Geographics,
Inc., GPOBCA 8-85 (January 8, 1987), 1987 WL 228966; Gholson
Byars & Holmes Construction Co. v. United States, 173 Ct. Cl.
374, 351 F.2d 987 (1965). See also W.G. Cornell Co. v. United
States, 179 Ct. Cl. 651, 376 F.2d 299 (1967).
36 See also Professional Printing of Kansas, Inc., supra, slip
op. at 64; McDonald & Eudy Printers, Inc., GPO BCA 06-91 (May 6,
1994), slip op. at 20, 1994 WL 377581 (hereinafter McDonald &
Eudy II); Shepard Printing, GPO BCA 23-91 (April 29, 1993), slip
op. at 19, 1993 WL 526848; Chavis and Chavis Printing, GPO BCA
20-90 (February 6, 1991), slip op. at 16, 1991 WL 439270; Rose
Printing Co., GPO BCA 2-87 (June 9, 1989), slip op. at 6, 1989 WL
384982; Fry Communications, Inc., GPO BCA 1-87 (June 1, 1989),
slip op. at 5, 1989 WL 384980; Stabbe Senter Press, GPO BCA Nos.
13-85 and 19-85 (May 12, 1989), slip op. at 48, 1989 WL 384977;
Dependable Printing Co., Inc., GPO BCA 5-84 (September 12, 1985),
slip op. at 23-24, 1985 WL 154847. Accord Mega Construction Co.,
Inc. v. United States, 25 Cl. Ct. 735, 741 (1992); S.S.
Silberblatt, Inc. v. United States, 193 Ct. Cl. 269, 433 F.2d
1314 (Ct. Cl. 1970); Wholesale Tire and Supply Co., Ltd., ASBCA
No. 42502, 92-2 BCA � 24,960; Orlando Williams d/b/a Orlando
Williams Janitorial Service, ASBCA Nos. 26099, 26872, 84-1 BCA �
16,983. Strict compliance can be enforced either by rejecting
the defective product, or accepting the work at a discount if
that is in the Government's best interest. See Professional
Printing of Kansas, Inc., supra, slip op. at 64; McDonald & Eudy
II, supra, slip op. at 21. The Appellant contends that except for
the dispute concerning binding stubs, GPO has waived this
argument with respect to the rest of the original printing of the
Student Guide. App. R. Brf., at 6. In other words, but for the
binding lip problem, the Government would agree that the
publication fully meets all contract requirements.
37 The Respondent implies that this is precisely what the
Appellant did in this case; i.e., it based its offer on a product
with binding lips, and thereby obtained a competitive advantage
over other bidders. R. Brf., at 14.
38 The Board was created by the Public Printer in 1984. See GPO
Instruction 110.10C, Subject: Establishment of the Board of
Contract Appeals, dated September 17, 1984. Before then, ad hoc
panels considered disputes between contractors and GPO. Even
though it was decided in January 1986, Vogard Printing was an ad
hoc panel case. The Board cites the decisions of these ad hoc
boards as GPOCAB. While the Board is not bound by ad hoc panel
rulings, its policy is to follow them where applicable and
appropriate. See Big Red Enterprises, GPO BCA 07-93 (August 30,
1996), slip op. at 22, n. 22, 1996 WL _____; The George Marr Co.,
GPO BCA 31-94 (April 23, 1996), slip op. at 50, n. 40, 1996 WL
______; New South Press & Assoc., Inc., supra, slip op. at 32, n.
45; Shepard Printing, supra, slip op. at 14, n. 19; Stephenson,
Inc., supra, slip op. at 18, n. 20; Chavis and Chavis Printing,
supra, slip op. at 9, n. 9.
39 Specifically, according to GPO, the Contracting Officer took
the following factors into account: (a) the Student Guide was "an
integral part" of the military recruiting program; (b) the target
audience consisted of high school students and their parents; (c)
the Government felt it was "important" for the publication "to
project a positive image of the military and aid in inducing
students to volunteer for the armed services;" and (d) both
MEPCOM and the Contracting Officer thought that the two binding
stubs were "visually offensive" and made it appear as if the
Student Guide was pieced together. R. Brf., at 17. Furthermore,
GPO says that insofar as the Appellant challenges the
Respondent's view that the Student Guide was a "promotional
piece," see note 5 supra, a contractor is not allowed to
substitute its judgment for that of the Government about what
constitutes a suitable product under the contract. R. Brf., at
17, n. 8 (citing D.E.W., Inc., ASBCA No. 17030, 72-2 BCA �
9,494).
40 Indeed, the Respondent argues that the "S" Corporation Tax
Package is irrelevant because of differences with the disputed
contract. R. Brf., at 18-19. In that regard, GPO notes that
App. Exh. No. 2: (a) was a Quality Level IV product not Quality
Level III; (b) it contained pages of forms which were meant to be
torn out, leaving a stub in the booklet; (c) was intended to be
thrown away once the forms were removed; and (d) had a "binding"
specification which was completely different because it allowed
for either saddle-stitch wire staples or paste. Id. See App.
Exh. No. 2, at 9. Moreover, before the tax package was printed,
the IRS approved a construction sample which showed the binding
stubs, in contrast to the situation here where the proof
submitted by the Appellant did not have such lips, and did not
alert GPO to the Contractor's intention "to deviate from
generally accepted trade practices." R. Brf., at 19.
41 The presumption is, of course, rebuttable by clear evidence
that the parties have changed their intent or were in
disagreement at the time they entered into the disputed contract.
See MPE Business Forms, Inc., supra, slip op. at 59; Publishers
Choice Book Manufacturing Co., GPO BCA 4-84 (August 18, 1986),
slip op. at 10, 1986 WL 181457 (citing Lockheed Aircraft Corp. v.
United States, 192 Ct. Cl. 36, 426 F.2d 322 (1970).
42 The record on which the Board's decision is based consists of:
(a) the Notice of Appeal, dated July 29, 1994; (b) the R4 File,
Tabs A-L; (c) the Appellant's Complaint, dated September 9, 1994;
(d) the Respondent's "general denial," dated October 7, 1994; (d)
the Report of Prehearing Telephone Conference, dated April 17,
1995; (e) the transcript of the hearing held on June 6, 1995; (f)
the exhibits submitted by the parties at the hearing, with the
exception of App. Exh. No. 3, which was withdrawn, and Gov. Exh.
No. 5, which was rejected; (g) the initial briefs filed by the
Appellant and the Respondent on August 24, 1995; and (h) the
parties' reply briefs submitted on September 7, 1995.
43 In his final decision of July 14, 1994, the only QATAP
reference made by the Contracting Officer was to finishing
attribute F-1 (Trim Size). See R4 File, Tab F, at 1.
Furthermore, as previously noted, at the hearing the Contracting
Officer stated that the original version of the Student Guide was
also rejectable on the basis of finishing attribute F-15 (Blank
Pages-Other Than Specified). See note 23 supra. However,
because the Board functions as an appellate body to consider
properly filed appeals from final decisions of GPO contracting
officers, it only deals with issues and facts as they existed at
the time of the final decision, and not with those which may have
arisen subsequently. See Datagraphics Press, Inc., [GPOCAB]
(June 23, 1978), slip op. at 6, 1978 WL 22342. See also Board
Rules, Preface to Rules, � I (Jurisdiction for Considering
Appeals). Therefore, since finishing attribute F-15 was not a
reason given by the Contracting Officer for his rejection of the
product in his final decision, the Board will not consider that
element of QATAP in the context of this opinion.
44 The United States Claims Court has observed that: "[a] mere
dispute over the terms does not constitute an ambiguity, and an
interpretation which is merely possible is not necessarily
reasonable." See Ceccanti, Inc. v. United States, supra, 6 Cl.
Ct. at 528. 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. See McDonald
& Eudy Printers, Inc., supra, slip op. at 14, n. 12; R.C. Swanson
Printing and Typesetting Co., supra, slip 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,
supra, 192 Ct. Cl. at 315, 427 F.2d at 725 (quoting Bishop
Engineering Co. v. United States, 180 Ct. Cl. 411, 416 (1967)).
Furthermore, a contractor claiming an ambiguity in drafting does
not have to prove its interpretation is more reasonable than the
Government-the test is whether or not the contractor's
interpretation standing alone is reasonable. See George Bennett
v. United States, 178 Ct. Cl. 61, 371 F.2d 859, 861 (1967) ("To
prevail . . . it is not essential that [the contractor]
demonstrate his position to be the only justifiable or reasonable
one. A specification susceptible to more than one
interpretation, found to be consistent with the contract's
language and the parties' objectively ascertainable intentions
becomes convincing proof of an ambiguity; the burden of that
ambiguity falls solely upon the party who drew the
specification." Citing Peter Kiewit Sons' Co., 109 Ct. Cl. 390,
74 F.Supp. 165 (1947)).
45 The purpose of any rule of contract interpretation is to carry
out the intent of the parties. See Hegeman-Harris & Co., 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. See 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.
46 See note 44 supra.
47 As previously indicated, App. Exh. Nos. 10-14 were admitted
only to show what the Appellant thought a promotional pamphlet
should look like, and are not relevant to this discussion of
trade practice. See note 5 supra.
48 For some reason, the relevant excerpt from Strauss' THE
PRINTING INDUSTRY, which the Contracting Officer cited in his
final decision letter, was never introduced by the Respondent.
See R4 File, Tab F, at 1.
49 In its post-hearing brief, the Appellant, for the first time,
challenged the credentials of the Respondent's witnesses as
"experts" with respect to commercial printing practices. App.
Brf., at 3. GPO, naturally, defended their expertise. R. R.
Brf., at 3. However, the simple answer is that the Contractor's
objections come too late to be heard by the Board-it had ample
opportunity to test the experience of the Government's witnesses
at the hearing, but it failed to do so. That matter is now
closed. See Coastal Structures, Inc., DOT BCA Nos. 1670, 1693,
1787, 88-3 BCA � 20,956 (post-trial motion to strike testimony of
Government's expert witness was denied, even though the
Government had not complied with an order to disclose the basis
of the expert's testimony prior to the trial, because the
contractor could have presented rebuttal expert testimony).
Besides, the issues involved in this appeal do not concern a
question of credibility, but of judgment. The parties difference
of opinion about whether the Student Guide satisfied the contract
specifications basically involves a clash between their
subjective viewpoints. In the Board's view, all of the witnesses
were technically qualified and credible, and what really exists
here is a situation where the failure to be more specific in the
'BINDING" specification left a wide range of possibilities. See
ITT Gilfillan Division, ASBCA No. 37834, 92-1 BCA � 24,490, at
122,226.
50 In its analysis of the "trade practice" issue, the Board has
disregarded the Appellant's evidence of other GPO contracts, such
as Programs A814-M and C181, for two reasons. First, the Board
shares GPO's doubts about the relevancy of these term contracts
to the facts of this case. R. R. Brf., at 1-2. See MPE
Business Forms, Inc., supra, slip op. at 2-3, n. 3 (copy of a
term contract for a different Program other than the one in
dispute and unrelated to it); Professional Printing of Kansas,
Inc., supra, slip op. at 23-24, n. 38 (copies of samples printed
by another contractor, and copies of forms subsequently printed
by the appellant and approved in a press-sheet inspection were
irrelevant to a dispute involving rejected forms); Universal
Printing Co., supra, slip op. at 26, n. 27 (price quotation from
a company which did no work for contractor was inadmissible); RD
Printing Associates, Inc., supra, slip. op. at 10, 13, ns. 11, 15
(memorandum from customer-agency employee supporting contractor's
interpretation of the contract, and the revised pricing
specification from the succeeding contract were inadmissible).
Accord Tecom, Inc., ASBCA Nos. 44122, 44123, 44516, 44959, 45158,
45555, 45800, 94-1 � 26,483; Fireman's Fund Insurance Co., ASBCA
No. 39666, 91-1 BCA � 23,372 (citing, Delco Electronics Corp. v.
United States, 17 Cl. Ct. 302 (1989)); Atlantic Electric Co.,
GSBCA No. 6016, 83-1 BCA � 16,484; Hildebrand and Day, AGBCA No.
82-183-1, 82-188-1, 83-1 BCA � 16,321. Second, and perhaps more
importantly, regardless of any relevancy considerations, its
narrow jurisdictional mandate prevents it from considering
matters outside the scope of the disputed contract. See Asa L.
Shipman's Sons, Ltd, supra, slip op. at 14, n. 19; Universal
Printing Co., supra, slip op. at 26, n. 27; Shepard Printing,
Inc., GPO BCA 37-92 (January 28, 1994), slip op. at 9, n. 8, 1994
WL 275077 (hereinafter Shepard II); Shepard Printing, supra, slip
op. at 7, n. 11; RD Printing Associates, Inc., supra, slip op. at
9, 13, ns. 9, 15; B. P. Printing and Office Supplies, supra,
slip. op. at 14-15; Automated Datatron, Inc., GPO BCA 20-87
(March 31, 1989) slip op. at 4-5, 1989 WL 384973; Peak Printers,
Inc., GPO BCA 12-85 (November 12, 1986), slip op. at 6, 1986 WL
181453. See generally, Matthew S. Foss, U.S. Government Printing
Office Board of Contract Appeals: The First Decade, 24 PUB. CONT.
579, 585-86 (1995) (hereinafter Foss, The First Decade). While
there is a limited exception to this jurisdictional prohibition,
namely other related contracts for the purpose of seeing how
certain contract language was interpreted in the past, see e.g.,
Professional Printing of Kansas, Inc., supra, slip op. at 2, n. 4
(exhibits relating to a previous printing of the product at issue
by another contractor), Programs A814-M and C181 do not fall
within that narrow range.
51 See note 15 supra.
52 This probably accounts for Willard's "dismay" at finding that
some GPO employees were accepting printed products with binding
stubs even though the page count was divisible by four, and were
"incorporating language in the specifications to insure the
exclusion of the binding stubs (or binding lips) on all saddle-
stitched products." Gov. Exh. No. 3, Attachment. See note 18
supra.
53 Leaving aside for the moment the fact that GPO contracting
officers act independently within the scope of their authority,
the Board cannot help but wonder what standards were applied to
determine the Government's discount for the product printed by
Fry? Discounting implies some relationship to QATAP. The
Contracting Officer also said he could have accepted the Student
Guide at a discount, and it is clear that in his mind that the
nexus between the pamphlet and QATAP was finishing attribute F-1
(Trim Size). Tr. 111-12. However, there is nothing in the
record to indicate that other contracting officers from different
GPO procurement offices (aside from the Purchase Division), who
had received Quality Level III products with binding stubs, saw
things the same way.
54 The authorities also tell us that in Government contracts law
proof of a "prior course of dealing" is an important type of
extrinsic evidence which can be used by a party in two ways: (a)
as an aid to interpretation of ambiguous contract language; or
(b) as an estoppel or waiver to demonstrate that an explicit
requirement of the contract is not binding because the
requirement was not enforced in the past. See John Cibinic, Jr.
and Ralph C. Nash, Jr., Administration of Government Contracts,
at 199 (The George Washington University, 3rd ed. 1995)
(hereinafter Cibinic & Nash, Administration). The Appellant's
reliance on Gresham and Co., Inc. v. United States, see App. R.
Brf., at 7-8, seems to indicate that the Contractor is raising a
"prior course of dealing" as a waiver claim, rather than as an
interpretive device. See Cibinic & Nash, Administration, at 206.
55 Two other GPO contracts relied on by the Contractor-Programs
A814-M and C181-have been disregarded by the Board on relevancy
and jurisdictional grounds. See note 50 supra.
56 The Board has already indicated that it will not consider the
Contracting Officer's examination of the Student Guide under
finishing attribute F-15 (Blank Pages-Other Than Specified) in
this case because it was not a reason he gave in his final
decision for rejecting the product. See note 43 supra. However,
it should be additionally noted that not only did the Contracting
Officer admit at the hearing that binding stubs are not "pages,"
Tr. 107, but the Board itself has held that a "page" generally
refers to "one of the leaves of a book, magazine, letter, or
manuscript; also a single side of one of these leaves[']" see
Stabbe Senter Press, supra, slip op. at 51. [Original emphasis.]
See also GPO Handbook, Glossary of Graphic Arts Terms, at 38 (A
"page" is defined as "[o]ne side of a written or printed leaf.");
GPO Glossary, at 11 (same).
57 It should be noted that the Government's evidence in McDonald
and Eudy II contained copies of two relevant inspection reports
showing that the trim deviation in the samples it inspected was
more than 1/8", or greater than the allowable tolerance for
finishing attribute F-1. See McDonald & Eudy II, supra, slip op.
at 25. In this case, not only is there no "Notice of Quality
Defects" (GPO Form 1815) in the record, see note 15 supra, but
the Board has also searched in vain for an "Inspection Report,"
(GPO Form 916), showing how the Contracting Officer figured the
extent to which the binding stubs were major defects under QATAP
sufficient to reject the Student Guide. However, there is no
such documentary proof in this case because, as the Board has
already observed, MEPCOM's complaint was treated as an exception
to the usual quality complaint procedures. On the other hand,
since the Board has found the Contracting Officer misapplied the
QATAP requirements, such a report, by itself, would not support
his decision. See Shepard Printing, supra, slip op. at 18-19.
58 Proof enough of the Appellant's reliance is the fact that its
interpretation of the contract resulted in bid that was
approximately $30,000.00 less than its successful offer the
previous year. See note 9 supra.
59 In RD Printing Associates, Inc., the Board posed essentially
the same question it asked here; i.e., can a critical missing
term be implied to fill in the gap between GPO's interpretation
of the contract and the contractor's understanding of the actual
words used in the solicitation? The Board answered that question
in the negative. See RD Printing Associates, Inc., supra, slip
op. at 23 -24, n. 24. In so holding, the Board said, in
pertinent part: ". . . since it is presumed that the drafter of a
document acts intentionally, the rule is clear that where a term
is carefully employed in one place and excluded in another, it
should not be implied where excluded. Cf. Rusello v. United
States, 464 U.S. 16 (1983); United States v. Espinoza-Leon, 873
F.2d 743 (4th Cir. 1989), cert. denied, 109 S.Ct. 3257 (1989);
Marshall v. Western Union Telegraph Company, 621 F.2d 1246 (3rd
Cir. 1980). This maxim of construction, called 'inclusio unius
est exclusio alterius,' simply means that the inclusion of one
thing is the exclusion of another. BLACK'S LAW DICTIONARY 906
(4th ed. 1968). Therefore, without some other indication in the
contract that potential bidders were expected to quote prices for
collating by the same or similar method that they were to use to
calculate prices for drilling, there is no basis for the Board to
assume that the drafter of the IFB intended such a result." Id.
60 The general understanding of a "constructive change" was
expressed by the ad hoc panel in Merchant Service Co., which
described the doctrine as "the mechanism used to direct the
Government to retroactively compensate the contractor for work
which it should have been properly compensated for under the
'Changes' or 'Extra' clauses during the term of the contract."
See Merchant Service Co., [GPOCAB] (February 11, 1980), slip op.
at 16, 1980 WL 81262 Accord Service Engineering Co., ASBCA No.
40275, 94-1 BCA � 26,382; Gary Aircraft Corp., ASBCA No. 21731,
91-3 BCA � 24,122; Pinay Flooring Products, Inc., GSBCA No. 9286,
91-2 BCA � 23.682; Harris System International, Inc., ASBCA No.
33280, 88-2 BCA � 20,641; Kahn Communications, Inc., ASBCA No.
27461, 86-3 BCA � 19,249; AGH Industries, Inc., supra, 85-1 BCA �
17,784; McCrory Electric Co., GSBCA No. 5363, 80-2 BCA � 14,686.
See also Cibinic & Nash, Administration, at 429 ("A constructive
change occurs when the contract work is actually changed but the
procedures of the Changes clause have not been followed.").
61 See notes 5 and 39 supra.
62 A contention that a contracting officer has been arbitrary,
capricious or unreasonable, should not be confused with an
allegation that he/she has acted in bad faith in dealing with the
contractor. As the Board has said on numerous occasions, bad
faith must be established by "well-nigh irrefragable proof"-
evidence which is incapable of being refuted; i.e., indisputable
evidence-because there is a strong presumption that Government
officials properly and honestly carry out their functions. See
Rose Printing, Inc., supra, slip op. at 25; Big Red Enterprises,
supra, slip op. at 36-37; MPE Business Forms, Inc., supra, slip
op. at 27-28, n. 34; New South Press & Assoc., Inc., supra, slip
op. at 36; Asa L. Shipman's Sons, Ltd., supra, slip op. at 12, n.
16; Professional Printing of Kansas, Inc., supra, slip op. at 43,
n. 58; Universal Printing Co, supra, slip op. at 24, n. 24.
Accord Brill Brothers, Inc., ASBCA No. 42573, 94-1 BCA � 26,352;
Karpak Data and Design, supra; Local Contractors, Inc., ASBCA No.
37108, 92-1 BCA � 24,491. The key to such evidence is that there
must be a showing of specific intent on the part of the
Government to injure the Contractor. See Rose Printing, Inc.,
supra, slip op. at 26; Big Red Enterprises, supra, slip op. at
37; MPE Business Forms, Inc., supra, slip op. at 27-28, n. 34;
New South Press & Assoc., Inc., supra, slip op. at 36, n. 52.
Accord Kalvar Corp. Inc. v. United States, supra, 211 Ct. Cl. at
199, 543 F.2d at 1302. See also Solar Turbines, Inc. v. United
States, 23 Cl. Ct. 142 (1991). The Appellant has not accused the
Respondent of "bad faith" in this case, and certainly nothing in
the record amounts to the sort of "irrefragable proof" required
to support such a claim.
63 Where, as here, the Government insists on strict enforcement
of the specifications, it must prove that the product does not
meet the requirements of the contract; i.e., it bears the initial
"burden of persuasion" of showing that the rejected work does, in
fact, deviate from the specifications. See Professional Printing
of Kansas, Inc., supra, slip op. at 64; McDonald & Eudy II,
supra, slip op. at 23-24; Stabbe Senter Press, supra, slip op. at
49. See also International Lithographing, GPO BCA 1-88 (December
19, 1989) slip op. at 20, 1989 WL 384986; Mid-America Business
Forms Corp., supra, slip op. at 18-19. Accord ABM/Ansley
Business Materials, GSBCA No. 9367, 93-1 BCA � 25,246; Goal
Chemical Sealants Corp., GSBCA Nos. 8627, 8628, 88-3 BCA �
21,083; Churchill Chemical Corp., GSBCA Nos. 4321, 4322, 4346,
4353, 77-1 BCA � 12,318, at 59,5000, aff'd, Churchill Chemical
Corp. v. United States, 221 Ct. Cl. 284, 602 F.2d 358 (1979);
Ramar Co., ASBCA No. 16060, 72-2 BCA � 9644; Pams Products, Inc.,
ASBCA No. 15847, 72-1 BCA � 9401; Hardeman-Monier-Hutcherson,
ASBCA No. 11785, 67-1 BCA � 6210. The Government usually meets
this burden by advising the contractor of the results of the
inspection it has conducted. See Professional Printing of
Kansas, Inc., supra, slip op. at 65; McDonald & Eudy II, supra,
slip op. at 24; Stabbe Senter Press, supra, slip op. at 49. The
burden then shifts to the contractor to prove the Government's
findings are invalid for one reason or another. See Professional
Printing of Kansas, Inc., supra, slip op. at 65; McDonald & Eudy
II, supra, slip op. at 24; Stabbe Senter Press, supra, slip op.
at 49; International Lithographing, supra, slip op. at 21.
Accord Nuclear Research Corp. v. United States, 814 F.2d 647, 650
(Fed. Cir. 1987); Riverport Industries, Inc., ASBCA Nos. 28089,
28090, 28091, 29577, 86-2 BCA � 18,835, reconsid. den., 86-3 BCA
� 19,050; Continental Chemical Corp.,, GSBCA No. 4483, 76-2 BCA �
11,948; Shamrock Industrial Maintenance, DOT CAB No. 72-11, 72-2
BCA � 9482; C.W. Roen Construction Co., DOT CAB No. 75-43, 76-2
BCA � 12,215. Otherwise, the presumption that the Government's
tests are conducted correctly will prevail. See Professional
Printing of Kansas, Inc., supra, slip op. at 66. Accord Astro
Science Corp. v. United States, 200 Ct. Cl. 354, 471 F.2d 624
(1973); Integrated Systems Group, Inc., GSBCA No. 11602-P, 92-1
BCA � 24,762; Donald R. Stewart & Associates, AGBCA Nos.
84-226-1, 84-227-1, 84-228-1, 84-239-1, 84-240-1, 84-241-1,
85-168-1, 89-222-1, 89-223-1, 89-224-1, 89-225-1, 92-1 BCA �
24,705; Goal Chemical Sealants Corp., supra; Horn Waterproofing
Corp., DOT CAB No. 73-24, 74-2 BCA � 10,933. On the other hand,
if the contractor comes forward with evidence that casts doubt on
the Government's test results, or somehow dilutes or neutralizes
their impact, and the Government presents no additional evidence
in support of its findings, then the so-called "validity" issue
will be decided against it. See Professional Printing of Kansas,
Inc., supra, slip op. at 79-80 (citing Unlimited Supply Co.,
Inc., GSBCA No. 12371, 94-3 BCA � 27,170, at 135,393; Praoil,
S.r.L., ASBCA Nos. 41499, 44369, 94-2 BCA � 26,840; Air-O-Plastik
Corp., GSBCA 4802, 4870, 4925, 4965, 81-2 BCA � 15,338;
Communications, Ltd., ASBCA Nos. 23261, 80-1 BCA � 14,368).
Simply stated, the rule is: "[W]here there is proof of differing
tests results and no additional evidence is presented, the issue
of conformity with specification must be decided against the
party having the burden of proof." See Praoil, S.r.L., supra,
94-2 BCA at 133,502 (citing Lisbon Contractors v. United States,
828 F.2d 759, 764-65 (Fed. Cir. 1987); Universal Steel Strapping
Co., ASBCA No. 13686, 69-2 BCA � 7799 at 36,212).
64 See note 34 supra.
65 The regulatory foundation for the Board's reasoning was the
PPR, which it said establishes the basic framework for the
inspection and testing of procured products. See Professional
Printing of Kansas, Inc., supra, slip op. at 66. In that regard,
the Board said that: "[ a]part from providing the foundation for
QATAP, and establishing the program as an integral part of most
procurement contacts, the PPR also states that such inspection
and testing 'shall be performed in accordance with article 14
'Inspection and Tests' of Contract Clauses in GPO Contract Terms
(Pub. 310.2).' [Footnote omitted.] See, PPR, Chap. XIII, Sec. 1,
�� 3(a),(b), 4(c)(2),(g). Furthermore, the PPR, inter alia: (1)
provides guidance for gathering inspection samples; (2) sets
forth basic inspection procedures; (3) makes special provisions
for the inspection of departmental random copies (blue label
copies); and (4) requires that appropriate records and
documentation of all quality assurance actions be maintained.
See, PPR, Chap. XIII, Sec. 1, �� 4(g)(1)-(4), h." See
Professional Printing of Kansas, Inc., supra, slip op. at 66-67.
As the Board read the PPR, the various QATAP manuals incorporated
by reference therein, and the "Inspections and Tests" article of
GPO Contract Terms, it was clear that: ". . . the proper
inspection and testing of procured products consists of three
things: (1) a sample which is randomly selected and adequate
enough to be representative of the lot; (2) the use of proper
testing procedures and techniques; and (3) the presence of
objective standards by which to measure the procured product.
[Citations omitted.] . . . [A] contracting officer who shows that
he has adhered to the testing and inspection requirements of the
contract is entitled to have his determination of product quality
upheld. [Citation omitted.]" See Professional Printing of
Kansas, Inc., supra, slip op. at 67. [Emphasis added.]
66 The Board noted, inter alia, that the ad hoc panel in Elgin
Business Forms was "not persuaded that two or three brief
stoppages in two boxes out of 540 constituted a failure to meet
the requirements of the contract." See Professional Printing of
Kansas, Inc., supra, slip op. at 74, n. 77 (citing Elgin Business
Forms, supra, slip op. at 8-9).
67 As a rule, proceedings before the Board are conducted de novo.
See The George Marr Co., supra, slip op. at 33; Sterling
Printing, Inc., GPO BCA 20-89 (August 12, 1994), Decision on
Second Motion for Reconsideration and Order, slip op. at 1-2, fn.
1, 1994 WL_____. Accord Wilner v. United States, 24 F.3d 1397,
1401 (Fed. Cir. 1994); Assurance Co. v. United States, 813 F.2d
1202, 1206 (Fed. Cir. 1987); Blount Brothers Corp. v. United
States, 191 Ct. Cl. 784, 424 F.2d 1074, 1085 (1970); Southwest
Welding and Manufacturing Co. v. United States, 188 Ct. Cl. 925,
413 F.2d 1167, 1184 (1969); Minority Enterprises, Inc., ASBCA
Nos. 45549, 45553, 45683, 45696, 95-1 BCA � 27,461, at 136,829;
Allen County Builders Supply, ASBCA No. 41836, 93-1 BCA � 25,398,
at 126,491-92. However, the prerequisite to the Board's
assertion of jurisdiction over an appeal is the issuance of a
final decision by a GPO contracting officer. Board Rules,
Preface to Rules, � I, Jurisdiction for Considering Appeals; GPO
Contract Terms, Contract Clauses, � 5 (Disputes); PPR, Chap. X,
Sec. 1, �� 2, 4. See Graphicdata, GPO BCA 35-94 (December 21,
1994), slip op. at 5, 1994 WL 837428 (hereinafter Graphicdata
II); Shepard II, supra, slip op. at 28; Epco Associates, GPO BCA
26-93 (November 18, 1993), Decision and Order Granting
Appellant's Motion Under Rule 1(c) and Staying Proceedings Under
Rule 1(d), slip op. at 3, 1993 WL 526919 (citing Associated
Contract Specialties Corp., ASBCA No. 37437, 90-3 � 23,258;
Spruill Realty/Construction Co., ASBCA No. 40477, 90-3 BCA �
23,255). See also Foss, The First Decade, at 588. Thus, the
underlying precepts of the Board Rules are essentially the same
as those of the Contract Disputes Act of 1978, 41 U.S.C. � 601 et
seq., which places great emphasis on the role of the contracting
officer in resolving contract claims, makes his/her decision an
indispensable precondition to the assertion of a contract appeal,
and characterizes that final decision as "the linchpin" for the
contract appeal process. See Graphicdata II, supra, slip op. at
5 (citing Paragon Energy Corp. v. United States, 645 F.2d 966
(Ct. Cl. 1981); Continental Products, Inc., ASBCA No. 45193, 93-2
BCA � 25,879; John C. Grimberg Co., Inc., ASBCA No. 42695, 91-3
BCA � 24,074; DHR, Inc., EBCA No. 401-12-87, 88-1 BCA � 20,451).
See also Dawco Construction, Inc. v. United States, 930 F.2d 872
(Fed. Cir. 1991); Santa Fe Engineers, Inc. v. United States, 818
F.2d 856 (Fed. Cir. 1987), aff'g, sub nom. Santa Fe Engineers,
Inc., ASBCA Nos. 28058 and 29362, 86-3 BCA � 19,092; Tecom, Inc.
v. United States, 732 F.2d 935 (Fed. Cir. 1984); W.M. Schlosser
Co. v. United States, 705 F.2d 1336 (Fed. Cir. 1983); J.F. Shea
Co., Inc. v. United States, 4 Cl. Ct. 46 (1983); Lee Ann
Wyskiver, PSBCA No. 3621, 95-2 BCA � 27,755; R & E Electronics,
Inc., VABCA Nos. 2227, 2299, 2300, 85-3 BCA � 18,316. In that
regard, the requirement for a contracting officer's final
decision is not a mere technical formality. As indicated in the
PPR: "The decision of the Contracting Officer is vital to the
administrative process of resolving disputes. Without it there
is no immediate issue, appeal, or review. It directs the way the
contract will proceed in the interim. The final decision should
be rendered promptly since the contractor must continue to
perform while an appeal is pending. If there is a delay in the
final decision, this very delay may become an issue in the
dispute or the failure to make a final decision may itself be
appealed. Finally, the decision is the basis for the GPO's
position on appeal. With supplementary data, it forms the record
that the Board of Contract Appeals reviews in deciding the case."
PPR, Chap. X, Sec. 1, �� 2, 4.c. See Shepard II, supra, slip op.
at 28-29. Thus, the Board will not entertain new claims raised
for the first time in the appeal process. Id., slip op. at 32.
Accord Dawco Construction, Inc. v. United States, supra, 930 F.2d
at 877; J.F. Shea Co., Inc. v. United States, supra, 4 Cl. Ct. at
54. See also Foss, The First Decade, at 589.
68 Santa Fe Engineers, Inc. involved a construction contractor's
claim for "all problems, changes and directives that were issued
on the project." The ASBCA dismissed the claim because the
claims presented to the contracting officer pertained only to the
amount of additional compensation, if any, to which the
contractor was entitled for three specific changes. In so
ruling, the ASBCA reasoned, in pertinent part: "It is quite
evident, as strenuously asserted by the Government, that the
claim developed by appellant before the Board was essentially
different from the claims presented by it to the contracting
officer as to which the subject appeals were taken. The claims
before the contracting officer pertained only to the amount of
additional compensation, if any, to which appellant was entitled
for changes 'AD,' 'CD' and 'HK.' They did not include one for
'all the problems, changes and directives that were issued on the
project,' . . . Appellant has elected to proceed under the
Contract Disputes Act of 1978. Under said Act the 'claim' is the
centerpiece of the disputes resolution process. [Citation
omitted.] It is necessary that a claim be presented in writing
to the contracting officer for decision prior to its assertion to
the Board. . . . The claim ultimately presented to the Board in
the subject appeals was beyond the Board's jurisdiction, due to
its not having first been submitted to the contracting officer .
. . [Citations omitted.]". See Santa Fe Engineers, Inc., supra,
86-3 BCA at 96,508.