U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
The Appeal of PENNSYLVANIA PRINTED PRODUCTS CO., INC.
Docket No. GPO BCA 29-87
January 22, 1990
MICHAEL F. DiMARIO
Administrative Law Judge
OPINION
This appeal, timely filed by Pennsylvania Printed Products
Co., Inc., Hatboro, PA 19040 (hereinafter "Appellant"), is
from the December 14, 1987, final decision of Douglas M.
Faour, Contracting Officer, Atlanta Regional Printing
Procurement Office (ARPPO), U.S. Government Printing Office
(hereinafter "Respondent"), terminating a certain contract
with Appellant identified as Purchase Order F 9938, Jacket
736-202, "for default for failure to perform under the
provisions of the contract." The decision of the Contracting
Officer is reversed for the reasons set forth hereinbelow.
BACKGROUND
On or about September 25, 1987, Appellant, by the above
referenced Purchase Order, was awarded a contract to produce
150,000, plus or minus one percent, 4-color (silver, blue,
red, and black), die cut, "Express Mail Craft (leave behind)
Card" folders as requisitioned from the Respondent by the U.S.
Postal Service (Req. No. 7-00032). Respondent was to furnish
necessary camera copy and a construction model to Appellant by
September 25, 1987. Appellant was to provide all other
materials necessary to produce the job which was to be
delivered in-hand by October 23, 1987. No proofs were
required by the specifications. The purchase order more fully
describes the work to be performed as:
Die cut folder printing type & rule with line art. Face side
prints 4 colors with reverse areas. Back side prints black
only. See attachment 1.) Do not print outlining border!
R4 File, Tab L, page 1
The attachment to the purchase order shows an illustration of
an Express Mail collection box with instructions for the
placement of colors and printing in various locations thereon.
Among these is an instruction stating "bottom half of
collection box -- #G-5115, blue (see attached)." This
instruction is encircled and bears a line pointing to an area
on the lower half of the illustration below two diagonal lines
and above a quasi-rectangular area with rounded upper corners.
The rectangular area bears no separate instruction pointing to
it. The intention of the Postal Service was to have the
rectangular portion remain white in order to create the effect
of legs on the mailbox.
R4 File, Tab L, pages 2 and 3
During the course of production, Appellant, among other
things, printed the entire bottom portion, including the
rectangular area, in blue. Appellant, at that point (October
15, 1987), raised the question with the Government as to
whether it had, in fact, produced the illustration correctly.
R4 File, Tab J, page 1
Appellant was advised that it appeared that it had not.
Appellant was then requested to furnish a press sample to the
Postal Service in Miami, FL. Appellant complied with this
request and, by letter of October 15, 1987, so advised the
ARPPO's Mr. James E. Olson. The letter, in further pertinent
part, stated:
On looking at what we were given (enclosed) I feel we were
correct in our color separation of what we were given.
If you will look at the instructions for the color separation,
you will see that the instructions marked by me as "A" tells
us to print the upper 1/2 of the front in Silver (the line
points to only one block however) and the instructions I have
marked as "B" tells us to print the bottom half in Blue. The
strip is to be printed in red and the only place for the black
ink is in the logo at the bottom right side.
I feel therefore, we should be reimbursed for the time lost in
taking the job off the press and for the proof we sent.
As we only had 1/2 of the front printed, our costs so far are
for 2 additional washups and 2 plate make readies at a cost of
$498.00.
Should "Janice", after seeing the proofs, decide on changes we
will have to charge for what additional costs might be
incurred.
App 3
The press sample was received and reviewed by the Postal
Service on October 22, 1987. Following various conversations
on the 22nd and 23rd, Melodie K. Ransom for Kathleen Boehm,
U.S. Post Office, Miami, FL, wrote to Mr. Jim Olson at the
ARPPO furnishing a construction model of the Express Mail
craft leave behind card. The letter, dated October 23, 1987,
in pertinent part, stated that the construction model was
being furnished in order to alleviate any further problems or
discrepancies and that the following ". . . is a list of
corrections and questions on the press sample . . . :
1) Color of blue incorrect shade.
2) Area between "legs" of collection box to be white. (Art work
specifically points into collection box; lower half to be blue.)
3) Top of collection box wrong. Does not show inset lines
depicting lid of box and also is not centered on card.
4) Several samples were received and no two cards exactly the
same cut, etc. (See enclosed marked press samples.)
5) Print ("EXPRESS MAIL NEXT DAY SERVICE") and lines not clear
and clean print.
6) Card is to be folded in half; back half which is to be black
print on silver-#877C. (Why is press sample not finished folded
size?)
7) Die cut to be made at top of card; both front and back to
round off top of collection box graphic. (Die cut not yet
completed on press sample submitted?)
8) Per questions in letter enclosed with press samples from
contract printer, black and red print to be as shown as enclosed
construction model. In addition, a photo, art work and a
brochure depicting graphic art of Express Mail collection box was
originally submitted in printing package."
R4 File, Tab H
The letter was forwarded to Mr. William H. Brehm, II,
Appellant's President, on October 26, 1987, with a note,
"Bill, Call me when you receive this. J.E. Olson"
R4 File, Tab J, page 2
Appellant apparently complied with this request since by an
October 28, 1987, letter to John Edridge, ARPPO, Appellant,
responding to the Postal Service letter, stated, in pertinent
part, that:
After talking with Mr. Olson and you, I am sending both you
and Kathleen Boehm color "proofs" with the bottom of the mail
box now white, not blue.
I maintain that the "arrows" pointing to the top and bottom of
the original art work are miss-leading [sic] in how to
"handle" the bottom of the "box" that they now want white. I
do not feel we were wrong in printing the entire bottom blue.
I do acknowledge that the blue is off shade [sic].
Now to the new issues:
1. There is no way we should know that the black line in the art
work prints black.
2. The black line is very bad-it was never cleaned up-is rough,
thick and thin and "wavey" and "fat" and smudged.
3. In the letter we are told that the words "Express Mail"
(paragraph 5) are not clear and clean print. The lettering in
the art work is like that-
4. The type on the inside of the card is, if possible, worse. It
is smudged-runs into itself and is not clear and clean.
5. We cannot make a silk purse out of a pigs ear!
6. We are printing flake silver #877 which will spread some on
the press. This, together with bad type will not produce the
"perfect" result as if they had the type set.
Please examine the proof we have enclosed and you will see my
concern over this art work."
App 5
Subsequently, by letter dated November 24, 1987, Appellant
advised Olson as follows:
Listed below are the additional charges we are incurring (or
have incurred) to re-do the art work, die and step and repeat
on the "all-new" art work.
Cost of 2 make readies and washup $ 498.00
Cost of 2 sets of Dylux color proofs 193.00
Cost to send overnight 4 @ 10.75 each 43.00
Cost of 5 new plate negs-step and repeat, etc. 529.00
Cost to re-do die outline and step and repeat 191.00
Cost of new steel rule die, 48 up 356.00
Cost of replacement of 1600 sheets of 8pt.KKC1S 534.00
(23 X 35 - 220 @ $1.517 cwt) ______
Total Cost $ 2344.00
+5% discount $2,467.00
We are proceeding with the order on a rush basis and have it
scheduled to ship December 4th 1987.
R4 File, Tab C
However, this was not done. Accordingly, on December 11,
1987, the Post Office telephonically notified the ARPPO that
the job had not yet been received. By return call the ARPPO
Compliance Officer determined that since the order was so
late, the Post Office no longer had a need for the job.
Appellant's Mr. Brehm was then called by the Compliance
Officer and Brehm advised that the job was completely printed
but that a die which he had ordered from a subcontractor had
not arrived as planned. Notwithstanding this, Brehm was
advised that he was in default for not shipping the order on
December 4, 1987, as per his signed letter of November 24,
1987. He was also told that the agency no longer had a need
for the order and to put a hold on the die since it was no
longer needed.
R4 File, Tab B
That same day, the Contracting Officer advised the U.S.
Government Printing Office Contract Review Board (CRB) in
writing that Appellant was in default with respect to shipping
by December 4, 1987, and that he was going to terminate the
contract for default but with no excess reprocurement costs
being charged since the Postal Service no longer had a need
for the order.
Concurrence to this action was given by the CRB on December 14,
1987. This was followed by the Contracting Officer's "final
decision" letter to Appellant, dated December 14, 1987, supra.
The letter is captioned "NOTICE OF TERMINATION, Complete."
R4 File, Tab A
Thereafter, by letter, dated December 22, 1987, Appellant
noted its appeal to this Board. The appeal was docketed on
December 22, 1987, and Appellant was so advised by letter,
dated December 30, 1987. The letter furnished Appellant a
copy of the Rules of Practice and Procedure of this Board and
advised that a more complete Complaint was required under Rule
6.(a).
By letter, dated January 25, 1988, Appellant responded to this
direction as follows:
This letter is to comply with your Rule 6. (a) "Pleadings" of
your, instructions: GPO 110.12 and letter dated December
30th, 1987.
We claim that there were no grounds to terminate this purchase
order.
We were able to make delivery of this job in a timely manner,
considering the many changes made by your customer, The Postal
Service.
We feel we should be paid for the work we completed and all
the extra work that was requested and we furnished.
I have requested several times, substantiating dates from your
Atlanta office which will make it quite evident that we
proceeded with this order in a most timely manner.
We are asking for: (1) The original amount of $3,997.00
(2) The "washups" $ 498.00
(3) The second set of work $2,467.00
Total Due $6,962.00
I have not, as yet, been provided with the information
requested from Atlanta-see my letter of December 31st. When I
receive this information, I will file with you a much more
concise set of facts.
I do wish a hearing on this.
By letter received February 18, 1988, Appellant filed a more
complete statement of its case in the form of a Complaint.
Respondent, in turn, filed its Answer to this latter
communication on April 5, 1988. A subsequent prehearing
conference was held on April 27, 1988. At the conference, the
Board requested that a statement be obtained from Mr. James E.
Olson respecting certain issues. Mr. Olson's response is set
forth in a Declaration made under penalty of perjury. The
Declaration was received by the Board on June 15, 1988, and
states as follows:
1. I currently hold the position of Printing Specialist,
Atlanta Regional Printing Procurement Office, U.S. Government
Printing Office.
2. Purchase Order 9938, Jacket No. 736-202, was awarded to
Pennsylvania Printed Products Company, Inc. (PPP) on September
22, 1987.
3. The specifications called for PPP to deliver (not ship) the
completed product on October 23, 1987, and allowed a
production schedule of 30 calendar days.
4. On October 15, 1987, only six working days before the
delivery date, Bill Brehm, the President of PPP called me with
the concern that he was not printing the job correctly. After
talking with him and Melodie Ramson [sic] of the Miami office
of the U.S. Postal Service, I advised Mr. Brehm to put the job
on hold and send a sample of his work to myself and the Postal
Service.
5. We examined the sample sent by PPP and concluded that it
was, as Mr. Brehm suspected, printed incorrectly. In
addition, the sample was printed with the wrong color ink.
Had PPP processed this job to completion, it would have been
rejected.
6. The Postal Service, after receiving their sample, now
requested the opportunity to OK a proof before printing, to
prevent any more problems with PPP. The Postal Service also
took the opportunity to make changes in the camera copy.
7. New camera copy was forwarded to PPP on November 3, 1987,
and received by them the next day.
8. On November 24, 1987, Mr. Brehm informed me that he had an
OK proof from the Postal Service, which he had received
November 19, 1987. We discussed reestablishing the delivery
date and Mr. Brehm agreed to complete and ship (not deliver)
the job in the first week in December. The reestablished ship
schedule was confirmed by Mr. Brehm in his letter of November
24, 1987, where he agreed to ship by December 4, 1987 (which
was 30 calendar days from receipt of new camera copy).
9. If there was any delay in completing the contract, it was
caused by PPP. At the time PPP advised us that they were
producing the job incorrectly, they had 6 working days left to
complete and deliver the order. On November 19, 1987, when
PPP got the OK from the Postal Service they had a full 10
working days in which to produce and ship the job.
10. The reason no change order or contract modification was
issued was because we had a letter from PPP confirming the
ship date, and because Mr. Edridge, the Assistant Manager and
myself did not agree that all costs billed by PPP were in fact
due, or were fair and reasonable. We decided to negotiate
after the job was delivered and approved by the Postal
Service.
A copy of the said Declaration was served upon Appellant by
mail from Government counsel that same day.
By letter, dated July 27, 1988, Appellant served
Interrogatories and Requests for Admissions upon Mr. Olson
through this Board. Subsequently, extended discovery was
conducted by both parties, culminating in a submission from
Appellant, entitled "Summary of Facts," setting forth
Appellant's final argument which was received by this Board on
July 31, 1989. A copy of this submission was furnished to
Respondent by the Board. However, no response was received
from Respondent. Accordingly, by letter, dated October 31,
1989, received by the Board on November 8, 1989, Appellant
demanded a directed judgement in its favor as follows:
We have and still are seeking a judgement for the following
amount:
Origional [sic] Quoted Amount: $3997.00
Additional costs per letter of Nov.24, 1987: $2464.00
Factoring costs @ 1.5% per month (24 MONTHS) $2326.33
TOTAL AMOUNT: $8787.33
The Appeal comes now before the Board in this form for
decision.
DISCUSSION
The Board disagrees with the Government's computation of
Appellant's entitlement to time for its performance of the
contract. The facts presented show that the Appellant, under
the terms of the purchase order, was entitled to 29 days to
perform its work; i.e., from September 25, 1987, the date by
which the Government was to furnish materials, until October
23, 1987, the date in which delivery was to be made in-hand.
The facts also show that the instructions given to Appellant
on the illustrations furnished as attachments to the original
camera copy respecting the placement of blue ink were facially
ambiguous, notwithstanding the Government's allegations
concerning defects in Appellant's performance of the original
work. Thus, in this Board's view the point at which the
Government furnished replacement copy and a new construction
model marked the commencement of an entirely new 29 calendar
day period of time for contractor performance, with the
contractor being entitled to be paid for all previous work
performed prior to that date as an additional cost over and
above the contract price. Finding this to be the case, the
commencement date for performance was November 4, 1987, with
the completed product due delivered "in-hand" by December 3,
1987, subject to any additional time to which Appellant was
contractually entitled for Government delay.
The Government denies causing any such delay; however, the
Government, by its own admission, requested black and white
proofs from Appellant on the same date the second set of
camera copy and construction model were received; i.e.,
November 4, 1987. The proofs were furnished to the Government
at some point thereafter and returned to the Contractor with
an "OK to print" on November 19, 1987. Examining this in the
light of the fact that the contract terms have no requirements
for proofs, we conclude that the Government, while entitled to
make such request under Article 2-2, entitled "Changes," of
Contract Terms No. 1 (GPO Publication 310.2, Revised October
1, 1980, incorporated into the contract by reference),
nevertheless caused a 15 calendar day delay for the
Contractor.
Applying the provisions of Contract Terms No. 1, we find that
pursuant to Article 2-11.(c), entitled "Extension of
schedules," Appellant was entitled to have the shipping
schedule automatically extended by the total number of
workdays that work was delayed, plus a grace period of one
workday for each day of delay, not to exceed three workdays.
Examining our 1987 calendar, we find that there was an 11-
workday delay, excluding Saturday, Sunday, and the Veterans'
Day holiday. Accordingly, Appellant was entitled to a 14-
workday extension of schedule. Therefore, adding the 14
workdays to the due date of December 3, 1987, brings the
contractual due date to December 22, 1987, unless there was a
valid, enforceable agreement between the parties to modify
that date.
Examining the file in this regard to see whether the
"agreement" respecting the December 4, 1987, date constituted
such an "enforceable agreement," we note that there is no
evidence in the file of the exchange of any additional legal
consideration between the parties concerning an accelerated
delivery date. Thus, it appears to the Board that while a
delivery date of December 4th was used by the parties and
certainly was mentioned by the Appellant in its letter of
November 24, 1987, such use and mention was without legal
force and effect. Given this analysis, the Board holds that
the Appellant was not in default at the time of the
termination. Accordingly, it reverses the Contracting
Officer's decision in its entirety. The Board remands the
case back to the Contracting Officer with direction to convert
the termination to one of convenience for the Government with
negotiated settlement of payment to be made to Appellant
accordingly. Reversed and remanded.
It is so Ordered.