U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
WASHINGTON, D.C. 20401
In the Matter of )
)
The Appeal of )
)
SHEPARD PRINTING ) Docket No. GPO BCA 37-92
Program B717-S )
Purchase Order 91595 )
DECISION AND ORDER
By letter dated October 2, 1992, Shepard Printing, 620-G East
Diamond Avenue, Gaithersburg, Maryland 20877 (Appellant or
Contractor), filed a timely appeal from the September 18,
1992, final decision of Contracting Officer Linwood Imlay, of
the U.S. Government Printing Office's (Respondent or GPO or
Government) Printing Procurement Department, Washington, DC
20401, rejecting the Appellant's request for an equitable
adjustment of $11,979.38, representing the Contractor's loss
of anticipated profits, when the Government failed to place an
order for a Department of Labor (DOL or customer agency)
Annual Report under its contract identified as Program B717-S,
Purchase Order 91595 (R4 File, Tabs H and K).1 For the
reasons which follow, the decision of the Contracting Officer
is hereby AFFIRMED, and the appeal is DENIED.2
FINDINGS OF FACT3
1. On June 21, 1991, the Respondent issued an Invitation for
Bids (IFB), soliciting bids on a single-award, term contract
for the production and distribution of DOL General Wage
Determination Reports (GWDRs), consisting of 52 Weekly Updates
and an Annual Report (three volumes) (R4 File, Tab A, p. 5).4
The contract covered the period August 1, 1991 through July
31, 1992 (R4 File, Tab A, p. 1).
2. Among other specifications, the contract contained a
"Requirements" clause, which stated, in pertinent part:
This is a requirements contract for the items and for the
period specified herein. Shipment/delivery of items or
performance of work shall be made only as authorized by
orders issued in accordance with the clause entitled
"Ordering". The quantities of items specified herein are
estimates only and are not purchased hereby. Except as may
be otherwise provided in this contract, if the Government's
requirements for the items set forth herein do not result
in orders in the amounts or quantities described as
"estimated", it shall not constitute the basis for an
equitable price adjustment under this contract.
Except as otherwise provided in this contract, the
Government shall order from the contractor all the items
set forth which are required to be purchased by the
Government activity identified on page 1 (R4 File, Tab A,
p. 4.)5
[Emphasis added.]
3. On August 6, 1991, the Respondent issued Purchase Order
91595 to the Appellant awarding it a contract for the contract
price of $90,193.00 (R4 File, Tab D). It is undisputed that
during the contract term the DOL issued print orders for the
Weekly Updates, which were fulfilled by the Contractor. See,
Report of Prehearing Conference (April 30, 1993), p. 3 (PCR).
However, the record also shows that on July 24, 1992, during
the term of the Appellant's contract, the DOL submitted 60
Printing and Binding Requisitions (Form SF-1) (hereinafter
SF-1s) to the Respondent for the printing and publication of
GWDRs, which were produced by GPO at its own facility.6 PCR,
pp. 5-6.
4. The DOL did not issue any print order for the three
volume Annual Report during the contract period. PCR, p. 3.
The reason the DOL did not order the Annual Report in 1992,
"as per the contract," was that the customer agency:
. . . changed computer systems; during the process the
system failed, losing much data. The past few months have
been spent in getting it up and running, hoping to put out
the next Annual Report by December or January this year (R4
File, Tab I).
5. On August 13, 1992, after the disputed contract had
expired and the work had been awarded to a different printer
under a new contract, the Appellant telephoned the Contracting
Officer and raised the matter of compensation for the Annual
Report, even though it was never ordered by the DOL (R4 File,
Tab E). In response, the Contracting Officer told the
Appellant to submit a proper claim for his consideration,
although he also expressed the opinion that since such
requirements are estimates only, claims of this nature are
generally denied (R4 File, Tab E).
6. Accordingly, on August 24, 1992, the Contractor sent a
letter to the Contracting Officer by facsimile transmission,
seeking an equitable adjustment in the amount of $11,979.38
"because of the [G]overnment's failure to order the [A]nnual
[R]eport, a specified requirement of the contract[.]" (R4
File, Tab F). In filing its claim, the Appellant reasoned:
[The "Requirements" clause of the contract] . . . states in
part that: ". . . If the Government's requirements for the
items set forth herein do not result in orders in the
amounts or quantities described as 'estimated,' it shall
not constitute the basis for an equitable price adjustment
under this contract.". . . .The Annual Report is not an
estimated requirement but is a major part of the contract
that represents approximately 36 percent of the bid price.
The deletion of this requirement by the Government is
tantamount to a constructive change to the contract and our
company is entitled to recover anticipated profits because
the Government is going to procure this item
from a successor contractor to satisfy its requirement (R4
File, Tab F). [Emphasis added.]
7. The following day, when the Appellant telephoned the
Contracting Officer to see if he had received the claim, it
was advised that the Respondent would not issue a change order
because:
The contract is a requirements contract for estimated
quantities. The quantity [of] requirements represent[s]
the best estimate of forecast needs furnished by the [DOL]
to GPO. The quantities are estimates only. The
[Government] simply agrees that for the stated period it
will use the contract to satisfy its actual requirements
which may be more or less than the estimate (R4 File, Tab
G). [Original emphasis.]
8. On September 18, 1992, the Contracting Officer issued a
written final decision rejecting the equitable adjustment
claim, essentially for the following reasons: (1) this was a
requirements contract and the items covered were "estimates
only;" (2) the contract quantities were reasonable estimates
based on the past history of the program and DOL's previous
orders; and (3) no print order was issued for the Annual
Report because of a good faith decision by the Government to
reduce its activity due to an unanticipated change in its
situation ((R4 File, Tab H). Specifically, the Contracting
Officer told the Appellant:
As you pointed out, the Government originally estimated
that during the term of the contract there would be one
order placed for the Annual
Report consisting of three volumes; however the order was
never placed.
This is a requirements contract. . . .[As stated in the
"Requirements" clause], the quantities are estimates only.
The Government agrees that for the stated time period, it
will use the contract to satisfy its actual requirements,
which may be more or less than the estimate. The estimated
quantities are based on the past history of the contract
and the agencies [sic] estimated quantities.
The contractor is not entitled to compensation if the
Government's failure to place orders results from either
risks assumed by the contractor or good faith decisions of
the Government to reduce its activity because of
unanticipated changes in its situation. Therefore, your
request for an equitable adjustment is denied.
9. On October 2, 1992, the Contractor appealed the
Contracting Officer's final decision of September 18, 1992, to
the Board (R4 File, Tab K).
ISSUES PRESENTED
As indicated by the Board at the close of the presubmission
conference held on February 11, 1993, three questions are
presented by the facts in this case:
1. Are covered items treated as separate entities under a
"Requirements" clause, or are the specified estimated
quantities controlling, if they are in good faith?
2. If the Annual Report was a separate requirement under
the contract, did the DOL's failure to place an order for
it amount to a change in the terms of the contract, and if
so, is the Appellant entitled to an equitable adjustment
for the profits it lost because of the Government's
omission?
3. Were the SF-1s issued by the DOL on July 24, 1992,
during the term of the Appellant's contract, covered by the
Contractor's agreement, so that GPO breached the contract
by printing the material in-house?
See, PCR, pp. 6-7.
POSITION OF THE PARTIES7
The central question in this appeal involves the proper
interpretation of the "Requirements" clause of the contract.
Appellant maintains that the plain meaning of so much of that
clause which says that an equitable price adjustment can not
be based on the failure of the Government to place orders ". .
. for the items . . . in the amounts or quantities described
as 'estimated'", is that the sentence refers only to changes
in the "estimated" amounts or quantities, but not to the item
itself.8 PCR, pp. 4-5. The essence of the Appellant's
argument is its belief that "a 'requirement' is a need not an
estimate." App. Brf., p. 1. The Contractor contends that
since the Annual Report is a requirement and is listed as a
separate item in the contract's "Schedule of Prices," not
placing an order for the Annual Report and eliminating it
altogether, amounts to a change in the contract by the
Government. App. Brf., p. 2; App. R. Brf., p. 1. Thus, the
Appellant also believes that the "Requirements" clause is
inapposite to the facts of this case; i.e., a total failure to
order a listed item. PCR, p. 5.
With regard to the second issue, the Contractor contends that
when the DOL did not place an order for the Annual Report it
effectively eliminated more than a third of the printing
required under the contract, and caused the Appellant a loss
in estimated profits. PCR, p. 5. The Appellant argues that
the DOL's failure to order the Annual Report amounted to a
change in terms of the contract, for which it was entitled to
an equitable adjustment from the Government for its lost
profits.9
Finally, the Appellant contends that the SF-1s issued by the
DOL on July 24, 1992, during the term of its contract, were
covered by the agreement and should have been ordered from the
Contractor. PCR, pp. 5, 7, fn. 6; March Letter, p. 2.
Because GPO printed the GWDRs requisitioned in-house, instead
of placing the order under the contract, the Appellant
believes that the Respondent breached its agreement, and
harmed it by increasing the Contractor's loss of profits.
PCR, pp. 5, 7, fn. 6; March Letter, pp. 1, 2. Accordingly,
for all of these reasons, the Appellant believes that it is
entitled to an equitable adjustment in this case.
The Respondent, on the other hand, takes the view that no
equitable adjustment is warranted in this case because the
"estimates" language in the "Requirements" clause applies to
both the items named and the quantities given for them. PCR,
p. 4. In that regard, the Respondent argues that the settled
law of requirements contracts merely obligates the Government
to fill all of its actual needs for a particular item from the
contractor during the contract term. Res. Brf., p. 5 (citing,
Shader Contractors, Inc. v. United States, 149 Ct.Cl. 535,
538, 276 F.2d 1, 4 (1960)). More importantly, under the law
the contractor, not the Government, assumes the risk that the
covered items and quantities might not be ordered. PCR, p. 4;
Res. Brf., p. 5 (citing, Medart, Inc. v. Austin, 967 F.2d 579
(Fed. Cir. 1992); Res. R. Brf., p. 2. Indeed, GPO says that
the law presumes that a contractor bidding on a requirements
contract takes into consideration the possibility that the
amount of work actually produced might vary from the estimates
in the solicitation. Res. Brf., p. 6 (citing, Propane
Industrials, Inc. v. General Motors Corporation, 419 F.Supp.
214, 218 (W.D. Mo. 1977); Shader Contractors, Inc. v. United
States, supra, 149 Ct.Cl. at 538, 276 F.2d at 4; B & W Press,
GPOCAB 9-83 (March 8, 1984)).10 Thus, so long as the failure
to place any orders at all under a requirements contract is
bona fide, and the contractor is used to fill any needs the
Government does have, there is no liability for unordered
supplies. Res. Brf., p. 6 (citing, Folge & Company v. United
States, 135 F.2d 117 (4th Cir. 1943); National Laundry Company
v. United States, 63 Ct.Cl. 626 (1927); AGS-Genesys
Corporation, ASBCA No. 35302, 89-2 BCA � 21,702; Alamo
Automotive Service, Inc., ASBCA No. 8815, 63 BCA � 3,3830;
Metro Industrial Painting Corporation, ASBCA No. 6328, 62 BCA
� 3,343); Res. R. Brf., pp. 2-3. Consequently, since it is
undisputed that the DOL's failure to order the Annual Report
in this case was due to the unexpected computer system
breakdown, and as the Government used the Appellant to fulfill
all of its other requirements under the contract, the
Respondent believes that there is no merit to the Contractor's
equitable adjustment claim, and it should be dismissed.11
PCR, p. 4; Res. Brf., pp. 6-8; Res. R. Brf., p. 3.
The Government's failure to write print orders from the July
SF-1s and place them with the Appellant is a totally different
matter.12 In that regard, the Respondent believes that the
Appellant's breach of contract argument must fail for three
reasons: (1) the Board is without jurisdiction to entertain
it; (2) the Contractor has not exhausted its administrative
remedies; and (3) even if the Board has jurisdiction, the
Government did not violate any of the Appellant's contractual
rights by printing the material in-house. Res. Brf., pp.
8-11. First, the Respondent contends that since the Board is
not a creature of the Contract Disputes Act of 1978 (CDA),
Pub. L. 95-563 (November 1, 1978), 92 Stat. 2383, 41 U.S.C. �
601 et seq., but rather takes its authority from the
"Disputes" clause, GPO Contract Terms, Contract Clauses, � 5,
breach of contract claims are beyond its jurisdiction. Res.
Brf., pp. 8-9 (citing, United States v. Utah Construction and
Mining Company, 384 U.S. 394 (1966); E & E.J. Pfotzer,
Engineers, ENGBCA No. 2656, 65-2 BCA � 5,144; Alco Lumber
Company, ASBCA No. 9641, 1964 BCA � 4,349; Jack Clark, ASBCA
No. 3672, 57-2 BCA � 1,402; Harbor Printing & Copy Service,
Inc., GPOCAB 77-5 (1977); Cloverleaf Enterprises, Inc., GPOCAB
79-12 (1980); Information Systems, Inc., GPOCAB 78-11 (1979)).
See also, The Wessel Company, Inc., supra, Sl. op. at 32-35,
46.
Second, the Respondent argues that the Appellant's allegations
relating to the SF-1s are a new claim, unrelated to its
initial appeal, which should have been presented to the
Contracting Officer for a final decision. Res. Brf., p. 9
(citing, GPO Contract Terms, Contract Clauses, � 5). Because
the Contractor failed to raise its claim with the Contracting
Officer first, the Board is deprive of jurisdiction to hear
it. Id. (citing, Board Rules, Preface to Rules, � I,
Jurisdiction for Considering Appeals).
Finally, the Respondent believes that even if the Board had
jurisdiction to entertain the SF-1 claim, there is no basis
under the law to grant relief. Res. Brf., p. 10. The
Respondent contends that the "Requirements" clause only
applies to items "which are required to be purchased by the
Government[.]" (R4 File, Tab A, p. 4). Id. [Emphasis added.]
While that phrase requires use of the contractor to fill
outside needs once a decision to purchase is made, it does not
prevent the Government deciding not to buy at all, or to
produce the work with its own personnel.13 Id. (citing,
Trans-Student Lines, Inc., ASBCA No. 20230, 75-1 BCA � 11,343;
Applied Painting and Decorating Company, ASBCA Nos. 15919,
16252 and 16332, 73-2 BCA � 10,358; Export Packing & Crating
Company, ASBCA No. 16133, 73-2 BCA � 10,066). Furthermore,
that language gives the Government broad discretion in making
such decisions, and requires a showing of bad faith before
recovery will be allowed on the basis of non-orders.14 Id.
(citing, Arcon-Pacific Contractors, ASBCA No. 25057, 82-2 BCA
� 15,838). Accordingly, the Respondent contends it was
authorized by law to print the SF-1s in-house, and it urges
the Board to dismiss the breach of contract portion of this
appeal. Res. Brf., p. 11.
CONCLUSIONS15
Although the "Requirements" clause issues were refined
into two separate questions at the prehearing conference-
i.e, (1) whether the Government's "requirements" refers
to the specified items ordered or its good faith
estimates; and (2) if the categories of supplies control,
did DOL's failure to order the Annual Report change in
terms of the contract, entitling the Appellant to an
equitable adjustment-in reality only one question is
presented here, namely, what is the scope and meaning of
the "Requirements" clause as applied to the facts of this
case? Since the parties have drawn different meanings
from the disputed language, the Board's task is simple-it
must determine which of the two conflicting
interpretations is correct, or whether both readings may
be reasonably derived from the contract specifications;
in other words, is the contract ambiguous?16
Since the focus of inquiry in this case is confined to the
contract itself, see, RD Printing Associates, Inc., supra, Sl.
op. at 9, 13, fns. 9 and 15; B. P. Printing and Office
Supplies, supra, Sl. op. at 15, certain legal principles
should be kept in mind at the outset. When the parties
confront the Board with two different interpretations of the
same contract language they raise the possibility that the
specifications may be ambiguous. R.C. Swanson Printing and
Typesetting Company, GPO BCA 31-90 (February 6, 1992), Sl. op.
at 41, aff'd on other grounds, Richard C. Swanson, T/A R.C.
Swanson Printing and Typesetting Company v. United States,
Cl.Ct. No. 92-128C (October 2, 1992). Contractual language is
ambiguous if it will sustain more than one reasonable
interpretation.17 Fry Communications, Inc./ InfoConversion
Joint Venture, GPO BCA 9-85, Decision on Remand (August 5,
1991), Sl. op. at 9; R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 41, fn. 22; General Business Forms,
Inc., supra, Sl. op. at 16. See also, Fry Communications,
Inc./InfoConversion Joint Venture v. United States, supra, 22
Cl.Ct. at 503 (citing, Edward R. Marden Corporation v. United
States, 803 F.2d 701, 705 (Fed. Cir. 1986); Sun Shipbuilding &
Drydock Co. v. United States, 183 Ct.Cl. 358, 372 (1968)). In
analyzing disputed contract language, the courts and contract
appeals boards place themselves in the shoes of a reasonably
prudent contractor; i.e., the language of the contract must be
given that meaning which a reasonably intelligent contractor
acquainted with the circumstances surrounding the contract
would derive. General Business Forms, Inc., supra, Sl. op. at
18 (citing, Salem Engineering and Construction Corporation v.
United States, 2 Cl.Ct. 803, 806 (1983)). See also, Norcoast
Constructors, Inc. v. United States, 448 F.2d 1400, 1404, 196
Ct.Cl. 1, 9 (1971); Firestone Tire and Rubber Company v.
United States, 444 F.2d 547, 551, 195 Ct.Cl. 21, 30 (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.18 Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl.Ct. at 503
(citing, Edward R. Marden Corporation v. United States, supra,
803 F.2d at 705); R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 41, fn. 22. 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.19 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 (1970); WPC Enterprises, Inc. v. United
States, 163 Ct.Cl. 1, 6 (1963)); General Business Forms, Inc.,
supra, Sl. op. at 17 (citing, Enrico Roman, Inc. v. United
States, 2 Cl.Ct. 104, 106 (1983)).
However, the rules concerning 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. R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 42. The most basic principle of
contract construction is that the document should be
interpreted as a whole.20 Hol-Gar Manufacturing Corporation
v. United States, 169 Ct.Cl. 384, 388, 351 F.2d 972, 975
(1965); General Business Forms, Inc., supra, Sl. op. at 16;
Restatement (Second) Contracts, � 202(2) (1981). Hence, all
provisions of a contract should be given effect and no
provision is to be rendered meaningless. Pacificorp Capital,
Inc. v. United States, supra, 25 Cl.Ct. at 716; United States
v. Johnson Controls, Inc., 713 F.2d 1541, 1555 (Fed. Cir.
1983); Fortec Constructors v. United States, 760 F.2d 1288,
1292 (Fed. Cir. 1985); Jamsar, Inc. v. United States, 442 F.2d
930 (Ct.Cl. 1971); Grace Industries, Inc., ASBCA No. 33553,
87-3 BCA � 20,171; General Business Forms, Inc., supra, Sl.
op. at 16 (citing, Raytheon Company v. United States, 2 Cl.Ct.
763 (1983)). 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.21 B. D. Click Company
v. United States, 614 F.2d 748 (Ct.Cl. 1980).
Applying these principles to the facts in the record, the
Board reaches the following conclusions:
A. The contract language in question is not ambiguous. The
"Requirements" clause in the Appellant's contract is a
standard one. Thus, the rights and obligations of the
parties are those traditionally defined by such clauses.
Accordingly, the DOL's failure to place an order for the
Annual Report did not change the terms of the contract, and
the Appellant is not entitled to an equitable adjustment in
this case.
This is a very simple case. Notwithstanding the painstaking
efforts of the Appellant to construe the contract's
"Requirements" clause, the Board does not see any ambiguity in
its terms. Cf., R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 43-44; Export Packing & Crating
Company, supra, 73-2 BCA � 10,066, at 47,215. In that regard,
the Board's research discloses that the relevant GP2O
language, except for minor word differences, copies the
standard "Requirements" clause set forth in the Federal
Acquisition Regulation (FAR) for Executive branch
procurements.22 See, FAR � 52.216-21 (Requirements). Perhaps
more importantly, the disputed clause is, for all practical
purposes, a verbatim republication of the "Requirements"
clause found in Executive branch contracts prior to 1984.23
There is no confusion in the case law about the scope and
meaning of its terms.
The United States Claims Court (Claims Court) has
consistently defined a requirements contract as a:
. . . contract in which the purchaser agrees to buy all of
its needs of a specified material from a particular
supplier, and the supplier agrees, in turn, to fill all of
the purchaser's needs during the period of the contract.
Inland Container, Inc. v. United States, 206 Ct.Cl. 478,
482-483, 512 F.2d 1073 (1975); Ready-Mix Concrete Co., Ltd.
v. United States, 141 Ct.Cl. 168, 169, 158 F.Supp. 571
(1958); Gemsco, Inc. v. United States, 115 Ct.Cl. 109
(1950); Johnstown Coal & Coke Co. v. United States, 66
Ct.Cl. 616 (1929).
See, Media Press, Inc. v. United States, 215 Ct.Cl. 985, 986
(1977).24 As explained by the Claims Court in Torncello:
Requirements contracts also lack a promise from the buyer
to order a specific amount, but consideration is furnished,
nevertheless, by the buyer's promise to turn to the seller
for all such requirements as do develop. Such contracts
clearly are enforceable on that basis. Brawley v. United
States, 96 U.S. 168, 172, 24 L.Ed. 622 (1878); Shader
Contractors, Inc. v. United States, 149 Ct.Cl. 535, 540-43,
276 F.2d 1, 4-6 (1960); Gavin at 244-48 [Gavin, Government
Requirements Contracts, 5 Pub.Cont.L.J. 234 (1972)]. The
entitlement of the seller to all of the buyer's
requirements is the key, for if the buyer were able to turn
elsewhere for some of its needs, then the contract would
not be distinguishable from an indefinite quantities
contract with no stated minimum, unenforceable as we have
stated.
Torncello v. United States, 681 F.2d at 761-62. [Emphasis
added.]
Thus, the earmark of a requirements contract is the existence of
an exclusive relationship between the contractor and the
Government; i.e., an understanding that the contractor has the
exclusive right and legal obligation to fill all of the
Government's needs for the work of the kind described in the
contract, and that the Government will purchase those needs from
no one other than the contractor. Ralph Construction, Inc. v.
United States, supra, 4 Cl.Ct. at 731; Torncello v. United
States, supra, 681 F.2d at 761; Automated Services, Inc., DOTBCA
No. 1753, 87-1 BCA � 19,459, at 98,350; Dynamic Science, Inc.,
supra, 85-1 BCA � 17,710, at 88,383.
While a requirements contract creates an exclusive
relationship between the Government and the contractor, it is
not a guarantee either of the volume of work,25 or any work at
all. Under the terms of a "Requirements" clause such as the
one here, the Government's obligations are merely to exercise
due care in preparing its estimates,26 see, Crown Laundry and
Dry Cleaners, Inc. v. United States, 39 CCF � 76,575 (Fed.Cl.
September 22, 1993); Dynamic Science, Inc., supra, 85-1 BCA �
17,710; Huff's Janitorial Service, ASBCA No. 26860, 83-1 BCA �
16,518, and to order from the contractor, and no one else, the
supplies or services "required to be purchased" by the
ordering activity, Skip Kirchdorfer, Inc., supra, 83-2 BCA �
16,713, at 83,138; Trans-Student Lines, Inc., supra, 75-1 BCA
� 11,343, at 54,027. In the absence of bad faith, the
Government does not have to order supplies or services which
are not needed or which can be provided in-house. See, Skip
Kirchdorfer, Inc., supra, 83-2 BCA � 16,713, at 83,138; Arcon-
Pacific Contractors, supra, 82-2 BCA � 15,838, at 78,516;
Trans-Student Lines, Inc., supra, 75-1 BCA � 11,343, at 54,027
(citing, Export Packing & Crating Company, supra, 73-2 BCA �
10,066; Machlett Laboratories, Inc., ASBCA No. 16194, 73-1 BCA
� 9,929).
One of the cases cited by the Respondent for the principle
that so long as the Government acts in good faith, it is not
liable to a contractor for a failure to place any orders at
all under a requirements contract-AGS-Genesys Corporation,
supra, 89-2 BCA � 21,702-seems to be precisely on point with
the facts here. In that case, the U.S. Air Force (Air Force)
entered into a term contract with the contractor for the
provision of support services on a computer data base
management system called "FOCUS". AGS-Genesys Corporation,
supra, 89-2 BCA � 21,702, at 109,106. The basic contract term
was seven (7) months, with two additional one year options.
Id. The contract also contained the standard FAR
"Requirements" clause. See, FAR � 52.216-21 (Requirements).
Id., at 109,107. When the contract was awarded, the Air Force
believed that another computer system-"CESAC" (communications-
electronics scheme accounting and distribution system)-would
utilize "FOCUS". Id., at 109,106. Although the Air Force
ordered "FOCUS" services in the two option years, no such
orders were placed during the basic term of the contract.
Id., at 109,107. One of the reasons for the failure to place
such orders was that the "CESAC" system was developed on a
computer that did not use "FOCUS"; the Air Force, however, did
not change its contract estimates. Id., at 109,106. After
the basic term of the contract expired, the contractor filed a
claim with the Air Force to recover its costs, including
overhead, direct labor, training, claim preparation, and the
loss of anticipated profits. Id., at 109.107-08. On appeal
to the ASBCA from the contracting officer's denial of the
claim, the contractor alleged, inter alia, that the
Government's failure to place orders for "FOCUS" services
amounted to a change in requirements. In dismissing the
appeal, the ASBCA reasoned:
When the Government enters into a requirements contract
that provides, as this one does, that the Government will
order from the contractor all the services required to be
purchased by the Government, all that is guaranteed is that
the Government will order whatever its outside purchase
needs are and that the estimates were made in good faith
with the exercise of due care. [Citations omitted.] . . .
The very nature of a requirements contract mandates its use
when the future is uncertain concerning the Government's
requirements. If existing needs were certain, a
requirements contract would not be necessary. While it is
unfortunate that a requirement did not arise in the basic 7
month term of the contract . . . there is no proof that the
Government failed to exercise due case in its estimate or
took any action in bad faith. [Citation omitted.]
Appellant's second argument that the Government changed its
requirements after award is without merit. . . . Neither
have we any evidence that the Government changed its
requirements. [The Air Force contracting activity] was not
responsible for ["CESAC"] being developed on a system other
than ["FOCUS"], and in any event the contract said nothing
about work on any particular tasks or systems. There was
no provision in the contract that required the Air Force to
develop any system using ["FOCUS"].
AGS-Genesys Corporation, supra, 89-2 BCA � 21,702, at 109,108.
[Emphasis added.] See also, Sanford & Sons Company, ENGBCA Nos.
5515, 5516, 5519, 90-1 BCA � 22,455 (the contractor was not
entitled to any equitable compensation because of the
Government's failure to order certain services under its
requirements contract).
In the Board's view, the ASBCA's rationale in AGS-Genesys
Corporation is equally applicable to this dispute. Simply
stated, there is no proof here that the Government failed to
exercise due care when it prepared an estimate of its needs or
that it took any action in bad faith which deprived the
Appellant of an opportunity to print the Annual Report;
indeed, the Appellant has not alleged bad faith on the part of
either DOL or GPO in this case. Trans-Student Lines, Inc.,
supra, 75-1 BCA � 11,343, at 54,027. Furthermore, there is no
evidence that the Government changed its requirements under
the circumstances of this case; i.e., there is nothing to show
that the DOL changed its mind about its need for an Annual
Report, rather it was frustrated in meeting this requirement
because of an unexpected computer breakdown (R4 File, Tab I).
Obviously, if the DOL had decided for any reason, in good
faith, not to procure the Annual Report during the term of the
agreement, the Government would have been legally protected
from liability. AGS-Genesys Corporation, supra, 89-2 BCA �
21,702, at 109,108; Arcon-Pacific Contractors, supra, 82-2 BCA
� 15,838, at 78,516. Consequently, there is no basis to
penalize the Respondent where, as here, no Annual Report was
ordered from the Appellant because of an unplanned computer
breakdown. Accordingly, for these reasons, the Board
concludes that the Contractor's request for an equitable
adjustment in this case is without merit and is denied.27
B. The Board lacks jurisdiction to consider the Appellant's
allegations concerning the SF-1s issued by the DOL on July
24, 1992, because they were not presented to the
Contracting Officer first.
The last issue in this appeal involves the Appellant's
allegation that the SF-1s issued by the DOL on July 24, 1992,
during the term of its contract, were covered by that
agreement and should have been ordered from the Contractor
instead of being printed in-house by the Respondent. Because
of the Government's failure to place those SF-1s with the
Appellant, it amended its original claim of $11,979.38 in
these proceedings, and is now asking for an additional
$9,982.50, or a total of $21,961.88, as an equitable
adjustment. March Letter, p. 2. The Respondent, on the other
hand, contests the Board's jurisdiction over that question,
inter alia, on the ground that the Contractor has not
exhausted its administrative remedies. The Board agrees.
The prerequisite to the Board's assertion of jurisdiction over
an appeal is the issuance of a final decision by a GPO
contracting officer. See, 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 also, Epco Associates, GPO BCA 26-93, Decision and
Order Granting Appellant's Motion Under Rule 1(c) and Staying
Proceedings Under Rule 1(d) (November 18, 1993), Sl. op. at 3
(citing, Associated Contract Specialties Corporation, ASBCA
No. 37437, 90-3 � 23,258; Spruill Realty/Company, ASBCA No.
40477, 90-3 BCA � 23,255). 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. [Emphasis added.]
The jurisdictional rules of the Board parallel those followed
in Executive branch contract appeals under the CDA. See,
e.g., Dawco Construction, Inc. v. United States, 930 F.2d 872,
877 (Fed. Cir. 1991); Santa Fe Engineers, Inc. v. United
States, 818 F.2d 856, 858 (Fed. Cir. 1987), aff'g Santa Fe
Engineers, Inc., ASBCA Nos. 28058 and 29362, 86-3 BCA �
19,092; Tecom, Inc. v. United States, 732 F.2d 935, 937 (Fed.
Cir. 1984); W.M. Schlosser Company v. United States, 705 F.2d
1336, 1338-39 (Fed. Cir. 1983); J.F. Shea Company, Inc. v.
United States, 4 Cl.Ct. 46, 54 (1983); R & E Electronics,
Inc., VABCA Nos. 2227, 2299, 2300, 85-3 BCA � 18,316, at
91,898 (citing, AB-Tech Construction, Inc., VABCA No. 1531,
82-2 BCA � 15,897). In Santa Fe Engineers, Inc., a
construction contractor's claim for "all problems, changes and
directives that were issued on the project", was dismissed
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. Santa Fe Engineers, Inc., supra, 86-3 BCA � 19,092.
The ASBCA's ruling in that case was based on the following
reasoning:
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. For claims of more than
$50,000 there is the further requirement of certification.
41 U.S.C.A. � 605. 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 and certified in accordance with
the Act. [Citations omitted.]
Santa Fe Engineers, Inc., supra, 86-3 BCA � 19,092, at 96,508.
[Emphasis added.] This is not to say that evidence developed
during discovery cannot be the basis for amending an existing and
valid claim. Rather, it is the duty of the trier of fact to
ensure that such an amendment is not, in reality, a new claim.28
See, J.F. Shea Company, Inc. v. United States, 4 Cl.Ct. at 54;
Santa Fe Engineers, Inc., supra, 86-3 BCA � 19,092, at 96,508.
Cf., The Wessel Company, Inc., supra, Sl. op. at 2, fn. 2.
Applying the "essential difference" test of Santa Fe
Engineers, Inc., to the facts of this case, the Board is
convinced that the increased amount of the Appellant's
claim-$9,982.50-based on the Respondent's failure to place the
July 24, 1992, SF-1s with the Contractor, which was not
submitted to the Contracting Officer for decision, represents
a new claim. The record shows that the Appellant's original
claim, which was sent to the Contracting Officer on August 24,
1992, sought an equitable adjustment of $11,979.38 on the
theory that the Government's failure to order the Annual
Report amounted to a constructive change of the contract (R4
File, Tab F). The Contracting Officer's written final
decision letter of September 18, 1992, rejecting the original
claim, solely and specifically addressed the "Annual Report"
issue ((R4 File, Tab H). The appeal filed with the Board on
October 2, 1992, was from the Contracting Officer's final
decision of September 18, 1992 (R4 File, Tab K). However, it
is clear that the Appellant's amended claim relies on a
totally different theory of recovery; i.e., the Appellant
believes that the Government owes it an additional $9,982.50
because the failure to have the SF-1s printed by the
Contractor was in the nature of a breach of contract.29 See,
March Letter, p. 2. In the Board's view, the evidence of
record is compelling that the Appellant has not merely amended
its original claim by asking for more compensation because the
SF-1s were not placed under its contract, but rather it is
seeking to litigate a new claim unrelated to the one denied by
the Contracting Officer. Therefore, to the extent that the
amended claim does not pertain to the allegation concerning
the Government's failure to order the Annual Report, and was
not first submitted to the Contracting Officer for his
decision, it is dismissed.30
ORDER
The Board finds and concludes that the Appellant has not
proved that the Government's failure to order the DOL Annual
Report under its requirements contract changed the terms of
the agreement, and thus the Contractor is not entitled to an
equitable adjustment under the circumstances of this case.
THEREFORE, the decision of the Contracting officer is
AFFIRMED, and the appeal is DENIED. To the extent that the
Appellant seeks an additional equitable adjustment based on
the Government's failure to place the July 24, 1992, SF-1s
with it, that claim is dismissed for lack of jurisdiction.
It is so Ordered.
January 28, 1994 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 November 16, 1992. 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 hereinafter as R4 File, with
an appropriate Tab letter also indicated. The R4 File
consists of eleven (11) documents identified as Tab A through
Tab K.
2 In its Complaint letter of October 28, 1992, the Appellant
advised the Board that it had selected the optional
Accelerated Procedure to process its appeal. Board Rules,
Rules 12.1(b) and 12.3.
3 Decisions under the Accelerated Procedure are normally
brief and contain only summary findings of fact and
conclusions. Board Rules, Rule 12.3(b). In this case,
however, the Board believes that the nature of the
controversy entitles the parties to a fuller explanation of
the facts, issues, and reasons for the Board's decision than
would be found in a typical Accelerated Procedure case. See,
Hurt's Printing Company, Inc., GPO BCA 27-92 (January 19,
1994), Sl. op. at 2, fn. 3; RD Printing Associates, Inc., GPO
BCA 02-92 (December 16, 1992), Sl. op at 2, fn. 3. The Board
also notes that this decision, unlike its opinions under the
Small Claims (Expedited) Procedure, may be cited as precedent
in future appeals. Cf., Graphics Image, Inc., GPO BCA 13-92
(August 31, 1992), Sl. op. at 2, fn. 3; Board Rules, Rule
12.2(d).
4 The "Ordering" clause of the contract provided, in
pertinent part, that: "Items to be purchased under the
contract shall be ordered by the issuance of print orders by
the Government[.]" (R4 File, Tab A, p. 3). Since, the
contract was to be a "direct-deal" arrangement, the DOL would
be responsible for issuance of the print orders during the
term of the agreement (R4 File, Tab A, p. 4). See, Printing
Procurement Regulation, GPO Publication 305.3 (September 1,
1988), Chap. XII, Sec. 1, � 2 (hereinafter PPR).
5 Apart from the usual specifications pertaining to printing,
binding and delivery of the publications in question, the
contract was also governed by applicable articles of GPO
Contract Terms, GPO Publication 310.2, effective December 1,
1987 (Rev. 9-88) (GPO Contract Terms), and GPO's Quality
Assurance Through Attributes Program, GPO Publication 310.1,
effective May 1979 (revised November 1989) (QATAP), which
were incorporated by reference in the Purchase Order (R4
File, Tab A, p. 2).
6 At the prehearing conference held on February 11, 1993, the
Appellant stated that it became aware of these SF-1s from
Betty Williams, DOL's Printing Specialist. PCR, p. 5. The
Appellant argued that since its contract covered GWDRs, the
DOL should have ordered these publications from the
Contractor instead of asking GPO to procure it from other
sources. Id. The Respondent, however, denied that the SF-1s
concerned items covered by the disputed term contract. PCR,
p. 6. The Board believed, on the other hand, that the SF-1s
might be relevant to the central question in the case-Did the
Government fail to meet its obligations under this
requirements contract?-and it directed the Respondent to
submit them as part of the appeal record. Id. Furthermore,
the parties were instructed to review the SF-1s, and to
prepare and submit to the Board within 30 days a joint
stipulation of facts stating the extent to which they were
for purchase of items covered by the Appellant's requirements
contract. Id. By Notice of Filing, dated March 9, 1993,
Counsel for GPO complied with the Board's instructions and
submitted copies of the SF-1s to the Board. The SF-1s show
that they were prepared by the DOL and sent to GPO on July
24, 1992, for the purpose of reprinting of one (1) copy each
of a previous edition of a Weekly Update to accommodate the
needs of the Superintendent of Documents' Sales Program;
indeed, the first 13 SF-1s, and 15 altogether, are for
publications which antedate the Appellant's term contract.
However, the parties were unable to agree on a joint
stipulation. Although the Appellant submitted a letter to
the Board, dated March 12, 1993, entitled "Joint Stipulation
Concerning Examination Sixty (60) Standard Form Ones
(SF-1s)," it was only signed by the Appellant's President,
Daniel Campbell. See, Letter from Daniel Campbell to U.S.
Government Printing Office Board of Contract Appeals, dated
March 12, 1993 (March Letter). Moreover, the document gives
just the Appellant's interpretation of the SF-1s, and amends
the Contractor's claim from the original amount of $11,979.38
to $21,961.88. March Letter, p. 2. Thus, notwithstanding
its caption, the Appellant's March Letter is not a
stipulation of fact, but rather is in the nature of an
amended pleading. Cf., Board Rules, Rule 7(b).
7 Both parties submitted briefs setting forth their
respective positions on the issues in this appeal. On May
24, 1993, the Board received the Appellant's Brief Regarding
Contract Language (hereinafter App. Brf.). The Respondent's
Brief was also submitted to the Board on May 24, 1993
(hereinafter Res. Brf.). In addition, both parties submitted
reply briefs on June 15, 1993 (hereinafter App. R. Brf. and
Res. R. Brf., respectively). The Board's understanding of
the positions of the parties is based on the Appellant's
Complaint, the Appellant's March Letter, the formal briefs
filed by the parties, and the discussions at the prehearing
conference on February 11, 1993.
8 Both at the prehearing conference and in its initial brief,
the Appellant cited two cases-Elden v. United States, 617
F.2d 254, 260-61 (Ct.Cl. 1980), and Timber Access Industries
Company v. United States, 553 F.2d 1250, 1256 (Ct.Cl. 1977)-
in support of the rule of construction which states that
clear and unambiguous contract language must be given its
plain and ordinary meaning by a court in defining the rights
and obligations of the parties. See, PCR, p. 5; App. Brf.,
p. 1. See also, App. R. Brf., p. 1. Furthermore, the
Appellant relies on the current specifications of another
contract, Program 814-M, to buttress its view that estimated
quantities relate to and should be considered on a category
or item basis. App. Brf., p. 2. However, the Board has
ruled on numerous occasions that in interpreting the language
of a particular contract, it will not consider the terms and
specifications of contracts unrelated to the one under review
in the case before it. See, RD Printing Associates, Inc.,
GPO BCA 02-92 (December 16, 1992), Sl. op. at 9, 13, fns. 9
and 15; B. P. Printing and Office Supplies, GPO BCA 14-91
(August 10, 1992), Sl. op. at 15. The reason is that the
Board's authority is purely derivative and contractual, and
is limited to deciding disputes within the parameters of the
contract under review. See, e.g., The Wessel Company, Inc.,
GPO BCA 8-90 (February 28, 1992), Sl. op. at 32-33; Bay
Printing, Inc., GPO BCA 16-85 (January 30, 1987), Sl. op. at
9; Peake Printers, Inc., GPO BCA 12-85 (November 12, 1986),
Sl. op. at 6. Consequently, the Board has no authority to
consider legal questions existing outside the contract
itself. Automated Datatron, Inc., GPO BCA 20-87 (March 31,
1989), Sl. op. at 4-5.
9 As indicated above, in its original claim the Appellant
sought reimbursement in the amount of $11,979.38, for the
Government's failure to order the Annual Report (R4 File,
Tabs F and H). PCR, pp. 4, 5. By letter dated March 12,
1993, the Contractor informed the Board that after examining
copies of the 60 SF-1s which the DOL had sent to GPO on July
24, 1992, and concluding that they concerned publications
which should have been ordered under the Appellant's
requirements contract, it was amending its claim to recover
lost profits in the amount of $21,961.88. March Letter, p.
2. See, note 6 supra.
10 The Board was created by the Public Printer in 1984. GPO
Instruction 110.10C, Subject: Establishment of the Board of
Contract Appeals, dated September 17, 1984. Prior to that
time, appeals from decisions of GPO Contracting Officers were
considered by ad hoc panels of its predecessor, the GPO
Contract Appeals Board (GPOCAB). The Board has consistently
taken the position that it is a different entity from the
GPOCAB. See, The Wessel Company, Inc., supra, Sl. op. at
25, fn. 25. Nonetheless, it has also been the Board's policy
to follow the holdings of the ad hoc panels where applicable
and appropriate, but the Board differentiates between its
decisions and the opinions of those panels by citing the
latter as GPOCAB. See, e.g., Stephenson, Inc., GPO BCA 02-88
(December 20, 1991), Sl. op. at 18, fn. 20; Chavis and Chavis
Printing, GPO BCA 20-90 (February 6, 1991), Sl. op. at 9, fn.
9.
11 In reaching this conclusion, the Respondent rejects the
Appellant's view of the applicable law, i.e., that the
"Requirements" clause only limits the Government's liability
for variations in quantity, and not for failures to order
items. GPO argues that contractor's are not entitled to
relief just because of changed circumstances. Res. Brf., p.
7 (citing, Tennessee Valley Authority v. Imperial
Professional Coatings, 599 F.Supp. 436 (E.D. Tenn. 1984);
Gulf Coast Aviation Company, ASBCA Nos. 10189 and 10380, 65-2
BCA � 4,928; Solano Aircraft Service, Inc., ASBCA Nos. 20677
and 20941, 77-2 BCA � 12,584; East Bay Auto Supply, ASBCA No.
25542, 81-2 BCA � 15,204). Indeed, according to the
Respondent, recovery has been denied where the Government
failed to order any services whatsoever under a requirements
contract. Res. Brf., pp. 7-8 (citing, Henry Barracks Housing
Corporation v. United States, 281 F.2d 196 (Ct.Cl. 1960);
Metro Industrial Painting Corporation, supra, 62 BCA �
3,343); Res. R. Brf., pp. 2-3 (citing, Henry Barracks Housing
Corporation v. United States, supra, 281 F.2d 196; AGS-
Genesys Corporation, supra, 89-2 BCA � 21,702; Metro
Industrial Painting Corporation, supra, 62 BCA � 3,343).
12 It is undisputed that the purpose of these SF-1s was to
allow the Superintendent of Documents to "ride" the order for
more copies for the GPO Documents Sales Program. Res. Brf.,
pp. 2-3 (citing, 44 U.S.C. �� 1705, 1707). See also,
Respondent's Notice of Filing, dated March 9, 1993, note 6
supra.
13 Indeed, the Respondent believes that the language in the
"Requirements" clause only obligates the Government to
purchase its good faith needs, and precludes an equitable
adjustment altogether. Res. Brf., p. 6 (citing, Central Data
Processing, Inc., GPOCAB 74-14 (January 7, 1975), Sl. op. at
4).
14 The Board has held on numerous occasions that because of
the strong presumption that Government officials properly and
honestly carry out their functions, an allegation of bad
faith must be established by "well-nigh irrefragable" proof.
See, e.g., Hurt's Printing Company, Inc., GPO BCA 27-92
(January 21, 1994), Sl. op. at 11, fn. 15; Shepard Printing,
GPO BCA 23-92 (April 29, 1993), Sl. op. at 7, fn. 11; B. P.
Printing and Office Supplies, GPO BCA 14-91 (August 10,
1992), Sl. op. at 16; Stephenson, Inc., supra, Sl. op. at 55;
The Standard Register Company, GPO BCA 4-86 (October 28,
1987); Sl. op. at 12-13. Also see, Karpak Data and Design,
IBCA 2944 et al., 93-1 BCA � 25,360; Local Contractors, Inc.,
ASBCA 37108, 92-1 BCA � 24,491. The key to such evidence is
that there must be a showing of a specific intent on the part
of the Government to injure the contractor. Kalvar
Corporation v. United States, 543 F.2d 1298, 1302 (Ct.Cl.
1976), cert. denied, 434 U.S. 830 (1977); Hurt's Printing
Company, Inc., supra, Sl. op. at 11, fn. 15; Shepard
Printing, supra, Sl. op. at 7, fn. 11; Stephenson, Inc.,
supra, Sl. op. at 54.
15 The record on which the Board's decision is based consists
of: (1) the Appellant's letter, dated October 2, 1992, noting
an appeal from the Contracting Officer's decision; (2) the
Appellant's Rule 6(a) Complaint, dated October 28, 1992; (3)
the R4 File (Tabs A-K); (4) the Board's Order, dated December
29, 1992, entering a "general denial" on behalf of the
Government under Rule 6(b); (5) the Respondent's Notice of
Filing, dated March 9, 1993, including copies of the SF-1s
prepared by the DOL and sent to GPO on July 24, 1992; (6) the
Appellant's letter to the Board, dated March 12, 1993,
entitled "Joint Stipulation Concerning Examination Sixty (60)
Standard Form Ones (SF-1s)"; (7) the Report of Prehearing
Conference, dated April 30, 1993; (8) the Appellant's Brief
Regarding Contract Language, received by the Board on May 24,
1993; (9) the Respondent's Brief, dated May 24, 1993; (10)
the Appellant's Reply Brief, received by the Board on June
15, 1993; and (11) the Respondent's Reply Brief, dated June
15, 1993.
16 Contract interpretation is clearly a question of law, see,
e.g., Pacificorp Capital, Inc. v. United States, 25 Cl.Ct.
707, 715 (1992), aff'd 988 F.2d 130 (Fed. Cir. 1993); Fortec
Contractors v. United States, 760 F.2d 1288, 1291 (Fed.Cir.
1985); P.J. Maffei Building Wrecking Company v. United
States, 732 F.2d 913, 916 (Fed. Cir. 1984); Fry
Communications, Inc.-InfoConversion Joint Venture v. United
States, 22 Cl.Ct. 497, 503 (Cl.Ct. 1991); Hol-Gar Mfg. Corp.
v. United States, 169 Ct.Cl. 384, 386, 351 F.2d 972, 973
(1965); General Business Forms, Inc., GPO BCA 2-84 (December
3, 1985), Sl. op. at 16 (citing, John C. Grimberg Company v.
United States, 7 Ct.Cl. 452 (1985)); RD Printing Associates,
Inc., supra, Sl. op. at 13, as is definition of the contract.
See, Ralph Construction, Inc. v. United States, 4 Cl.Ct. 727,
731 (1984) (citing, Torncello v. United States, 681 F.2d 756,
760 (Ct.Cl. 1982). Any decision by this Board concerning
such a matter is reviewable by the Courts under the
Wunderlich Act, 41 U.S.C. �� 321, 322. Fry Communications,
Inc./ InfoConversion Joint Venture v. United States, supra,
22 Cl.Ct. at 501, fn. 6; General Business Forms, Inc., supra,
Sl. op. at 16.
17 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." Ceccanti, Inc. v. United States, 6
Cl.Ct. 526, 528 (1984). 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.
R.C. Swanson Printing and Typesetting Company, supra, Sl. op.
at 42.
18 In such cases, the doctrine of contra proferentem applies
and the dispute language will be construed against the
drafter, 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)); R.C. Swanson Printing and Typesetting
Company, supra, Sl. 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. Fry
Communications, Inc./InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 510 (citing, Fruin-Colon
Corporation 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).
19 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. Fry
Communications, Inc./InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 504 (citing, Newsom v. United
States, 230 Ct.Cl. 301, 303 (1982)); Enrico Roman, Inc. v.
United States, supra, 2 Cl.Ct. at 106; S.O.G. of Arkansas v.
United States, 546 F.2d 367, 212 Ct.Cl. 125 (1976); Beacon
Construction v. United States, 314 F.2d 501 (Ct.Cl. 1963).
20 The purpose of any rule of contract interpretation is to
carry out the intent of the parties. Hegeman-Harris and
Company, 440 F.2d 1009 (Ct.Cl. 1979). 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. Corbetta
Construction Company v. United States, 461 F.2d 1330, 198
Ct.Cl. 712 (1972). See also, Salem Engineering and
Construction Corporation v. United States, 2 Cl.Ct. 803, 806
(1983). The provisions of the contract itself should provide
the evidence of the objective intent of the parties.
21 It is unnecessary to set forth in detail the rules of
contract construction which apply when interpreting an
agreement. Suffice it to say that, within the contract
itself, ordinary terms are to be given their plain and
ordinary meaning in defining the rights and obligations of
the parties. Elden v. United States, 617 F.2d 254, 223
Ct.Cl. 239 (1980). Similarly, technical terms are given
their technical meaning. Industrial Finishers, Inc., ASBCA
No. 6537, 61-1 BCA � 3,091; Coastal Drydock and Repair
Corporation, supra, 87-1 BCA � 19,618. Likewise, terms
special to Government contracts will be given their technical
meanings. General Builders Supply Company v. United States,
409 F.2d 246, 187 Ct. Cl. 477 (1969) (meaning of "equitable
adjustment"). As for extrinsic evidence of the intent of the
parties, the rules of construction allow, among other things,
custom and trade usage to explain or define terms. W. G.
Cornell Company v. United States, 376 F.2d 199, 179 Ct. Cl.
651 (1967); Harold Bailey Painting Company, ASBCA No. 27064,
87-1 BCA � 19,601 (used to define "spot painting"). However,
custom and trade usage may not contradict clear or
unambiguous terms. WRB Corporation v. United States, 183
Ct.Cl. 409, 436 (1968). On the other hand, the Board is not
bound by what the parties call a contract, Ralph
Construction, Inc. v. United States, supra, 4 Cl.Ct. at 731
(citing, Torncello v. United States, supra, 681 F.2d at 760;
Mason v. United States, 222 Ct.Cl. 436, 444, 615 F.2d 1343,
1346-47 (1980)), and the understanding and actions of
officials administering an agreement are not dispositive,
Salem Engineering & Construction Corporation v. United
States, supra, 2 Cl.Ct. at 808.
22 The relevant provisions of the 1984 revision to the FAR
"Requirements" clause reads as follows: "(a) This is a
requirements contract for the supplies or services specified,
and effective for the period stated, in the Schedule. The
quantities of supplies or services specified in the Schedule
are estimates only and are not purchased by this contract.
Except as this contract may otherwise provide, if the
Government's requirements do not result in orders in the
quantities described as 'estimated' or 'maximum' in the
Schedule, that fact shall not constitute the basis for an
equitable adjustment.". . . "(c) Except as this contract
otherwise provides, the Government shall order from the
Contractor all the supplies or services specified in the
Schedule that are required to be purchased by the Government
activity or activities specified in the Schedule." See, FAR
� 52.216-21(a),(c) (Requirements).
23 The 1966 version of the "Requirements" clause, as set
forth in the Armed Service Procurement Regulation (ASPR),
provided, in pertinent part: "(a) This is a requirements
contract for the supplies or services specified in the
Schedule, and for the period set forth herein. Delivery of
supplies or performance of services shall be made only as
authorized by orders issued in accordance with the clause
entitled 'Ordering'. The quantities of supplies or services
specified herein are estimates only and are not purchased
hereby. Except as may be otherwise provided herein, in the
event the Government's requirements for supplies or services
set forth in the Schedule do not result in orders in the
amounts or quantities described as 'estimated' or 'maximum'
in the Schedule, such event shall not constitute the basis
for an equitable price adjustment under this contract[.]";
and "(b) Except as otherwise provided in this contract, the
Government shall order from the Contractor all the supplies
or services set forth in the Schedule which are required to
be purchased by the Government activity identified in the
'Ordering' clause." ASPR 7-1102.2(a),(b). See, e.g.,
Dynamic Science, Inc., ASBCA No. 29510, 85-1 BCA � 17,710, at
88,378; Skip Kirchdorfer, Inc., ASBCA No. 22997, 83-2 BCA �
16,713, at 83,133-34; Arcon-Pacific Contractors, supra, 82-2
BCA � 15,837, at 78,514. The Armed Services Board of
Contract Appeals (ASBCA) also recognizes a "limited form"
requirements contract, which substitutes the following
language for paragraph (b) above: "Except as otherwise
provided in this contract, the Government shall order from
the Contractor all the supplies or services of the Government
activity named in the Schedule which the activity may itself
furnish within its own capabilities." See, Dynamic Science,
Inc., supra, 85-1 BCA � 17,710, at 88,383; Maya Transit
Company, ASBCA No. 20186, 75-2 BCA � 11,552. Contra, Ralph
Construction, Inc. v. United States, supra, 4 Cl.Ct. at 731.
24 Pursuant to Title IX of the Federal Courts Administration
Act of 1992, Pub. L. No. 102, 106 Stat. 4506 (1992), the
United States Claims Court was renamed the United States
Court of Federal Claims, effective October 29, 1992.
25 This fact is expressly stated in the disputed contract's
"Determination of Award" clause (R4 File, Tab A, p. 10).
26 Since the Appellant has not alleged a lack of due care by
the Respondent in preparing its estimates, that issue is not
before the Board. Cf., Dynamic Science, Inc., supra, 85-1
BCA �17,710, at 88,382.
27 In light of this conclusion, the Board finds it
unnecessary at this time to address whether, as argued by the
Respondent, the "Requirements" clause precludes an equitable
adjustment in any and all cases, and thus adopt the holding
of the GPOCAB in Central Data Processing, Inc. See, note 13
supra. Central Data Processing, Inc., supra, Sl. op. at 4.
On the other hand, the Board is well aware of the rule
followed by the ASBCA which says that a contractor cannot
recover the difference between estimated services and actual
orders where solicitation expressly provides that failure to
order the full estimated quantities would not constitute the
basis for an equitable adjustment. See, e.g., Command Tech
Corporation, ASBCA No. 40318, 90-3 BCA � 23,215.
28 As explained by the Claims Court: "This court and its
predecessor have consistently held that it is a
jurisdictional prerequisite to a direct access suit in this
court that the claim at issue be first certified and
submitted in writing to the contracting officer pursuant to
41 U.S.C. �� 605(a), 605(c)(1). [Citations omitted.]
However, as litigation in this court includes pretrial
proceedings, including discovery, it must be recognized that
additional facts may be developed which could increase or
decrease the amount of a claim. It would be most disruptive
of normal litigation procedure if any increase in the amount
of a claim based upon matters developed in litigation before
the court had to be submitted to the contracting officer
before the court could continue to a final resolution on the
claim. In this circumstance, it has been ruled that, after
certification is complete, a contractor is not precluded from
changing the amount of the claim or producing additional data
in support of increased damages. [Citation omitted.] A
plaintiff must be precluded, however, from raising any new
claim before this court which was not previously presented
and certified to the contracting officer for decision.
[Citation omitted.]". See, J.F. Shea Company, Inc. v. United
States, 4 Cl.Ct. at 54.
29 Thus, the Appellant writes in its March Letter: "In light
of the new evidence revealed, Shepard Printing is entitled
not only to the money lost due to the Government's failure to
procure the Annual Report, but it is also entitled to the
money lost due to placing the SF-1s dated 7-24-92 off
contract." March Letter, p. 2. [Emphasis added.]
30 In light of the Board's disposition of the Appellant's
amended claim, it does not have to address the other arrow in
the Respondent's jurisdictional quiver, namely, that the
Board is without jurisdiction to consider and decide breach
of contract claims. See, R.C. Swanson Printing and
Typesetting Company, GPO BCA 15-90 (March 6, 1992), Sl. op.
at 41; See also, The Wessel Company, Inc., supra, Sl. op. at
46. However, the Board is aware of the rule which holds that
damages are only awarded for breaches of requirements
contracts where there is bad faith or an abuse of discretion
on the part of the Government; otherwise the remedy for the
contractor is an equitable adjustment under the "Termination
for Convenience" clause. See, Earth Property Services, Inc.,
ASBCA No. 36764, 91-2 BCA � 23,753, at 118,941 (citing,
Viktoria Transport GmbH and Company, KG, ASBCA No. 30371,
88-3 BCA � 20,921).