U.S. Government Printing Office Office of General Counsel Contract Appeals Board Appeal of Scanforms, Incorporated Docket 75-6 September 24, 1975 Vincent T. McCarthy, Chairman Jay E. Eisen, Member Essie A. Ablove, Member This is an appeal filed.on April 28, 1975, by Scanforms, Incorporated, Keystone Park, 181 Rittenhouse Circle, Bristol, Pennsylvania 19007, herein also referred to as the contractor, under the disputes clause of the contract, Article 29, United States Government Printing Office Contract Terms No. 1. I. Findings of Fact a. This case arises out of a contract entered into by the appellant, Scanforms, Incorporated, and the U.S. Government Printing Office, herein referred to as the GPO, for the production of 400,010 four-part multiform forms as described in the specifications of the invitation to bid. b. The contract, designated as GPO Jacket No. 534-513, Purchase Order 58322, is a fixed price agreement for the procurement of the form for use by the U.S. Postal Service, pursuant to their Requisition No. 608-4830. The title of the form is designated as "Rail Van Control System, Load/Dispatch Record." The type of paper to be used in the production of the item was specified in the contract as follows: "At contractor's option, paper may be NCR Bond or 3-M Type 200 of comparable color and weight as follows: Part l-CB, Sub. 30, Part 2-CFB, Sub. 34, Part 3-CFB, Sub. 34 and Part 4-CF, Sub. 30." c. The contract was awarded to the contractor on April 9, 1974, and confirmed by issuance of the Purchase Order 58322 in acceptance of their bid in the amount of $21,175.40. The "copy" was furnished to the contractor on April 15, 1974 as agreed. d. The schedule required delivery of the forms to three listed destinations on or before May 24, 1974, as follows: Pauline, Kansas 66601 200,000 sets Somerville, N.J. 08887 200,000 sets Washington, D.C. 20260 10 sets e. The contractor by letter, dated May 21, 1974, stated that due to a sudden shortage of all types of carbonless paper, performance would be delayed. The contractor was advised on June 11, 1974 that the ordering agency required 100,000 sets of the forms by July 11, 1974, the balance later; also that they would accept a carbon interleaved product. The contractor issued a purchase order to a paper supplier, Frye Copy Systems, Inc., Des Moines, Iowa, on April 19, 1974, for delivery of paper by May 13, 1974. Frye acknowledged receipt of the order on May 8, 1974. The supplier stated he could not ship the paper until September 13, 1974. An alternate supplier, Paper Mart, Inc., Livingston, New Jersey, pursuant to a purchase order for paper issued by Scan Forms, Inc., dated May 30, 1974, agreed to make delivery of the ordered paper on July 15, 1974. f. The date of delivery of the completed forms to the three specified destinations was on August 30, 1974. g. As a result of delays in performance and pursuant to the terms of the contract, the contracting officer assessed liquidated damages against the contractor. Damages were computed at the rate of one percent of the contract price plus overruns totaling $21,175.00 for each working day the contractor was in default of the shipping schedule; that is at the rate of $211.75 per day covering a period of 68 days default of the shipping schedule (scheduled delivery date of June 24, 1974). However, the total damages assessed represents the maximum allowable under the terms of the contract, that is, not in excess of 50% of the total value of the entire order. Thus, the liquidated damages amounts to a total of $10,587.50. h. The contractor sought relief from the contracting officer, asserting by letter dated December 20, 1974, that the delay in performance was due to circumstances beyond its control and not due to its fault or negligence. i. The contracting officer, by letter dated January 10, 1975, rejected the contractor's request to extend the shipping schedule. j. The contracting officer on April 8, 1975, rendered his final decision denying the contractor's request for relief of liquidated damages. He indicated in pertinent part in the letter that the "documentation submitted to date fails to establish an original commitment for the stock and the specific nature of the delay encountered by your supplier. Your request for an extension of the shipping date is denied." II.. .Opinion The contract provided in pertinent part the following: "The shipping schedules must be maintained. See Liquidated Damages and Penalty Payments in GPO Form 2873c." (Emphasis added.) The reference to liquidated damages in GPO Form 2873c provides in pertinent part the following: "Liquidated Damages: Should the contractor default on shipping schedules stated in the specifications, the contractor will be assessed liquidated damages against that part or parts of an order which have not been shipped to the specified destination on the specified date. Damages will not be assessed against that part or parts of an order which have been shipped on schedule. The amount of damages will be computed at the rate of one percent (1%) of the contract price of the quantity not shipped in accordance with specifications for each working day the contractor is in default of the shipping schedule(s): Provided, That the minimum amount of liquidated damages shall not be less than $5 for the entire order and not more than $500 per day on the entire order, except the total damages assessed against the contractor shall in no case exceed fifty percent (50%) of the total value of the entire order. Liquidated damages will not be assessed if the contractor has shipped at least ninety percent (90%) of the quantity ordered for shipment to a specified destination on or before the scheduled date." (Emphasis added.) It is well established that a contractor who claims that his late performance and delivery is excusable has the burden of establishing the same under the contract. The contractor must prove affirmatively that the failure to achieve timely performance was caused by or arose out of a situation which was beyond his control and he was not at fault or negligent. In addition. the contractor must show that he could have performed on time save for the occurrence of the event he claims as an excusable delay. Lee K. Geiger Construction Company, GSBCA, 67-1 BCA � 6189; American Construction Company, Inc., GSBCA, 65-2 BCA � 4964. The appeal in this case arose out of the application of the liquidated damages clause of the contract due to delayed performance. The contract provided that delivery of the completed forms was to be made in the required quantities to the locations prescribed in the contract on or before May 24, 1974. The appellant's first written request for an extension was dated on December 20, 1974; it was denied. The contractor stated in his appeal of April 28, 1975, that because of the "chaotic conditions of the paper market prevailing at that time due to pulp shortages, fuel shortages and titanium shortages," it was unable to obtain paper in time to conform to the schedule. The contractor submitted a purchase order to his supplier to acquire the needed paper on April 19, 1974, which was after the date of the award, although he states that an original commitment for paper was made by phone before the award. There was not any supporting evidence submitted to support the telephonic commitment by a paper supplier. Every contractor impliedly represents, when he makes his bid, that he can accomplish what he sets out to do, within the time upon which there was an agreement; and by such implied representation, he is not, in the eyes of the law, entitled to maintain a mental reservation, to the effect, that he can perform within the time required provided the material suppliers lives up to their commitment and he can obtain the paper stock in time to maintain the required schedule. Woodhull Construction Company, ASBCA, 57-1 BCA � 1260. The failure of the paper supplier to make timely delivery of the necessary stock does not excuse the contractor from resulting delays in contract completion. First Dominion Corp., GSBCA, 69-1 BCA � 7488 (1967). The contractor alleges that the specific nature of the delay that affected his supplier's inability to provide the adequate paper stock was because of "the chaotic conditions of the paper market prevailing at that time due to pulp shortages. . . ." While it is noted that a tight supply and demand condition may have been present in the paper industry during the period under consideration in this appeal, the evidence of record does not reflect in any substantial manner that paper stock of the required quality and quantity was unavailable in the market place. The cause of the delay was due to the contractor not having the firm commitment from a supplier on the date of tendering his bid to the effect that the material will be delivered in time to complete the order to meet the delivery schedule. The cause of the delay was not unforeseeable and beyond the control and without the fault or negligence of the contractor. We are constrained to hold that appellant is not entitled to an extension of time to relieve it from the imposition of liquidated damages for its delay in performing the contract. Lewis Enterprises, Inc., GSBCA, 67-2 BCA � 6681; Acme Paving Company, Inc., AGBCA, 73-2 BCA � 10,092; 34 Comp. Gen. 251. The contractor has not convinced us that the "liquidated damages for delay provided for, are beyond damages reasonably contemplated by the parties at the time of the contract." The circumstances under which a provision fixing in advance the amount of damages payable in the event of its breach will be enforced depends on whether the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach and that the harm that is caused by the breach is one that is incapable or very difficult of accurate estimation. The reasonableness of a liquidated-damages provision must be judged as of the time the parties entered into the contract, rather than at the time of the breach Federal Roofing and-Painting, Inc., Eng. BCA, 68-1 BCA � 6912. Liquidated damages are properly imposed, however, even where the Government has failed to show actual damages by the delay; nor does the fact that the liquidated damages imposed resulted in a hardship to the contractor in any way impugn the validity of the assessment. Sunset Construction, Inc., IBCA, 65-2 BCA � 5188. On the basis of the facts found, the Board concludes that liquidated damages were properly assessed for delayed performance not found to be an excusable delay. In view of the foregoing, the appeal is denied.