January 29, 1981
UNITED STATES GOVERNMENT PRINTING OFFICE
CONTRACT APPEALS BOARD
APPEAL OF SWANSON TYPESETTING SERVICE
Jacket No. 276-745
Appeal Dated July 25, 1980
Hearing Held on November 25, 1980
Decision dated January 26, 1981
Panel 80-9
JAY E. EISEN
Chairman
CHARLES L. RITCHEY, JR.
Member
ROBERT C. McARTOR
Member
UNITED STATES GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
Panel 9-80
APPEAL OF SWANSON TYPESETTING SERVICE
5205 York Road
Baltimore, Maryland 21212
This is an appeal filed by the Swanson Typesetting Service,
Baltimore, Maryland, herein also referred to as the contractor,
under the disputes clause of the contract, Purchase Order 71047,
Jacket 276-745, Article 29, United States Government Printing
Office Contract Terms No. 1, approved July 1, 1943, Rev. July 15,
1970.
The appeal came before the Board of Contract Appeals on November
25, 1980, following a decision by the Contracting Officer on July
3, 1980, to terminate the contract, Jacket 276-745, for default
due to the failure of the contractor to perform the quality
requirements called for in the specifications in accordance with
the terms of the contract. The appellant submitted its notice of
appeal by letter dated July 25, 1980. The contractor requested a
hearing as indicated in the letter dated September 15, 1980.
Accordingly, the Board convened on November 25, 1980, to provide
an opportunity to the appellant to present its appeal at an
informal hearing pursuant to the procedures provided in the Board
of Contract Appeals Rules of Practice and Procedures,
specifically paragraph 13, GPO Instruction 110.10A, September 17,
1980. This procedure consists of a written submission as
provided in Paragraphs 8, 10, and 12 (supra) and a hearing before
the panel. The purpose of such a hearing generally is not to
serve for introduction of new matter but to permit explanations
and/or arguments regarding written matters already in the record.
Accordingly, no transcript of the proceedings was prepared. Mr.
Richard P. Swanson, together with Mr. Earl Harrison appeared for
the contractor. Mr. James C. Lane, Office of the General Counsel
appeared for the Contracting Officer together with Mr. James
Markley as the Contracting Officer's representative. Additional
supporting documents offered by the appellant were accepted into
evidence, properly identified, and referred to in the findings of
facts.
The United States Government Printing Office Contract Terms No.
1, approved July 1, 1943, Revised July 15, 1970, and GPO Form
2834 (Rev. APR 1973) General. Specifications for Composition,
Camera Copy and/or Reproduction Proofs are incorporated by
reference as part of the contract. The specifications provide in
part that:
"IN CASE OF CONFLICT BETWEEN THE PROVISIONS OF GPO FORM 2834 AND
THOSE OF THE SPECIFICATIONS, THE SPECIFICATIONS SHALL PREVAIL."
I. Findings of Fact
A. This case arises out of a contract entered into by the
Swanson Typesetting Service and the U.S. Government Printing
Office, hereinafter referred to as the GPO on November 18, 1978,
at a cost of $6,215 (est.), "For the Purchase of Reproduction
Proofs/Camera Copy" to be used for the printing of a publication
by the Department of Commerce titled "NBS Monograph 162, Plane-
Wave Scattering-Metrix Theory of Antennas, etc." The contractor
was furnished with 300 folios of manuscript copy fully prepared,
typewritten, with a moderate amount of handwritten editorial
markings. The invitations to bid included five (5) facsimile
samples of manuscript copy which is representative of
approximately 95% of the furnished manuscript copy. Five sets of
galley proofs and the manuscript were scheduled to be received by
GPO on or before December 1, 1978.
B. The specifications provide that the composition is to be Hot
Metal and/or, Photo Composition and/or Cold Type. The
specifications as related to composition provide the following:
"NOTE: Bidders must have the capability for setting simple &
complex mathematical and scientific equations which require all
the usual special characters which are too numerous to list here.
"It is estimated that there will be approximately 275,000 ems of
text matter set 8 & 10 pt. Bodoni Book with miscellaneous Bodoni
Bold words & letters scattered throughout, 2-pt. leaded, 26 1/2
picas. Copy contains a profusion of special characters in the
text matter as well as in the equations as shown in the facsimile
samples of manuscript copy on pages 6-10 which represents
approximately 95% of the typesetting. The balance (5%) of the
typesetting consists of preliminary matter, Contents, Reference
matter, footnotes & legends. It is estimated that there will be
approximately 40 multiline equations, 315 2-line fractional
equations, and 500 l-line equations throughout. DISPLAY: 10 &
12 pt. Spartan Heavy.
C. "TABULAR MATTER: Approximately 5,000 ems, set 8 on 10 pt.
Bodoni Book, 26 1/2 picas. Approximately four casts.
Approximately 20 vertical rules required.
. . . .
D. "A. PREFERRED TYPEFACES
"1. TEXT: 8 & 10 pt. Bodoni Book with italics
"2. 8 & 10 pt. Bodoni Bold (runs in with Bodoni
Book)
"3. TABULAR: 8 pt. Bodoni Book
"4. DISPLAY: 10 & 12 pt. Spartan Heavy
"B. Alternate typefaces [X] will not be accepted,
'lookalikes' only, with different generic names
"SCHEDULES
"Manuscript copy will be furnished by November 20, 1978
. . . .
"GALLEY PROOFS: 5 sets and manuscript copy must be mailed on or
before: December 1, 1978. Will be withheld 10 working days.
REVISED GALLEY Proofs (if required) accompanied by author's
galleys must be mailed within 3 days after receipt of galley
proofs.
"PAGE PROOFS: 6 sets accompanied by author's galleys must be
mailed within 3 working days after receipt of galley proofs.
"Will be withheld 10 working days.
"REPRODUCTION PROOFS: 1 sets must be mailed to GPO within 3
working days after receipt of OK proofs."
F. The contractor, who elected to use linotype composition,
forwarded 12 galleys to GPO that were received at GPO on December
8, 1978, with the balance received on December 20, 1978. Due to
typographical errors the galleys were returned to the contractor,
together with the original manuscript on February 26, 1979. In
addition, 2 sample pages were returned to the appellant for use
in preparing (5 copies) revised galleys as a guide for contractor
to properly set all special symbols and equations. (Exhibits 7,
9, and 10.)
G. The customer agency (United States Department of Commerce,
National Bureau of Standards) returned "unread" the second set of
galley proofs on April 6, 1979. (Appellate Exhibit C) Their
representatives had scanned through the proofs and "found
disturbing discrepancies too numerous to accept".
Representatives of the agency met with GPO procurement personnel
on April 20, 1979, who convinced them that, despite the symbols
being in rough galley form, all proofs would be fully acceptable
at the reproduction proof stage. (Exhibits 12 and 13.) On June
25, 1979, the agency, upon receiving the critique of the editor
of the publication (a textbook scheduled for use in universities)
rejected the proofs on the grounds of errors and discrepancies in
the use of alien characters throughout the text and equations.
(Exhibit 14.)
H. The contractor, Mr. Richard Swanson, attended a meeting at
GPO on July 19, 1979, participated in by National Bureau of
Standards and GPO representatives, to discuss recurring errors in
the galley proofs. It was agreed between the parties that the
agency will mark the galleys to be corrected by the contractor
for preparation of sample camera-ready page reproductions for
approval prior to finalizing the composition. It was also agreed
that most of the errors referred to by the editor were author's
alterations, and that in the future, the galley proofs will be
marked "AA" or "PE" as the case may be. A department
representative, Ms. Betty Burroughs, presented a similar
technical National Bureau of Standards publication to the
contractor for use as a guide. (Appellate Exhibit 1; Exhibits 18
and 19.)
I. On November 15, 1979, the contractor made inquiry of GPO as
to the status of Jacket 276-745 and was informed that it was
considered temporarily suspended as of May 27, 1979. In response
to a request by the contractor, a meeting was scheduled for
December 19, 1979, at 2 p.m. at GPO to be attended by the
contractor, GPO and National Bureau of Standards representatives.
The National Bureau of Standards officials departed at 2:40 upon
the failure of the contractor to appear. Mr. Richard Swanson and
Mr. Earl Harrison arrived at GPO at 3:30 p.m. and met with
Messrs. Douglas MacBride and James Willard, GPO representatives.
Several matters were raised, but principally discussed was the
availability of boldface Greek characters as requested and
insisted on by the customer agency, a requirement not originally
identified in the specifications. The Government then instructed
the vendor that the newly required Greek characters were
available from a specific source, but the vendor later discovered
that such was not the case, and the Government then made other
arrangements with the vendor (for "paste-up") to satisfy the
requirement. (Exhibits 24, 25, 26, 27, 28, 29, 30, 31, and 34.)
J. On March 17, 1980, the customer agency voiced disappointment
and frustration at the contractor's lack of performance and his
failure to satisfy the quality requirements of the contract, and
requested cancellation of the same. On April 17, 1980, GPO
verbally proposed to the contractor its intention to terminate
the contract for the convenience of the Government. The
contractor responded by submitting a settlement demand in the
amount of $13,500 based on an estimated cost of $4,500 for the
original typesetting and two subsequent typesettings. The
contractor disputed that it made extensive typographical errors,
but rather that the majority of errors were author's alterations
for which they had no control. The contractor therefor
disclaimed liability due to the poorly prepared manuscript copy.
(Appellate Exhibits 2 and 5; Exhibits 35, 36, 41 and 42.)
K. In view of the fact that the Government would not be
receiving usable, acceptable composition in consideration of
payment to the contractor incidental to the proposed termination
for convenience, GPO decided to proceed with its attempt to
secure an acceptable product from the contractor. (Exhibit 53.)
The plan was to waive the page proof requirement and return to
the revised galley proofs (Appellate Exhibit 5) which were fully
reviewed by the customer agency. The contractor, after making
all the corrections indicated on the galley proofs, would then
produce one set of page reproduction proofs, error free, in
compliance with the specifications. To assist the contractor in
making the corrections as marked on the first revised galley
proofs, a five-page list of instructions was forwarded to the
appellant on May 20, 1980, by the Chief, GPO Composition
Specification Section, including a caveat to ignore any prior
references for the use of bold face Greek characters. The
appellant was, therefore, requested on May 21, 1980, to furnish
one set of page reproduction proofs and two sets of companion
readers proofs, in accordance with the specifications and
referenced instructions, on or before June 12, 1980. The
contractor was advised on May 21, 1980, that this was a final
opportunity to perform and complete an acceptable product.
(Exhibits 49, 50, and 54.)
L. The contracting officer on June 19, 1980, notified the
contractor by a "Show Cause" telegram that it failed to perform
the quality, requirements of the contract for the following
reasons: that of the 198 reproduction proofs submitted, 150
pages contained one or more defects as follows:
typographical errors (i.e.) printers errors, wrong fonts, broken
characters, smears, poor inking, crooked pasted characters,
spacing problems, character positions, and etc.
The contractor on June 25, 1980, disagreed and asserted that "the
overwhelming majority of errors described as . typographical
errors, are author's alterations." The appellant admitted to
some instances of broken type appearing in the proofs which could
be corrected, except that the proofs were marked-up with
correction ink inserts, so as to make the proofs useless. On
June 30, 1980, a breakdown of the 198 reproduction page proofs by
the GPO Composition Specification Section was made as follows:
Considered satisfactory: 48 pages
Considered unsatisfactory: 150 pages
Pages considered unsatisfactory because of typographical errors
(i.e.) printer's errors, wrong fonts, etc. 80 pages
Pages considered unsatisfactory because-of broken characters,
smears, poor inking,
crooked pasted characters 122 pages
Pages considered unsatisfactory because of spacing problems,
character position pages 57
(Appellate Exhibit 3; Exhibits 55, 56, and 59.)
M. In accordance with the "Disputes" clause, U.S. Government
Printing Office Contract Terms No. 1, the Contractor was notified
on July 3, I980, that the contract was terminated for default
because of failure to perform the quality requirements of the
contract. The contractor submitted a timely written appeal
directed to the Public Printer dated July 25, 1980. (Exhibits 61
and 63.)
II. Issue
Having recited the operative facts in this case, the Board now
focuses on the question of the propriety of the decision by the
Contracting Officer to terminate Jacket No. 276-745 for default
following the rejection by GPO of the composition (typesetting
requirements) furnished by the contractor because of failure to
conform to the strict requirements of the specifications.
III. Decision
By the very nature of the contract, the contractor is required to
perform in accordance with the specifications made a part of the
contract. As a general rule two types of compliance are
recognized: complete compliance and substantial compliance. In
this instance, specifications relating to the purchase of
reproduction proofs/camera copy to be used for a printing of a
publication by the National Bureau of Standards, the contractor
was required to perform exactly in accordance with the details of
the specifications in regard to preparing the composition from a
fully prepared manuscript copy containing a voluminous quantity
of simple and complex mathematical and scientific equations with
special characters. Facsimile samples of the manuscript copy
were provided to the contractor as representative of
approximately 95% of the furnished manuscript copy.
In addition to Contract Terms No. 1, dated July 1, 1943 (Rev.
7/15/70) incorporated by reference, GPO Form 2834 (Rev. Apr.
1973) titled General Specifications for Composition, Camera Copy
and/or Reproduction Proofs, is incorporated by reference as an
integral part of the contract. It generally provides the terms
and conditions in typesetting contracts established with
commercial suppliers by the Government Printing Office. It
provides in part as relating to quality the following:
"1.2 Quality. -- All type set under these specifications must be
first class in every respect. It must be free from error and in
conformity with the copy submitted. Hollow or pitted type,
broken serifs or hairlines will not be acceptable. Style :must
be in accordance with these specifications, unless otherwise
specified . . . ."
GPO Form 2834 under 1.12 Proofs provides in part the following:
"CAUTION: All proofs (galley, page, and repro) submitted under
these specifications must be FREE FROM ERROR and in conformity
with the copy submitted . . . ."
It is inescapable that appellant's difficulties apparently
stemmed, although acceptable in the specifications, when the
contractor decided to produce the required camera copy through
use of the linotype process. The contractor should have
anticipated with the numerous amount of multi-line and fractional
equations indicated in the specifications, that the linotype
process was limited and not designed ' for such multi-line
composition. The appellant ran into difficulty early during the
period of contract administration in December 1978 and again
April 6, 1979, when the galley proofs were returned by the
customer agency and found to display disturbing discrepancies too
numerous to accept. It was agreed that many of the errors
referred to by the editor of the publication were author's
alterations.
In connection with its contention that it satisfied specification
requirements, appellant also appears to be arguing that it should
be considered to have fully performed the contract; that the
product was commercially acceptable as when compared to the
quality of similar types of contracts it performed on prior
occasions. However, it is fundamental that under the strict
specification requirements in this contract, the contracting
officer has the right to insist upon strict compliance with
specifications. Ideal Restaurant Supply Co. Inc., VACAB 67-1 BCA
6237.
The Contracting Officer and the contractor both contributed to
many of the problems associated with the administration of this
contract. The Contracting Officer, having considered terminating
the contract for convenience rescinded that procedure since GPO
would not receive any quid pro quo for payment to the appellant.
The Contracting Officer then proceeded to give the appellant one
last opportunity to submit an acceptable product. The contractor
was requested to produce one set of reproduction proofs, error
free and was provided with a five-page list of instructions on
May 20, 1980, furnished by the Chief, GPO Composition.
Specifications Section. The final product, upon inspection by
the GPO representatives, indicated that of the 198 reprobation
proofs submitted 150 pages contained one or more fatal defects.
An inspection of the final product indicates that the contractor
failed to follow the provided list of instructions and that the
contractor was not equal to the stringent quality requirements of
the contract. Despite the contention of the contractor that it
had ample experience in providing mathematical composition
(equations) this is not fully supported by the evidence
consisting of the various proofs. Close examination of the
proofs reflect errors such as various symbols appearing in three
or four different sizes or styles, certain "stacked" fractions
and then poor spacing and other defects.
The general and overriding principle is that the Government is
entitled to strict compliance with the specifications. Polyphase
Contracting Corp., ASBCA, 68-1 BCA 6759 (1967); Consolidated
Airborne Systems, Inc., ASBCA, 66-1 BCA 5586 (1966). This
doctrine is enforced even when the deviations are minor. In the
instant case, we believe that the specifications, together with
subsequent written instructions were clear and were not lived up
to. The contractor's argument that he received conflicting
instructions does not, by itself, justify his rendition of a
product not conforming to the specifications. The Government had
a right to obtain what it contracted for and it did not receive
it. Contrary to appellant's argument at the hearing, nothing
arbitrary or unconscionable appears merely from the Government's
requirement of adherence to the specifications.
In fairness to the contractor, the evidence as adduced reflects
that the original galley proofs submitted by the contractor were
rejected on the basis of extensive typographical errors
throughout, the equations. The Contracting Officer concurred in
that most of the errors referred to by the editor of the National
Bureau of Standards publication were in fact author's
alterations. The Contracting Officer advised the contractor on
July 23, 1979, that the galley proofs will be marked "AA" or "PE"
to aid it in billing of the same.
GPO Form 2834 (Rev. April 1973) under 2.10 Item No. 7: Author's
alterations states in part the following: "Author's alterations
consist of all marks made by the author at variance with the
original manuscript as submitted to the contractor, but do not
include corrections marked by the editor due to the failure of
the contractor to follow copy literally."
Under this section of GPO Form 2834 charges are authorized for
author;s alterations on a "per line" basis for text matter and a
"per column line" basis for tabular matter.
In light of a possible entitlement of charges by the contractor
for author's alteration, an opportunity should be afforded the
contractor to submit a voucher supported by available proofs or
facsimiles thereof showing the author's alteration marks in
accordance with the provisions of 2.10 Item No. 7: GPO Form
2834.
In addition, during the protracted and prolonged course of
contract administration in this case because of problems
associated with Jacket 276-745, the matter of availability of
boldface Greek characters was raised by the agency and requested
for use in the production of the final product. This was a
requirement not originally identified in the specifications. The
Contracting Officer advised the contractor that the newly
required characters were available from a specific source, but
Swanson later discovered that such was not the case, and GPO then
advised the contractor to "paste-up" to satisfy the requirement.
Ordinarily, any modification or change of specifications,
according to the terms of the contract, is required to be made by
a written change order issued by the Contracting Officer. No
oral statement of any person as in this case is generally allowed
to modify or otherwise affect the specifications of the contract.
However, the whole question of authority to modify the contract
was left in such a state that Swanson was led to believe that the
Contracting Officer could bind GPO by the issued oral change
orders. The oral changes should have been confirmed by a written
change order by the Contracting Officer. As a matter of law, the
Contracting Officer did not have authority to make , such changes
orally, but both he and the contractor believed and acted as if
he had the authority. The oral changes requested by the
Contracting Officer are deemed by the Board of Contract Appeals
to constitute a constructive change order. ABCO Builders, Inc.,
POD BCA, 69-1 BCA 7434. Accordingly, it is directed that this
issue be remanded to the Contracting Officer for the negotiation
of an equitable adjustment as to any expenses incurred by the
contractor in attempting to comply with the oral order.
Accordingly, in reviewing all the evidence that has been
presented and after considering all the arguments, the Board
finds --
1. The default termination was proper.
2. The appeal is denied.
3. Consistent with the provisions of 2.10 Item No. 7: Form
2834, the Contracting Officer should afford the appellant an
opportunity to submit a voucher supported by available proofs or
facsimiles showing author's alteration in support of a claim for
reimbursement thereof.
4. In light of the Board's decision that a constructive change
occurred upon an oral order by the Contracting Officer to the
appellant to procure "boldface Greek" characters, this issue is
remanded to the Contracting Officer for-the negotiable adjustment
as to provable expenses incurred by the appellant in attempting
to comply with the order.
JAY E. EISEN
Chairman
PANEL # 9-80
CHARLES L. RITCHEY, JR.
Member
ROBERT C. McARTOR
Member
January 26, 1981
DATE