UNITED STATES GOVERNMENT PRINTING OFFICE CONTRACT APPEALS BOARD Appeal of Graphic Litho Appeal dated November 23, 1983 Decision dated May 25, 1984 Panel 83-11 THOMAS O. MAGNETTI, Chairman JAMES A. HICKEY JAMES K. MEHAN PRELIMINARY STATEMENT Graphic Litho (hereafter the contractor) has appealed the decision of a Contracting Officer of the U.S. Government Printing Office (GPO) terminating a contract for default. The appeal was filed in a timely fashion and was in accordance with the "Disputes" clause of the contract. Article 2-3, Contract Terms No. 1, GPO Publication 310.2, revised October 1, 1980. This Board has jurisdiction over this appeal pursuant to GPO Instruction 110.10B, entitled "Board of Contract Appeals Rules of Practice and Procedure" and Contract Terms No. 1, supra. As the contractor was given the opportunity to have its appeal heard at an informal hearing, but did not so request, the decision is based solely on the written record. That record consists of an Appeal File with 43 exhibits. By Purchase Order 28319 dated April 7, 1983, the contractor was awarded a contract by the GPO to produce a folded form printed in four color process, entitled "Rank Recognition Chart of Africa - South of the Sahara." According to the contract specifications, the contractor was to furnish proofs and, if necessary, revised proofs to the GPO.. The proofs were to be held by the GPO for 5 workdays and then returned to the contractor. The contractor was to ship the completed product by April 29, 1983. After a series of extensions were granted by the GPO in the contract schedule, the contractor submitted proofs on June 29, 1983. Exhibit 25. On July 19, 1983, the color proofs were inspected and rejected. Exhibits 28, 29 and 30. By letter dated July 28, 1983, the GPO informed the contractor of its decision to reject the proofs. The contractor was also notified that it would have to correct the proofs. Exhibit 32. On August 3, 1983, the contractor contacted the GPO and informed it that the contractor's plant would be closed the week of August 8, 1983, and that it would have the corrected proofs ready by August 30, 1983. Exhibit 34. The GPO notified the contractor by a Contract Modification dated August 7, 1983, that it had to submit proofs to the GPO on or before August 11, 1983. Id. Apparently the contractor was aware that it would have to supply the proofs by August 11th before the Contract Modification was issued, because it contacted the GPO on August 5, 1983, stating that it could not comply with the change order. Exhibit 35. The contractor sent a telegram to this effect on August 9, 1983. Exhibit 37. By letter dated August 16, 1983, the GPO rejected the contractor's proposed date for submission of the revised proofs. Id. The contract was terminated by letter dated August 25, 1983, for default because of the contractor's failure to adhere to "the mutually agreed adjusted schedule." Exhibit 39. The contractor was informed that it would be liable for any excess costs for reprocurement. The contract was reprocured on September 12, 1983, with a shipping date of October 12, 1983, for a cost of $11,152.00. Exhibit 43. The contractor appealed the default termination on November 23, 1983. DECISION The GPO defaulted the contract because the contractor allegedly failed to adhere to the "mutually agreed adjusted [contract] schedule." Under the default article of the contract, the GPO is authorized to terminate a contract if the contractor fails to make delivery of the supplies within the time specified by the contract or any extension thereof. Article 2-18 (a)(l), Contract Terms No. 1, supra. In the instant case, the evidence of record demonstrates that the GPO granted the contractor several extensions in the contract schedule. Exhibit 38. In early August, the GPO notified the contractor that it had to submit proofs by August 11, 1983. The contractor did not comply and the contract was terminated for the aforementioned reason. However, there is no evidence in the record that would indicate the contractor failed to meet a "mutually agreed" adjusted schedule. In fact, the evidence indicates that there was no mutually agreed adjusted schedule for submission of the proofs. Exhibits 34 - 37. The contractor informed the GPO that it could not deliver the corrected proofs until August 30, 1983. The GPO rejected that date, informing the contractor that it would have to perform by August 11, 1983. Although the GPO did not waive its right to timely delivery by granting numerous extensions in the contract schedule, it did establish a schedule for the submission of the proofs which it knew to be impossible for the contractor to meet. On August 3, 1983, the contractor informed the GPO that its plant would be closed the week of August 8, 1983. The GPO then notified the contractor that it had to submit the proofs by August 11, 1983. According to the evidence of record, this date was designated for the purpose of giving the GPO "another point to default [the contractor] from." See Exhibit 34, the handwritten draft of the Contract Modification. It would seem that the GPO wished to be in the best possible possible position to default the contractor. A delivery date was chosen, knowing that the contractor could not perform, so the contractor.could be defaulted for late delivery. 1/ Given this questionable method of contract administration, it would be against equity and good conscience to enforce this termination for default. Therefore, the Board finds that, in this case, scheduling a delivery date, with the foreknowledge that it would be impossible for the contractor to meet the schedule is inappropriate and renders the default termination improper. As the GPO has not alleged or proven that it had other grounds to default the contractor on August 25, 1983, the termination for default is not sustained. Accordingly, the Board remands this appeal to the Contracting Officer to convert the default termination to one for the convenience of the Government. See Articles 2-17 and 2-18(e), Contract Terms No. 1, supra. In the event that negotiations regarding the contractor's recovery prove unsatisfactory to the contractor, it has the right to appeal the matter to the Board in accordance with the "Disputes" clause of the contract. _______________ 1/ The Contracting Officer attempted to default the contractor in June 1983 for failure to adhere to the delivery schedule. Exhibit 38. However, the GPO did not proceed with that default action. Exhibit 25.