UNITED STATES GOVERNMENT PRINTING OFFICE CONTRACT APPEALS BOARD Appeal of Himark. Printing Co. Appeal dated December 9, 1983 Decision dated March 16, 1984 Contract Appeals Board Panel 84-1 Thomas O. Magnetti, Chairman Joseph Nadler, Member Morris J. Mervis, Member PRELIMINARY STATEMENT Himark Printing Company (hereafter the contractor) has appealed the Contracting Officer's decision which terminated the contract that the contractor had with the U.S. Government Printing Office (GPO), for default and assessed the contractor for the excess costs of reprocurement. The contractor appealed this decision in accordance with the "Disputes" clause of the contract. See Article 2-3, Contract Terms No. 1, GPO Publication 310.2, revised October 1, 1980. The contractor in its appeal asserts that it should not be liable for excess costs. The GPO Contract Appeals 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 an 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 13 exhibits. FINDINGS OF FACT 1). By Purchase Order K0743, dated August 19, 1983, the contractor was awarded a contract to produce 2,700 Smyth-sewn books. Exhibit 4. The contractor received the award because it was lowest responsible responsive bidder. Exhibit 2 and 3. On August 18, 1983, prior to the contract's award, the contractor reviewed and confirmed his bid. See Exhibit 2. The specifications for the contract called for delivery of the books by October 3, 1983. Exhibit 1. 2). On August 26, 1983, the contractor contacted the GPO and alleged that, due to an error made by its subcontractor in estimating the cost of sewing the books, the bid submitted by the contractor was $1,000 too low. Exhibit 6 and 8. However because the subcontractor refused to supply an affidavit attesting to its error, the contractor was unable to substantiate the alleged post award error in bid. Exhibit 6. 3). By letter dated September 1, 1983, the contractor informed the GPO that it could not perform the contract for the original bid price. Exhibit 8. It returned the negatives of the book and the sample to the GPO with this letter. 4). By letter dated September 12, 1983, the contractor was notified that the contract was terminated for default. Exhibit 10. The reason for default was the contractor's stated and demonstrated inability to proceed with the performance of the contract in accordance with the contract terms. In this termination notice, the contractor was informed that it would be liable to the Government for any excess costs that may arise from reprocuring the contract. 5). The contract was reprocured from the next lowest bidder at a cost of $7,816.00. Exhibits 2 and 11. The excess cost for reprocuring the defaulted contract was $2,030.88. 6). The contractor appealed the decision asserting that it was improper for the GPO to hold the contractor liable for excess costs. Exhibit 12. With its appeal letter, the contractor submitted the incorrect bid supplied by the subcontractor and a corrected bid. DECISION The contractor argues that, because its subcontractor provided the contractor an incorrect price for the Smyth sewing machine operation, the contractor should not be liable for any of the excess costs for reprocurement. 1/ However, the Government has the contractural right to assess a contractor for the excess costs for reprocuring a contract that was terminated for default. Article 2-18(b), supra. The contractor is not liable for these excess costs only if its failure to perform the contract arises out of causes beyond the control of contractor and without its fault or negligence. Article 2-18(c), supra. In the instant case, the contractor's failure to perform was directly related to its decision not to perform the contract. See Exhibits 6 and 8. By returning the Government's material (samples & negatives) to the GPO, the contractor abandoned performance. As stated above, the contractor's decision not to perform was allegedly based upon its subcontractor's error in the bid provided to the contractor for subcontracting the Smyth sewing machine operation. However, neither the contractor nor the subcontractor substantiated that claim by submitting affidavits attesting to the error. Exhibits 6, 9 and 12. The documentation submitted by the contractor was insufficient to establish an error in bid. Having failed to demonstrate that its nonperformance was beyond its control, the contractor was properly defaulted and is contractually liable to the Government for the excess costs of reprocurement. Therefore, the appeal is denied in its entirety. _______________ 1/ In its appeal the contractor does not contest the validity of the termination for default. See Exhibit 12.