BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
PROFESSIONAL PRINTING ) Docket No. GPO BCA 02-93
OF KANSAS, INC. )
Jacket No. 325-149 )
Purchase Order 87604 )
DECISION AND ORDER
This appeal, timely filed by Professional Printing of Kansas,
Inc. (Appellant or Contractor), 315 Constitution, Empire,
Kansas 66801, is from the final decision of Contracting
Officer James L. Leonard, of the U.S. Government Printing
Office's (Respondent or GPO or Government) Printing
Procurement Department, Washington, DC 20401, dated December
14, 1992, rejecting the Contractor's equitable adjustment
claim for reprinting forms initially produced under its
contract identified as Jacket No. 325-149, Purchase Order
87604, and rejected by the Government (R4 File, Tab X).1 On
October 13, 1993, and October 14, 1993, respectively, a
hearing was conducted by the Board for the purpose of
developing evidence on the issues involved in the case.2 At
the hearing, both parties were represented by counsel, who,
thereafter, filed timely briefs with the Board addressing the
issues involved.3 Board Rules, Rule 23. From the record in
this case, including the evidence developed at the hearing and
the posthearing briefs of the parties, the Contracting
Officer's decision rejecting the first shipment of forms is
REVERSED and REMANDED. To the extent that the Appellant seeks
payment for the undelivered forms in its plant which are from
the same production run as the rejected forms, the appeal is
DENIED.
I. BACKGROUND
A. Chronology of Events
This dispute arises from a contract awarded to the Appellant
on July 10, 1992, to print 600,000 pads of a "Security
Prescription Form" (SPF)-a total of 60,000,000 SPFs-for the
U.S. Department of Veterans Affairs (VA) at a contract price
of $533,000.00 (R4 File, Tab E).4 Under the contract, 100,000
pads were to be shipped to the VA by July 27, 1992, with the
remainder of the order delivered by August 17, 1992 (R4 File,
Tab A, p. 3).
The following contract specifications for the SPFs are
relevant to this appeal:
PRODUCT: Padded form. Numbering required.
* * * * * * * * * *
GOVERNMENT TO FURNISH:
Offset film negatives for the black printing and a sample
for use as a guide for the security tint background.
One reproduction proof, Form 905 (R. 3/90) with labeling
and marking specifications.
Identification markings such as register marks, ring
folios, rubber stamped jacket numbers, commercial
identification marks of any kind, etc., except GPO imprint,
form number, and revision date, carried on copy or film,
must not print on finished product.
CONTRACTOR TO FURNISH: All materials and operations, other
than those listed under "Government to Furnish," necessary
to produce the product(s) in accordance with these
specifications.
PROOFS: None required.
* * * * * * * * * *
PRINTING: Print head to head. Face prints in black and in
a match of Pantone 287 blue ink and back prints in black
ink only. On face, the black linematter overprints a blue
background (background bleeds all sides). Background
(printing media to be created by the contractor) is a
security tint with a "VOID" dropout pattern. The word
"VOID" (each letter to be approx. 5/8" high) must appear at
least 3 times (vertically, horizontally and diagonally) and
must not be visible on the printed sheet, but must appear
when the sheet is reproduced by electrostatic means.5
NUMBERING: Number in a match of Pantone 185 red ink on face
of form in a space 1-7/8 x 3/16", in the right portion of
the form, approx. 1-3/4" from top edge, in numbers 3/16"
high. Number from 36000001 through 96000000. No missing
numbers. Numbering is parallel to the 5-1/2" dimension.6
* * * * * * * * * *
QUALITY ASSURANCE LEVELS AND STANDARDS:7 The following
levels and standards shall apply to these specifications:
Product Quality Levels:
(a) Printing Attributes-Level III.
(b) Finishing Attributes-Level III.
Inspection Levels (from MIL-STD-105):
(a) Non-destructive Tests-General Inspection Level I.
(b) Destructive Tests-Special Inspection Level S-2.
Specified Standards: The specified standards for the
attributes requiring them shall be:
Attribute Specified Standard
P-7. Type Quality and
Uniformity Furnished Camera Copy
P-9. Solid and Screen
Tint Color Match Pantone Matching System
QUALITY ASSURANCE RANDOM SAMPLES: The contractor may be
required to submit quality assurance random copies to test
for compliance against specifications. The purchase order/
specifications will indicate the number required, if any.
When ordered, the contractor must divide the entire order
lot into equal sublots and select a copy from a different
general area of each sublot. The contractor will be
required to execute a statement furnished by GPO certifying
that copies were selected as directed. Copies will be paid
for at the running rate offered in the contractor's bid and
their cost will not be a consideration for award. A copy
of the purchase/order specifications must be included.
See, R4 File, Tab A, pp. 1-3 (Contract Specifications).
In addition to these specifications, the contract was also
governed by applicable articles of GPO Contract Terms,
Solicitation Provisions, Supplemental Specifications, and
Contract Clauses, GPO Publication 310.2, effective December 1,
1987 (Rev. 9-88) (GPO Contract Terms). See, R4 File, Tab A,
p. 1 (Contract Specifications). In pertinent part, GPO
Contract Terms contains the following relevant supplemental
specification:
1. Quality.
(a) The quality requirements indicated in the
specifications represent the minimum acceptable level.
(b) Notwithstanding the minimum acceptable level, the
following shall also apply:
(1) Printing and binding shall be held to a high
standard of imposition; makeready; press running; clear,
sharp printing; binding ; and good quality in every
respect.
* * * * * * * * * *
(c) Contractors must have a quality control system that
will assert product quality acceptable to the Government.
See article 14 "Inspection and Tests" of Contract Clauses.
(d) Specific quality requirements are further defined in
[QATAP].
See, GPO Contract Terms, Supplemental Specifications-General, ¶
1(a)-(d) (Quality). Furthermore, the following contract clauses
are also relevant:
1. Contractual Responsibility.
Awards by GPO for printing, binding, and related services
are the sole responsibility of GPO and not of its customer
agencies. Modifications shall have no force or effect
unless addressed before the fact to and subsequently
confirmed in writing by the Contracting Officer. Failure
to comply with this article may be cause for nonpayment of
additional costs incurred or rejection of the order.
2. Order of Precedence.
In the event of an inconsistency, the inconsistency shall
be resolved by giving precedence in the following order:
(a) specifications; (b) supplemental specifications; (c)
solicitation provisions; (d) contract clauses; and (e)
other provisions whether incorporated by reference or
otherwise.
* * * * * * * * * *
7. Government Furnished Property (GPF).
The contractor is required to examine the furnished
property immediately upon receipt. If at that time there
is disagreement with the description or the requirements as
presented in the specification (or print order/GPO Form
2511), and prior to the performance of any work, the
contractor shall contact the U.S. Government Printing
Office, Central Office Printing Procurement Division,
Washington, DC 20401, or the originating Regional Printing
Procurement Office, and contest the description. (Failure
to examine the GFP/specifications and bring any
discrepancies to the attention of the Contracting Officer
will not relieve the contractor of responsibility to
perform.) The Contracting Officer will then investigate
and make a determination which will be final. If the
decision is reached that the original description is
proper, the contractor will be required to proceed with the
work. Failure to agree to the description shall be a
dispute within the meaning of article 5 "Disputes.". . .
[Original emphasis.]
* * * * * * * * * *
14. Inspection and Tests.
* * * * * * * * * *
(b) The contractor shall provide and maintain an inspection
system acceptable to the GPO covering supplies under the
contract and shall tender to the Government for acceptance
only supplies that have been inspected in accordance with
the inspection system and have been found by the contractor
to be in conformity with contract requirements. . . .
(c) The Government has the right to inspect and test all
supplies called for, to the extent practicable, at all
places and times, including the period of manufacture, and
in any event before acceptance. The Government shall
perform inspections and tests in a manner that will not
unduly delay performance and assumes no contractual
obligation to perform any inspection and test for the
benefit of the contractor unless specifically set forth
elsewhere.
* * * * * * * * * *
(f) The Government has the right either to reject or to
require correction of nonconforming supplies. Supplies are
nonconforming when they are defective in material or
workmanship or are otherwise not in conformity with
requirements. The Government may reject nonconforming
supplies with or without disposition instructions.
See, GPO Contract Terms, Contract Clauses, ¶¶ 1 (Contractual
Responsibility), 2 (Order of Precedence), 7 (Government Furnished
Property (GPF)), 14 (Inspection and Tests).
The record discloses that this was the Appellant's first
"VOID" pantograph job, although it was familiar with the
process (Tr. 51, 127-28). However, the Contractor was
planning to have the films for the "VOID" security feature
made by a company that buys the screen directly from
Pantograph, and thus it was confident about its ability to
perform (Tr. 55). Before the Appellant could begin
performance, the prior contractor for the SPFs, Standard
Register, informed the parties that it held the patent for the
"VOID" dropout pattern, and that the Contractor would be
guilty of patent infringement if it used the pattern (R4 File,
Tabs B and C).8 Consequently, in order to produce the job,
the Appellant had to acquire the right to use the patent,
which it did by entering a licensing agreement with Standard
Register in July 1992 (Tr. 128, 149, 151, 234-35). The
licensing agreement only covered the use of the "VOID"
security feature, and nothing else-e.g., screens or other
support, identification of the reproduction standards, a
warranty with respect to copying, etc.-was provided by
Standard Register (Tr. 236-38). The record shows that 34
other companies also hold licenses to use the Standard
Register "VOID" security pattern (Tr. 151, 235). See, R4
File, Tab B.
Under the terms of the contract the Government-furnished
material (GFM) included, inter alia, ". . . a sample for use
as a guide for the security tint background". See, R4 File,
Tab A, p. 1 (Contract Specifications). On July 10, 1992, when
the Contractor picked up the GFM it discovered that instead of
a sample of an old SPF, the Respondent had supplied a copy of
a specimen check from an unrelated job (Tr. 12-13, 33, 56, 57,
137; 148; App. Exh. No. 1; R4 File, Tab F).9 Accordingly,
John Gallagher, the Appellant's Production Coordination
Manager, telephoned GPO and spoke to Anthony Hooks, a Printing
Specialist in the Contracts Branch of the GPO's Purchase
Division (Tr. 7, 15). Gallagher informed him that the sample
provided to the Contractor for the SPF security background was
a specimen check, and he asked Hooks to send a sample of the
previous job (Tr. 16, 40).10 Hooks told Gallagher that the
kind of sample he requested was not available, and that the
Appellant should follow the specifications in performing the
work (Tr. 18, 136).
After talking to Hooks, Gallagher spoke to his boss, Cripps,
about the matter. Gallagher told Cripps that he was confused
by the sample received from the Government and wanting to know
the Appellant was supposed to produce a check instead of a
prescription form (Tr. 49, 57). Cripps was also bewildered by
the sample check, especially with regard to the security
background pattern, so he also called Hooks and asked for a
clarification and a proper sample (Tr. 57-58, 148, 185,
334).11 Hooks repeated what he had told Gallagher, namely
that no other sample was available and the Appellant should be
guided by the specifications (Tr. 58, 229). See, GPO Contract
Terms, Contract Clauses, ¶ 2 (Order of Precedence). In
addition, Hooks instructed Cripps to use a parchment-type
background, block letters and straight lines for the SPFs (Tr.
59).
Although the contract specifications said that proofs were not
required, the record shows that on or about July 15, 1992,
after talking to Hooks, Cripps told Gallagher to prepare a
proof of the job and send it to GPO (Tr. 21-23, 42; App. Exh.
No. 3).12 However, the proof, which consists of: (1) an
original glossy photograph of the SPF; (2) a photocopy of the
glossy; and (3) an acetate overlay, was not sent to GPO
because the Contractor was advised that no proof was required
by the specifications and the Government did not want one (Tr.
24, 43, 274).13
After the Government declined to examine the proof, the
Appellant proceeded to produce the job. Although the
Contractor was in contact with the GPO's Quality Assurance
(QA) staff while it was printing the original SPFs, the
undisputed evidence shows that during this time it was never
told of any equipment standards-i.e., the range, type or name
of photocopiers -against which the forms would be measured
(Tr. 125, 156).14 According to the Appellant, while the
"PRINTING" specification would technically be met if the
"VOID" pantograph appeared when tested on its plant
photocopier, it did not believe that success on one copier
would be enough to satisfy the Government (Tr. 164, 229-30).15
The Contractor knew that the SPFs would eventually be used on
an entire range of photocopiers which are generally accessible
to the public, so it tested the forms on several other copy
machines prior to shipment (Tr. 157-59, 164, 165, 177).16
Once the Appellant was satisfied that the form would reproduce
as required, it shipped the first lot of 100,000 SPF pads to
the Government.17
On or about August 7, 1992, shortly after the first delivery
was received, the VA complained to Ms. Barbara McBride, a
Printing Specialist in GPO's Customer Service Division, that
the SPFs were full of quality defects, including the one at
issue here, "Does not void" (Tr. 261, 306; R4 File, Tab H).
Subsequently, the VA prepared a "Notice of Quality Defects"
(GPO Form 1815), and sent it to GPO along with random samples
of the Appellant's SPFs and, for purposes of comparison, the
forms previously produced by Standard Register (marked "Old")
(Tr. 70-72, 289, 295). The sample forms were given to John
Nowalk of QA's Contract Management Division, for testing.
Although there were several defects in the VA's complaint,
Nowalk only evaluated the forms for the reproduction quality
of the "VOID" pantograph (Tr. 261).18 Nowalk tested the forms
on two photocopiers in GPO-one in the Term Contracts Division
(Room A-843) and the other in the General Counsel's Office
(Room C-814). However, he could not get the word "VOID" to
appear on either of them, and determined that the SPFs did not
meet specifications (Tr. 261-62; R4 File, Tab K).19 After
finishing his tests, Nowalk reported the results to Leonard.
The Contracting Officer also tried copying samples of the SPFs
on the Canon copier in his office, but could not get the word
"VOID" to appear either (Tr. 262, 266).
Therefore, on the morning of August 11, 1992, pursuant to
directions received from Leonard, Hooks telephoned Gallagher
to tell him about the VA's complaint, and instructed the
Appellant to stop production and not ship the remainder of the
forms (Tr. 24-25, 40, 43-44, 156, 221-22, 224-25; App. Exh.
No. 4).20 In response to Gallagher's question asking what the
problem was, Hooks said that he did not know (Tr. 25).
However, later that day Hooks called back and told Gallagher
that the Appellant should restart production of the forms but
still not ship them (Tr. 25, 30, 40, 224-25, 226; App. Exh.
No. 4). During this conversation, Hooks outlined, in general,
the scope of the problem with the delivered SPFs, namely, that
there were defects in the "VOID" pantograph, the numbers on
the forms, and the ink color (Tr. 25-26, 45; App. Exh. No. 4).
Notwithstanding Hooks' instructions to continue printing,
Gallagher stopped the job until he could find out from the
Respondent precisely what defects were involved, so the
Appellant could correct them (Tr. 28, 45). At the same time,
Gallagher informed Cripps that there was a serious quality
problem with the job (Tr. 129). Specifically, he told Cripps
that the VA had complained about three defects in particular;
i.e., the sequential numbering, the "VOID" pantograph and the
ink color (Tr. 129, 155). Therefore, Cripps checked the
numbers and the ink on samples of the form, and was satisfied
that both were in accordance with the specifications (Tr.
129-30).21 Furthermore, he tested the "VOID" dropout pattern
again, and could not see anything wrong with its copying
capability (Tr. 129-30). Since the forms had been tested on
several copy machines prior to shipment and the "VOID" dropout
pattern had reproduced as required, Cripps thought it
important to find out what standard the Respondent was using
to evaluate the forms; i.e., what photocopier(s) and what
setting(s) (dark, light or normal) was the Government
employing for its tests (Tr. 129-30, 156-57, 165).
On August 17, 1992, Leonard telephoned Gallagher to tell him
that the job had been rejected, and that the "number one
reason" was because the "VOID" dropout pattern would not
reproduce by electrostatic means on the Respondent's copy
machines (Tr. 31, 46, 261, 266; R4 File, Tab J; App Exh. No.
4). 4. Thereafter, on August 27, 1992, GPO sent a letter to
the Appellant which stated, in pertinent part:
An examination of the forms your firm produced for [the]
Department of Veterans Affairs has revealed the following
defect:
Failure to Follow Specifications-Background printing
does not show the word "VOID" in three places or a
dropout pattern as required in the specifications, when
reproduced by electrostatic means.
Based on the results of this inspection, the initial
delivery of 100,000 pads has been determined rejectable,
and will require reprinting. The reprinting will be
accomplished at no additional cost to the Government with a
change to the specifications as follows. The location of
the numbering should be printed as per sample supplied.22
See, R4 File, Tab M.23 The letter also confirmed that the
Contractor had agreed to pickup and destroy the rejected SPFs,
and would deliver 12,240,000 reprinted ones by September 11, 1992
(R4 File, Tabs L and M; App. Exh. No. 4).
The record discloses that also on August 27, 1992, Gallagher
discussed the reprint with both Nowalk and Adams (App. Exh.
No. 4). The upshot of these conversations was that GPO
promised to send the Contractor a drawing of the preferred
"VOID" dropout pattern and a sample of the SPF (Tr. 32, 34,
36-37, 82, 87-88; R4 File, Tab N; App. Exh. Nos. 5 and 6).24
It is undisputed that the drawing and sample form furnished by
the Government for the reprint showed the Contractor, for the
first time, what the "VOID" background was to look like and
how it was to copy (Tr. 34, 37, 81, 87-88). Furthermore, the
dropout pattern indicated in the drawing used a reverse image
of the word "VOID," and was totally different from the one
employed in the original printing; i.e., when photocopied, the
background remained but the center of the letters disappeared
(Tr. 82, 123; R4 File, Tab N; App. Exh. No. 5). By contrast,
the background vanishes on the rejected SPFs, but the word
"VOID" remains (Tr. 83, 87, 160; App. Exh. Nos. 9-18).
In reprinting the SPFs, the Appellant used the "VOID" dropout
pattern suggested on the sample form provided by GPO (Tr. 82,
89; App. Exh. No. 6). Accordingly, the Contractor made a new
film for the changed background, and used block outline
letters instead of the simple block letters employed on the
original job (Tr. 83, 86). In addition, the Appellant added
black to the ink color to make it darker and improve the
copying capability of the image (Tr. 87, 160, 166, 255).25
The record discloses that in addition to asking for a reprint
of the form, the VA also wanted a press-sheet inspection prior
to the production run. The Appellant agreed that such a
precaution was necessary in light of the circumstances
involved in the rejection of the original job; i.e., while the
"VOID" pantograph would reproduce on the Contractor's
photocopiers and on other copy machines in town, it would not
copy on the Government's photocopy machines (Tr. 84-85, 90,
153; App. Exh. No. 4).26 The press-sheet inspection was
conducted at the Contractor's plant in Emporia, Kansas, on
September 4, 1992, by Charles Lee, an employee of the VA (Tr.
89-90). Lee was accompanied throughout the press-sheet
inspection by Cripps (Tr. 85-86). The record shows that
before the press-sheet inspection began, Lee showed Cripps a
yellow file folder containing about twenty (20) sample copies
of the SPF with photocopies attached, and pointed out that the
samples did not reproduce as required (Tr. 94, 192). Cripps
took a sample from Lee, copied it on one of the Appellant's
photocopiers, and saw that the "VOID" image did not reproduce
(Tr. 94-96; App. Exh. No. 7). However, on closer examination
of that form and the other samples as well, Cripps discovered
that they were not the Appellant's work and so told Lee (Tr.
94-95, 190).27 In that regard, it seems that Lee had
mistakenly brought samples of another contractor's SPFs with
him to the press-sheet inspection (Tr. 191-92; R4 File, Tab W,
p. 2).28 In the pressroom, Lee checked the placement of the
sequential numbers on the press-sheet, made a photocopy of it
which produced the "VOID" dropout pattern as required, and
approved the job (Tr. 100-01; App. Exh. No. 8). Thereafter,
the approved press-sheet became the quality control standard
for the job, and the press operators constantly checked the
reprinted forms against the press-sheet throughout the
production run (Tr. 218, 252, 313, 324).
The record shows that while they were engaged in the press-
sheet inspection, Cripps mentioned to Lee that there were
still 96,000 pads of the rejected order in the plant, and said
he could demonstrate that those SPFs would copy just as well
on the Appellant's Minolta Model 4950 photocopier (Tr. 99,
199-200).29 Indeed, Cripps proceeded to make a copy of one of
the rejected forms on his copy machine and showed Lee that the
"VOID" pantograph appeared as specified (Tr. 91). However,
Lee replied that those SPFs were not usable because of an
error in the contract specification itself, namely, the red
prescription number was in the wrong place on the form (Tr.
100, 138-39, 167).30 Lee also admitted that the mistake was
made by the VA when it drafted the specification, and that
since it was their error the customer-agency would pay for it
(Tr. 139-40, 167).31
As Lee was preparing to leave, Cripps asked him if he wanted
to make any more copies of the reprinted SPFs on different
photocopy machines (Tr. 102). Although Lee thought additional
copies were unnecessary, Cripps was concerned that the reprint
had been evaluated and approved on the basis of photocopies
produced by the same Minolta copier which the Appellant had
used to test the original forms only to have the shipment
rejected. Therefore, Cripps insisted that he and Lee perform
further tests of the reprinted forms on different copy
machines outside the Contractor's plant (Tr. 102-03).
Accordingly, the record discloses that pursuant to Cripps'
suggestion, he and Lee visited several commercial
establishments in Emporia, where they made copies of the
reprint satisfactory to Lee and he left (Tr. 103).
Following Lee's press-sheet inspection, the Contractor
reprinted and delivered the SPFs and otherwise completed
performance of the contract.32 However, a few days prior to
Lee's plant visit, by letter dated August 31, 1992, Counsel
for the Appellant confirmed the design changes made to the
SPFs, the arrangements for a press-sheet inspection, and the
revised delivery schedule for the reprinting,33 but also
stated, in pertinent part:
While Professional Printing has agreed to reprint the
entire order to meet the needs of the agency, and to comply
with the GPO's verbal reprint order, they initially felt
that the product they produced was not rejectionable. As
was discussed with yourself and Mr. Leonard, the contractor
has the right to dispute any determination of the
contracting officer regarding quality problems or
rejectability of an order, unless there is an agreement to
the contrary. In this particular instance, it was agreed
that the most critical issue facing the GPO and the vendor
was the prompt production of the job, to fill the needs of
the agency, and to follow the contracting officer's
instructions regarding the reprint.
Professional Printing has devoted their efforts toward that
goal, and I am not aware of whether they have completed
review of the samples and the prior printed piece, compared
those to the specifications, and determined whether or not
they accept the position that the pieces produced initially
were rejectable.
Obviously, if they conclude that the product was properly
rejected there will be no reason to dispute the rejection.
If on the other hand, they conclude the originally produced
product meets [specifications], and wish to dispute the
rejection of the original printed product, they retain the
right to do so. That issue, under contract terms, is
totally separate from the requirement that they reprint the
job based solely on the contracting officers determination
of rejectability.
See, R4 File, Tab O, p. 2.
The record shows that Leonard met with the Appellant at GPO on
September 11, 1992, and October 16, 1992, respectively, for
the purpose of discussing his rejection of the original
shipment of SPFs (R4 File, Tabs V and W). During these
meetings, the Contractor, who was accompanied by Counsel,
asserted that the first printing of the forms fully conformed
to the specifications, and the real reason they were rejected
was because the VA needed to fix the error it had made with
respect to the placement of the prescription number on the
form (R4 File, Tab W., p. 3). The Respondent, on the other
hand, maintained that the original SPFs were defective, and
that the only reason for the rejection was that the word
"VOID" did not appear as required when the form was
photocopied (R4 File, Tab V and W, p. 2). Furthermore, the
record reveals that during the meeting on October 16, 1992,
Cripps copied a sample of the rejected SPF on Leonard's office
copier, and while the outline of the "VOID" pantograph could
be seen, the image was very weak (Tr. 125; R4 File, Tabs V and
X).34
Thereafter, on December 10, 1992, Counsel for the Appellant
wrote a letter to Leonard which: (a) reaffirmed the
Contractor's position that the SPFs initially delivered to the
VA met the specifications in every respect; (b) contended that
the Government's rejection of the original forms was improper;
and (c) claimed payment for all of the 19.6 million forms
which were produced before the Appellant was notified that the
Government had rejected the first shipment (R4 File, Tab W,
pp. 2-3).35 Among other things, Counsel for the Appellant
argued, in pertinent part:
There are no technical requirements in the specifications,
the only requirement being that the product copy on an
electrostatic copier. While you may possess a copier which
does not copy the product, we have tested the product on at
least 10 other photocopiers and found it to reproduce.
Whether or not it reproduces as well as you would like is
not the question, because you had no density standards for
reproduction. The fact is it does copy, and you can read
it. Had you wanted it to copy on "all electrostatic
copiers" the specifications should have said so.
See, R4 File, Tab W, p. 2. Accordingly, the Appellant asked the
Contracting Officer for his final written decision concerning the
dispute. Id. See, GPO Contract Terms, Contract Clauses, ¶ 5(a)
(Disputes).
On December 14, 1992, Leonard issued a final decision
rejecting the Appellant's claim to be compensated for the 19.6
million original forms (R4 File, Tab X).36 In that regard,
the Contracting Officer specifically stated, in pertinent
part, as follows:
All aspects of your claim have been carefully reviewed.
The reprinting of this product was required do [sic] to
your firm's failure to follow specifications. The
specifications clearly state the following: The word "void"
must appear at least three times (vertically, horizontally
and diagonally) and must not be visible on the printed
product, but must appear when the sheet is reproduced by
electrostatic means.
Testing by GPO's Quality Assurance Section could not get
the word "void" to appear on any forms produced by your
firm by electrostatic means.
* * * * * * * * * *
Also . . . you stated that there were no technical
requirements in the specifications and that your company
had tested the product on at least 10 other photocopiers
and found that it reproduced. As far as the specifications
are concerned, I see nothing wrong. Concerning the
electrostatic copier, GPO tried several copiers in the
building and could not get it to reproduce on any of our
copiers nor could the Department of Veterans Affairs.
See, R4 File, Tab X, pp. 1-2 [Original emphasis.]
On January 11, 1993, the Appellant timely noted an appeal of
the Contracting Officer's final decision with the Board.
Board Rules, Rule 1(a).
B. Demonstrative Evidence
At the hearing, both parties introduced demonstrative evidence
consisting of reproductions of samples of SPFs from the
rejected production run.37 Each party used a slightly
different methodology. The Appellant made single copies of
randomly selected individual forms on various photocopiers in
Emporia, Kansas, and grouped them together in nine separate
exhibits ( Tr. 111-14, 166, 198; App. Exh. Nos. 10-18).38 The
Respondent, on the other hand, tested the same ten SPFs on
different copy machines within GPO, and introduced the copies
as a single exhibit (Tr. 278; R. Exh. No. 1). The results of
their respective tests are as follows.
1. Appellant's Exhibits
The SPF copies comprising the Appellant's exhibits were made
using the normal or average settings on the identified
machines,39 and, in its view, all of photocopiers
satisfactorily reproduced the "VOID" pantograph (Tr. 111-114,
115, 121, 122). For the most part, the Board agrees. Below
is a listing of the Appellant's exhibits, showing: (1) the
photocopier model used and its location; (2) the prescription
number of the sample SPF; and (3) the Board's assessment of
the quality of the copies in each exhibit (in parentheses).
App. Exh. No. 10 [Minolta EP-450, Rebhels Store]. SPF Nos.
80597391, 80582872, 78784988, 78768667, 83591531, 80408802,
and 78997391 (the word "VOID" is light, but is clearly
visible in three places on the form); SPF No. 81397391 (the
word "VOID" is extremely light, but nonetheless is visible
in three places); and SPF No. 79480175 (the word "VOID" is
extremely light and is barely visible in three places).
App. Exh. No. 11 [Xerox 5028 (three different copiers),
Dillons West]. SPF No. 8039150 (copies B and C-the word
"VOID" reproduces with normal intensity and is clearly
visible in three places on the form; copy A-the word "VOID"
reproduces with normal intensity and is generally visible
in three places on the form, but the diagonal and vertical
words are partially obscured by a mottled background).
App. Exh. No. 12 [Xerox 5018, Dillons East]. SPF No.
80541702 (the word "VOID" reproduces with normal intensity
and is clearly visible in three places on the form); SPF
No. 82825409 (the word "VOID" reproduces with normal
intensity and is clearly visible in three places on the
form, notwithstanding the mottled background); SPF Nos.
80670109, 84614652, 79743601 (the word "VOID" is light, but
is clearly visible in three places on the form); and SPF
No. 84159962 (the word "VOID" is extremely light, although
still visible in three places).
App. Exh. No. 13 [Xerox 5028 (copier B), Dillons West].
SPF No. 85208801 (the word "VOID" reproduces with normal
intensity and is clearly visible in three places on the
both copies of this form, although the second copy has a
slightly mottled background); and SPF Nos. 82182872 and
81991530 (the word "VOID" is light, but is clearly visible
in three places on the form, notwithstanding a slightly
mottled background).
App. Exh. No. 14 [Xerox 5028 (copier A), Dillons West].
SPF No. 82141702 (the word "VOID" is light, but is clearly
visible in three places on the form); and SPF No. 82141802
(the word "VOID" is somewhat lighter, but is still clearly
visible in three places on the form).
App. Exh. No. 15 [Minolta EP-450, Country Mart]. SPF Nos.
78941901 and 82214652 (the word "VOID" reproduces with
normal intensity and is clearly visible in three places on
the form); and SPF No. 82142267 (the word "VOID" reproduces
with normal intensity and is clearly visible in three
places on the form, but the background is mottled).
App. Exh. No. 16 [Xerox 5028, Dillons East]. SPF Nos.
79797325, 79782872, 81208801, 83782873, 85217292 and
79584988 (the word "VOID" reproduces with normal intensity
and is clearly visible in three places on the form, but the
background is slightly mottled); SPF Nos. 79566405,
81470109, 81225409 and 83584989 (the word "VOID" is
lighter, but is still clearly visible in three places on
the form, notwithstanding a slightly mottled background).
App. Exh. No. 17 (Minolta EP-450].40 SPF No. 79741802 (the
word "VOID" is light, but is still clearly visible in three
places on the form).
App. Exh. No. 18 [Appellant's Minolta EP-450]. SPF Nos.
82942904 and 82941802 (the word "VOID" reproduces with
normal intensity and is clearly visible in three places on
the form).41
2. Respondent's Exhibits
As indicated above, R. Exh. No. 1 consists of copies of ten
forms from the rejected first printing, namely SPF Nos.
86864101, 91656101, 94541701, 86146473, 91656043, 86146459,
93216556, 93888649, 93217301, and 94541766, made on various
copiers in GPO. The forms were copied in a specific order
using the machine's normal or average setting (Tr. 280-81).
Furthermore, Leonard testified that in copying each of the ten
samples, he was only looking for the word "VOID" to appear in
three places, as required by the "PRINTING" specification (Tr.
293). Listed below, by photocopier model, are Leonard's
findings. As with the Appellant's exhibits, the Board's
observations are shown in parentheses.
Konica 3290, in Regional Procurement, Room A-638. Leonard
testified that mostly the "VOID" dropout pattern did not
appear, except that the word "VOID" appeared lightly and
was vaguely discernable in one place (horizontally) on the
copy of SPF No. 9451701 (copy no.3) (Tr. 284-86). (The
Board can also see the vertical word "VOID" on SPF No.
9451701. In addition, although very light, the Board can
see the horizontal and vertical words "VOID" on SPF Nos.
94541701, 86146473, 86146459 and 93888649, but only the
horizontal word "VOID" on SPF Nos. 93216556 and 94541766.
SPF Nos. 91656101, 8684101, 91656043 and 93217301 are
either blank, or the "VOID" pantograph blends so much into
the background as to be practically invisible).
b. Kodak Ektaprint 150, in the General Counsel's Office,
Room C-826. Leonard testified that the "VOID" dropout
pattern did not appear at all on any copy of the samples
(Tr. 291). (The Board, by straining, can barely see the
outlines of the horizontal word "VOID" on SPF Nos.
93217301, 93216556 and 91656043, but the word is so faint
that, as a practical matter, the Contracting Officer's
assessment is correct).
c. Savin 7500, in the Customer Service Office, Room C-830.
Leonard testified that the "VOID" pantograph appears
exactly as specified on SPF Nos. 91656043, 91656101 and
93216556 (Tr. 291-92). In addition, Leonard said that he
could read one of the "VOID" words on SPF No. 86864101, as
well as se the shadow of a word on SPF No. 86146459 (Tr.
291-92). The remaining five forms did not reproduce at
all. (Like Leonard, the Board clearly sees the word "VOID"
in three places on SPF Nos. 91656043, 91656101 and
93216556. However, the Board can also read the "VOID"
pantograph as specified on SPF No. 93217301, and although
very light the three words are visible on SPF Nos. 8684101
and 94541766. As for the remaining forms, the word "VOID"
is so faint that only parts of the three words, or even
less than three, are barely visible (SPF Nos. 94541701,
93888649, 86146459 (horizontal and diagonal only ) and SPF
No. 86146473 (diagonal only)).
d. Savin 7230, located in T & D (Technology and Design),
Room C-848. Leonard testified that the "VOID" dropout
pattern failed to reproduce on each copy of the samples
(Tr. 292). (Although very light, the Board can see the
three words of the "VOID" pantograph on SPF Nos. 86864101
and 94541766. However, on other forms the words are so
faint that only parts of less than three words are barely
visible-SPF Nos. 93216556, 93888649, 93217301 and 86146473
(horizontal word "VOID" and some letters of the vertical
word), SPF No. 94541701 (horizontal word "VOID" and some
letters of the diagonal word) and SPF No. 91656101
(horizontal only). Nothing at all appears on SPF Nos.
91656043 and 86146459).
e. Canon NP-8580, located in the Purchase Division, Room
C-829. Leonard testified that the "VOID" dropout pattern
did not appear on any copy of the samples at all (Tr.
292-93). (The Board can barely make out the three words of
the "VOID" pantograph on SPF Nos. 86146473, 94541701 and
94541766. Nothing at all is visible on SPF Nos. 91656101,
86864101, 91656043, 86146459, 93216556, 93888649, and
93217301).42
The results of Leonard's tests only reenforced his opinion
that the forms were clearly rejectionable "without question"
(Tr. 293).43
II. ISSUES PRESENTED
During the prehearing conference, the Board expressed its
belief that three questions were raised by the facts in this
appeal, namely:
1. Is the "PRINTING" specification in the contract
ambiguous, and if so, is that ambiguity latent or patent?
2. Was the Contracting Officer in error in rejecting the
first shipment of the SPFs on the ground that the forms
failed to satisfy the "PRINTING" specification's
requirement that the word "VOID" appear in three places
when reproduced by electrostatic means? Stated otherwise,
was his decision merely a subterfuge for the real reason,
which was that the customer-agency could not use the forms
because the prescription numbers were in the wrong place
due to a Government error in the design of the "NUMBERING"
specification?
3. Is the Appellant entitled to be compensated for all of
the 19,600,000 SPFs, including the approximately 9,600,000
forms which it printed prior to the Respondent's rejection
of the initial order that are still in its Emporia plant?
See, RPTC, pp. 6-7. However, from the evidence taken during the
hearing, the Board also sees two additional questions in this
case:
4. Apart from the issue of ambiguity with respect to the
"PRINTING" specification, was the contract otherwise
defective because it failed to provide any objective
standard by which to determine when, and if, the SPFs
satisfied the requirement for "[t]he word `VOID' . . . [to]
appear at least 3 times (vertically, horizontally and
diagonally) . . . when the sheet is reproduced by
electrostatic means?
5. In light of the Contracting Officer's finding that the
Contractor's original SPFs forms did not reproduce the
"VOID" pantograph as required in the specifications, is the
Appellant entitled to the benefit of the "implied warranty
of specifications" doctrine, which would shift the burden
of nonperformance to the Government? Stated otherwise, is
the true reason for the failure of the forms to copy in
accordance with the specifications to be found in a
defective design or in the Appellant's own production
processes?
III. POSITIONS OF THE PARTIES44
A. Appellant's Position
At the prehearing conference, the Appellant maintained that
the Contracting Officer's decision rejecting the initial
shipment of SPFs was wrong for three reasons: (1) the
contract's "PRINTING" specification was vague since it did not
prescribe any standards with respect to the visual density of
the word "VOID", or tell the Contractor that the dropout
pattern had to reproduce on all electrostatic copiers; (2) the
19.6 million SPFs printed by the Appellant were equal to or of
better quality than similar forms currently used by the VA
produced by someone else; and (3) the Government's error with
respect to the location of the prescription number was the
real reason for the rejection of the initial shipment of SPFs
because it needed to be corrected before the forms could be
used. See, RPTC, pp. 5-6. However, in its posthearing brief,
while the Appellant continues to press its "ambiguity" and
"Government error" contentions,45 see, App. Brf., pp. 22-24,
27-28, it also raises several additional arguments.
First, the Appellant states that the Respondent breached the
so-called "superior knowledge" doctrine by not disclosing
relevant information necessary to successful performance under
the contract, including an acceptable design of the "VOID"
pantograph, the correct ink color, and the proper placement of
the prescription number. App. Brf., pp. 10-15. In this
regard, the Appellant relies on a well-settled principle which
holds that the Government has a duty to disclose information
to a contractor, which is otherwise unavailable to it, where
that information is essential for contract performance.46
App. Brf., p. 10 (citing, Helene Curtis Industries, Inc. v.
United States, 312 F.2d 744 (Ct.Cl. 1963); Johnson
Electronics, Inc., ASBCA No. 9366, 65-1 BCA ¶ 4,628). Here,
the Contractor believes that the Government had "superior
knowledge" with regard to the need for a darker ink than
Pantone 287 blue if the "VOID" pantograph was to copy
properly, the fact that the red prescription number was
misplaced, and the fact that a sample of the previous printing
of the form showing the correct security-tint background
actually existed. App. Brf., p. 11-12. Nevertheless, the
Government failed to disclose all of this information,
especially the sample of the previous form, to the Appellant
at its request, until problems arose.47 App. Brf., pp. 13-14.
Indeed, the Contractor contends that by telling it that no
sample of the previous SPF was available, and by implying that
whatever "VOID" pantograph it designed in response to the
Government's verbal description would be acceptable, GPO
affirmatively mislead the Appellant to its detriment. App.
Brf., p. 14. For these reasons, the Contractor asserts that
the Respondent failed to meet its responsibilities under the
"superior knowledge" doctrine, and thus has forfeited any
contractual remedies it may have had because of the
Appellant's nonperformance. App. Brf., p. 15 (citing,
American Shipbuilding Company v. United States, supra;
Hardeman-Monier-Hutcherson v. United States, 458 F.2d 1364
(Ct.Cl. 1972); The Kehm Corporation v. United States, 93
F.Supp. 62 (Ct.Cl. 1950).
Second, the Appellant argues that the Government is equitably
estopped from rejecting the original printing of the SPFs
because of its failure to furnish an acceptable sample of the
previous printing of the form, and its refusal to evaluate the
Contractor's prior-to-production proof.48 App. Brf., pp.
15-20. The Appellant contends that the Respondent possessed a
sample of the previously-printed form, which was absolutely
critical to performance because it held the key to the proper
placement of the prescription number, the ink color, and the
correct "VOID" pantograph design, and failed to provide it to
the Contractor. App. Brf., pp. 16-17. Furthermore, the
Appellant argues that the combined impact of GPO's failure to
furnish a sample of the previous product and its refusal to
look at the proof was prepared in accordance with the
Respondent's verbal description of the security-tint
background, was to induce the Contractor to rely on incorrect
information for the first production run.49 App. Brf., pp.
17-18 (citing, American Electronic Laboratories, Inc. v.
United States, 774 F.2d 1110 (Fed. Cir. 1985)). By depending
on the information it had, and following GPO's instructions,
the Appellant produced SPFs that conformed to the
specifications, as written, but which were not usable by the
VA because the prescription number was misplaced and the ink
color was too light for reproduction purposes. App. Brf., pp.
18-19 (citing, Colorado State Bank of Walsh v. United States,
18 Cl. Ct. 611, 633 (1989)). Finally, the Appellant contends
that by relying on the specifications, the GFM, and the
Respondent's verbal directions, it suffered a financial loss
of approximately $176,000.00 when the forms it produced were
rejected by GPO. App. Brf., p. 19 (citing, Simmonds Precision
Products, Inc. v. United States, 546 F.2d 886, 892 (Ct.Cl.
1976)). Accordingly, the Contractor believes that equitable
estoppel against the Government is appropriate in this case.50
App. Brf., pp. 19-20 (citing, Federal Crop Insurance
Corporation v. Merrill, supra; OAO Corporation v. United
States, supra).
Third, even though the Appellant regards the "PRINTING"
specification as vague and ambiguous, it also argues, in the
alternative, that the language unambiguously supports the
interpretation that for the specification to be satisfied, it
is only necessary for the word "VOID" to appear in three
places when the form is reproduced on one photocopier. App.
Brf., pp. 20-22. The Contractor states that nothing in the
express wording of the specification requires the "VOID"
pantograph to copy on all or most machines, as contended by
the Respondent, nor does the specification identify any
photocopier brand or manufacturer on which the forms would be
used or tested for compliance. App. Brf., p. 21. It says
that in order to imply either the words "all" or "most" before
the phrase "electrostatic means", as contended by GPO, there
must be a finding that the specification is ambiguous. App.
Brf., p. 21 (citing, Bayou Land and Marine Contractors, Inc.
v. United States, 23 Cl. Ct. 764 (1991)). However, the
Contractor is unaware of any case in which an adjudicative
forum has supplied the word "all" where it did not exist
before in an agreement, and thus changed the meaning of a
contract. App. Brf., p. 21 (citing, cf., Thermal Electronic,
Inc. v. United States, 25 Cl. Ct. 671, 673 (1992) (the court
held that "all" means "all" and not something less, as
contended by the contractor)). The Appellant notes that it
has placed in evidence a number of electrostatic copies of
sample SPFs from the rejected printing, made on different
photocopiers in its plant and in local area stores, all of
which show the word "VOID" in three places on the form. App.
Brf., pp. 21-22. Similarly, tests of the SPFs during the
hearing showed that they reproduced as required on some
machines in GPO, but not on others. App. Brf., pp. 20, 22.
In the Appellant's view, the fact that samples from the
original press run were able to copy on any machine means that
the clear and unambiguous requirements of the specifications
have been met. App. Brf., p. 22.2
Finally, the Appellant contends that it is not liable for any
problems with the "VOID" pantograph because it followed the
Government's defective design of the product, and the outcome
was a form that failed to meet the "PRINTING" specification.
App. Brf., 24-29. The Contractor's argument is based on
"black letter" law which states that where the Government
drafts specifications for a desired product and creates a
"design-type" contract, there is an implied warranty that if
the specifications are followed, the resulting product will
satisfy the contract's requirements. App. Brf., pp. 24-25
(citing, Spearin v. United States, 248 U.S. 132 (1918); J.L.
Simmons Company Inc. v. United States, 412 F.2d 1360, 1363
(Ct.Cl. 1969)). Where, as here, a contract consists of mixed
design and performance specifications,51 a contractor can
defend on an implied warranty theory if the design
specifications are defective to the degree that adherence to
them would result in nonperformance.52 App. Brf., pp. 25-26
(citing, R.J. Crowley, Inc. v. United States, supra; R.E.D.M.
Corporation v. United States, 428 F.2d 1304, 1310 (Ct.Cl.
1970)). Under this contract, the Appellant was responsible
for the following performance aspects: (1) the parameters of
the printing; (2) the creation of the background printing
media; and (3) the requirement that the word "VOID" appear at
least three times when the SPF was reproduced by electrostatic
means. App. Brf., pp. 26-27. On the other hand, the
Government controlled the following requirements on both the
original printing and the reprint as well (a significant
factor where the question of an implied warranty is involved):
(1) the security-tint background; (2) the design of the "VOID"
dropout pattern; (3) the location of the prescription number;
and (4) the choice of ink color for the form. App. Brf., p.
27 (citing, Hol-Gar Manufacturing Corporation v. United
States, 360 F.2d 634 (Ct.Cl. 1966)). The Appellant says that
because it adhered to the Government's initial design
specifications, which turned out to be defective, it produced
a form which GPO now alleges did not meet the performance
specifications. App. Brf., 28-29. However, given these
circumstances, the Contractor states that under well-settled
legal principles it is not responsible for the production of
an unsatisfactory product on the original press run.53 App.
Brf., p. 29 (citing, R.E.D.M. Corporation v. United States,
supra; R.J. Crowley, Inc. v. United States, supra).
Accordingly, for all of these reasons, the Appellant asks the
Board to reverse the Contracting Officer's final decision and
direct him to accept the entire first printing of 19.6 million
SPFs at the contract price. App. Brf., p. 30.
B. Respondent's Position
The Respondent has maintained throughout these proceedings
that the Contracting Officer properly rejected the initial
shipment of forms because they failed to conform to the
contract's "PRINTING" specification, and moreover, that he
rightly denied the Appellant's claim for payment for 19.6
million SPFs. See, RPTC, p. 4; R. Brf., p. 3. In that
regard, GPO denies the Appellant's allegation that the true
reason for the rejection was the Government's error in the
location of the prescription number on the form, which had to
be corrected. See, RPTC, p. 5; R. Brf., p. 4. The Respondent
also contends, contrary to the Contractor, that the unshipped
SPFs in the Contractor's plant are not part of this case-only
the 100,000 pads actually delivered to the VA, inspected and
found rejectionable, are involved here. Id.
Basically, the Respondent's posthearing argument boils down to
the contention that the Appellant failed to meet its burden of
proof on the essential ingredients of its claim; i.e., there
is no credible evidence in support of the Contractor's
allegations that: (1) the "PRINTING" specification was
ambiguous and that it relied on its own interpretation of the
specification in preparing and submitting its bid; (2) it
produced the entire quantity of 19,600,000 SPFs in conformance
with the specifications as it understood them; and (3) the
Contracting Officer rejected the initial shipment primarily to
correct the numbering error. R. Brf., pp. 2, 5. With regard
to the "ambiguity" question, GPO notes that the Appellant did
not object to the specifications prior to starting performance
under the contract, and besides the Contractor seems to have
abandoned that contention and is pursuing other defenses. R.
Brf., pp. 5, 8. On the other hand, the Respondent believes
that when considered in context, the plain meaning of the
language in the "PRINTING" specification which says that the
word "`VOID' . . . must not be visible on the printed sheet,
and must appear where the sheet is reproduced by electrostatic
means", is that the product must copy on all commercially
available copiers. R. Brf., p. 10. GPO contends not only is
this the logical interpretation of that provision, but also
that the Appellant itself has admitted that the SPFs had to
copy with some universality, and indeed, tested the product on
a number of copiers during the initial production process just
to make sure that the form performed as required. Id.
Finally, the Respondent observes that the Contractor failed to
introduce any evidence that it relied on its "one machine
only" reading of the contract language when it prepared its
bid, and, in fact, conceded that it would have produced the
product the same way even if the words "all commercially
available electrostatic copiers" had appeared in the
specifications. R. Brf., pp. 10-11. Consequently, the
Government asserts that the only reasonable interpretation of
the specification is that the "VOID" dropout pattern was to
reproduce on all electrostatic copiers, and that was the
standard by which the forms were measured. R. Brf., p. 11.
As for the Appellant's new arguments, the Respondent believes
that while the Contractor has clearly explained the relevant
law, it has failed to show where or how those principles apply
to the facts in this case. With respect to the Appellant's
"superior knowledge" claim, the Respondent says that the
Contractor has failed to establish that the Government had
superior knowledge of facts which were essential to the
performance of the contract and were not disclosed by
Respondent. R. Brf., p. 12. Furthermore, while the Appellant
contends that GPO's failure to disclose vital information
excuses its inability to produce an acceptable product, it has
not demonstrated a cause and effect relationship between any
act or omission of the Government and the Contractor's lack of
performance. R. Brf., pp. 8-9 (citing, Baifield Industries,
Division of A-T-O, Inc. v. United States, 706 F.2d 320 (Fed.
Cir. 1983); Brantley Construction Company, ASBCA No. 27604,
84-3 BCA ¶ 17,532; Santa Fe Engineers, Inc. ASBCA No. 25549,
82-2 BCA ¶ 15,982; Meyer-Weddle Company, GSBCA No. 5736, 81-1
BCA ¶ 14,952; Felton Construction Company, AGBCA No. 406-9,
81-1 BCA ¶ 14,932). Thus, for example, the Respondent says
that the Contractor has failed to show how either knowledge of
a darker color ink or possession of a sample from the previous
printing of the SPFs would have resulted in the production of
an acceptable form.54 R. Brf., pp. 10, fn. 8, 11-12. First,
GPO notes that the darker ink which was used for the new forms
did not result in a product which satisfied the contract
specifications; i.e., the reprints were only accepted because
the approved press-sheet superseded the contract
specifications as the quality standard for printing. R. Brf.,
p. 11. Second, GPO states that a sample of the previously
printed form would not have assisted the Contractor, because
there is no evidence to indicate that the prior product was
tested, that it reproduced as required, and was accepted by
the Government. Id. For that reason, the Respondent rejects
the Appellant's arguments that a sample of the prior SPF was
essential for the security-tint background, or was otherwise
required for proper performance, on the ground that there is
no factual support for either assertion. R. Brf., p. 12.
Lastly, GPO points out that the Contractor has admitted that
it had all the information it needed to produce the form. Id.
The Respondent believes that the Appellant's "equitable
estoppel" argument is also without merit. Noting that the
Contractor's claim is premised upon allegations that
Government concealed or misrepresented material facts, GPO
flatly denies that it did so and says that the record is
devoid of any such evidence. R. Brf., pp. 10, fn. 8, 12. The
Respondent rejects the Appellant's notion that by making a
sample from a prior printing available to the Contractor, the
result would have been a form which complied with the
specifications and was acceptable. R. Brf., p. 13. To the
charge that its refusal to examine the Appellant's
preproduction proof damaged the Contractor, GPO contends that
not only was it acting within its rights, but observes that a
visual inspection of the proof at the hearing demonstrated
that it, too, was unacceptable. R. Brf., p. 12. In sum, the
Respondent argues that there is no basis for an equitable
estoppel against the Government, especially where, as here,
the specifications gave the Appellant wide latitude in
choosing its own process to perform the contract. R. Brf., p.
13.
Finally, the Respondent states that the Appellant's
"impossibility of performance" claim is without any foundation
in the record. R. Brf., pp. 10, fn. 8, 13. First, GPO says
that there is no evidence to support the Appellant's assertion
that the Government's choice of Pantone 287 blue ink rendered
the "PRINTING" specification so defective and flawed that
adherence to it necessarily resulted in an unsatisfactory
form, and hence made performance impossible. R. Brf., p. 13.
Second, the Respondent rejects the Contractor's allegation
that the design of the "VOID" pantograph, which it relied
upon, was dictated by the Government, and contends instead
that the real problem here was not the design, but rather the
Appellant's method of performance. Id. In the Respondent's
view, since there is nothing to establish that performance
under the original specifications was impossible, the only
conclusion is the Appellant alone is responsible for its
failure to perform in this case. R. Brf., p. 13.
Accordingly, for all of these reasons, the Respondent submits
that the Contracting Officer's final decision was correct, and
it asks the Board to deny the appeal. R. Brf., p. 14.
IV. DISCUSSION55
Although this contract appeal, replete as it is with complex
and novel issues, appears before the Board in the guise of a
simple dispute over the rejection of the initial printing of
SPFs, for all practical purposes the controversy is really
about scrap paper. Because of the Government's design error
with regard to the location of the prescription numbers on the
original forms, the VA could not use them even if they had all
reproduced the "VOID" pantograph perfectly. However, the
parties stipulated that since the Contractor placed the
numbers on the first SPFs where the specifications said they
should be, but for the problem with the "VOID" dropout
pattern, the Government would have accepted and paid for the
forms.56 Indeed, the evidence of record shows that Lee, the
VA representative who inspected and approved the press-sheet
for the reprint, admitted his agency made a mistake in
drafting the "NUMBERING" specification, and said that if the
forms had reproduced as required the VA would have paid for
them (Tr. 139-40, 167). In the Board's view, nothing in the
record tends to cast doubt on the parties' stipulation.57
See, Banta Company, GPO BCA 03-91 (November 15, 1993), Sl. op.
at 52-53, 1993 WL 526843. Therefore, to the extent that the
Appellant joined in the stipulation, the Board believes that
it has abandoned its argument that the real reason for the
Government's rejection of the forms was the numbering error,
and that issue is no longer in the case.58 See, RPTC, pp.
5-6.
Even if there was a suggestion in the record that the VA was
more interested in the proper placement of the prescription
number than in the reproduction capability of the "VOID"
dropout pattern, the customer-agency's motive for rejecting
the forms is irrelevant in this case. The contract at issue
is between the Appellant and GPO (Tr. 272-73). See, GPO
Contract Terms, Contract Clauses, ¶ 1 (Contractual
Responsibility). The Respondent's printing procurement rules
expressly state that the only person authorized to make final
determinations on whether products supplied by a contractor
conform to contract specifications is the contracting officer,
as this decision is within his discretion in administering a
contract.59 See, PPR, Chap. XIII, Sec. 1, ¶ 4.f. See also,
Sterling Printing, Inc., supra, Sl. op. at 34-35, fn. 46;
Hurt's Printing Company, Inc., supra, Sl. op. at 10, fn. 13;
Dependable Printing Company, GPO BCA 5-84 (September 12,
1985), Sl. op. 24, 1985 WL 154847; Graphic Litho, GPO BCA
21-84 (February 4, 1985), Sl. op. at 19-21, 1985 WL 154850.
Accord, Thomas W. Yoder Company, Inc., VACAB No. 997, 74-1 BCA
¶ 10,424. In this case, there is no doubt that the rejection
of the first shipment of SPFs was based on the Contracting
Officer's own investigation of the VA's complaint, and the
exercise of his independent judgment that the forms did not
meet the specifications. The Board finds no evidence that the
Contracting Officer was influenced in his decision by the
customer-agency. Cf., Graphics Image, Inc., GPO BCA 13-92
(August 31, 1992), Sl. op. 27-28, 1992 WL 487875 (citing,
Colorgraphics Corporation, GPO BCA 16-87 (March 31, 1989) Sl.
op. at 24, 1989 WL 384970).
From its careful review of the record, exhibits, and the
parties' briefs in this case, the Board has reached the
following conclusions:
A. Contrary to the Appellant's belief, the disputed
sentence in the contract's "PRINTING" specification is not
ambiguous when read against the contract's quality
assurance provisions.
From the outset, the focus of this dispute has centered on the
"PRINTING" specification in the contract. In a nutshell, the
Appellant's position has been that the contract provision is
vague and ambiguous, while the Respondent has insisted
throughout that the language in the specification is "as clear
as a bell."60 See, RPTC, pp. 5-6; App. Brf., pp. 20-21; R.
Brf., p. 10. The ambiguity issue arises because the Appellant
says that the principal sentence in controversy-"The word
`VOID' (each letter to be approx. 5/8" high) must appear at
least 3 times (vertically, horizontally and diagonally) and
must not be visible on the printed sheet, but must appear when
the sheet is reproduced by electrostatic means"-supports the
interpretation that satisfactory performance only requires the
word "VOID" to appear as specified when the form is reproduced
on one photocopier. App. Brf., pp. 20. The Respondent, on
the other hand, argues that the plain meaning of the disputed
language is that the product must copy on all commercially
available copiers.61 R. Brf., p. 10. Since the parties have
drawn different meanings from the disputed specification, the
Board's task is simple-it must decide which of the two
conflicting interpretations is correct, or whether both
readings may be reasonably derived from the contract terms; in
other words, is the contract ambiguous? As the parties
recognize, the answer to that question essentially involves
an interpretation of the contract by the Board.62 See, Web
Business Forms, Inc., GPO BCA 16-89 (September 30, 1994) Sl.
op. at 16-17; McDonald & Eudy Printers, Inc., GPO BCA 25-92
(April 11, 1994), Sl. op. at 13, 1994 WL 275093; Shepard
Printing, GPO BCA 37-92 (January 28, 1994), Sl. op. at 15-16,
1994 WL 275098.
The focus of inquiry in this case is confined to the contract
itself. See, Web Business Forms, Inc., supra, Sl. op. at 17;
Universal Printing Company, supra, Sl. op. at 26, fn. 27, 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.
Therefore, certain legal principles should be kept in mind at
the outset. First, 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. See, McDonald & Eudy Printers, Inc., supra, Sl.
op. at 13; R.C. Swanson Printing and Typesetting Company, GPO
BCA 31-90 (February 6, 1992), Sl. op. at 41, 1992 WL 487874,
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). Second, contractual language is
ambiguous if it will sustain more than one reasonable
interpretation.63 See, Webb Business Forms, Inc., supra, Sl.
op. at 17; 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, Neal & Company v. United
States, 19 Cl. Ct. 463, 471 and fn. 4 (1990), aff'd 945 F.2d
385 (Fed. Cir. 1991); 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).
Third, in analyzing disputed contract language, the courts and
contract appeals boards place themselves in the shoes of a
reasonably prudent contractor, and give the language of the
contract that meaning which a reasonably intelligent
contractor acquainted with the circumstances surrounding the
contract would give it. McDonald & Eudy Printers, Inc.,
supra, Sl. op. at 14; 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, 196 Ct.
Cl. 1, 9, 448 F.2d 1400, 1404 (1971); Firestone Tire and
Rubber Company v. United States, 195 Ct. Cl. 21, 30, 444 F.2d
547, 551 (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.64 See, Web Business Forms, Inc., supra, Sl.
op. at 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.65 See, Webb Business Forms, Inc., supra, Sl. op. at
19; Fry Communications, Inc./ InfoConversion Joint Venture v.
United States, supra, 22 Cl. Ct. at 504 (citing, Max Drill,
Inc. v. United States, supra, 192 Ct. Cl. at 626; 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, supra, 2 Cl. Ct. at 106).
However, the rules governing 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. See, Webb Business Forms, Inc., supra,
Sl. op. at 19; McDonald & Eudy Printers, Inc., supra, Sl. op.
at 16; Shepard Printing, supra, Sl. op. at 19; 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.66 See, Hol-Gar
Manufacturing Corporation v. United States, supra, 169 Ct. Cl.
at 388, 351 F.2d at 975; Webb Business Forms, Inc., supra, Sl.
op. at 19-20; General Business Forms, Inc., supra, Sl. op. at
16. Hence, all provisions of a contract should be given
effect and no provision is to be rendered meaningless. See,
Webb Business Forms, Inc., supra, Sl. op. at 20; General
Business Forms, Inc., supra, Sl. op. at 16 (citing, Raytheon
Company v. United States, 2 Cl. Ct. 763 (1983)). See also,
Pacificorp Capital, Inc. v. United States, supra, 25 Cl. Ct.
at 716; Fortec Constructors v. United States, supra, 760 F.2d
at 1292; United States v. Johnson Controls, Inc., 713 F.2d
1541, 1555 (Fed. Cir. 1983); Jamsar, Inc. v. United States,
442 F.2d 930 (Ct.Cl. 1971); Grace Industries, Inc., ASBCA No.
33553, 87-3 BCA ¶ 20,171; 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.
See, Webb Business Forms, Inc., supra, Sl. op. at 20. Accord,
Granite Construction Company v. United States, 962 F.2d 998
(Fed. Cir. 1992); B. D. Click Company v. United States, 614
F.2d 748 (Ct.Cl. 1980). That is, an interpretation which
gives a reasonable meaning to all parts of a contract will be
preferred to one which leaves a portion of it "useless,
inexplicable, inoperative, void, insignificant, meaningless,
superfluous, or achieves a weird and whimsical result."67
Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir.
1991) (quoting, Arizona v. United States, 216 Ct. Cl. 221,
235-36, 575 F.2d 855, 863 (1978)). See also, ITT Arctic
Service, Inc. v. United States, 207 Ct. Cl. 743, 524 F.2d 680,
684 (1975) (contract interpretation should be "without twisted
or strained out of context [and without] regard to the
subjective unexpressed intent of one of the parties. . .").
In interpreting the disputed language here, the parties have
staked out positions at the opposite ends of the spectrum-from
the Appellant's "one machine" theory to the Respondent's "all
commercially available copiers" view. However, as emphasized
above, for an ambiguity to exist the differing interpretations
of the contract language must be reasonable. See, Webb
Business Forms, Inc., supra, Sl. op. at 17; R.C. Swanson
Printing and Typesetting Company, supra, Sl. op. at 41, fn.
22; General Business Forms, Inc., supra, Sl. op. at 16.
Against that standard, in the Board's view, the Appellant's
interpretation is so unreasonable and bizarre that the Board
cannot imagine any self-respecting contracting officer
agreeing to such an absurd proposition. Consequently, if for
no other reason, it must be rejected on that basis alone.
See, Gould, Inc. v. United States, supra, 935 F.2d at 1274;
Arizona v. United States, supra, 216 Ct. Cl. at 235-36, 575
F.2d at 863 (1978).
At first blush, the Respondent's "zero" failure rate
interpretation also seems to be unreasonable. See, Foster
Construction, C.A. v. United States, 193 Ct. Cl. 586, 435 F.2d
873 (1970); Souter Construction Company, Inc., ENG BCA No.
5701, 93-3 BCA ¶ 26,175, at 130,264; Meredith Construction
Company, ASBCA No. 41736, 93-2 BCA ¶ 25,864. However, the
Board is required to interpret the contract so as to give
meaning to all of its parts. Consequently, it is compelled to
recognize that the disputed language in the "PRINTING"
specification does not stand in isolation, but rather there is
a natural transition between the requirement for perfect
performance and the contract's detailed quality assurance
provisions, especially QATAP.68 A brief glance at the QATAP
manual discloses the following explanation, in pertinent part,
about the program's evaluation standards:
For all but four of the numbered attributes and some paper
characteristics, evaluation is made on an absolute basis,
with defects assessed on deviation from explicit or
implicit nominal values, rather than on comparisons to a
specified physical object called the specified standard. .
. . Tolerances specify how far the product may deviate from
the nominal and still be acceptable.
* * * * * * * * * *
. . .[T]he evaluation for attributes P-7 through P-10, and
some paper characteristics are made relative to a specified
standard while the other attributes and paper
characteristics are evaluated on an absolute basis.
See, QATAP, p. vi. [Emphasis added.] It seems to the Board that
the "PRINTING" specification sentence in controversy, which
expresses performance in absolute terms, merely echoes QATAP's
evaluation philosophy, and is capable of being read against the
contract's quality assurance provisions, taken as a whole,
without negating the language of any part of the contract. See,
Webb Business Forms, Inc., supra, Sl. op. at 21; R.C. Swanson
Printing and Typesetting Company, supra, Sl. op. at 43-48.
Accord, Granite Construction Company v. United States, supra; B.
D. Click Company v. United States, supra. Thus, when properly
read, the contract says that within the tolerances allowed by
QATAP for defective SPFs at the Quality Level indicated, based on
an appropriate sample, the word "VOID" must appear three times
when the forms are reproduced by electrostatic means. This
plainly advises the Contractor that while it is expected to
produce an SPF which works every time, some leeway would be
allowed because of the nature of "VOID" pantograph work, beyond
which the form would either be rejected or a discount taken. The
Respondent's interpretation is in complete harmony with this
view, while the Appellant's de minimis approach effectively reads
the quality assurance provisions out of the contract. See, DWS,
Inc., Debtor-in-Possession, ASBCA No. 29743, 93-1 BCA ¶ 25,404,
at 126,540; Falcon Jet Corporation, DOT CAB No. 78-32, 82-1 BCA ¶
15,477, at 76,693.
Obviously, in an ideal world all of the SPFs would reproduce
as required; indeed, if the "PRINTING" specification is any
example, Government contracts are usually drafted in absolute
terms in the expectation that contractor's will aim for
perfect performance. Cf., Thermal Electronic, Inc. v. United
States, supra, 25 Cl. Ct. at 673. But common sense tells us
that we do not live in an ideal world, so some reasonable
allowance must be made for failure-not total failure, but some
acceptable level of imperfect performance which the parties
can live with-hence, the rule that performance specifications
are not as strictly enforced as design specifications. See,
e.g., Radiation Technology, Inc. v. United States, 177 Ct. Cl.
227, 366 F.2d 1003, 1005-06 (1966). See also, Fry
Communications, GPO BCA 22-84 (February 20, 1986), Sl. op. at
20, 1986 WL 181462. Accordingly, the Board finds the above
reading of the contract, which accepts the meaning ascribed to
the disputed sentence in the "PRINTING" specification by the
Respondent, as modified by the quality assurance provisions,
is the only reasonable interpretation of the contract read as
a whole. When a contract admits to only one construction, it
is not ambiguous. See, Webb Business Forms, Inc., supra, Sl.
op. at 21; R.C. Swanson Printing and Typesetting Company,
supra, Sl. op. at 43-48. See also, Falcon Jet Corporation,
supra, 82-1 BCA at 76,693 (citing, Martin Lane Company v.
United States, 193 Ct. Cl. 203 (1970); General Dynamics
Corporation, DOT CAB 76-29, 79-1 BCA ¶ 13,858).
B. An inadequate or defective Government design was the
real reason for the failure of the Appellant's original
SPFs to reproduce the "VOID" pantograph as required in the
"PRINTING" specification. Therefore, since the Contractor
was entitled to rely on that specification in manufacturing
the forms, under the doctrine of "implied warranty of
specifications" the Government bears the responsibility for
nonperformance.
Having found that the "PRINTING" specification is not
ambiguous, the answer to the next question raised by the
Appellant requires an examination of that provision in detail.
In that regard, the Contractor contends that the reason its
first SPFs were rejectable was because it followed the
Government's defective "VOID" pantograph design, and hence it
is entitled to the protection of the "implied warranty of
specifications" doctrine. App. Brf., pp. 24-25. The
Respondent, on the other hand, argues that the design of the
"VOID" pantograph was of the Contractor's own making, and
moreover the real problem was not the design but the
Appellant's method of performance, for which the Government
cannot be held accountable. R. Brf., p. 13. An analysis of
the record indicates that the Appellant's position has merit.
When the Government requires a contractor to follow detailed
plans and specifications, it is well-established that it
impliedly warrants that if the specifications are followed,
the result will be adequate. See, D.E.W., Incorporated, ASBCA
No. 35896, 94-3 BCA ¶ 27,182, at 135,459 (citing, United
States v. Spearin, supra; Blake Construction Company v. United
States, 987 F.2d 743, 745 (Fed. Cir. 1993); Santa Fe
Engineers, Inc., ASBCA No. 45228, 93-2 BCA ¶ 25,555). See
also, Hol-Gar Manufacturing Corporation v. United States,
supra, 360 F.2d at 638. As this Board has explained:
The Government's implied warranty of the adequacy of its
specifications is based on its responsibility for the
specifications rather than any presumed "superior
knowledge" in the sense of greater expertise. When one of
the parties to a contract undertakes to prepare the
specifications, that party is responsible for the
correctness, adequacy and feasibility of the
specifications, and the other party is under no obligation
to check and verify the work product of the party who
assumed responsibility for the preparation of the
specifications, even though he may be as much or more of an
expert than the party who prepared the specifications.
Courts have held many times that a bidder need not verify
the correctness and adequacy of Government specifications
prior to bidding. Ithaca Gun Co. v. United States, 176 Ct.
Cl. 477 (1966); Harvey-Whipple, Inc. v. United States, 169
Ct. Cl. 689 (1965).
See, Colorgraphics Corporation, supra, Sl. op. at 22 (quoting,
Consolidated Diesel Electric Corporation, ASBCA No. 10496, 67-2
BCA ¶ 6669, at 30,951-52).69 A contractor seeking to avail
itself of this "implied warranty" principle has the burden of
showing that the Government's specifications were somehow
defective and that they were the cause of the problems it
experienced. See, Printing Unlimited, GPO BCA 21-90 (November
30, 1993), Sl. op. at 17, 1993 WL 516844; Editors Press
Incorporated, GPO BCA 3-90 (September 4, 1991), 1991 WL 439271.
See also, Wornick Family Foods Company, ASBCA Nos. 41317, 41318,
41319, 94-2 BCA ¶ 26,808; Bradley Construction, Inc., ASBCA No.
39733, 91-2 BCA ¶ 23,974; AGH Industries, Inc., ASBCA Nos. 258,
26535, 85-1 BCA ¶ 17,784.
Government contracts like this one often contain both
performance and design specifications. See, Wornick Family
Foods Company, supra, 94-2 BCA at 133,339; Falcon Jet
Corporation, supra, 82-1 BCA at 76,691. The law makes a clear
distinction between "design" specifications and "performance"
specifications in determining the respective rights and
obligations of the parties to a Government contract.
Therefore, before applying the basic principle to the facts
here, and in order to determine which requirement was the
source of the Appellant's difficulties, if any, it is
necessary to understand exactly what kind of specification we
are dealing with in this case. See, Aleutian Constructors v.
United States, 24 Cl. Ct. 372 (1992).
Generally, design specifications explicitly state how the
contract is to be performed and permit no deviations, while
performance specifications focus on the results to be
obtained, and leave it to the contractor to determine how to
achieve that objective. See, Neal & Company v. United States,
supra, 19 Cl. Ct. at 468. See also, Stuyvesant Dredging
Company v. United States, supra, 834 F.2d at 1582; J.L.
Simmons Company, Inc. v. United States, supra, 188 Ct. Cl. at
684, 412 F.2d at 1360. As the Board has explained:
[There are] DESIGN specifications which set forth precise
measurements, tolerances, materials, in process and
finished product tests, quality control, inspection
requirement, and other specific information. Under this
type specification, the Government is responsible for
design and related omissions, errors, and deficiencies in
the specifications and drawings. PERFORMANCE
specifications set forth operational characteristics
desired for the item. In such specifications, design,
measurements and other specific details are not stated or
considered important so long as the performance requirement
is met. Where an item is purchased by a performance
specification, the contractor accepts general
responsibility for design, engineering, and achievement of
the stated performance requirements. The contractor has
general discretion and election as to detail but the work
is subject to the Government's reserved right of final
inspection and approval or rejection.
See, Colorgraphics Corporation, supra, Sl. op. at 23 (quoting,
Monitor Plastics Company, ASBCA No. 14447, 72-2 ¶ 9,626 (1972)).
[Original emphasis.] See also, Big Chief Drilling Company v.
United States, 26 Cl. Ct. 1276, 1294 (1992) ("Design
specifications set forth in detail the materials to be employed
and the manner in which the work is to be performed, and the
contractor is `required to follow them as one would a road map.'
[Citation omitted.] Whereas, performance specifications simply
set forth an objective or end result to be achieved, and the
contractor may select the means of accomplishing the task.
[Citation omitted.]"). This distinction is important because,
while the Government is entitled to performance in strict
compliance with design specifications, performance specifications
are not as rigidly enforced since the contractor is expected to
exercise his ingenuity and select the means for achieving the
standard of performance required. See, Carmon Construction,
Inc., GSBCA No 11227, 92-2 BCA ¶ 25,001, at 124,615; Falcon Jet
Corporation, supra, 82-1 BCA at 76,691-92 (citing, J.L. Simmons
Co., Inc., supra; R&M Mechanical Contractors, Inc., DOT CAB [No.]
75-51, 76-2 BCA ¶ 12,084; Santa Fe Engineers, Inc., ASBCA [No.]
22950, 79-2 BCA ¶ 14,084). See also, Centre Manufacturing
Company v. United States, 183 Ct. Cl. 115, 392 F.2d 229 (1968);
J.D. Hedin Construction Company v. United States, 171 Ct. Cl. 70,
347 F.2d 235 (1965).
The "PRINTING" specification which is at the heart of this
particular dispute is composed of both design and performance
elements. Of the five sentences which make up the
specification, three of them-"Print head to head," "Face
prints in black and in a match of Pantone 287 blue ink and
back prints in black ink only" and "On face, the black
linematter overprints a blue background (background bleeds all
sides)"-are wholly design in nature and totally the
Government's responsibility; i.e., nothing in those
requirements require the Appellant's input. The fourth
sentence-"Background (printing media to be created by the
contractor) is a security tint with a "VOID" dropout pattern-
is a mixed specification containing design (the background
pattern requirement) and performance (the creation of the
printing media) elements. The fifth sentence-"The word "VOID"
(each letter to be approx. 5/8" high) must appear at least 3
times (vertically, horizontally and diagonally) and must not
be visible on the printed sheet, but must appear when the
sheet is reproduced by electrostatic means-also has some
design characteristics (the requirement for the word "VOID" to
appear vertically, horizontally and diagonally on the form and
the size of the letters in the word), but otherwise the
language is purely one of performance. However, the fact that
the "PRINTING" specification contains some performance aspects
does not alter the conclusion that, by and large, it is a
design specification; i.e., the design requirements
predominate over the Contractor's discretion in performance.
See, Neal & Company v. United States, supra, 19 Cl. Ct. at 468
("Moreover, the inclusion of language requiring a completed
project or assembly to pass certain performance tests or
standards does not convert a design specification into one of
performance." Citing, R.E.D.M. Corporation v. United States,
supra, 192 Ct. Cl. at 901, 428 F.2d 1304); Harrison
Western/Franki-Denys, Inc., ENG BCA [ No.] 5523, 92-1 BCA ¶
24,582. See also, Falcon Jet Corporation, supra, 82-1 BCA at
76,691 ("When a technical proposal is submitted and accepted
in a two-step procurement, the specific design parameters of
that proposal control over the general performance
specifications of the RFTP." Citing, Hydrospace Electronics &
Instrument Corporation, ASBCA No. 17922, 74-2 BCA ¶ 10,682, at
50,805).
No one disputes that the Appellant followed and completely
satisfied the first three design requirements in the
"PRINTING" specification on its initial press run of SPFs.
Indeed, the only controversy involving those three elements
which took place at the hearing concerned whether or not the
Contractor used a color ink on its first printing which
matched Pantone 287 blue, but in the end the parties
stipulated that the Appellant had satisfied this requirement
(Tr. 328).70 There also seems to be no question that the
Contractor met the design requirements of the fifth sentence
in the specification with respect to the height of each letter
in the word "VOID" and the configuration of that word three
times on the form). Rather, the point of contention on this
issue involves the fourth sentence of the specification, which
charged the Appellant with creating the printing media for the
security tint background for the Government-designed "VOID"
dropout pattern.
This is not a typical "implied warranty" case. Here, the
Contractor asserts that it did select the appropriate
"printing media," which in the context of this appeal means
the selection of inks, screens, other materials, etc.,
required to produce a security-tint background with the
desired "VOID" dropout pattern, and successfully tested the
SPFs on several photocopiers only to be told later that its
handiwork was a failure. The Respondent, on the other hand,
claims that since the design of the "VOID" pantograph was the
Appellant's responsibility, and because the delivered forms
would not copy as required, the source of the problem was
obviously the Contractor's method of performance. However,
there is nothing in the record to show that the Contractor's
production processes were somehow deficient, nor is it clear
why the Appellant should have been aware of problems in its
printing processes when the results of its own quality control
tests prior to shipment indicated that it had manufactured a
workable form. See, Colorgraphics Corporation, supra, Sl. op.
at 22-24. Nor is this a situation where there was a total
failure of the forms, since the Contracting Officer found at
least one GPO machine, in his limited test of the SPFs during
the hearing, which reproduced the "VOID" pantograph on some
prescription forms exactly as specified. R. Exh. No. 1 (Savin
7500, Room C-830). See, Wornick Family Foods Company, supra,
94-2 BCA at 133,339. The only suggestion in the record of
possible process defects during the initial press run concerns
the color of the ink and screens employed, but, as indicated,
the parties stipulated that the Appellant used the correct
ink, and the testimony about the screens is inconclusive.
Moreover, the Board cannot ignore the contrast between the
active participation of the Respondent in the manufacturing
process for the reprinted SPFs when compared with its total
noninvolvement during the production of the original forms.
Thus, the record indicates that for the reprint process the
Government not only furnished an exact replica of the SPF
showing precisely the preferred "VOID" dropout pattern,71 but
GPO also authorized a press-sheet inspection conducted by the
customer-agency, and otherwise provided close advice and
guidance to the Contractor. During the original press run,
however, the Appellant was simply given a sample of a specimen
check, not the actual form, to guide it in creating a
security-tint background, received only perfunctory responses
to its inquiries for information, and was otherwise left to
fend for itself. In the Board's judgment, the Respondent's
altered approach in dealing with the Contractor during the
reprint process constitutes relevant and persuasive evidence
that the design in the original specifications was defective.
See, McNally Industries, Inc., ASBCA No. 43027, 93-3 BCA ¶
26,130 (the Government's issuance of changes to "correct
design errors" was held to prove the original specifications
were defective). See also, Big Chief Drilling Company v.
United States, supra, 26 Cl. Ct. at 1294; Hol-Gar
Manufacturing Corporation v. United States, supra, 360 F.2d at
638; J.S. Alberici Construction Company, ENG BCA No. 4900,
90-1 BCA ¶ 22,320.
In the final analysis, the Respondent's attempts to shift
responsibility for the performance failures to the Appellant
are unavailing. On this record, the Government's case amounts
to little more than a claim of res ipsa loquitur, which is
insufficient to convert what is essentially a design
specification into a performance one. See, Wornick Family
Foods Company, supra, 94-2 BCA at 133,339. Therefore, the
Board holds that since the "PRINTING" specification was,
overall, a design specification, the Respondent impliedly
warranted that if the Appellant adhered to its terms the
result would be a product which would reproduce the "VOID"
pantograph exactly as specified. Furthermore, the Board finds
that the failure of the SPFs to copy as required by the terms
of the contract was due to an improper design in the
specification, rather than any performance problems on the
part of the Appellant. Moreover, the Board also concludes
that when the forms failed to reproduce the "VOID" pantograph,
despite the Contractor's strict adherence to the Government's
design and using its best production efforts (which its
quality control tests indicated were successful), it was
entitled to rely on the Government's implied warranty of
specifications. See, Colorgraphics Corporation, supra, Sl.
op. at 22-24. Accordingly, the Board holds that the
Respondent bears the responsibility for nonperformance in this
case.
C. The Contracting Officer's rejection of the initial
shipment of SPFs was in error. Although he tested the
forms and found that they did not satisfy the "PRINTING"
specification's requirement that the word "VOID" appear in
three places when reproduced by electrostatic means, the
record fails to disclose what evaluation standards he
employed in reaching that conclusion. In the absence of
such testing or measurement criteria in the specifications,
elsewhere in the contract, or GPO's quality assurance
regulations, the basis for the rejection cannot be
established.
The ultimate question in this case is whether or not the
Contracting Officer made an erroneous decision when he
rejected the initial shipment of SPFs. Subsumed in this issue
is another one which asks if the Contracting Officer's
decisional process was somehow procedurally defective. As
previously indicated, the performance requirements of the
"PRINTING" specification must be read in harmony with the
contract's quality assurance provisions, especially QATAP.
Consequently, in order to answer the subsumed question, it is
necessary to examine the test procedures and evaluation
standards employed by the Contracting Officer in deciding that
the forms did not comply with the contract specifications.
From its review of the evidence, including the contract and
GPO's quality control regulations, and relevant precedent, the
Board concludes that the Respondent has failed to establish an
adequate basis for the rejection because the standards for
electrostatic reproduction are either imprecise or totally
nonexistent, certainly none is shown in the record. Without
such standards the Contracting Officer's decision rejecting
the forms was erroneous.
The starting point for the Board's analysis is the oft-cited
"black letter" rule that the Government is generally entitled
to strict compliance with its specifications, including those
of fixed-price supply contracts. See, McDonald & Eudy
Printers, Inc., GPO BCA 06-91 (May 6, 1994), Sl. op. at 20, 94
WL 377581; Shepard Printing, GPO BCA 23-92 (April 29, 1993),
Sl. op. at 19, 1993 WL 526848; Chavis and Chavis Printing, GPO
BCA 20-90 ((February 6, 1991), Sl. op. at 16, 1991 WL 439270;
Rose Printing Company, GPO BCA 2-87 (June 9, 1989, Sl. op. at
6, 1989 WL 384982; Fry Communications, Inc., GPO BCA 1-87
(June 1, 1989), Sl. op. at 5, 1989 WL 384981; Stabbe Senter
Press, GPO BCA Nos. 13-85 and 19-85 (May 12, 1989), Sl. op. at
48, 1989 WL 384977; Dependable Printing Company, Inc., supra,
Sl. op. at 23-24. Accord, Mega Construction Company, Inc. v.
United States, 25 Cl. Ct. 735, 741 (1992); S.S. Silberblatt,
Inc. v. United States, 433 F.2d 1314 (Ct.Cl. 1970); Wholesale
Tire and Supply Company, Ltd., ASBCA No. 42502, 92-2 BCA ¶
24,960; Orlando Williams d/b/a Orlando Williams Janitorial
Service, ASBCA Nos. 26099, 26872, 84-1 BCA ¶ 16,983. Strict
compliance can be enforced either by rejecting the defective
product, or accepting the work at a discount if that is in the
Government's best interest. See, McDonald & Eudy Printers,
Inc., supra, Sl. op. at 21 (citing, Automated Datatron, Inc.,
supra, Sl. op. at 4). However, when it insists on strict
enforcement of the specifications, the Government must prove
that the product does not meet the requirements of the
contract; i.e., it bears the initial "burden of persuasion" of
showing that the rejected work does, in fact, deviate from the
specifications. See, McDonald & Eudy Printers, Inc., supra,
Sl. op. at 23-24; Stabbe Senter Press, supra, Sl. op. at 49.
See also, International Lithographing, GPO BCA 1-88 (December
19, 1989) Sl. op. at 20, 1989 WL 384986; Mid-America Business
Forms Corporation, supra Sl. op. at 18-19. Accord, ABM/Ansley
Business Materials, GSBCA No. 9367, 93-1 BCA ¶ 25,246; Goal
Chemical Sealants Corporation, GSBCA Nos. 8627, 8628, 88-3 BCA
¶ 21,083; Churchill Chemical Corp., GSBCA Nos. 4321, 4322,
4346, 4353, 77-1 BCA ¶ 12,318, at 59,5000, aff'd, Churchill
Chemical Corp. v. United States, 221 Ct. Cl. 284, 602 F.2d 358
(1979); Ramar Company, ASBCA No. 16060, 72-2 BCA ¶ 9644; Pams
Products, Inc., ASBCA No. 15847, 72-1 BCA ¶ 9401; Hardeman-
Monier-Hutcherson, ASBCA No. 11785, 67-1 BCA ¶ 6210. The
Government usually meets this burden by advising the
contractor of the results of the inspection it has
conducted.72 See, McDonald & Eudy Printers, Inc., supra, Sl.
op. at 24; Stabbe Senter Press, supra, Sl. op. at 49. The
burden then shifts to the contractor to prove the Government's
findings are invalid for one reason or another. See, McDonald
& Eudy Printers, Inc., supra, Sl. op. at 24; Stabbe Senter
Press, supra, Sl. op. at 49; International Lithographing,
supra, Sl. op. at 21. Accord, Nuclear Research Corporation v.
United States, 814 F.2d 647, 650 (Fed. Cir. 1987); Riverport
Industries, Inc., ASBCA Nos. 28089, 28090, 28091, 29577, 86-2
BCA ¶ 18,835, mot. for reconsid. den., 86-3 BCA ¶ 19,050;
Continental Chemical Corporation, GSBCA No. 4483, 76-2 BCA ¶
11,948; Shamrock Industrial Maintenance, DOT CAB No. 72-11,
72-2 BCA ¶ 9482; C.W. Roen Construction Company, DOT CAB No.
75-43, 76-2 BCA ¶ 12,215. Otherwise, the presumption that the
Government's tests are conducted correctly will prevail. See,
Astro Science Corp. v. United States, 200 Ct. Cl. 354, 360,
471 F.2d 624, 627 (1973); Integrated Systems Group, Inc.,
GSBCA No. 11602-P, 92-1 BCA ¶ 24,762; Donald R. Stewart &
Associates, AGBCA Nos. 84-226-1, 84-227-1, 84-228-1, 84-239-1,
84-240-1, 84-241-1, 85-168-1, 89-222-1, 89-223-1, 89-224-1,
89-225-1, 92-1 BCA ¶ 24,705; Goal Chemical Sealants
Corporation, supra. See also, Horn Waterproofing Corporation,
DOT CAB No. 73-24, 74-2 BCA ¶ 10,933.
GPO's procurement regulation establishes the basic framework
for the inspection and testing of procured products. Apart
from providing the foundation for QATAP, and establishing the
program as an integral part of most procurement contacts, the
PPR also states that such inspection and testing "shall be
performed in accordance with article 14 `Inspection and Tests'
of Contract Clauses in GPO Contract Terms (Pub. 310.2)."73
See, PPR, Chap. XIII, Sec. 1, ¶¶ 3(a),(b), 4(c)(2),(g).
Furthermore, the PPR, inter alia: (1) provides guidance for
gathering inspection samples; (2) sets forth basic inspection
procedures; (3) makes special provisions for the inspection of
departmental random copies (blue label copies); and (4)
requires that appropriate records and documentation of all
quality assurance actions be maintained. See, PPR, Chap.
XIII, Sec. 1, ¶¶ 4(g)(1)-(4), h. Reduced to its essentials, a
reading of the PPR, the various QATAP manuals incorporated by
reference therein, and the "Inspections and Tests" article of
GPO Contract Terms, indicates clearly that the proper
inspection and testing of procured products consists of three
things: (1) a sample which is randomly selected and adequate
enough to be representative of the lot; (2) the use of proper
testing procedures and techniques; and (3) the presence of
objective standards by which to measure the procured product.
See, e.g., B. P. Printing and Office Supplies, GPO BCA 22-91
(February 5, 1993), Sl. op. at 18, 1993 WL 311371 (discussing
sampling techniques and citing QATAP Technical Manual, GPO
Publication 355.1 (March 1989) and GPO Technical Report No.
27, July 1, 1988, Subject: Acceptance Sampling); Matthew's
Printing, Inc., GPO BCA 31-88 (March 14, 1990), Sl. op. at
4-5, 1990 WL 454983 (sampling); Sterling Printing, supra, Sl.
op. at 8, fn. 13 (discussion of testing procedures for paper);
Fry Communications, GPO BCA 22-84 (February 20, 1986), Sl. op.
at 10-17, 1986 WL 181462 (discussion of techniques used for
measuring the color match of paper under QATAP and the JCP
Paper Specification Standards); McDonald & Eudy Printers,
Inc., supra, Sl. op. at 24-25 (discussing how defects are
measured under QATAP); Shepard Printing, supra, Sl. op. at
15-18 (discussing how defects are assessed under QATAP). As
previously mentioned, a contracting officer who shows that he
has adhered to the testing and inspection requirements of the
contract is entitled to have his determination of product
quality upheld. See, French/Bray, Inc., supra, Sl. op. at 17.
In this case, the Appellant has not challenged the size of the
sample or the method used by the Respondent to select the
sample to insure that it was as representative as possible of
the lot.74 Cf., B. P. Printing and Office Supplies, supra,
Sl. op. at 18-19. Nor has the Contractor contested GPO's
testing methodology. Cf., Shepard Printing, supra, Sl. op. at
15-18. Indeed, the only possible testing technique for
discovering the alleged defect in this case-copying the SPF by
electrostatic means and visibly checking to see if the word
"VOID" appeared vertically, horizontally and diagonally on the
form-is contained in the "PRINTING" specification itself, and
was used by both the Contractor and the Government. However,
the Appellant has expressly questioned the standards applied
by the Respondent in rejecting the forms (Tr. 156-57).75 In
the Board's view, that issue describes the crux of the problem
in this case.
The law is clear that before the Government can reject a
contractor's product, either as a prelude to default or some
lesser action, it must first establish specific, quantifiable,
objective, and firm criteria indicating the level of quality
which the product is expected to meet. See, Wornick Family
Foods Company, supra, 94-2 BCA ¶ 26,808 (the Government
improperly rejected pears that were pink, beige, brown, red,
reddish brown, or gray following dehydration because the
contract for freeze dehydrated fruit had no provision for
rejecting the fruit for discoloration); John L. Hall dba Taiga
Resource Consultants, AGBCA No. 92-217-1, 93-3 BCA ¶ 26,212
(the contract criteria were not specific enough to support a
Government deduction based on the contractor's failure to
provide sufficiently thorough briefings); Shirley Contracting
Corporation and ATEC Contracting Corporation, ENG BCA No.
4650, 85-3 BCA ¶ 18,214 (the Government's rejection of a
contractor's source of rock was improper because the contract
did not set forth any objective performance criteria and the
standards that the Government had insisted on were in excess
of its own prevailing standards and those accepted in the
industry); Chandler-Wilbert Vault Company, VACAB No. 1444,
80-2 BCA ¶ 14,682 (rejection of the contractor's grave liners
for failure to prevent sinkage in graves was improper because
there was no specified test or standard in the contract for
"sunken graves"). Stated otherwise, the Government cannot
leave a contractor "in the dark" with respect to the quality
standards it is expected to strive toward, and then rely on
unclear, subjective, or indefinite standards to reject a
product, because such conduct is tantamount to setting a
contractor up for failure. See, See, Mid-American Engineering
and Manufacturing, ASBCA No. 20939, 78-1 BCA ¶ 12,870 (in a
contract for the supply of electrical harnesses, where the
Government, without showing a sample of an acceptable product
to the contractor, rejected the contractor's first article
submission because too many air bubbles were present in the
potting compound encapsulating the cables, and then replied to
the contractor's request for the establishment of some
criteria as to the number of air bubbles allowed by stating
that there should be no, or almost no, visible air bubbles, a
default termination following the first article test failure
was improper because the performance criterion thus
established was too indefinite). One way to set such a
standard, of course, is to provide the contractor with a
sample of an acceptable product. Id., at 62,629. With
respect to printing contracts, such as the one here, another
way would be to require proofs or a press-sheet inspection
prior to production, as the Government eventually did for the
reprint in this case.
The "indefinite standards" issue is not a question which the
Board, or its predecessor the GPO Contract Appeals Board
(GPOCAB), has faced very often.76 Consequently, there is a
paucity of agency precedent precisely on point. However, at
least one GPOCAB ad hoc panel decision-Elgin Business Forms,
GPOCAB 10-84 (October 19, 1984), 1984 WL 148108-is closely
analogous to the situation in this appeal and is particularly
instructive on the issue. Elgin Business Forms was a default
termination case involving a contract to print 270,000
marginally punched continuous forms for the National
Aeronautics and Space Administration (NASA). The contract
contained the usual specifications concerning paper color,
dimensions, the number of parts, placement of the carbon
paper, alignment and spacing of holes, etc., and a requirement
that the forms run on the Honeywell PRU 1200 Printer, which
was the only piece of equipment mentioned in the contract.
The contractor was not furnished with a sample copy of the
form by either NASA or GPO. Shortly after delivery of the
forms, NASA complained that they were unacceptable because,
inter alia, misaligned holes caused the printer to jam and the
carbon paper ripped during the decollating process. In
response to NASA's complaint, representatives of the customer-
agency and the contractor conducted tests on two boxes of the
forms, with the following results: (1) on forms from the first
box, the printer jammed three times because of misaligned
holes and twice because of improper stacking; and (2) forms
from the second box only jammed three times because of
improper stacking (no feeder or decollating problems were
observed). GPO separately tested two boxes of the forms and
found: (1) forms from half of the first box, which was tested
on the Honeywell PRU 1200 Printer, jammed four times while
there was one stacking problem; and (2) on forms from the
second box, the printer jammed twice, again there was one
stacking problem, and decollating was unacceptable at normal
operating speed. Accordingly, GPO rejected the forms on the
ground that they did not meet the minimum specifications, and
then defaulted the contract when the contractor failed to
replace them as instructed by the contracting officer. No
excess reprocurement costs were assessed.
The GPOCAB ad hoc panel held that GPO had not sustained its
burden of proof of showing that the contractor's forms failed
to meet the contract specifications, and overturned the
contracting officer's default determination. See, Elgin
Business Forms, supra, Sl. op. at 11. The panel used a three-
pronged rationale to explain why the default was inappropriate
under the factual situation in that case, namely: (1) neither
the contract nor the specifications provided specific
performance and testing standards or requirements; (2) a
default cannot be based on unstated specifications; and (3)
the inspection and tests conducted on the forms were not
dispositive. See, Elgin Business Forms, supra, Sl. op. at
5-10. The reasoning of the panel with respect to the
vagueness of the specifications is particularly illuminating
in the context of this appeal, and is set forth in partial
detail here:
Section 2.20(c) of the contract provides that "special and
performance tests shall be as described in the
specifications." Section 301 of the contract provides:
Forms produced under the contract must be of first class
workmanship in materials suitable for their intended
use. All operations and materials such as printing,
collating, punching, perforating, registration, joining,
splicing, paper, and carbon leaves shall be such as will
ensure satisfactory continuous operation over makes,
kinds of equipment, and usage specified. [Emphasis
added.]
The Panel agrees . . . that the criteria "satisfactory
continuous operation" and "unsatisfactory performance"
(section 2.20(e)) ". . . leave room for interpretation."
[Record citation omitted.] The [contract] specifications
do not establish any performance criteria usage tests or
quality standards. While the contract is voluminous, the
specifications are woefully vague and insufficient if their
purpose was to ensure that NASA, the ordering agency,
received a product which would meet its particular needs.
The deficiency in the specifications in the contract is the
glaring failure of the government to precisely state what
its performance requirements were and how it would test to
determine conformity with those requirements. While the
specifications informed the Appellant that the forms would
be run on a Honeywell PRU 1200 Printer they did not
indicate the expected performance level. [Record citation
omitted.] Likewise the specifications did not contain a
performance standard for the decollator which is an
integral part of the process. Although the specifications
fail to contain a particular brand of decollating
equipment, the Panel finds that the failure to state any
performance level for the decollator is a critical
deficiency on the part of the government.
The Appeal File and the record indicate that the forms were
subject to several tests. Unfortunately, except for the
test ordered by the Panel, the reports contained in the
Official Appeal File neither contain a statement of
sampling nor performance criteria. For example, [a
December 9, 1983, memorandum from NASA to the contracting
officer] only states that [NASA] had received 540 cartons
of forms ". . . which were unacceptable ." [Record
citation omitted.] The memo does not state the number of
boxes tested, how or when they were tested, or most
importantly what were the acceptability criteria.
Similarly, . . . on January 11, 1984, [representatives of
NASA and the contractor] inspected two boxes and rejected
them because "paper holes do not line up with carbon holes
causing the printer to jam, paper appears to be shaded, and
carbon rips when paper is decollated." [Record citation
omitted.] The Panel finds that the inspection of two boxes
out of 540 is not an adequate sample upon which to default
this contract. Society Brand Hat Co., ASBCA [No.] 6904,
1962 BCA ¶ 3349.
. . . Likewise, the Panel finds that the tests conducted on
January 17 and 30, 1984, were defective because of the
sample size and the failure to specifically state the
expected performance level. The GPO did not sustain its
burden of proving that the forms produced by Elgin did not
meet the specifications. Pams Products, Inc., ASBCA [No.]
15847, 72-1 BCA ¶ 9401.
The Panel was not presented with any evidence which proved
that the Appellant had not met the standard of satisfactory
continuous operation. In the absence of any definition by
the government the Panel construes the requirement of
"satisfactory continuous operation" to mean something less
than continuous operation. If the forms were expected to
run continuously without any stoppages, the contract should
not have used the term "satisfactory." The term
satisfactory implies to the Panel a contemplated standard
of operation which expects some stoppages. The Panel is
unaware of any product which runs continuously without ever
stopping. The question then is how many stoppages
constitute satisfactory? The Panel believes that
"satisfactory" like "beauty" is in the eye of the beholder.
It is an imprecise term which should have been defined
exactly in the specifications. [Footnote omitted.]
The record indicates that NASA . . . has used this type of
form for approximately ten years. [Record citation
omitted.] During this long period of time NASA should have
established a specific performance standard by which it
would measure acceptability. However, both the Official
Appeal File and Hearing Record are devoid of any evidence
of NASA's past experience. Such evidence or even common
trade practice performance standards for this type of form
would have given the Panel a basis of comparison with the
existing test results. Gholson, Byars & Holmes
Construction Co. v. United States, 173 Ct. Cl. 374 (1965).
See, Elgin Business Forms, supra, Sl. op. at 5-8.77 See also,
Electronic Composition, [No GPOCAB No.] (December 22, 1978), Sl.
op. at 34, 1978 WL 22339 ("We have scrutinized the subject
contract in vain for any stated requirements that [the electronic
typography system] perform `economically', or that it have multi-
reel or automatic restart capability or that it should produce
pages at a specified rate. As we stated earlier, the contractor
will not be bound by the unexpressed intent of the Government."
Citing, Elgin National Watch Company, ASBCA Nos. 10421, 10589,
10698, 10730, 11721, 67-2 BCA ¶ 6400; ITT Arctic Services, Inc.
v. United States, supra).
The Board has no doubt that the holding in Elgin Business
Forms was correct as a matter of law. Consequently, and its
teachings can be applied to the facts in this case, which are
substantially similar.78 The Appellant here, like the
contractor in Elgin Business Forms, was not provided with a
sample of the form it was expected to produce by either the VA
or GPO, despite its request for one, but rather was told to
follow the specifications. However, in contrast to Elgin
Business Forms where the contract identified a specific make
of printer (the Honeywell PRU 1200 Printer) as a measure of
operational performance, the Contractor here was not told that
the SPFs would have to copy on any particular photocopier or
range of photocopy machines. Given this lack of guidance, the
Appellant did the only thing a reasonably prudent contractor
could do under the circumstances-test the forms on its own
photocopier and several others to make sure that the forms
copied as required before shipping them to the VA. As the
record shows, those tests satisfied the Contractor that the
word "VOID" would appear three times "when reproduced by
electrostatic means." If the Respondent intended the "VOID"
pantograph to reproduce on all photocopiers, it should have
expressly told the Contractor so. Although, for reasons
already explained, producing a "VOID" pantograph which will
copy without fail on every copy machine manufactured is
technologically impossible,79 no one doubts the Government's
right to require complete or perfect performance in its
specifications. See, Thermal Electronic, Inc. v. United
States, supra, 25 Cl. Ct. at 673. On the other hand, if the
Respondent, in giving full effect to the contract's quality
assurance provisions, meant to indicate that product
acceptability could be something less than total success with
respect to copying, then it had an obligation to make that
clear to the Contractor; e.g., identify which brand of
photocopiers or range of machines would be used, or establish
a failure rate for copying, based on VA's experience with the
forms, which the customer-agency would tolerate. The
Government did neither in this case.
In Elgin Business Forms, the GPOCAB was dealing with
performance specifications in the contract which were
indefinite or vague. Here, the Board has diligently searched
the four corners of the agreement, including QATAP and its
supporting manuals and reports, in vain for some clue as to
what reasonable standard the Contractor was expected to meet
for its forms to be considered acceptable in copying the
"VOID" pantograph. The problem, as the Board sees it, is that
no QATAP category precisely fits the alleged defect in this
case. The closest analogy for the word "VOID" not reproducing
as required would seem to be the finishing attribute for loss
of information (F-17), which is defined as "any omission of or
damage to the printed image which impairs the transmission of
the intended information."80 See, QATAP, p. 44. However,
neither the VA nor GPO's inspector, Nowalk, considered or
measured the failure of the word "VOID" to appear as a loss of
information; i.e., the F-17 box is not checked on either the
Notice of Quality Defects or the Inspection Report (R4 File,
Tabs H and K). Perhaps, more importantly, Nowalk's report
classifies the "VOID" pantograph problem as a "major" defect,
whereas as QATAP clearly states that loss of information is
always assessed as a "critical" defect (R4 File, Tab K). See,
QATAP, pp. ix, 44. In short, unless there is an undisclosed
standard somewhere which provided the yardstick for measuring
the nonappearance of the word "VOID" when the form was
photocopied, the quality problem at issue must be seen as sui
generis and one without any established norm or tolerances.
Therefore, when the Respondent rejected the forms under these
circumstances and required the Appellant to reprint them, it
was, in effect, making a constructive change in the contract;
indeed, the reprint was practically a different product. See,
Service Engineering Company, ASBCA No. 40275, 94-1 BCA ¶
26,382; Gary Aircraft Corporation, ASBCA No. 21731, 91-3 BCA ¶
24,122; Pinay Flooring Products, Inc., GSBCA No. 9286, 91-2
BCA ¶ 23.682; Harris System International, Inc., ASBCA No.
33280, 88-2 BCA ¶ 20,641; Kahn Communications, Inc., ASBCA No.
27461, 86-3 BCA ¶ 19,249; AGH Industries, Inc., supra, 85-1
BCA ¶ 17,784; McCrory Electric Company, GSBCA No. 5363, 80-2
BCA ¶ 14,686,
Thus, the question remains-what standard did the Contracting
Officer use to reject the forms? At the hearing, the
Contracting Officer testified that he used a very simply
litmus test-the word "VOID" either appeared or did not appear
when the SPF was photocopied, was legible or not legible, was
visible to the naked eye or not visible (Tr. 267-68). The
Appellant applied the same standard in its pre-delivery tests
of the forms (Tr. 126-27). However, by definition, such a
standard is not an objective one, but rather is subjective and
capable of creating great discrepancies in test results among
individual evaluators in different locations, as occurred
here. See, Wornick Family Foods Company, supra, 94-2 BCA at
133,341; Shirley Contracting Corporation and ATEC Contracting
Corporation, supra, 85-3 BCA at 91,428-29. Consequently, the
demonstrative evidence in this case is of great significance
in resolving the standards issue.
As one would expect, the demonstrative evidence submitted by
the respective parties is in direct conflict. The Appellant's
exhibits show that the "VOID" pantograph reproduced as
specified when samples of SPFs from the rejected press run
were tested on its photocopiers and seven other machines in
Emporia, Kansas; i.e., there were nine successful evaluations
of the forms (App. Exh. Nos. 10-18). The Respondent, on the
other hand, tested the samples of the forms on five copy
machines in GPO, and with one exception (the Savin 7500, Room
C-830), the "VOID' pantograph did not copy; i.e., there was
only one partial success out of the five photocopiers used (R.
Exh. No. 1).81 Although the parties obtained different
results from the tests they made at different locations, when
their demonstrative evidence is considered as a whole, the
Board finds that of the 14 photocopy machines used, the "VOID"
pantograph reproduced as required on all of the samples forms,
or on some of them, on 10 machines-a 71 percent success rate.
It is not for the Board to determine whether reproduction of
the "VOID" pantograph 71 percent of the time amounts to
acceptable performance-that is a matter for the Contracting
Officer in the exercise of his discretion. However, the
demonstrative evidence does illustrate the underlying
technical problem with respect to developing proper test
procedures for the SPF, namely, different results may be
achieved on different equipment.
We are told by the authorities that photocopiers vary greatly
in the quality of copies they produce. See, Beach, Shepro,
and Russon, supra, p. 145. Such variables as the age of the
machine, its frequency of use, the toner level, the
cleanliness of the glass, and even the quality of the original
to be copied, can affect the quality of the copies produced by
any particular photocopier. Id., pp. 145-46. As the
Appellant's witness, Cripps, indicated during the hearing,
photocopying is not "foolproof," and the fact that the patent
holder, Standard Register, did not provide any warranty with
respect to the copying quality of the "VOID" pantograph lends
some support to that conclusion (Tr. 230, 237-38).
Apart from the practical considerations involved in testing
the forms on different photocopiers, there are also legal
consequences attached to the conflict in the demonstrative
evidence. Where, as here, a contractor tests supplies from
the same production run as the Government, and submits its own
test results tending to disprove the results obtained by the
Government, it raises a question as to whether the product
conforms to the contract specifications or not, and places the
validity of the Government's tests in issue. See, Donald R.
Stewart & Associates, supra, 92-1 BCA ¶ 24,705; Goal Chemical
Sealants Corporation, supra, 88-3 BCA ¶ 21,083; G. Santoro &
Sons, Inc., VACAB No. 755, 68-2 BCA ¶ 7282. In such a case,
because the Government has the burden of proof, a finding that
it has failed to adduce sufficient probative evidence to
persuade the contract appeals board that the product did not
meet the contract requirements is warranted. See, Unlimited
Supply Company, Inc., GSBCA No. 12371, 94-3 BCA ¶ 27,170, at
135,393 (citing, Praoil, S.r.L., ASBCA Nos. 41499, 44369, 94-2
BCA ¶ 26,840; Air-O-Plastik Corporation, GSBCA 4802, 4870,
4925, 4965, 81-2 BCA ¶ 15,338). See also, Communications,
Ltd., ASBCA Nos. 23261, 80-1 BCA ¶ 14,368, at 70,836 (the
proof offered by the contractor was sufficient to overcome the
presumption that the tests conducted by the agency were
proper, and agency failed to carry its burden of going forward
with the evidence). Simply stated, the rule is:
[W]here there is proof of differing tests results and no
additional evidence is presented, the issue of conformity
with specification must be decided against the party having
the burden of proof. E.g., Lisbon Contractors [v. United
States [34 CCF ¶ 75,358 ] 828 F.2d 759 (Fed. Cir. 1987)],
[828] F.2d at 764-65 (the party with the burden loses if
evidence on issue is evenly balanced); Arden Engineering
Co., supra, at 82,553-54; Universal Steel Strapping Co.,
ASBCA No. 13686, 69-2 BCA ¶ 7799 at 36,212.
See, Praoil, S.r.L., supra, 94-2 BCA at 133,502. In this case,
the Respondent did introduce additional evidence in the form of
further tests of sample SPFs which tended to confirm its original
results, with one exception. However, the Board believes that
these additional test results are insufficient to sustain the
Government's burden of showing conclusively that the failure of
the "VOID" pantograph to copy as required was due to defects in
the form itself, rather than any differences in the Respondent's
and the Appellant's copying equipment.82 Accordingly, the Board
finds that the evidence of test results, overall, is
inconclusive, and does not form a basis for rejecting the
original SPFs. See, Shepard Printing, supra, Sl. op. at 19
(GPO's Inspection Report, standing alone, would not support the
Government's decision, made in partial reliance thereon, to
default the contract).
In summary, when the Board considers the record evidence in
this case, it finds that the absence of clear and objective
standards for evaluating and measuring the copying capability
of the ordered SPFs is a fatal defect in the contract.
Without such criteria, testing performance against the
specifications becomes untrustworthy, vague and inadequate for
the principle purpose of the contract, providing the VA with a
product which would meet its particular needs. Similarly,
although the matter was not contested, the Board cannot ignore
the fact that the Respondent decided that the first shipment
of SPFs were rejectable after evaluating only 50 forms on
three copy machines (R4 File, Tab K). The QATAP Manual
provides guidance as to the appropriate size of the sample for
particular order or lot sizes. See, B. P. Printing and Office
Supplies, supra, Sl. op. at 20 (citing, QATAP Manual, pp. 5,
6). Applying the QATAP Manual guidelines to this case, the
sample size for the first lot of 100,000 pads of forms should
have been 400 pads (40,000 forms). See, QATAP Manual, pp. 5,
6. Therefore, the Board believes that it was unreasonable for
the Respondent to base its decision to reject the original
shipment on such a small sample as 50 forms. See, Elgin
Business Forms, supra, Sl. op. at 6. Cf. B. P. Printing and
Office Supplies, supra, Sl. op. at 20-21. Accordingly, for
all of the foregoing reasons, the Board concludes that the
Contracting Officer's decision rejecting the forms was in
error and must be reversed.83
D. Although the Appellant is entitled to compensation for
the rejected shipment of 10,000,000 SPFs, payment for the
remaining approximately 9,600,000 forms still stored in its
plant is not authorized under applicable law.
The last issue before the Board basically concerns the remedy
in this case, and is easily disposed of. There is no doubt
that the Appellant is entitled to compensation for the
rejected shipment of 10,000,000 SPFs both on the theory that
the "implied warranty of specifications" shifted the
responsibility for nonperformance to the Respondent, and the
ground that the rejection was erroneous because the contract
failed to provide specific, quantifiable, and objective
standards indicating the level of quality which the product
was expected to meet. See, Colorgraphics Corporation, supra,
Sl. op. at 25; Elgin Business Forms, supra, Sl. op. at 11.
However, the Contractor also seeks payment for the additional
96,000 pads of undelivered forms in its printing plant from
the same production run as the rejected forms (Tr. 214). See,
RPTC, p. 5. The Respondent, on the other hand, has maintained
throughout these proceedings that the undelivered SPFs are not
part of this case because they were never shipped to the VA or
rejected by GPO; i.e., the Government's position is that only
the 100,000 pads which were delivered to the customer-agency
are involved in this appeal (Tr. 271, 309). See, RPTC, p. 6.
The Board agrees with the Respondent.
It is well-settled that if a sample from a lot is rejected
only that lot is rejected. See, Kitco, Inc., ASBCA No. 31809,
91-3 BCA ¶ 24,190; Pierce Coal Sales International, Inc.,
ASBCA No. 33243, 87-1 BCA ¶ 19,667; Varo, Inc., ASBCA No.
25446, 86-1 BCA ¶ 18,531; Associate-Aircraft-Tool and
Manufacturing, Inc., ASBCA No. 7255, 1963 BCA ¶ 3730. Also
cf., Infotec Development, Inc., ASBCA Nos. 31809, 32235, 91-2
BCA ¶ 23,909; Henry Angelo & Company, Inc., ASBCA No. 30502,
87-1 BCA ¶ 19,619. The contract in this case clearly provided
for shipment of the entire order of 600,000 pads of forms in
two installments. The first delivery of 100,000 pads was to
be sent to the VA by July 27, 1992. The remaining 500,000
pads were scheduled for shipment by August 17, 1992 (R4 File,
Tab A, p. 3). Since it is undisputed that the only SPFs
actually shipped, tested and rejected were the 100,000 pads of
the first installment, under applicable principles only those
forms are affected by the Board's ruling that the Government's
rejection was in error. Consequently, there is no legal basis
for the Board to direct the Respondent to pay for the
approximately 96,000 pads of forms remaining in the
Appellant's plant. Accordingly, to that extent, the
Contractor's appeal is denied.
V. CONCLUSIONS
In summary, the Board concludes that while the relevant
contract specifications are not ambiguous, the "PRINTING"
specification is, by and large, a design specification
authored by the Government. See, Neal & Company v. United
States, supra, 19 Cl. Ct. at 468; R.E.D.M. Corporation v.
United States, supra, 192 Ct. Cl. at 901, 428 F.2d 1304.
Consequently, when the Respondent instructed the Appellant to
follow the specifications in producing the SPFs, it impliedly
warranted that the results would be adequate and acceptable.
See, Blake Construction Company v. United States, supra, 987
F.2d at 745; Hol-Gar Manufacturing Corporation v. United
States, supra, 360 F.2d at 638; D.E.W., Incorporated, supra,
94-3 BCA at 135,459. Since a defective Government design was
the real reason that the Appellant's original SPFs failed to
reproduce the "VOID" pantograph as required by in the
"PRINTING" specification, the Government's implied warranty
shifts the burden of nonperformance to the Respondent and
entitles the Contractor to compensation for the rejected
shipment of forms. See, Colorgraphics Corporation, supra, Sl.
op. at 25. Accord, Wornick Family Foods Company, supra, 94-2
BCA at 133,340.
Second, the Board concludes that the absence of specific,
quantifiable, objective, and firm criteria indicating the
level of performance which the SPFs were expected to meet,
either in the specifications or elsewhere in the contract,
invalidates the Respondent's rejection of the first shipment
of forms. See, Elgin Business Forms, supra, Sl. op. at 5-8;
Electronic Composition, supra, Sl. op. at 34. Accord, Shirley
Contracting Corporation and ATEC Contracting Corporation,
supra, 85-3 BCA at 91,428; Chandler-Wilbert Vault Company,
supra, 80-2 BCA at 72,412; Mid-American Engineering and
Manufacturing, supra, 78-1 BCA at 62,629-30. Although both
the Respondent and the Appellant used the same test to measure
the success of the ordered product-the word "VOID" either
appeared when the SPF was photocopied or did not-that
standard, by definition, is subjective rather than objective,
and can create great discrepancies in test results among
inspectors and locations. See, Wornick Family Foods Company,
supra, 94-2 BCA at 133,341; Shirley Contracting Corporation
and ATEC Contracting Corporation, supra, 85-3 BCA at
91,428-29. In that regard, the Appellant's demonstrative
evidence was sufficient to raise a question as to whether or
not the original SPFs conformed to the contract
specifications, and placed the validity of the tests which the
Respondent relied on to reject the forms in issue. See,
Donald R. Stewart & Associates, supra, 92-1 BCA at 123,311;
Goal Chemical Sealants Corporation, supra, 88-3 at 106,447.
Therefore, the Government had the burden of going forward with
the evidence, and while it did introduce additional test
results, they were inconclusive and insufficient to carry its
burden of showing that the form itself, and not equipment
differences, was the cause of the failure of the "VOID"
pantograph to copy as required. See, Unlimited Supply
Company, Inc., supra, 94-3 BCA at 135,393; Praoil, S.r.L.,
supra, 94-2 BCA at 133,502; Communications, Ltd., supra, 80-1
BCA at 70,836. Furthermore, the size of the sample (50 SPFs)
on which the Respondent relied in rejecting the original forms
was too small to provide a valid basis for measuring their
performance. See, Elgin Business Forms, supra, Sl. op. at 6.
Cf. B. P. Printing and Office Supplies, supra, Sl. op. at
20-21. Therefore, the evidence of test results, overall, does
not form a basis for rejecting the original SPFs. See,
Shepard Printing, supra, Sl. op. at 19. Accordingly, an
additional ground for sustaining the Appellant's claim as to
the first shipment of forms is that the Contracting Officer's
decision to reject them was in error. See, Elgin Business
Forms, supra, Sl. op. at 11.
Finally, the Board concludes that the scope of the remedy in
this case must be limited to the first delivery of forms.
Because the contract clearly provided for shipment of the
entire order in two installments, and it is undisputed that
the only SPFs shipped, tested and rejected were the 100,000
pads of the first installment, there is no legal basis for the
Board to direct the Respondent to pay for the forms from the
original press run which remain in the Appellant's plant.84
See, Kitco, Inc., supra, 91-3 BCA ¶ 24,190; Pierce Coal Sales
International, Inc., supra, 87-1 BCA ¶ 19,667; Varo, Inc.,
supra, 86-1 BCA ¶ 18,531. Accordingly, since the 100,000
rejected pads of forms represents 1/6, or 16.7 percent, of the
entire order of 600,000 pads, the Board concludes that the
Appellant is entitled to a proportionate payment of the
original contract price of $533,000.00 as compensation, or
$89,011.00, and it will so order.85
ORDER
From the foregoing analysis and for the reasons enunciated,
the Board finds and concludes that the Appellant has shown
that the Contracting Officer's rejection of the initial
shipment of 100,000 pads of SPFs was erroneous, and it is
entitled to compensation for those forms. Since the rejected
shipment represents 1/6 of the entire order of forms, the
Board finds that the Respondent owes the Contractor an
equitable adjustment in the amount of $89,011.00, as a fair
and reasonable compensation in this case. THEREFORE, the
Board REVERSES the Contracting Officer's decision denying the
claim and REMANDS the appeal with instructions that
appropriate arrangements be made to pay the Contractor in
accordance with this opinion. Universal Printing Company,
supra, Sl. op. at 56; Banta Company, supra, Sl. op. at 62. On
the other hand, the Contractor has not sustained its claim to
be paid for the undelivered 96,000 pads at its plant.
ACCORDINGLY, to that extent, its appeal is DENIED.
It is so Ordered.
May 19, 1995 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 February 16, 1993. GPO Instruction
110.12, Subject: Board of Contract Appeals Rules of Practice
and Procedure, dated September 17, 1984 (Board Rules), Rule
4(a). It will be referred to hereafter as the R4 File, with
an appropriate Tab letter also indicated. The R4 File
consists of twenty-four (24) documents identified as Tab A
through Tab X.
2 The court reporter's transcript shall be referred to
hereinafter as "Tr." with an appropriate page number
thereafter.
3 The Respondent's brief will be referred to hereinafter as
"R. Brf.", with an appropriate page citation thereafter. The
Appellant's brief will be cited as "App. Brf.," with an
appropriate page number thereafter. Furthermore, at the
hearing both parties introduced documentary evidence. The
Appellant's exhibits will be referred to as "App. Exh. No.,"
with an appropriate number thereafter. The Respondent's
exhibit will be referred to as "R. Exh. No. 1".
4 During the hearing, the Appellant introduced a number of
exhibits relating to the previous printing of the SPFs. See,
App. Exh. Nos. 2, 6 and 7. That job, Jacket No. 305-949, was
issued on November 1, 1991, and was awarded to Standard
Register (Tr. 66, 128, 145, 228). See, R4 File, Tab D.
According to the record testimony, although the Appellant
received a copy of the 1991 solicitation, it did not submit a
bid because not enough time was left to prepare one, and
besides it had no presses available for the work (Tr. 52-53,
54, 64, 145, 186; App. Exh. No. 2). However, it continued to
maintain a file on the job, and when GPO solicited the work
again, the Contractor submitted an offer and was awarded the
contract (Tr. 17-18, 54, 228-29).
5 Unlike the previous job by Standard Register, which showed
the word "VOID" once, the SPFs printed under this contract
used the word three times (Tr. 41, 65-66, 301). The "VOID"
pantograph required in the specifications is a security
feature designed to deter persons from reproducing the
document for unauthorized or fraudulent purposes, or at least
make it more difficult to produce a forgery (Tr. 242).
Essentially, it is a series of different size dots in a
screen pattern with an image inserted, with the dots being
lighter and smaller in size, so that when the document is
photocopied the dots should disappear and expose the image
(Tr. 232). The key security feature is the repetitive use of
a word, in this case "VOID", in the background in such a way
that the dots hide the image until it is reproduced by
electrostatic means (Tr. 55-56, 164, 233). In printing
industry parlance, the "VOID" pantograph would be a "dropout"
pattern, i.e., one in which halftone dots are eliminated when
overexposed. See, Mark Beach, Steve Shepro, and Ken Russon,
Getting It Printed: How to Work with Printers and Graphic
Arts Services to Assure Quality, Stay on Schedule, and
Control Costs, (Coast to Coast Books, Portland, Oregon,
1986), p. 198 (hereinafter Beach, Shepro, and Russon). There
is no single background pattern for the "VOID" pantograph
(Tr. 233). See also, Pocket Pal: A Graphic Arts Production
Handbook (International Paper Company, Memphis, Tennessee,
1989), p. 191 (defining a "dropout" as "[p]ortions of
originals that do not reproduce, especially colored lines or
background areas (often on purpose)."
6 The sequential numbering system and the requirement that
the SPFs should have no missing numbers constitutes a second
security feature, in addition to the "VOID" pantograph (Tr.
152, 163, 242). The sequential numbers are placed on the
SPFs during the production process-the numbering machine is
on the press and a separate stamping operation prints the
numbers on the forms as they are passing through (Tr. 27, 52,
61; App. Ex. No. 3). These security features-the sequential
number and the "VOID" pantograph- were required because the
SPFs are used by VA physicians and others to dispense drugs
(Tr. 152, 163).
7 GPO's Quality Assurance Through Attributes Program, GPO
Publication 310.1, as revised in November 1989 (QATAP), was
incorporated in the contract by reference (R4 File, Tab A, p.
1).
8 Standard Register has held the patent for the "VOID" since
1979 (Tr. 243).
9 The other GFM items, offset film negatives and a
reproduction proof, were supplied as specified in the
contract (Tr. 14, 56).
10 In this regard, the Appellant was following the GFM
dispute resolution procedures established in the "Government
Furnished Property (GFP)" clause of GPO Contract Terms. See,
GPO Contract Terms, Contract Clauses, ¶ 7 (Government
Furnished Property (GFP)). As explained by Richard Cripps,
the Appellant's President, at the hearing, since the
Appellant is in business to print the product which the
customer wants, when it is confronted by two (2) different
sets of guidelines to go by, namely, a specification and a
sample, as here, it must clarify which one controls; i.e.,
does the customer want something that looks like the sample,
or a product which is in accordance with the specifications
(Tr. 136).
11 At the hearing, Cripps testified that he did not consider
the copy of the specimen check to be the security background
"sample" required by the contract (Tr. 147-48; App. Exh. No.
1). Instead, he thought that it was an "example", not a
"sample"; a "sample" would have been an exact replica of the
SPF the Appellant was expected to produce (Tr. 146, 147).
12 As explained by Gallagher at the hearing, notwithstanding
the absence of a proofing requirement in the specifications,
the Contractor deemed it advisable to offer the Respondent
one anyway, in accordance with standard industry practice,
because this was a half a million dollar contract (Tr. 23-24,
43).
13 At the hearing, Leonard testified that there was nothing
unusual about GPO's refusal to evaluate the Contractor's
proof, because the Government normally will not accept proofs
when the contract does not require them (Tr. 274, 314). In
this case, the VA did not ask for proofs, and GPO did not add
a proofing requirement to the specification because not only
would it add a cost to the contract, but it would also have
shifted the burden of responsibility for the quality of the
product to the Government (Tr. 274-75, 314). Furthermore,
the Appellant's proofs were unnecessary because the
Respondent had already furnished the negatives to the
Contractor (Tr. 314). GPO's decision not to evaluate the
Appellant's prior-to-production proofs was consistent with
the agency's policy regarding unsolicited samples. See,
Printing Procurement Regulation, GPO Publication 305.3 (Rev.
10-90), Chap. XII, Sec. 4, ¶ 3 (hereinafter PPR). See also,
Hurt's Printing Company, Inc., GPO BCA 27-92 (January 21,
1994), Sl. op. at 23-28, 1994 WL 275098. On the other hand,
the fact that proofs are not required does not alter a
contractor's obligation to perform in accordance with the
contract terms. See, Fry Communications, Inc./InfoConversion
Joint Venture, GPO BCA 7-84 (July 9, 1986), Sl. op. at 12-13,
1986 WL 181458.
14 According to the Leonard's testimony at the hearing, the
standard for measuring the job was the specification (Tr.
266-67). Insofar as the "VOID" pantograph is concerned, the
only performance test for the pantograph is a simple one-
photocopying either produces three legible and readable
"VOIDs" or it doesn't (Tr. 267-68).
15 On the other hand, the Appellant does not believe that the
only successful "VOID" pantograph would be one which copied
on all photocopiers, because, in Cripps' view, such
performance is simply not possible (Tr. 229-30). According
to Cripps' testimony, there are many different "VOID" dropout
patterns commercially available, and not all of them will
copy on all copy machines; indeed, they may not even copy on
most copiers (Tr. 241, 252-53). In fact, Cripps said he
conducted an experiment with various "VOID" pantograph
products and could defeat the security feature by moving the
image down to the lightest setting on the copier (Tr. 243).
16 As required by GPO Contract Terms: "Contractors must have
a quality control system that will assure product quality
acceptable to the Government." GPO Contract Terms,
Supplemental Specifications, ¶ 1.(c) (Quality); Contract
Clauses, ¶ 14 (Inspection and Tests). Cripps testified that
the Appellant photocopied samples of the form on several
machines with varying degrees of success, but it would always
copy; i.e, the word "VOID" would appear on all manipulations
of the photocopier, including the darker and lighter
settings, although on the darker settings the background
tended to be mottled (Tr. 157).
17 Although the contract called for the Appellant to make the
initial shipment by July 27, 1992, the record reveals that
only 71,680 pads were received by the VA on that date (R4
File, Tab G). The balance-28,320 pads-was delayed because
the Contractor's numbering machine had malfunctioned, and the
error was not discovered until the pads had been packed for
shipment (Tr. 9; R4 File, Tab F; App. Exh. No. 4).
Consequently, those pads of SPFs had to be renumbered and
repacked, and were not delivered to the VA until August 4,
1992 (R4 File, Tabs F and G; App. Exh. No. 4). Furthermore,
it seems that the customer-agency wanted the SPFs shipped by
a special type of delivery service called "signature
service," but that requirement was inadvertently omitted from
the original specifications (R4 File, Tab G; App. Exh. No.
4). Both of these problems were cured by Contract
Modification No. 1, dated August 4, 1992, which extended the
date for shipping the balance of the first lot of SPFs to
August 4, 1992, and amended the contract to provide that the
rest of the job, including the balance of the first shipment,
should be sent by "signature service" (R4 File, Tab G).
18 Among other things, the VA also voiced its concern about
the solid or screen tints color match (Printing Attribute No.
9), the use of darker blue ink; and the prescription numbers
being printed in [the] wrong area (Tr. 261; R4 File, Tab H).
In addition, the customer-agency made several minor
complaints regarding the way the Appellant packaged the SPFs
for delivery-e.g., cartons not sequential, carton numbers
mixed on pallets, pallets not numbered, pallets not wrapped
securely, etc.-but these were never seriously considered by
GPO even though they might have been grounds for returning
the shipment to the Contractor (Tr. 290).
19 With regard to the other defects, the VA's complaint about
the ink color match is discussed in note 25 infra. As for
the other problems mentioned by the customer-agency, Nowalk
concluded that they were not enough to support rejection of
the forms (R4 File, Tab K). This was confirmed by Leonard
during his telephone conversation with Gallagher on August
17, 1992 (Tr. 31, 46; App. Exh. No. 4). See also, R4 File,
Tab M.
20 In the opinion of the Contracting Officer, Hooks properly
placed the Appellant on notice of the problem with the SPFs,
but should not have told Gallagher to stop the job, leaving
that decision to the Contractor (Tr. 306-07). On the other
hand, Leonard also testified that if he was the Appellant: ".
. . I would have pulled the job off the press until the
problem was straightened out." (Tr. 307).
21 With respect to the ink, under the specifications the
Contractor was allowed to pick whatever screen it wanted so
long as the ink matched Pantone 287 blue (Tr. 132). A
difference in the screens used can account for a color
variation in the same Pantone ink (Tr. 133; App. Exh. Nos. 6
and 7).
22 As became clear during the hearing, there was a major
design problem with the original printing of the SPFs,
namely, the Government had made an error with respect to the
placement of the sequential numbers on the form (Tr. 75-76).
Leonard testified that the VA never specifically said
anything to him about the erroneous location of the numbers,
and he only became aware of the problem later (Tr. 263, 299).
But see, R4 File, Tab H ("Numbers printed in wrong area").
Regardless, Leonard asserted that the numbering problem had
nothing to do with rejection of the job (Tr. 299). However,
the parties did stipulate that: (a) the Contractor had placed
the numbers in the proper place on the original SPFs and the
printed forms conformed to the specifications in that
respect; (b) because the number was not where the VA wanted
it on the original SPFs, the forms were not usable even if
the "VOID" pantograph had copied correctly; and (c)
nonetheless, if there had been no other problems-i.e., if the
"VOID" dropout pattern had reproduced by electrostatic means,
as required by the specifications-the Government would have
accepted and paid for the forms (Tr. 63, 75, 79-80, 304-05).
23 The letter was signed by another Contracting Officer, John
Adams (Tr. 277).
24 The drawing and the sample were sent to the Appellant both
by facsimile transmission and overnight mail. In that
regard, the record testimony discloses that App. Exh. No. 6,
the sample of the prior SPF job, is probably the one which
the Contractor had been told did not exist (Tr. 37, 39, 137).
25 At the outset of the hearing, the parties were at odds
over whether the Appellant had used the proper ink color for
the original printing of the SPFs. Like the previous
contract performed by Standard Register, the Appellant's
contract required "a match of Pantone 287 blue ink" (R4 File,
Tab A, p. 2; App. Exh. No. 2, p. 2). Cripps testified that
the Standard Register forms actually used a darker color ink,
which was preferable because it allowed for better copying of
the "VOID" pantograph (Tr. 134-35, 137, 139; App. Exh. Nos. 6
and 7). Cripps also stated that if the GFM had included a
proper sample of the job, he would have questioned the ink
color and sought a clarification from GPO (Tr. 135; App. Exh.
No. 6). On the other hand, Leonard testified that his
examination of the rejected SPFs clearly showed a color
fluctuation in the product which inhibited proper copying of
the forms (Tr. 286-88). As he saw it, while none of the
forms met the specifications with respect to reproductive
quality, the lighter colored SPFs copied better than the
darker ones (Tr. 288). Leonard also testified that although
the VA had complained to GPO about the ink color match on the
original SPFs, Nowalk never bothered to test the quality of
that printing attribute or make a determination concerning
the color, inspecting the forms instead only for the failure
of the "VOID" pantograph to copy as required, the most
obvious defect (Tr. 289-90, 293-94; R4 File, Tabs H and K).
Even so, notwithstanding what he saw as an obvious color
difference in the samples of the rejected forms, Leonard was
unable to say conclusively that the variation in the ink
itself was the reason for the "VOID" pantograph not copying
(Tr. 290. 291). In addition, although Nowalk did not
testify, Gallagher's notes of his conversation with Nowalk on
August 27, 1992, contains the following entry: "I told him
(Nowalk) . . . that J. Leonard had indicated that even the
ink color was wrong - John (Nowalk) said the ink color was OK
and disputed that J. Leonard had told me it was wrong." See,
App. Exh. No. 4. Finally, at the close of the hearing, the
parties stipulated that the ink color of the original
printing was close enough to Pantone 287 blue that the forms
would not have been rejected because of failure to meet the
color specifications for the job (Tr. 328).
26 Leonard testified that a simple press-sheet inspection was
within the prerogative of the VA, but only GPO had the
authority to make changes to the contract (Tr. 311). See,
GPO Contract Terms, Contract Clauses, ¶ 1 (Contractual
Responsibility). He also said that generally if a customer-
agency approves the press-sheet at such an inspection, GPO
does not hear about it (Tr. 312).
27 Cripps concluded that Lee's sample forms were not produced
by the Contractor because, inter alia: (a) the ink color was
darker than Pantone 287; and (b) they did not have a red
sequential number on them, as did all of the SPFs shipped by
the Appellant (Tr. 98).
28 The parties stipulated that it is unknown whether or not
these SPFs were either accepted or rejected by the Government
(Tr. 193).
29 These were the pads that were printed and ready for
delivery when the Appellant was ordered to stop shipping the
forms (Tr. 198).
30 The specification called for the number to be 1-3/4" from
the "top edge" of the form (R4 File, Tab A, p. 2, "Numbering"
specification). According to the Appellant, the VA's problem
with the number placement stemmed from the fact that the
location measurement was from the top and not the bottom of
the form, which would have been consistent with printing
industry practice (R4 File, Tab W, p. 3). Consequently, for
the number to be exactly where the VA wanted it, namely, at
the top of the number box, the measurements in the
specification should have required the top and bottom of the
number to be approximately 1-1/8 and 1-3/8 inches,
respectively (R4 File, Tab W, p. 3).
31 See also, note 22 supra.
32 At the hearing, Leonard testified that unless a customer-
agency complains, GPO assumes the product has met the
specifications (Tr. 295). Thus, the samples of the original
shipment of SPFs were only tested after the VA complained
(Tr. 296-97, 298). Since the VA did not complain to the
Respondent about the reprint, GPO presumed that those forms
were satisfactory to the customer-agency.
33 As agreed by the parties, the Appellant was to begin
delivery of the reprint order with 12.24 million forms being
shipped on or before September 11, 1992 (R4 File, Tab O).
Apparently, because of the press-sheet inspection, and the
fact that Lee had to agree to the numbering system, the first
shipment was not made until September 18, 1992 (R4 File, Tab
U). For the same reason, the shipping schedule for the
remaining four installments of the reprinted order was
revised, as reflected in Contract Modification No. 2, issued
by GPO on September 24, 1992 (R4 File, Tab R). Under the
adjusted schedule, the Contractor was to deliver the rest of
the reprinted SPFs as follows: (a) three separate shipments
of 12.24 million forms (122,400 pads) each on October 1,
1992, October 8, 1992, and October 13, 1992, respectively;
and (b) a final shipment of 11.04 million forms (110,400
pads) on October 16, 1992 (R4 File, Tabs R and U).
34 The R4 File contains copies of the form reproduced on
three different photocopiers-a Kodak 90E, a Kodak Ektaprint
300, and an unidentified copier (R4 File, Tab V). The Kodak
90E copy shows the "VOID" pantograph clearly, while the
copies from both the Kodak Ektaprint 300 and the unidentified
copy machine are extremely light, although visible to the
naked eye. There is nothing in the record to indicate if the
unmarked copy was produced on the copy machine in Leonard's
office, which he testified was a three or four-year old Canon
photocopier (Tr. 262). Furthermore, the Board cannot tell if
these copies were made from the original forms, or are copies
of the reprinted SPFs which were tested at the meeting on
September 11, 1992, and found satisfactory (R4 File, Tab X).
35 The 19,600,000 forms originally printed by the Appellant
represents about 32.7 percent of the entire order of
60,000,000 SPFs. Thus, at the contract price of $533,000.00,
the Contractor is claiming reimbursement from the Government
of $174,291.00. Of this amount, $89,011.00 would be the
price of the initial shipment of 10,000,000 forms, which was
16.7 percent of the entire order.
36 The Contracting Officer took issue with the Appellant's
contention that the Government had rejected all 19,600,000
forms, stating instead that only 100,000 pads (10,000,000
forms) were covered by his letter of August 27, 1992 (R4
File, Tab X, p. 1). Furthermore, Leonard disagreed with the
Contractor's understanding that the parties would test random
samples from the 96,000 pads which were still at the plant,
stating his belief that only forms which were delivered to
the VA would be evaluated (R4 File, Tab X, p. 1). However,
during the hearing, the Contracting Officer had a change of
heart, and offered to examine the forms on the Appellant's
premises. See, note 81 infra.
37 For obvious reasons, the Appellant's samples were drawn
from the unshipped forms in its plant, while the Respondent's
samples were taken from the rejected shipment itself (Tr.
111, 114, 212, 279-80).
38 Five of the Appellant's exhibits-App. Exh. Nos. 7, 9, 19,
20, and 21-are not relevant to these proceedings, and have
not been considered by the Board. App. Exh. No. 7 is a copy
of the sample form which Lee brought to the press-sheet
inspection and which was originally printed by another
contractor, while App. Exh. No. 19 is a copy of that form
reproduced on the Board's Monroe photocopier (Tr. 94-96, 116,
190-92, 203). Apart from the fact that during the hearing
both the Appellant and the Respondent discovered that the
Board's copy machine is a poor one by anyone's standard (Tr.
124, 325), the simple truth is that App. Exh. Nos. 7 and 19
were not generated from copies of the SPFs rejected by the
Respondent. Similarly, App. Exh. Nos. 9, 20 and 21 are
copies of the press-sheet of the reprint approved by Lee
(App. Exh. No. 8), made on different photocopiers at various
locations in Emporia, and offices in GPO (Tr. 109, 118, 121,
196-97, 204, 253, 325-26). As the hearing testimony
revealed, the approved press-sheet furnished the quality
control standard for the reprinted SPFs (Tr. 218, 252, 313,
324), and thus, by definition, App. Exh. Nos. 9, 20 and 21
are unrelated to the issue in this case which deals with the
rejected forms. For the same reason, the Board has not
considered the copies of the approved press-sheet on App.
Exh. Nos. 12, 13, 15 16 and 18, although it has examined
copies of the rejected SPFs on those same exhibits. It
should be noted that during the hearing both parties
unsuccessfully attempted to reproduce the "VOID" pantograph
from the approved press-sheet on photocopy machines in GPO
(Tr. 325-26; App. Exh. No. 21). Indeed, the Respondent
stipulated that App. Exh. No. 8-the standard for the reprint-
would have been rejected by the Government if it had been
subjected to the same quality control tests as the original
printing of the SPFs (Tr. 326-27). In fact, the Contracting
Officer could find no better reason than "incompetence" to
explain why the VA accepted a reprint which was clearly
rejectable according to his tests (Tr. 327). Regardless, for
the reasons already stated, the Board believes that App. Exh.
No. 21, is irrelevant to this appeal.
39 Cripps testified on cross-examination that although most
copies of the SPFs were made on normal photocopier settings,
a few were reproduced on lighter machine settings (Tr.
200-01). However, Appellant's Counsel stated that he had
removed the manipulated copies and used only the ones from
normal settings for exhibits (Tr. 202).
40 Although the location of the photocopier used to create
App. Exh. No. 17 is not identified on the exhibit, the
hearing record would seem to indicate that it, like App. Exh.
No. 18, is a product of the Appellant's copy machine (Tr.
123).
41 During the hearing, the question arose as to the cause of
the intensity variation in the "VOID" pantograph on the
copies of the SPFs in App. Exh. Nos. 10-18 (Tr. 123). The
Appellant believed that the variation was the result of
differences in the photocopiers themselves (Tr. 124). The
Respondent, on the other hand, thought that an obvious
variation in the color density of the ink used during the
production process caused the different intensities in the
copies of the Contractor's forms; i.e., the lighter the color
the better the reproduction (Tr. 286-88). Since the
Appellant made just one copy of each SPF in the above
exhibits, and the lack of uniformity in the color of the
originals is, as Counsel for GPO suggests, clearly visible to
the naked eye (Tr. 328), the Board tends to agree with the
explanation offered by the Respondent. Regardless of the
reasons for the intensity variation in the "VOID" pantograph
on App. Exh. Nos. 10-18, the fact remains that the word
"VOID" reproduces in three places on the form, and moreover,
the parties stipulated that the color of the blue ink used in
the original printing of the SPFs was a close enough match to
Pantone 287 that the forms would not have been rejected for a
failure to meet the color requirements of the specifications
(Tr. 328).
42 From its review of R. Exh. No. 1, the Board's curiosity
was piqued by the fact that for some reason a particular SPF
sample would copy differently on different photocopiers. For
example, on SPF No. 93216556 the "VOID" pantograph appeared
clearly as specified on the Savin 7500, but only the
horizontal word "VOID" reproduced on the Konica 3290 and
Kodak Ektaprint 150, while just the horizontal word "VOID"
and a few letters of the vertical word were visible on the
Savin 7230, and nothing at all reproduced on the Canon
NP-8580. However, it is not necessary to solve this puzzle
in the context of this decision since the main issue in this
appeal concerns the contract specifications themselves. See,
Report of Prehearing Telephone Conference, dated September
23, 1993, pp. 6-7 (hereinafter RPTC).
43 The Board settled the record in this case on April 6,
1994. See, Professional Printing of Kansas, Inc., GPO BCA
02-93, Order Settling the Record, dated April 6, 1994. After
the record was settled, the Appellant wrote to the Board and
informed it of two changes which the Respondent made in the
follow-on contract for the SPFs (Jacket No. 364-170), namely:
(a) the "VOID" pantograph feature was eliminated and a
different security device was specified; and (b) the
Government now requires production samples as part of the
terms of the contract. See, Letter from Rick Cripps,
President, Professional Printing of Kansas, Inc. to the
Board, dated November 30, 1994. The obvious purpose of the
Contractor's letter was to support its contention that the
"PRINTING" specification in its contract was defective, and
that by changing the specifications the Government, in
effect, had admitted as much. However, the settled rule is
that, absent unusual circumstances, evidence proffered for
admission after the record has been settled will not be
accepted. See, Sterling Printing, Inc., GPO BCA 20-89,
Decision on Motion for Reconsideration and Order (July 5,
1994), Sl. op. at 12 , 1994 WL 377592 (citing, Goetz
Demolition Company, ASBCA Nos. 40605, 41346, 93-2 BCA ¶
25,886; Pascal Redfern, PSBCA No. 1512, 87-3 BCA ¶ 19,1983;
Polarad Electronics Corporation, ASBCA No. 20636, 79-1 BCA ¶
13,777; Canadian Commercial Corporation, ASBCA No. 17187,
76-2 BCA ¶ 12,145. See also, Marshall Logging, Inc., ASBCA
No. 87-283-1, 88-2 BCA ¶ 20,726; Jim Davis, AGBCA Nos.
86-103-1, 86-104-1, 86-1 BCA ¶ 18,634). This principle is
specifically incorporated in the Board's procedural rules.
See, Board Rules, Rule 13(b) ("Except as the Board may
otherwise order in its discretion, no proof shall be received
in evidence after completion of an oral hearing, nor in cases
submitted on the record will proof be received after
notification by the Board that the case is ready for
decision."). Accord, Sunshine Cordage Corporation, ASBCA No.
38904, 90-1 BCA ¶ 22,572; USD Technologies, Inc., ASBCA No.
31305, 87-2 BCA ¶ 19,680 at 99,616, aff'd, 845 F.2d 1033
(Fed. Cir. 1988). As the Board has noted: "This well-
established rule is really nothing more than a judicial
proscription against a party having `two bites at the
apple.'" See, Sterling Printing, Inc., supra, Decision on
Motion for Reconsideration and Order, Sl. op. at 13 (citing,
Goetz Demolition Company, supra, 93-2 BCA at 128,768).
Accordingly, the Appellant's letter of November 30, 1994, has
not been considered in deciding this appeal.
44 Both parties waived oral argument at the hearing (Tr.
336-37). However, as mentioned at the outset, each party
filed a posthearing brief with the Board. The Appellant's
brief was filed with the Board on December 9, 1993. The
Respondent submitted a brief to the Board on January 5,
1994. Neither party filed a reply brief. Accordingly, the
Board's understanding of the positions of the parties is
based on: (a) the Appellant's Complaint, dated February 16,
1993; (b) the Respondent's Answer, dated March 16, 1993; (c)
the Report of Prehearing Telephone Conference, dated
September 21, 1993; (d) the evidence presented at the hearing
on October 13 and 14, 1993; and (e) the formal briefs filed
by the parties.
45 With respect to its allegation that the "PRINTING"
specification is ambiguous, the Appellant's argues that the
ambiguity is latent, not patent, and the doctrine of contra
proferentum should be applied against the Government in this
case. See, App. Brf., pp. 22-24 (citing, Newsom v. United
States, 230 Ct. Cl. 301, 303, 676 F.2d 647, 650-51 (1982);
Chris Berg, Inc. v. United States, 455 F.2d 1037, 1045
(Ct.Cl. 1972); Max Drill, Inc. v. United States, 192 Ct. Cl.
608, 626, 427 F.2d 1233, 1244 (1970); City Electric
Anchorage, Inc., ASBCA Nos. 6570, 6675, 6856, 62 BCA ¶ 3,435;
Brezina Construction Company, Inc., ASBCA No. 5750, 60-1 BCA
¶ 2,611). As for the "Government error" issue, the
Contractor simply states that the "NUMBERING" specification
was design in nature, and under prevailing law it was
entitled to rely on it in printing the forms, so it cannot be
held accountable for the fact that the rejected forms would
have been worthless to the VA. See, App. Brf., p. 28.
46 For the "superior knowledge" doctrine to apply all of the
following conditions must be present: (a) the Government has
information which it knows or should know is required for the
contractor's performance; (b) the Government does not
disclose that essential information; (c) the Government knows
or should know that the contractor lacks the information or
knowledge and either has no reason to obtain it or is
unlikely to do so; (d) the contract misleads the contractor,
or fails to give notice that it is necessary to ask the
Government about its specialized knowledge; and (e) the
contractor's lack of knowledge or possession of the
information causes increased costs or prevents performance of
the contract. App. Brf., at p. 11 (citing, American Ship
Building Company v. United States, 654 F.2d 75, 79 (Ct.Cl.
1981); ECOS Management Criteria, Inc., VABCA No. 2058, 86-2
BCA ¶ 18,885, at 78,579).
47 Petrofsky v. United States, 616 F.2d 494 (Ct.Cl. 1980),
cert. denied, 450 U.S. 968 (1981).
48 The Appellant tells us that estoppel arises when the
following four conditions are met: (a) the Government knows
or has reason to know the material facts; (b) the Government
either intends that its conduct or statements be acted upon
or acts in such a manner as to give the contractor that
impression; (c) the contractor must not have knowledge of the
material fact known by the Government; and (d) the contractor
detrimentally relies on the Government's conduct or
statements. App. Brf., p. 16 (citing, Heckler v. Community
Health Services of Crawford County, 467 U.S. 51 (1984); OAO
Corporation v. United States, 17 Cl. Ct. 91, 104 (1989);
Granite Construction Company, ENG BCA No. 4642, 89-3 BCA ¶
21,946, at 110,395 (1989)). Whether or not these equitable
estoppel elements have been satisfied is a question of fact.
Id. (citing, Tidewater Equipment Company v. Reliance
Insurance Company, 650 F.2d 503, 506 (4th Cir. 1981)).
49 The thrust of the Appellant's argument is that the process
of correcting the proof would have provided the vehicle for
informing the Contractor that it could have used an alternate
ink and that the prescription number had been relocated on
the form. App. Brf., p. 18.
50 The Appellant also observes that even if the four
conditions supporting an estoppel are established, equitable
relief cannot be granted unless it is also shown that the
Government employee(s) who made the misrepresentations or
concealed the material facts possessed the actual authority
to deal with the contractor. App. Brf., p. 19 (citing,
Federal Crop Insurance Corporation v. Merrill, 332 U.S. 380
(1947); Manloading and Management Associates, Inc. v. United
States, 461 F.2d 1299 (Ct.Cl. 1972)). The Contractor points
out that here it dealt with two GPO Contracting Officers,
Adams and Leonard, who are authorized by the PPR and GPO
Contract Terms to make all determinations and decisions with
regard to the contract. See, PPR, Chap. I, Sec. 3, ¶ 2(d);
GPO Contract Terms, Contract Clauses, ¶ 1 (Contractual
Responsibility). Furthermore, Hooks, the Contract
Administrator for this contract, served as a conduit between
the Appellant and the Contracting Officers from time-to-time.
However, the authority of the Government's agents in this
case has never been seriously questioned by any one.
51 As noted by the Appellant, the law makes a distinction
between "design specifications" and "performance
specifications". App. Brf., pp. 24-25 (citing, Johns
Manville Corporation v. United States, 13 Cl. Ct. 72, 119
(1987); Aerodex, Inc., ASBCA No. 7121, 62 BCA ¶ 3492).
"Performance specifications" are specifications which do not
detail the materials and methods to be employed, but rather
"set forth an objective or standard to be achieved" by the
contractor, who assumes the responsibility for selecting the
means to accomplish that objective or standard. App. Brf.,
p. 25 (citing, J.L. Simmons Company Inc. v. United States,
supra, 412 F.2d at 1363. Basically, as the Contractor points
out, under a pure performance contract, a contractor has
"complete discretion to determine how it would perform that
work." App. Brf., p. 25 (citing, R.J. Crowley, Inc. v.
United States, 923 F.2d 871, 874 (Fed. Cir. 1990) (quoting,
Stuyvesant Dredging Company v. United States, 834 F.2d 1576,
1582 (Fed. Cir. 1987)).
52 Whether or not the contract is primarily design or
performance can be determined by looking at both the original
contract, the relationship of the parties, and the duties
undertaken by each. App. Brf., p. 26 (citing, Mac Company v.
United States, 467 F.2d 1323, 1325 (Ct.Cl. 1972)).
53 In addition, the Appellant argues that these same facts
also allow it to avoid liability for the allegedly defective
product by means of the so-called "impossibility of
performance" doctrine. App. Brf., p. 29 (citing,
Dynaelectron Corporation v. United States, 518 F.2d 594, 602
(Ct.Cl. 1975); Hol-Gar Manufacturing Corporation v. United
States, supra).
54 Indeed, the Appellant's arguments to the contrary
notwithstanding, the Respondent contends that the record
evidence seems to suggest that a lighter color ink, rather
than a darker one, reproduces better. R. Brf., pp. 11-12.
To GPO, the Contractor's problems with regard to copying the
forms stemmed from its own printing process which resulted in
a visible color variation between pads. R. Brf., p. 12.
55 The record on which the Board's decision is based consists
of: (1) the Notice of Appeal, dated January 11, 1993; (2) the
R4 File (Tabs A-X); (3) the Complaint, dated February 16,
1993; (4) the Respondent's Answer, dated March 16, 1993; (5)
the Report of Prehearing Telephone Conference, dated
September 21, 1993; (6) the transcript of the hearing held on
October 13-14, 1993; (7) the exhibits submitted by the
parties' at the hearing with the exception of App. Exh. Nos.
7, 9, 19, 20, and 21; (8) the brief filed by the Appellant on
December 9, 1993; and (9) the brief submitted by the
Respondent on January 5, 1994.
56 See, note 22 supra.
57 As a rule, a party is bound by its stipulations, see,
Morelock v. NCR Corporation, 586 F.2d 1096, 1107 (6th Cir.
1978), cert. denied, 441 U.S. 906, 99 S.Ct. 1995 (1979), and
such evidentiary agreements freely entered into are
controlling and conclusive on all issues of fact, see,
Bromley Contracting Company, Inc. v. United States, 14 Cl.
Ct. 69, 74 (1987), aff'd, 861 F.2d 729 (Fed. Cir. 1988)
(citing, Gersham & Company v. United States, 200 Ct. Cl. 97,
112, 470 F.2d 542, 551 (1972)). A court or board may reject
a factual stipulation if it is "demonstrably false" or
contrary to the facts in the record. See, Dillon, Read &
Company, Inc. v. United States, 875 F.2d 293 (Fed. Cir.
1989); Bromley Contracting Company, Inc. v. United States,
supra, 14 Cl. Ct. at 74 (citing, Kaminer Construction
Corporation v. United States, 203 Ct. Cl. 182, 197, 488 F.2d
980, 988 (1973)). On the other hand, stipulations
representing conclusions of law are not binding on the boards
or courts. See, Bromley Contracting Company, Inc. v. United
States, supra, 14 Cl. Ct. at 74 (citing, Swift & Company v.
Hocking Valley Railroad, 243 U.S. 281, 289, 37 S.Ct, 287,
289-90, 61 L.Ed. 722 (1917)); Hegeman-Harris & Company v.
United States, 194 Ct. Cl. 574, 581, 440 F.2d 1009, 1012
(1971); Sac and Fox Tribe of Indians v. United States, 161
Ct. Cl. 189, 198, 315 F.2d 896, 901, cert. denied, 375 U.S.
921, 84 S.Ct. 266, 11 L.Ed.2d 165 (1963)); Reynolds
Construction, Inc., ASBCA No. 32047, 89-3 BCA ¶ 22,126.
58 In any event, the Appellant's contention is tantamount to
an allegation that the Government was acting in bad faith.
The Board has held on many 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., Universal Printing Company, GPO BCA 09-90 (June
22, 1994), Sl. op. at 24, fn. 24, 1994 WL 377586; Sterling
Printing, Inc., GPO BCA 20-89 (March 28, 1994), Sl. op. at
34-35, fn. 46, 1994 WL 275104; B. P. Printing and Office
Supplies, GPO BCA 14-91 (August 10, 1992), Sl. op. at 16,
1992 WL 382917; The Standard Register Company, GPO BCA 4-86
(October 28, 1987), Sl. op. at 12-13, 1987 WL 228972.
Accord, Karpak Data and Design, IBCA No. 2944 et al., 93-1
BCA ¶ 25,360; Local Contractors, Inc., ASBCA No. 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). See, Stephenson, Inc., GPO BCA 2-88
(December 20, 1991) Sl. op. at 54, 1991 WL 439274. In the
Board's view, no such "irrefragable" proof of bad faith
exists in this record. Certainly, there is absolutely
nothing to show that the employees of two separate Government
entities-GPO and the VA-set out to harm the Appellant or that
they acted in concert to achieve that specific result. See,
e.g., Universal Printing Company, supra, Sl. op. at 24, fn
24; Sterling Printing, Inc., supra, Sl. op. at 23, fn. 35;
Stephenson, Inc., supra, Sl. op. at 57.
59 In French/Bray, Inc., the Board found "as a matter of
contract interpretation, and thus of law," inter alia, that
"the determination of whether or not such burden has been met
lies solely with the [GPO], provided that the [GPO] does not
render its determination arbitrarily or capriciously but
rather does so objectively by adhering to the testing and
sampling standards of QATAP. . . . Thus, if the [GPO] shows
that it has adhered to the contractual standards for testing,
inspection, and determination of product quality, its
determination must be upheld. [Original emphasis.]" See,
French/Bray, Inc., GPO BCA 18-85 (October 23, 1986), Sl. op.
at 17, 1986 WL 181454. See also, Mid-American Business Forms
Corporation, GPO BCA 8-87 (December 30, 1988), 1988 WL
363330; Geographics, Inc., GPO BCA 8-85 (January 8, 1987),
1987 WL 228966; Product of Information Systems, GPO BCA 7-85
(November 25, 1986), 1986 WL 216057; The Standard Register
Company, supra.
60 Contrary to the Respondent, the Board does not believe
that the Contractor has abandoned its argument that the
contract is ambiguous. See, R. Brf., pp. 5, 8. Instead, the
Board sees Counsel for the Appellant merely doing in his
brief what most good advocates do in pursuing a claim-raising
as many possible alternative theories for relief as the facts
may support. FED. R. CIV. P. 10(b).
61 Such contrary interpretations often happen when parties
become locked in litigation; i.e., extreme positions are
taken which no party really believes as a practical matter.
In that regard, the evidence clearly shows conduct by both
parties which tends to contradict their position on the
record. On the one hand, the record tells us that the
Appellant believed it would be necessary for the form to copy
on more than one photocopy machine to satisfy the Government
(Tr. 164, 229-30). On the other, the evidence shows the
Respondent was not looking for perfection; i.e, GPO tested
samples of the SPFs on several different photocopiers before
it concluded that the forms were unsatisfactory (Tr. 261-62,
266).
62 Contract interpretation is clearly a question of law.
See, Fry Communications, Inc.-InfoConversion Joint Venture v.
United States, 22 Cl. Ct. 497, 503 (Cl.Ct. 1991); General
Business Forms, Inc., GPO BCA 2-84 (December 3, 1985), Sl.
op. at 16, 1985 WL 154846 (citing, John C. Grimberg Company
v. United States, 7 Ct. Cl. 452 (1985)); RD Printing
Associates, Inc., GPO BCA 02-92 (December 16, 1992), Sl. op.
at 13, 1992 WL 516088. See also, 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); Pacificorp Capital, Inc. v. United
States, 25 Cl. Ct. 707, 715 (1992), aff'd 988 F.2d 130 (Fed.
Cir. 1993); 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)); Hol-Gar Manufacturing Corp. v.
United States, 169 Ct. Cl. 384, 386, 351 F.2d 972, 973
(1965). Any decision by this Board concerning such a matter
is reviewable by the Courts under the Wunderlich Act, 41
U.S.C. §§ 321, 322. See, 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.
63 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.
McDonald & Eudy Printers, Inc., supra, Sl. op. at 14, fn. 12;
R.C. Swanson Printing and Typesetting Company, supra, Sl. op.
at 42. See also, International Business Investments, Inc. v.
United States, 17 Cl. Ct. 122 (1989), aff'd, 895 F.2d 1421
(Fed. Cir. 1990) (contract terms are not rendered ambiguous
by the mere fact that the parties disagree as to their
meaning; there must be reasonable uncertainty of meaning);
Perry & Wallis, Inc. v. United States, 192 Ct. Cl. 310, 315,
427 F.2d 722, 725 (1970) (quoting, Bishop Engineering Company
v. United States, 180 Ct. Cl. 411, 416 (1967)).
64 In such cases, the doctrine of contra proferentem applies
and the dispute language will be construed against the
drafter, see, 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)); Web Business Forms, Inc., supra, Sl. op. at
18, fn. 18; 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, see, Web Business
Forms, Inc., supra, Sl. op. at 19, fn. 18; 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)).
65 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. See, Interstate
General Government Contractors, Inc. v. Stone, 980 F.2d 1433
(Fed. Cir. 1992); Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl. Ct. at 504
(citing, Newsom v. United States, supra, 230 Ct. Cl. at 303;
Enrico Roman, Inc. v. United States, 2 Cl. Ct. 104, 106
(1983); S.O.G. of Arkansas v. United States, 212 Ct.Cl. 125,
546 F.2d 367 (1976); Beacon Construction v. United States,
314 F.2d 501 (Ct.Cl. 1963)). See also, Universal
Construction Company, NASA BCA No. 83-1092, 93-3 BCA ¶
26,173; Harwood Construction Company, NASA BCA No. 1165-45,
68-1 BCA ¶ 6768.
66 The purpose of any rule of contract interpretation is to
carry out the intent of the parties. Hegeman-Harris &
Company, supra, 194 Ct. Cl. 574, 440 F.2d 1009. 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, 198 Ct. Cl. 712, 461
F.2d 1330 (1972). See also, Salem Engineering and
Construction Corporation v. United States, supra, 2 Cl. Ct.
at 806. The provisions of the contract itself should provide
the evidence of the objective intent of the parties.
67 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. See, Elden v. United States, 223 Ct. Cl. 239,
617 F.2d 254 (1980). Similarly, technical terms are given
their technical meaning. See, Coastal Drydock and Repair
Corporation, ASBCA No. 31894, 87-1 BCA ¶ 19,618; Industrial
Finishers, Inc., ASBCA No. 6537, 61-1 BCA ¶ 3,091. Likewise,
terms special to Government contracts will be given their
technical meanings. See, General Builders Supply Company v.
United States, 187 Ct. Cl. 477, 409 F.2d 246 (1969) (meaning
of "equitable adjustment"). As for extrinsic evidence of the
intent of the parties, the rules of construction allow, inter
alia, custom and trade usage to explain or define terms.
See, W. G. Cornell Company v. United States, 179 Ct. Cl. 651,
376 F.2d 199 (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. See, WRB Corporation
v. United States, 183 Ct. Cl. 409, 436 (1968).
68 There are the contract specifications concerning "QUALITY
ASSURANCE LEVELS AND STANDARDS" and "QUALITY ASSURANCE RANDOM
SAMPLES," and, of course, QATAP is incorporated by reference
(R4 File, Tab A, pp. 1-3). The Board notes that although the
"QUALITY ASSURANCE RANDOM SAMPLES" specification told the
Contractor that it might be required to submit quality
assurance random copies to test for compliance against the
specifications, there is no evidence in the record that the
Government ever asked for such samples.
69 The Board has also observed that specifications serve the
purpose of eliciting and defining the essential qualities
necessary in the procured product, and that the Government
has a right to get exactly what it asked for in the
solicitation. See, Automated Datatron, Inc., GPO BCA Nos.
25-87 and 26-87 (April 12, 1989), Sl. op. at 3 (citing,
Nichols & Co. v. United States, 156 Ct. Cl. 358 (1962), cert.
denied, 371 U.S. 959 (1963); Rohr Industries, Inc., ENG BCA
No. 4058, 82-1 BCA ¶ 15,732).
70 See, note 41 supra.
71 The sample was totally different from the rejected SPFs in
that showed a reverse image for the word "VOID" and used
block outline letters (Tr. 83, 86).
72 The rule is that contractual provisions with respect to
inspection are for the exclusive benefit and protection of
the Government and not the contractor. See, Hurt's Printing
Company, Inc., supra, at Sl. op. 26; Custom Printing Company,
GPO BCA 10-87 (May 10, 1988), Sl. op. at 14, 1988 WL 363328
(citing, Red Circle Corporation v. United States, 185 Ct. Cl.
1, 398 F.2d 836 (1968)); Geographics, Inc., supra, Sl. op. at
10 (citing, Kaminer Construction Company v. United States,
supra, 203 Ct. Cl. at 182, 488 F.2d at 980. Furthermore, it
is also settled that the Government can use a different test
than the one specified in the contract so long as a more
stringent standard is not imposed on the contractor, and the
test used reasonably and accurately demonstrates compliance
or noncompliance. See, Circle Construction Group, ASBCA No.
38844, 90-3 BCA ¶ 22,999, at 115,493 (citing, Solar
Laboratories, Inc., ASBCA No. 19269, 74-2 BCA ¶ 10,897, mot.
for reconsid. den., 75-1 BCA ¶ 11,049; Gibbs Shipyard, Inc.,
ASBCA No. 9809, 67-2 BCA ¶ 6499).
73 For all intents and purposes, the language of GPO's
"Inspection and Tests" clause replicates the standard
inspection clause found in most Government contracts. See,
McDonald & Eudy Printers, Inc., supra, Sl. op. at 19 (citing,
Mid-American Business Forms Corporation, supra, Sl. op. at
18).
74 The selection method preferred by GPO is random sampling.
See, B. P. Printing and Office Supplies, supra, Sl. op. at 19
(citing, Report No. 27, Insuring that the Sample is
Representative of the Lot, p. 3). The record indicates that
random sampling was used for the test of the forms in this
case (R4 File, Tab K).
75 As Cripps testified at the hearing, his reaction to being
told that the word "VOID" would not photocopy on the forms
shipped to the VA was: ". . .[W]e [didn't] understand because
we [had] copied it on various machines, not just ours. And
what standard-that was our question-what standard [was GPO]
using. Was it on the normal setting, the dark setting, the
light setting. What do we have to go with it on, a Minolta
copier; was it on a Xerox. We didn't know." See, Tr.
156-57.
76 Prior to the establishment of the Board in 1984, appeals
from final decisions of agency contracting officers were
decided under a GPOCAB system in which cases were considered
by three-member ad hoc panels operating under the overall
supervision of GPO's General Counsel.
77 As for its conclusion that a default cannot be based on
unstated specifications, the ad hoc panel believed that the
Government's failure to present evidence of what constituted
satisfactory continuous operation was fatal to its case, and
it was "not persuaded that two or three brief stoppages in
two boxes out of 540 constituted a failure to meet the
requirements of the contract." See, Elgin Business Forms,
supra, Sl. op. at 8-9. Furthermore, the panel refused to
rely on GPO's tests of the forms, including an examination
which it ordered, because of a problem it had with the
acceptability standard utilized. See, Elgin Business Forms,
supra, Sl. op. at 9. In its view, the forms were measured
against subjective criteria based on personal opinion, rather
than objective standards based on NASA's actual experience
with the forms on the equipment to be utilized. See, Elgin
Business Forms, supra, Sl. op. at 9-10. Accord, Shepard
Printing, supra, Sl. op. at 18-19 (the Board concluded that
the inspection report, by itself, would not support GPO's
decision, made in partial reliance thereon, to default the
contract, because the compliance officer had misapplied the
QATAP requirements and the test findings were conflicting,
confusing and inaccurate).
78 As the Board has said on numerous occasions, while it is
not bound by the decisions of the GPOCAB, its policy is to
follow their rulings where applicable and appropriate. See,
Universal Printing Company, supra, Sl. op. at 11, fn. 9; R.C.
Swanson Printing and Typesetting Company, GPO BCA 15-90
(March 6, 1992), Sl. op. at 28, fn. 30, 1992 WL 382924;
Shepard Printing, supra, Sl. op. at 14, fn. 19; Chavis and
Chavis Printing, supra, Sl. op. at 9, fn. 9.
79 As the Appellant demonstrated at the hearing, even the
reprinted form could not meet such a standard (Tr. 325-27;
App. Exh. No. 21).
80 The only printing attribute defect shown on the VA's
Notice of Quality Defects is for a solid or screen tints
color match (P-9) (R4 File, Tab H). However, by virtue of
the parties' stipulation, that issue is removed from this
case (Tr. 328).
81 These tests simply mirrored the parties' results prior to
the rejection of the original shipment of forms; i.e., the
Appellant's pre-delivery tests satisfactorily produced the
"VOID" pantograph, and the Respondent's pre-rejection
inspection, made on three copiers (two used by Nowalk and one
by Leonard), produced only blanks.
82 The Board notes that except for the blank copies of the
SPFs submitted to GPO by the VA with its original complaint
(R4 File, Tab H), there is no evidence of any further tests
being performed on the customer-agency's photocopiers.
Compare, Elgin Business Forms, supra, Sl. op. at 3, ¶ 7.
83 The Board has also considered four other arguments made by
the Appellant in the context of in this case, and rejects
them. First, the Board does not believe that there is any
basis for a finding that the Respondent breached its implied
duty to cooperate with the Contractor and not hinder its
performance. In that regard, as the Board has already found,
GPO was within its rights under the PPR not to accept the
Appellant's pre-production proof. See, note 13 supra.
Furthermore, while not an exact replica of the SPF, the
specimen check was a proper sample within the meaning of the
contract. See, New South Press, GPO BCA 45-92 (November 4,
1994), at Sl. op. 23; Web Business Forms, Inc., GPO BCA 31-89
(July 22, 1994), Sl. op. at 14; Printing Unlimited, supra,
Sl. op. at 11-15. Second, the doctrine of estoppel does not
apply here. In other words, there was no Government conduct
on which the Appellant could have reasonably relied in
concluding that certain contract requirements had been
waived. See, Automated Datatron, Inc., supra, Sl. op. at 6-8
and cases cited therein. Accord, Industrial Data Link
Corporation, ASBCA No. 31570, 91-1 BCA ¶ 23,382. Third,
contrary to the Appellant, the Board does not believe that
the "superior knowledge" doctrine has any place in this case.
In order to recover under the "superior knowledge" doctrine,
a contractor must show, among other things, that the
knowledge purportedly withheld was not reasonably obtainable
from other sources. See, American Combustion, Inc., ASBCA
No. 43712, 94-3 BCA ¶ 26,961, at 134,244-45 (citing, H.N.
Bailey & Associates v. United States, 196 Ct. Cl. 166,
177-78, 449 F.2d 376, 382-83 (1971); Max Jordan
Bauunternehmung v. United States, 10 Cl. Ct. 672, 679 (1986),
aff'd, 820 F.2d 1208 (Fed Cir. 1987)); Helene Curtis
Industries v. United States, supra. The rule of Helene
Curtis is that the Government must share its superior
knowledge which is vital to the successful completion of the
contract. However, the corollary to this postulate is that
the Government is under no duty to volunteer such
information, if the contractor can reasonably be expected to
obtain the facts from other sources. See, H.N. Bailey &
Associates v. United States, supra. Accord, Dynamite
Graphics, [No GPOCAB No.] (August 31, 1979), Sl. op. at 13,
1979 WL 28892. In this case, the record discloses that there
were at least 34 other firms holding Standard Register
licenses from which the Appellant could have gotten the
information it was looking for, particularly with respect to
the "VOID" pantograph. The Contractor has offered no reason,
and none is apparent from the record, why it could not have
contacted those firms. Thus, the Appellant has failed to
demonstrate any lack of disclosure of knowledge not
reasonably available elsewhere. Finally, the Board sees
nothing in the facts here which would raise an issue of
"commercial impracticability." To come within the limited
doctrine of impossibility, which encompasses commercial
impracticability, one must show actual impossibility or that
performance could be achieved only at excessive and
unreasonable cost; a showing of simple economic hardship is
not sufficient. See, Jennie-O Foods, Inc. v. United States,
217 Ct.Cl. 314, 328-29, 580 F.2d 400, 409 (1978); American
Combustion, Inc., supra, 94-3 BCA at 134,243. See also,
Natus Corporation v. United States, 178 Ct. Cl. 1, 371 F.2d
450 (1967); Whitlock Corporation v. United States, 141 Ct.
Cl. 758, 159 F.Supp. 602, cert. denied, 358 U.S. 815 (1958).
The burden of proving impracticability lies with the
contractor, who must also show that its difficulties were not
attributable to its own subjective fault. See,
Intercontinental Manufacturing Company, Inc. v. United
States, 4 Cl. Ct. 591, 598-600 (1984); GLR Constructors, ENG
BCA No. 6021, 94-3 BCA ¶ 27,216, at 135,653; Crown Welding,
Inc., ASBCA No. 36107, 89-1 BCA ¶ 21,332, at 107,571; HLI
Lordship Industries, Inc., VABCA No. 1785, 86-3 BCA ¶ 19,182,
at 97,026. Accord, JR Composition, GPO BCA 8-86 (May 19,
1989), Sl. op. at 1, 1989 WL 384978 (citing, Koppers Company
v. United States, 186 Ct. Cl. 142 (1968)). Moreover, a
contractor can disprove its own claim of commercial
impracticability by showing that to some extent it can
successfully perform as expected under the contract. See,
GLR Constructors, supra, 94-3 BCA at 135,653; American
Combustion, Inc., supra, 94-3 BCA at 134,243. Here, the
demonstrative evidence of both parties indicates that the
Appellant was, indeed, able to produce a form which could
reproduce the "VOID" pantograph on some photocopiers. See,
App. Exh. Nos. 10-18; R. Exh. No. 1 (Savin 7500, Room C-830).
For that reason alone, there is no basis for finding that a
situation of commercial impossibility existed in this case.
84 During the hearing, the Contracting Officer offered to
send a GPO inspector to the Appellant's printing plant to
inspect a random sample of those forms, and said that the
Government would purchase remaining pads if, based on that
test, the forms complied with the contract specifications, as
written (Tr. 309). In the Board's view, the Contracting
Officer's offer is the appropriate route for the Contractor
to take in pursuing payment for the 96,000 pads of forms
which it never delivered to the VA. However, the parties are
reminded that any subsequent evaluation of the product at the
Appellant's plant should be made on a reasonable cross-
section of photocopy machines, and follow the guidance in the
QATAP Manual for randomly selecting samples of a sufficient
size to ensure the statistical validity of the test.
85 See, note 35 supra.