Fry Communications, Inc. - InfoConversion Joint Venture GPO BCA 8-84 PRINT ORDER 33846 JACKET NO. 878-84-2395 May 19, 1986 Michael F. DiMario, Administrative Law Judge Opinion This appeal, timely filed by Fry Communications, Inc. - InfoConversion Joint Venture (hereinafter "Appellant"),.is from the final decision of R. E. Lee, Jr., Contracting Officer, U.S. Government Printing Office (hereinafter "GPO" or "Respondent"), dated September 18, 1984, denying Appellant's request to be paid for certain proofs it had made in conjunction with its execution of Print Order 33846 under a certain contract between the parties identified as GPO Program 400-S, Jacket No. 878-84-2395. The appeal arises under Article 2-3 entitled "Disputes" of United States Government Printing Office Contract Terms No. 1 (GPO Publication 310.2 - Revised October 1, 1980) which was incorporated into and made a part of the said contract by reference therein. The decision of the Contracting Officer is affirmed for the reasons hereinafter set forth. Facts On February 9, 1984, Appellant, a joint venture between Fry Communications, Inc., Mechanicsburg, PA 17055, and InfoConversion, a division of Grumman Data Information Services, Inc., Woodbury, NY, was awarded a requirements type single award term contract by Respondent for data capture, printing, binding, and distribution of "Army Update Publications" as required by the Department of the Army through July 31, 1984, and extending one year at a time up to 1988 as funds are available. The procurement was undertaken by two-step formal advertising wherein prospective bidders were requested under Step One to furnish technical proposals without pricing. Thereafter, if their proposal was deemed acceptable, they were invited under Step Two to formally bid with price quotations. Four prospective bidders were so invited, Appellant among them. Thereafter, Appellant was awarded the contract as low bidder. Various documents from this process, including the Request for Technical Proposals/Specifications and the Invitation for Bids as each was amended; Appellant's Technical Proposal, and the bid, itself, comprise the contract between the parties. The contemplated scope of the contract at the outset of the solicitation was "data capture resulting in approximately 30,000 output pages, database maintenance, photocomposition, printing, binding, and distribution." (Appeal File, hereinafter "R4 File", Tab 1, page 5 of 20, dated May 4, 1983) The product itself was described as: "(1) Complete database file on full text database tapes at completion of contract. . . . (2) Publications which will have varying numbers of pages. . . . [M]inimum number of pages . . . 48, and the maximum 1,500 in any one week." (R4 File, Tab 1, page 7 of 20, dated May 4, 1983) The contract required the Government among other things to furnish Appellant: "For composition - Unprepared manuscript copy . . . , material typed on word processors that will have to be accepted without rekeying, some reprint copy, and IBM compatible magnetic tapes. Approximately 600 to 3600 pages of manuscript copy . . . weekly . . . .. (R4 File, Tab 1, pages 7 and 8 of 20, dated May 4, 1983) In turn the Appellant was to furnish, among other things, "[t] wo sets of page proofs [and] [w]hen requested, one set of page proofs on updated pages only." (R4 file, Tab 1, page 11 of 20, dated May 4, 1983) Moreover, the contract stipulated that "[i] f any contractor's errors are serious enough in the opinion of the GPO to require revised proofs, the revised proofs are to be provided at no expense to the Government." (R4 File, Tab 1, page 11 of 20, dated May 4, 1983 (emphasis added)) The contract with respect to "ORDERING" provided that "[i]tems to be furnished under this contract shall be ordered by the issuance of print orders by the Government." (R4 File, Tab 1, Part Two, page 4 of 18, dated January 9, 1984) In accordance therewith Appellant was issued Print Order No. 33846 for certain work to be performed by Appellant under the contract. Upon completion of the work Appellant submitted its voucher to Respondent for payment. Thereafter Appellant was advised by Respondent that it would not be paid for its separate line item charge for copies of page proofs. By letter of Donald B. Mandery dated September 13, 1984, Appellant took issue with Respondent's position in this matter. Respondent, by letter of R. E. Lee, Jr., Contracting Officer, dated September 18, 1984, replied to Mandery stating that: It was our intent that page proofs for initial data capture were to be provided at no separate cost to the Government. Initial proofing charges, like proofreading and other ancillary costs incurred in initial data capture are considered as part of the initial data capture and photocomposition charges (item 8 and 11). Our intent concerning proofs was clearly spelled out in the contract as follows: a. Page 11 of.20. Proofs: Two sets of page proofs. b. Page 10 of 18. I. File creation and maintenance - *** two sets of page proofs of all initial data capture, photocomposition, *** c. Page 12 of 18. Item 13 additional electrostatic page proofs ... per page ... $____ By design no line item appeared in the basis of award for proofs of initial data capture. Therefore, Line 13 items on vouchers requesting payment for proofs of initial data capture will not be honored. R4 File, Tab 3. Appellant treated this response by Mr. Lee as a Final Decision of the Contracting Officer concerning a "Dispute" arising under the contract and appealed to this Board by letter of December 14, 1984, and Complaint filed February 25, 1985. The Complaint substantially alleged the facts previously cited hereinabove and then beginning with numbered paragraph 7 argued that: 7. The G.P.O.'s May 4, 1983 letter, together with the General Terms and Conditions and amendments thereto, contain all of the technical requirements for.the subject contract. (Appeal Exhibit 3). Page 11 of 20 of that document contains the only reference in that document to page proofs. The only information apropos to relevant to [sic] this complaint reads: "Two sets of page proofs. When requested, one set of page proofs on updated pages only." This language has no bearing on how the Appellant will get paid for page proofs. 8. The Invitation For Bids revised January 9, 1984, contains the only information about how the Appellant is to be paid for electrostatic copies of page proofs. It reads, on page 10 of 18, as follows: I. FILE CREATION AND MAINTENANCE. Prices quoted must be all inclusive and include all data system charges, including programming and testing, all telecommunication functions (with the exception of actual telephone line charges), and all operations and materials necessary for capturing and coding data, creating and maintaining files, masterfile tapes, two sets of page proofs of all initial data capture, photocomposition, and camera copy charges as necessary in accordance with the specifications. Immediately following this. statement is a list of some thirty- four line items. While the above quoted statement says that the charge for two sets of page proofs is required to be included in the price, it says nothing about the line item in which the charge for sets of page proofs. should be included. The only line item which mentions page proofs is line item 13. It reads: Additional electrostatic page proofs per proof $___ 9. The Appellant's reasonable interpretation of the Invitation for Bids was that the most logical place to insert its charge for all copies of the page proofs was in line item 13. 10. In fact, when Appellant submitted its bid, the only line item in which Appellant included any charge for sets of page proofs was line item 13. That amount was $.51 per proof. 11. The final decision of the Contracting Officer denying Appellant payment for page proofs pursuant to line item 13 constitutes a breach of the subject contract, which breach has caused money damages to Appellant in an amount exceeding $14,500.00. In addition, Appellant continues and will continue throughout the life of the subject contract to be damaged as it continues to supply page proofs to the G.P.O. without being paid for them. WHEREFORE, Appellant respectfully demands that this tribunal grant this appeal, reverse the decision of the Contracting Officer dated September 18, 1984, and order that the G.P.O. pay Appellant for each copy of page proofs delivered to date and in the future at the contract rate of $.51 per page. Appellant further demands a hearing and oral argument on the issues presented herein. Official Record, Tab 5. Respondent, by formal Answer filed April 3, 1985, admitted the allegations of Appellant's Complaint except sentence 2 of paragraph 2, and paragraphs 7, 8, 9, and 11 which were denied and paragraph 10 wherein it was asserted that Respondent had "no information upon which to admit or deny . . ." the allegation. The response to paragraph 2 crystalizes Respondent's position respecting Appellant's claim stating in pertinent part that: The contracting officer does not deny the payment for page proofs. Step Two-Invitation for Bid provides in Section I. File creation and maintenance: "Prices quoted must be all inclusive . . ., including . . . two sets of page proofs of all initial data capture, . . .. " etc. When proofs are ordered in addition to these two sets included with all initial data capture, they may be charged as "additional electrostatic page proofs", under line item I.13. Official Record, Tab 9. The admission to paragraphs 3, 5, and 6 were qualified by "additional clarifications." The clarification of paragraph 3 is not germane to the instant issue. The response to paragraph 6 is by way of a clarification of what constitutes the contract documents. The clarification of paragraph 6 and the denials of the allegations in paragraphs 7 and 8 are as follows: 6. Paragraph 6 admitted but with additional clarification. It is to be noted that the appellant was awarded the contract only after it had been requested to review its bid and confirm the prices, and had indicated that it had done so. 7. Paragraph 7 is denied. All the documents contained in Exhibit 1 taken as a whole contain the requirements of the contract. The Step Two-Invitation for Bids contains information on how proofs are to be paid for. Since the first part of a Two-Step procurement concerns only technical acceptability on the part of the proposals submitted, it would have been improper to have included the question of method of payment in the original solicitation. (Reference to Exhibit 3 in this paragraph should be Exhibit 1.) 8. Paragraph 8 is denied. Since the paragraph quoted here states that two sets of page proofs are to be included for all initial data capture, then the charges for these proofs should be included in the line items for initial data capture. The line item I.13 is only for "additional" proofs, or those proofs not included, such as (1) any amount over two sets for initial data capture, (2) proofs required because of author's alterations made after initial data capture, or (3) any proofs required on updated pages "when requested." This is made further apparent by the fact that line item I.13 is not a basis of award item, which would have been necessary had it included those proofs required under the contract. Official Record, Tab 9. Subsequent to the filing of the Answer, a Prehearing Conference was held at which time cross motions for summary judgment were made. Thereafter, the parties submitted briefs. setting forth their points and authorities in support of and in opposition to such respective motions. Appellant's Brief contends in principal argument that: [I]t was clearly the Government's burden to set forth in its Invitation for Bids what it wanted. [T]he government failed to meet that burden . . . . . . . . . . . . . . . . While the language . . . [concerning FILE CREATION AND MAINTENANCE, supra] is arguably susceptible to the interpretation urged by the Government, the language is in no way such that it compels that interpretation. It is an extremely poor attempt by the Government to convey its alleged intention to prospective bidders. Thus, if Appellant's alternative construction is within the zone of reasonableness, then it must be adopted by the Board. [T]he instructions just following the heading, "FILE CREATION AND MAINTENANCE", consist of general instructions concerning how the bidder should price the 34 line items in the 14 subsections immediately following the instructions. These instructions, . . . advis[e] the bidder that . . . prices for such items as "capturing and coding data, creating and maintaining files, and two sets of page proofs of all initial data capture" must be inclusive of "data systems charges, including programming and testing, all telecommunication functions . . ., and all operations and materials necessary for" performing those tasks. . . . None of the language . . . directs the bidder to place his price for a particular item . . . . Thus, the bidder was left to logic in determining . . . which line item he would put his costs for certain items. . . . [T]here is no mention of page proofs in the line item under [consideration] . . . . [E]ight of the ten line items under initial data caputre [sic] are to be priced "per 1,000 characters." A prudent bidder would not assume that the Government was directing that it make a guess as to the number of characters on a page, therefore, he. logically would look to other line items . . . for . . . page proofs . . . . [T]he only line item which mentions page proofs in [sic] line item 13. . . . . . . . [T]he meaning of "Additional" is left to the bidder's imagination. Official Record, Tab 15. The Government's Brief in turn argues that Appellant's position "strains credibility" because it disregards the elementary rule that all of the parts of a contract must be read and interpreted together and that "the entire writing that embodies the agreement of the parties, not individual sections or clauses." (Official Record, Tab 13, page 3) The Government also points out that the law holds that "[a]n interpretation will generally be rejected if it leaves portions of the contract language meaningless, useless, ineffective or superfluous., (Official File, Tab 13, page 4) and that "[w]hen a contract is read as a whole, the provisions should, if possible, be interpreted so.as to be in harmony with each other." (Official File, Tab 13, Page 6) Discussion We agree with the Appellant that "it was clearly the Government's burden to set forth in its Invitation for Bids what it wanted" but disagree with the contention that "the Government failed to meet that burden." (Official Record, Tab 15, page 4) We have reached this conclusion by carefully reviewing each and every part of the contract taken as a whole as the Respondent rightly suggests must be done. We have rearranged and edited the pertinent contract provisions hereinbelow in order to crystalize their meaning. (THE CONTRACT) "The prospective contractor must furnish all services, equipment and materials necessary to do the photocomposition, printing, binding, distribution, and related services necessary and required to produce the Army Regulations as a complete product." (R4 File, Tab 1, Page 5 of 20, dated May 4, 1983) V. ESTIMATE OF 5-YEAR PRODUCTION REQUIREMENTS The following is intended as an estimate of the data capture and printing requirements expected for the term of the contract. This is given as a guide to the scope of the contract. It is reasonable to expect that, even though every effort has been made to determine ranges in numbers of pages and quantities, there may be occasions when variances may occur outside the ranges originally specified. In such cases, adequate notice will be given to the contractor of these unusual circumstances. 1. Masterfile. - It is anticipated that the maximum of the 30,000-output-page data base will be completed within 2 years at the rate of approximately 15,000 pages in each of the first 2 years. The rate of updating/editing is expected to be approximately 25 percent per year. In each of the third, fourth, and fifth years of the contract, the rate of updating/editing can be expected to remain at the approximately 25 percent level. In addition, there may be approximately 5,000 output pages per year in these 3 years of new data capture. These pages would not necessarily increase the total number of pages in the masterfile, but would more likely be replacement pages. R4 File, Tab 1, Amendment Number 3 to Request for Technical Proposal, page 6 of 8, dated September 9, 1983. Approximately 600 to 3600 pages of manuscript copy will be furnished to the contractor on a weekly basis. Each six pages of manuscript copy will make approximately one photocomposed page. For graphics (these must be digitized) - Reprint copy, line illustrations, monochromatic slides, and prints. Most are line illustrations and range in size from full page to one-eighth of a page. R4 File, Tab 1, Attachment I, page 8 of 20, dated May 4, 1983. "PROOFS: Two sets of page proofs. When requested, one set of page proofs on updated pages only." (R4 File, Tab 1, Attachment I, page 11 of 20, dated May 4, 1983) "*Contractor submit page proofs . . . ." "*The contractor will be required to deliver approximately 500 output pages per week, . . . . (R4 File, Tab 1, Attachment I, page 16 of 20, dated May 4, 1983) "METHOD OF DETERMINING AWARD: The Government will determine the lowest offer by applying the prices quoted in the "Schedule of Prices" to the following listed units. The usage and volume used for evaluation purposes represents that which is estimated to be ordered during a typical year. For items in Sections I and II, these units are an averge [sic] of the first three years' estimated production (with the exception of the first two items in section I, which are allowed only once in the 5-year term of the contract). . . . The responsive, responsible bidder with the lowest aggregate cost will be declared the low contractor and award will be made accordingly." R4 File, Tab 1, Part Two, IFB, page 7 of 18, dated January 9, 1984 (emphasis added). "Measurement and Payment for Data Capture: Initial data capture will be measured and payment will be made on the basis of output character count for text and tabular matter, and per illustration (either line or halftone) for digitizing of illustrations." (R4 File, Tab 1, Part Two Invitation for Bids, page 6 of 8, dated September 9, 1983) Thereafter, page 8 of 18 on both the January 9, 1984 and January 13, 1984 revision advises that "[t]he item designations used herein correspond to those used in the schedule of prices." Items 1 to 12 are listed seriatim followed by a conspicuous skip to item 14, thus omitting any corresponding reference to item "13. Additional electrostatic page proofs" from the "Schedule of Prices." The item designations used herein correspond to those used in the schedule of prices. The brief explanation preceding [sic] the unit multiplers [sic] for sections I and II, and the column headings and explanations given with sections III, IV, and V, are intended merely as a reference to what each unit represents. For the complete description of these units, refer to the "Schedule of Prices". (Abbreviations used in column headings: MR - makeready; M's - Running per thousand copies") Unit Multiplier 8. (a) (1) 39,905,000 text characters 39,905 (2) 5,179,000 tabular characters 5,179 (b) (1) 2,698,000 Text characters 2,698 (2) 358,000 tabular characters 358 (c) (1) 8,482,000 text characters 8,482 (2) 1,236,000 tabular characters 1,236 (d) (1) 11,860,000 text characters 11,860 (2) 1,572,000 tabular characters 1,572 (e) (1) 692 line illustrations 692 (2) 7 halftone illustrations 7 . . . . . . . . . . . . 12. 868 pages camera copy 868 14. One duplicate tape per month 12 R4 File, Tab 1, Amendment 4, page 8 of 18, dated January 13, 1984. Under "The Schedule of Prices" on page 10 of 18 revised January 9, 1984, is the language shown, supra page 8, for "I. FILE CREATION AND MAINTENANCE. Prices quoted must be all inclusive and include . . . two sets of page proofs of all initial data capture, . . . charges as necessary in accordance with the specifications." NOTE: The per 1,000 character measurement for all data capture will be based on output characters. 8. Initial data capture: (a) From manuscript or reprint copy: (1) Text matter per 1,000 characters $___ (2) Tabular matter per 1,000 characters $___ (b) From word processing media: (1) Text matter per 1,000 characters $___ (2) Tabular matter per 1,000 characters $___ (c) From magnetic tapes: (1) Text matter per 1,000 characters $___ (2) Tabular matter per 1,000 characters $___ (d) Through teleprocessing: (1) Text matter per 1,000 characters $___ (2) Tabular matter per 1,000 characters $___ (e) Digitizing illustrations: (1) Line per illustration $___ (2) Halftone per illustration $___ (All halftones are to be a minimum 100-line screen.) . . . . . . . . . . . . 12. Camera copy (for covers and stop press pages) $___ 13. Additional electrostatic page proofs per proof $___ 15 14. Duplicate tapes per tape $___ R4 File, Tab 1, pages 11 and 12 (Amendment 4) of 18, dated January 9, 1984, and January 13, 1984, respectively. The Board believes that the rearranged language and the bid abstract (R4 File, Tab 1) fully support Mr. Lee's contention that "[b]y design no line item appeared in the basis of award for proofs of initial data capture." In the Board's view, the language unambiguously states that the contract was to be awarded to the bidder whose price was.lowest based upon a comparison of each bidder's aggregate price quotation which Respondent would derive by applying the appropriate unit multiplier from numbered lines 1 through 12, and 14 of the "Basis of Award" clause to the unit price given by each bidder for the corresponding numbered lines of the "Schedule of Prices." The language further states that the price the bidder was to quote on each line of the "Schedule of Prices" was to be an all-inclusive unit price quotation per thousand output characters or per illustration, as applicable, and must include the bidder's contemplated charges for providing the required two sets of page proofs. The anticipated workload volume furnished in the "Statement of Work" was more than adequate for bidders to estimate such page proof costs and to convert the same to a cents per 1,000 character basis for inclusion with other costs associated with data entry. A bidder's contemplated charges for providing the one set of page proofs for updated pages as required from time to time, and for providing any other additional page proofs required by the Government, except where such requirement arose because of serious contractor error as determined by the Government, were to be quoted on the "Schedule of Prices" on line 13 "[a]dditional electrostatic page proofs" on a "per proof" basis. The Board believes any other reading of the contract would unjustly strain its language and result in a gross unfairness to other bidders in the competitive process. Decision The decision of the Contracting Officer is affirmed.