U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
WASHINGTON, DC  20401

Lawrence W. Kennelly, Chairman
Robert Beckett, Member
William Costigan, Member

Panel 2-81

American Drafting and Laminating Co.
Jacket 342-660, Program 390-S
July 31, 1981

Decision of Board of Contract Appeals

This matter is brought to the Contract Appeals Board as the
result of a timely appeal dated January 14, 1981, by American
Drafting and Laminating Company, hereinafter called the Company
or Appellant.  The Company appealed the termination for default
of Purchase Order 13331, (Program 8-390-S, Print Order No. 9 and
all Print Orders subsequent to Print Order No. 12, Jacket
341-660) for the printing of Area Handbooks for the Department of
the Army.

Facts

Invitations to Bid were sent to contractors on March 21, 1980.
The specifications covered the composition for Area Handbooks as
required from the U.S. Government Printing Office, (GPO), by the
Department of the Army.  The award to be made under the
solicitation would be for a period beginning May 1, 1980, and
ending April 30, 1981.

The General Terms and Conditions provided that any contract
resulting from the Bidders Offer would be subject to all terms
and conditions of U.S. Government Printing Office Contract Terms
No. 1, Revised August 1979, (GPO Publication 310.2).  Under the
specifications, it was provided that there would be no guarantee
as to the frequency or number of orders which would be placed
during the term of the contract.  It was anticipated that
approximately 7 new and 12 reprint orders would be placed during
the term of the contract.  The specifications also provided that
it was of the utmost importance that strict adherence to the
performance schedule be maintained.

There were 45 No Bids and 18 responses to the Invitation to Bid.
The Appellant was low bidder and was awarded the contract on May
20, 1980, and Purchase Order No. 13331 was issued.

On July 11, 1980, a "show cause" telegram was sent to the
Appellant for failure to perform the schedule requirements of
Purchase Order 13331, Print Order No. 1.

On July 17, 1980, the Appellant replied and stated the reason for
failure to live up to schedule was that the subcontractor,
"Compugraphic Corporation",

failed to deliver a proper width card for the phototypesetting
equipment.  The GPO responded and said it would withhold default
proceedings provided page proofs were delivered in accordance
with specifications by July 22, 1980.

On July 23, 1980, the page proofs were rejected because they were
not proofread and corrected before delivery as required by the
contract.  The Appellant was given until July 30, 1980, to make
necessary corrections and deliver those sets of page proofs that
were in conformity with the manuscript copy.

On October 1, 1980, a "show cause" letter was sent to the
Appellant.  This outlined the failure of the Appellant to
proofread the copy and a list of discrepancies was given.

One of the problems was the failure to use "en dashes" and in
their place hyphens were used.  The Appellant was told to see GPO
Style Manual for further instructions in this regard.

In addition to the problems with Print Order No. 1, there were
problems with Print Order No. 7.

On October 9, 1980, the Appellant responded to the show cause
letter of GPO and basically it denied it was not living up to the
specifications.

1. Page Proofs were not delivered late, but in accordance with a
modified delivery schedule;

2. The specifications did not require the Contractor to return
manuscript copy with proof copies;

3. The specifications did not specify when and how proofreading
would be performed.

There were nine other replies.  On October 20, 1980, the GPO
responded to the reply of the Appellant and explained why each
and every paragraph replied to by the Appellant was disagreed
with.  The Appellant was given until October 28, 1980, to inform
the Contracting Officer whether or not it would be able to meet
the requirements of the contract and to remedy the problems
mentioned in the correspondence.

On October 28, the Appellant replied by telegram, again taking
issue with the position of the Contracting Officer, except for
paragraph two where it admitted it would return manuscript with
the proof copy.  The telegram ended by saying:

"We are able and willing to meet the requirements of the contract
but feel that the contract provisions should be logically and
consistently applied . . ."

In addition to Print Order No. 1, there were eight additional
Print Orders requested and Print Orders 2 through 8 were reprints
involving a few pages of composition.  Print Order No. 1 and
Print Order No. 9 were complete volumes and required 636 and 532
pages respectively.

In addition to the problems in Print Order No. 1, there were
numerous problems with Print Order No. 9.

On November 6, 1980, the Contracting Officer sent a show cause
telegram to the Appellant saying that the GPO was notifying the
Appellant that it failed to perform the schedule requirements for
Print Order No. 9 in accordance with the terms of the Contract
and that GPO was considering terminating the contract for Print
Order No. 9 and for all subsequent orders that would have been
placed on Program 390-S.

On November 17, 1980, the Appellant replied and said that reason
for delay was due to Army not giving contractor material on time.

On November 19, 1980, and December 3, 1980, the Army wrote to GPO
on the unsatisfactory performance of the Appellant on both Print
Order No. 1 and Print Order No. 9.  The Army requested that GPO
take immediate action to resolve the problems and provide a
reliable source for this work.

On January 9, 1981, the Appellant was notified that Purchase
Order 13331 (Program B-390-S), Print Order No. 9, and all
subsequent print orders subsequent to Print Order No. 12, Jacket
341-660, were thereby terminated for default because of continued
failure to furnish proofs that were in conformity with the
manuscript and the requirements of the contract.  GPO then listed
seven discrepancies in the most recent proofs furnished by the
Appellant.

On January 7, the Contracting Officer notified the Appellant that
Print Order No. 9, and all products ordered on the program
subsequent to Print Order No. 12, would be procured from the
second low bidder on the contract at his originally quoted
prices.  This would represent an estimated cost difference of
$3,034.98.

In a series of letters with the Director of General Services, the
Appellant said it did not desire a hearing in person but would
rest its appeal on the record.  The Appellant requested that the
Board render a summary decision changing the termination for
default to a termination for convenience of the Government.

On February 25, the Panel was selected by the Director of General
Services to hear the Appeal and Lawrence W. Kennelly was selected
as chairman.

Position of Appellant and Contracting Officer's Response

The Contracting Officer responded to the request of the Appellant
to render a summary decision changing the termination for default
to a termination for the convenience of the Government.  This was
requested because the GPO had breached the contract by not
returning the reader's proofs by December 2, 1980, as required by
the original production schedule set forth in Print Order No. 9.

The Contracting Officer said proofs for Print Order No. 9 were
examined and many of the deficiencies found in Print Order No. 1
were still prevalent.  Because of these, the Department of the
Army requested the GPO default the Appellant.  The proofs were
held in order to investigate and make a decision as to whether
grounds for default existed.  If the Appellant had performed
properly, there would not have been a need to retain the proofs
and they would have been returned on schedule.

The first point made by the Contracting Officer addresses the
statement of the Appellant that the schedule paragraph 2.15(c)
does not require the Contractor to return the manuscript copy
with the reader's proofs since the schedule specifically states
the Department will take 20 days to have proofs checked and
indexed and furnish manuscript of approximately 30 index pages
with reader's proofs to the Contractor.

The Contracting Officer responds that paragraph 2.8 requires the
contractor to return all material with the reader's proofs.  The
Appellant was advised of this and he so admitted in his wire
dated October 28, 1980 (Ex. 24).  Proofs that have not been
proofread and corrected are useless for purposes of indexing.
Also, to check proofs for the proper location of heads, illustrations, etc., it is
necessary to have the manuscript on hand.  Also, it is impossible
to determine if there are serious errors when the manuscript is
not available in order to make a determination if revised proofs
are necessary.

The second point made by the Contractor was that the "original
production schedule" for Print Order No. 9 was October 20, 1980
through December 8, 1980, and paragraph 2.12(c) suggests that a
second proofreading occur during this period.

The Contracting Officer stated that the second proofreading is
suggested only if the Contractor feels the first one may not be
adequate, but both proofreadings are to be accomplished before
the proofs are delivered.

The third point made by the Appellant is that paragraph 2.11(c)
specifically states "The Contractor will be solely responsible
for the typographic accuracy of the finished product".  The
"Finished Product" being the reproduction proofs and not the
reader's proofs.

The Contracting Officer answers this by saying that the Appellant
mention 2.12(c) which refers to the typographic accuracy of the
finished product, but he overlooks paragraph 2.12(a) which says
the proofs must be in conformity with the copy.

The fourth point made by the Appellant is paragraph 2.12(c),
which clearly states, "The Department will not proofread the
reader's proofs but will have them indexed and checked for proper
location of illustration, heads, etc., only."  The Department
failed to return the proofs in accordance with the production
schedule for Print Order No. 9.

The response of the Contracting Officer is:  The contract does
state that the Department will not proofread the job, but when
glaring errors are found, the Department does have the right to
read the proofs to determine their suitability for indexing.
They were not returned because of the Department's request for a
"Default Action".

The fifth point the Appellant made was paragraph 2.8, which
states, "Return all material furnished".  This means upon
completion of the finished product.

The Contracting Officer responds that paragraph 2.8 specifically
states that the material furnished (manuscript copy in this case)
is to be returned with the reader's proofs and this should not be
construed to be limited to the time when the finished product is
delivered.

The sixth point the Appellant makes is that the discrepancies
listed in Ex. 39 are no different than some made in the sample
guides.

The Contracting Officer states that the seriousness of the
discrepancies in the proofs speak for themselves and reference
should not be made to any other publication.  The proofs must be
judged in the light of the requirements of Contract Terms No. 1
and the GPO Style Manual.

The seventh point made by the Appellant concerns accents drawn by
hand.

The Contracting Officer's response to this is, proofs have to be
in conformity with copy.  If the accents were had drawn or not
put in at all they would be a printer's error.

The Appellant's eighth point is that a set of reproduction proofs
for Print Order No. 9 was submitted to verify that discrepancies
were corrected.  The Contracting Officer's answer to this was,
"The Contractor made corrections to Print Order No. 9 after
delivering the proof, and not before as required by paragraph
2.12-1(a) of the contract."

The ninth point made by the Appellant is that all Print Orders
through No. 12 were accepted except for Print Order No. 9 and
only this should be considered and the exhibits that pertain to
it.

The response of the Contracting Officer is that this is a
decision the Appeals board will have to make; however, the GPO is
of the opinion that the overall performance must be considered
since this would determine whether the Appellant's performance
was endangering the balance of the contract.  The Contracting
Officer submitted Xerox copies of repros that were submitted by
the Contractor as the final product.  There were numerous errors
that the GPO corrected because of the urgent need for the
product.

The 10th point made by the Appellant was although the schedule
paragraph 2.15(b) states there will be approximately 12 reprint
orders placed over the term of the contract, the schedule did not
specify time allowed to deliver reprint orders.  In item number
11 the Appellant states the Government acknowledged this by
changing the specifications in the next solicitation.

The Contracting Officer responded to points 10 and 11 by saying,
the schedule in paragraph 2.15 is for all books including
reprints.  The Contractor has 6 workdays in which to deliver
proofs for up to 400 pages of manuscript copy.  The language of
the new solicitation has no bearing on the one to which he was
obligated.

The 12th point made by the Appellant concerned the books
furnished the Contractor for a guide as to format and style,
which books contained examples of poor printing that was accepted
by GPO.

The Contracting Officer responds that the Contractor was
furnished these books as a general guide for style, however, he
was told the style in those samples would be superseded by any
special instructions on the manuscript.  The poor printing in
these samples had no bearing on his requirements in this
contract.  The requirements were set forth in Contract Term No. 1
and the GPO Style Manual, both of which are an integral part of
the contract.

Discussion

It is apparent to this Board that we must make a decision on the
question of whether the position of the Appellant or the
Contracting Officer is correct on the right of the GPO to default
the Appellant on the facts that were presented.  If the
Government was justified under the contract terms in taking the
action it took, then the request of the Appellant to convert it
to a Termination for Convenience of the Government is moot.

Article 17, Default of Contract Terms No. 1, provides:

"(a) The Government may, subject to the provisions of paragraph
(c) of this Article, by written notice of default to the
contractor, terminate the whole or any part of the contract in
any one of the following circumstances:

(1) If the contractor fails to make delivery of the supplies or
to perform the services within the time specified herein or any
extension thereof;

(2) If the contractor fails to perform any of the other
provisions of the contract, or so fails to make progress as to
endanger performance of the contract in accordance with its
terms; and in either of these two circumstances does not cure
such failure within a period of 10 days (or such other period as
the Contracting Officer may determine to be reasonable and
authorized in writing) after receipt of notice from the
Contracting Officer specifying such failure."

Article 3, Disputes - Under this Article the Contracting Officer
is charged with the responsibility of making decisions and they
are final and binding unless a written appeal is made to the
Public Printer.  Thus, the decision of the Public Printer or a
duly authorized representative for the determination of Appeals
shall be final and conclusive unless determined by a court of
competent jurisdiction to have been fraudulent, or capricious, or
arbitrary, or so grossly erroneous as necessarily to imply bad
faith or not supported by substantial evidence.

The Board must decide if the Contracting Officer was within his
rights under the terms of the contract when he terminated the
contract for the reasons given in the Notice of Termination dated
January 6, 1981.  (Ex. 39)   These were:

1. Failure to proofread carefully as evidenced by an excessive
number of printer's errors;

2. Omission of words and phrases;

3. Failure to follow instructions to sink the first page of some
of the chapters;

4. Setting about 28 pages in the wrong point size;

5. Accents were frequently omitted from words requiring them and
where accents were inserted they were drawn in by hand and were
poorly done;

6. Improper word division; the following are just a few examples:
po-pulation, mun-icipal, traini-ng; Indian-s, etc.;

7. Excessive spacing between words.

The Appellant answers this by saying the Schedule does not
require (paragraph 2.15(c)) the Contractor to return the
manuscript copy with reader's proofs and paragraph 2.12(c)
suggests that a second proofreading will be accomplished by the
Contractor within the original production schedule.

The Board does not agree with the Appellant.  We agree with the
Contracting Officer when he quotes paragraph 2.8 that provides
all material furnished must be returned with the reader's proofs.
We also agree that in order for the Government to know if revised
proofs are required it must have the manuscript on hand.

The Appellant made much of the failure to the Government to
return the reader's proofs and the manuscript index pages to the
Contractor by December 2, 1980, as required by the original
production schedule set forth in Print Order No. 9. (Ex. 23A)

The Contracting Officer responded to this by saying the second
proofreading is suggested only if the Contractor feels the first
one may not be adequate but both proofreadings are to be
accomplished before the proofs are delivered.  The reason the
proofs were not returned was because of all the previous problems
with Print Order No. 1 and the Contracting Officer wanted to
investigate to determine if grounds for default were present.
The Contracting Officer said if the Contractor had performed
responsibly, the proofs would have been returned on schedule.

The Board agrees with the Contracting Officer.  The problems that
arose with Print Order No. 9 were similar to the ones encountered
with Print Order No. 1.  It was necessary to sent out a Cure
Notice (Ex. 9) on that purchase order.  The Default was withheld
in that instance.  (Ex. 14)  The Contracting Officer notified the
Appellant that the delay in Default Proceedings was not a waiver.

On October 1, 1980, a Show Cause Notice was sent to the Appellant
(Ex. 17) in which all of the discrepancies were noted.  The
Appellant responded giving its reasons for disagreeing with the
Contracting Officer.

On October 20, 1980, the Contracting Officer wrote (Ex. 23) and
set forth the position of the GPO and requested a response that
outlined specific steps that were going to be taken to remedy the
situation.

On November 6, 1980, another Show Cause Notice was sent to the
Appellant regarding Print Order No. 9.  The result of all of this
was the Termination Notice on January 6, 1981.  (Ex. 39)

The Appellant has requested the Board only consider the exhibits
that pertain to Print Order No. 9 because the Government approved
and accepted Print Orders No. 1-8 and 10-12.

It is the Board's position that we cannot isolate one particular
purchase order and the problems that were associated with it.  We
agree with the Contracting Officer that the overall performance
must be considered since this will determine whether the
performance was endangering the balance of the contract.  This is
provided for in Article 17, Default, Contract Terms No. 1, in (a)
(2) where it states:

"If the Contractor fails to perform any of the provisions of the
contract, or so fails to make progress as to endanger performance
of the contract in accordance with its terms. . . ."

The Appellant stated that it was provided with published
publications to be used as a guide and these were not in
conformity with the specifications.

The Contracting Officer's response was these "guides" may have
been examples of the Government accepting poor printing, however,
the Appellant entered into a contract with the knowledge that
standards of good typography were required as described in
Contract Terms No. 1 and the GPO Style Manual.

We agree with the Contracting Officer.  In Associated Foods
Services, Inc., 1962 ASBCA Nos. 6883 and 7638, 1961 BCA 3443, the
Board held:

"The Government has a right to insist on quality of performance
called for under a reasonable interpretation of the terms of the
contract even though it may under previous contracts have
accepted a lower level of quality than that to which it was
entitled."

There are many decisions of Boards of Contract Appeals that
uphold the right of the Contracting Officer to terminate for
failure to live up to the specifications.  See

(1) X Inc. (1968) POD BCA No. 272, 68-2 BCA 7211;

(2) Computer Technologies, Inc.  (1970) ASBCA No. 14066, 70-1 BCA
8147.

This case is of interest because in it we saw that a contract for
printing directories was properly terminated for default when the
Contractor had made three submissions that were rejected as not
meeting the contract specifications.  Whether the Contractor
might have corrected his errors was irrelevant because the
Government was not required to allow him to continue performance.

(3) International Aerial Mapping Co. (1962) ASBCA No. 7701, 1962
BCA 3626.

(4) Chicago Roll Forming Co. (1969) GSBCA No. 2342, 69-1 BCA
7610.

In this case the Board held the contract was properly terminated
for default because the pre-production samples furnished by the
Contractor failed to meet the contract requirements.  (See Carb
Mfg. Co. (1962), ASBCA No. 6553, 1962 BCA 3466)

The specifications were clearly drawn and Contract Terms No. 1
specifically provided that failure on the part of the Contractor
to perform any of the provisions of the contract, or to make
progress as to endanger the performance of the contract with its
terms, if not cured after notice by the Contracting Officer,
would be grounds for default.  This clearly occurred in the case,
and the seven reasons given in the Notice of Termination (Ex. 29)
were clearly spelled out.

The Appellant did not prove that the failure to perform was
beyond the control of the Contractor and without fault or
negligence.  The Appellant had the burden of proving this.  The
burden was to show among others:

1. Failure was because of Acts of God or the Public Enemy;

2. Acts of the Government in its sovereign or contractual
capacity;

3. Fires, floods, epidemics, quarantine restrictions, strikes,
freight embargoes and unusually severe weather.

None of the above or comparable reasons were proven for the
failure of compliance.

See:  Bergman Knitting Mills, Inc. (1951) ASBCA No. 12162, 68 BCA
6859; Bannercraft Clothing Co., Inc. (1963) ASBCA Nos. 6247,
6685, 1963 BCA 3995; Acushnet Carpet Mills, Inc. (1955) ASBCA No.
2435, 6 CCF 61908; Eastern Realty & Construction Co. (1963) ASBCA
No. 8066, 1963 BCA 3636; Hirsch a/b/a United Engineering Co.
(1960), ASBCA No. 5652, 60-2 BCA 2758.

Decision

We therefore find that the Termination for Default was proper and
deny the request to convert it to one that was for the
convenience of the Government.  The Contracting Officer was
within his rights in accordance with Article 17(b) to reprocure
and hold the Appellant liable for any excess costs.