United States Government Printing Office Contract Appeals Board Appeal of Bay Ridge Press Decision dated January 12, 1983 Panel 4-82 Thomas O. Magnetti Chairman James A. Hickey Member Morris J. Mervis Member Preliminary Statement This is a decision on an appeal filed by Bay Ridge Press, Inc. (hereinafter referred to as the contractor). The contract at issue (Program 1272-S) required the contractor to print and bind appeal briefs as needed by the U.S. Department of Justice. Because of the requirements of Title 44 of the U.S. Code, the contract was between the U.S. Government Printing Office (GPO) and the contractor. The GPO Contracting Officer terminated the contract for default because of the contractor's alleged inability to meet the delivery dates, alleged poor performance and its alleged refusal to accept work under the contract. The contractor disputes this final decision and appeals the action in accordance with Article 2-3 (the Disputes clause) of GPO Contract Terms, No. 1. Exhibit 2, Appeal File. The jurisdiction of the GPO Contract Appeals Board over this appeal is established pursuant to GPO Instruction 110.10B, entitled "Board of Contract Appeals Rules of Practice and Procedure" and to Contract Terms No. 1, supra. This decision of the Board is based solely on the record which consists of the twenty-two exhibits within the Appeal File. Statement of Facts On August 20, 1981, in accordance with standard GPO award procedures, Purchase Order C-5136 covering Program 1272-S was awarded to the contractor. Exhibit 4. Prior to the award, because of the contractor's perceived lack of the necessary manpower and equipment, agency officials were not convinced that this contractor could perform the contract. Exhibit 12. To allay these fears, the contractor submitted a proposal indicating the steps he would take to ensure timely and satisfactory performance if awarded the contract. Exhibit 3. Under the contract, the contractor was to print, bind and deliver legal briefs, records and other legal material as required by the U.S. Department of Justice. Exhibit 1. The term of the contract ran from September 1, 1981 to August 31, 1982. Exhibit 4. According to the specifications, the production and delivery of each set of appeal briefs were to strictly adhere to the schedule established in the contract. Exhibit 1, p.6. Because this was a "requirements" type contract, the contractor contracted to produce all the needs of the Government as covered by the specifications. Id, p.8. On September 24, 1981, John Martin of the U.S. Attorney's Office telephoned the GPO N.Y. RPPO, informing the GPO that he was dissatisfied with the services provided by the contractor. Exhibit 12. By letter dated September 30, 1981, the U.S. Attorney's Office described in detail its complaints. Exhibit 7. According to the ordering agency, the manuscript of the brief to be submitted in the case United States v. Ellis was delivered to the contractor on September 16, 1981. The contractor was supposed to deliver the page proofs for the brief by 5:00 p.m. on September 18, 1981. They were not delivered until 7:45 that evening and there were errors in the printing and proofreading. The page proofs were corrected and were delivered back to the contractor on the next day (Sept. 19). The contractor was to deliver the finished product by close of business on September 21, 1981 but did so on the following day (Sept. 22). After the document was filed with the U.S. Court of Appeals, it was discovered that not only were there numerous printing errors, but that four pages of text were missing (pp. 3-4, 17-18). Id., Exhibit 18. According to the Government, the ordering agency experienced even greater difficulty obtaining proper performance on a brief that was submitted in the case United States v. Desmond Mackin. Exhibits 7, 12. This brief was due to be filed on September 18, 1981, and the manuscript copy was delivered to the contractor between September 16th and the 18th. Although the contractor assured the government that the page proofs would be delivered that day (Sept. 18), they were not delivered until 1:15 a.m. the next day (Sept. 19). Corrected copies of the proof were given to the contractor on September 21, 1981 and the contractor was informed that the brief had to be filed that day. The contractor apparently promised to have the work ready for filing. The contractor finally delivered the brief at noon on September 22, 1981. However, because there were numerous printing errors, e.g. misplaced footnotes, that brief was not filed but was corrected and returned to the contractor for reprinting. See Exhibit 19. The complaint letter related how three employees of the U.S. Attorney's Office visited the contractor on September 23, 1981. They informed the contractor of the necessity to meet the delivery schedule and of the need for accurate proofreading and printing. The corrected copy of the Mackin brief, which the contractor had promised to deliver later that evening (Sept. 23), was delivered the following day (Sept. 24). But this supposedly corrected version of the brief contained numerous errors that had not been present in the previous set of page proofs. When these latest errors were brought to the attention of the contractor by the U.S. Attorney's Office, the contractor allegedly refused to make the corrections. Exhibit 7. Apparently the contractor relented, and these errors were corrected by the next day (September 25, 1981). This series of delays caused by the contractor's poor performance forced the U.S. Attorney's Office to file this brief on September 25, 1981, several days after the court-appointed date. Id. After reciting the above- described litany of complaints, Mr. Pomerantz described in this letter the disruption caused in the U.S. Attorney's Office by the contractor's substandard work. Id. However, as stated above, before receiving this complaint letter, the GPO N.Y. RPPO was telephonically contacted on September 24, 1981, by the U.S Attorney's Office and was informed of their dissatisfaction with the contractor's performance. Exhibit 12. The GPO then contacted the contractor by telephone about the numerous errors in his work. Id. The contractor's response was considered unsatisfactory in that the GPO was told that the Government would have to live with a few mistakes . . . .Id. Faced with this response, the GPO issued a cure notice to the contractor dated September 28, 1981. Exhibit 6. The notice, received on October 1, 1981, warned the contractor that the GPO considered its failure to meet required delivery dates, poor proofreading and inconsistent printing quality to be conditions which endangered performance of the contract. The contractor was directed that these conditions had to be cured within 5 days after receipt of the notice or face possible termination for default. The Government contends that no response to the cure notice was forthcoming. Exhibit 8. Moreover, on October 13, 1981, GPO employees made an inspection of the contractor's plant. Id. According to the Manager of the RPPO who went on the inspection, the contractor had failed to purchase an additional Meihle Vertical Press as had been promised in the contractor's initial proposal. See Exhibits 3, 12. Dissatisfied with the plant's operation, they questioned the contractor (Mr. John Hart) concerning the steps that had been taken to ensure timely delivery and adequate performance. The Government characterized his response as unsatisfactory. Exhibits 8, 12. The Government issued a notice of termination on October 15, 1981, declaring the contract terminated for default because of the contractor's poor performance, its inability to meet requested delivery dates and its refusal of work. Exhibit 9. The contractor appealed this action, alleging that it was not given an opportunity to cure its previous poor performance. Exhibit 11. The contractor further argued that it had been late on only 2 of 14 print orders and that no work had ever been refused. The contractor asked, as relief, that the contract be terminated for convenience. Id. Discussion Under the Default article of Contract Terms No. 1, the Government has the right to terminate a contract if the contractor fails to make delivery within the time specified or any extension thereof. Termination for reasons other than late delivery, such as failure to perform any of the other provisions of the contract or failure to make progress so as to endanger performance of the contract, must be preceded by a prescribed period wherein the contractor can cure the failure. Exhibit 2, p.13, Article 2-18(a)(l) and (2). The Board must determine from the record whether these mandatory provisions have been complied with in such a way as to make the Government's termination sustainable. Here the Government issued a cure notice to the contractor on September 28, 1981. Exhibit 6. In that notice the Government cited.poor proofreading, inconsistent printing quality and the inability to meet requested delivery dates as conditions that endangered performance of the contract in accordance with its terms. The contractor was given 5 days to cure these deficiencies. When no satisfactory response was forthcoming, the Government terminated the contract. The first issue to be resolved is whether the contractor's performance was such that it led the Contracting Officer to believe that timely performance was endangered. Our review of the Contracting Officer's action is limited to a determination that there was a reasonable basis for his belief that there existed a lack of progress and that contract completion was endangered by it. RFI Shield-Rooms, ASBCA Nos. 17374, 17991, 77-2 BCA ¶ 12,714. We hold that there was a rational basis for the Contracting Officer to conclude that the contractor's inadequate performance on the Mackin and Ellis briefs constituted conditions which endangered performance. The very fact that the Ellis brief was submitted by the contractor to the Government missing four pages (pp.3-4, 17-18) and with textual matter interspersed in a footnote gives rise to the conclusion that the contractor was not performing satisfactorily. Exhibit 18, p.19. The contractor never presented any suitable excuse for the presence of these errors. A review of the two Mackin briefs also lends credence to the proposition that there was poor proofreading and inadequate printing quality on the part of the contractor. See Exhibits 19 and 19a. Such deficiencies endangered proper and timely performance on the contract, therefore justifying the issuance of a cure notice. The next factual issue to be resolved is whether the contractor effected a cure of those conditions which the Contracting Officer considered as endangering performance. After issuance of a cure notice, the Government is entitled to adequate assurances from the contractor that performance will continue in accordance with the contract specifications. A contractor's failure to provide such assurances justifies a termination for default. However, when a contractor acts to demonstrate that contract performance is satisfactory, the Government's grounds for default no longer exist. Lorch Electronics Corporation, ASBCA Nos. 21496, 21749, 78-1 BCA¶ 12,911. Based upon the facts as documented by the record, this Board holds that the Government has failed to prove that the endangering conditions were not cured by the contractor. According to Exhibit 5, the Government issued Print Order 704 on September 25, 1981 with a delivery date of October 1, 1981. Although the Government contends that the contractor was late in delivering work under this print order, it does not demonstrate how late the delivery was or when the brief was delivered. See Exhibit 16. The Government's mere allegation of lateness is not enough to overcome the evidence presented by the contractor. The contractor disputes this allegation of lateness in delivering work under this print order in its letter of December 8, 1982, wherein it is stated that the work was timely. Exhibit 10. Attached to this letter is a receipt for this work dated October 1, 1981. The Board rules that there is no conclusive evidence that this work was late. Also, the Government has not demonstrated that this work was substandard. More importantly, after the cure notice was issued the contractor received two other print orders under this contract, Nos. 705 and 706. Exhibit 5. There is no indication in the record that the contractor's work on these print orders was either late or substandard. This would indicate that during the five day cure notice period, the contractor was performing satisfactorily on the contract. The obvious conclusion is that those conditions that endangered performance prior to issuance of the cure notice were rectified during this period of time. The notice of termination set out two other reasons for termination of the contract; the contractor's inability to meet requested delivery dates and its alleged refusal of work. Exhibit 9. It is the finding of this Board that the Government has failed to prove either of these claims. The schedule established in the contract specifications gave the contractor five days to work on orders of 64 pages or less. As the number of pages increased, more time was provided. Exhibit 1, p. 7. There is little indication that Government officials from the U.S. Attorney's Office complied with that schedule when they placed work with the contractor. Under the specifications the contractor was directed to work in conjunction with the U.S. Attorney's Office in matters relating to proofs and arranging details of schedule. However, the parties were cautioned that these arrangements could not conflict with or alter the terms of the written contract. Exhibit 1, p. 2. The manuscript copy for the Ellis brief was delivered to the contractor between September 16 and 18, 1981. The contractor was instructed to have the final page proofs delivered by September 18, 1981, as the brief had to be filed on that day. Exhibit 7. There were no provisions in the contract for this kind of delivery schedule. The work was finally delivered by the contractor on September 22, 1981, within the five days set out in the specifications. According to the Government, the manuscript copy for the Mackin brief was also sent to the contractor between September 16 and 18, 1981. It also had to be filed on the 18th. A presentable copy of the brief was not delivered by the contractor until September 25, 1981. Id. However, since September 25 is five working days after September 18, 1981, it would be difficult for the Government to prove late delivery. The record indicates that the U.S. Attorney's Office attempted to vary the terms of the contract by requesting delivery on briefs earlier than set out in the contract. Id. There was no authority for this because the Government Printing Office did not provide written authorization for the change. Exhibit 1, p.2. Since these altered schedules were not in accordance with the contract terms, the contractor can not be penalized for complying with the contract. It should also be noted that the record indicates that there were no complaints concerning the contractor's delivery on Print Orders 705 and 706. The implication is that delivery was timely. As this work was done after the cure notice was issued and all of the work under previous print orders was accepted, there was no outstanding delinquent work at the time of the termination. This would indicate that failure to make delivery schedules was an inappropriate reason to terminate the contract for default. Gibraltar Fabrics, Inc., ASBCA 15709, 73-1 BCA 9905. The allegation that the contractor refused work must also be rejected. The Government asserts that the contractor refused to make necessary corrections on the Mackin brief on September 24, 1981, and that this was the refusal of work. However, the record indicates that the contractor did make the corrections on the brief, albeit later than the U.S. Attorney's Office would have liked. Exhibit 7. Decision Based on the foregoing reasons, the Board concludes that the contractor's failure to make progress was cured when it successfully delivered on Print Orders 704, 705 and 706. There were no other grounds for finding the contractor in default. Accordingly, the termination for default was improper and must be converted to a termination for convenience. The matter is remanded to the Contracting Officer to follow these instructions in accordance with Articles 2-17 and 2-18(e), Contract Terms No. 1. Exhibit 2. In the event that negotiations regarding the contractor's recovery should prove unsatisfactory to the contractor, it has the right to appeal the matter to the Board pursuant to the aforementioned "Disputes" clause.