BOARD OF CONTRACT APPEALS U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC 20401 In the Matter of ) ) the Appeal of ) HARMONY PRINTING & ) Docket No. GPOBCA 05-96 DEVELOPMENT COMPANY ) Jacket No. 639-963 ) Purchase Order F-0868 ) For the Appellant: Harmony Printing & Development Company, Liberty, Missouri, by Frederic G. Antoun, Jr., Attorney at Law, Chambersburg, Pennsylvania. For the Government: Drew Spalding, Esq., Deputy General Counsel, U.S. Government Printing Office. Before BERGER, Ad Hoc Chairman. DECISION AND ORDER Harmony Printing and Development Company (Appellant), 1200 East 210 Highway, Liberty, Missouri, timely appealed the February 20, 1996 final decision of Contracting Officer Gary C. Bush of the U.S. Government Printing Office (GPO or Respondent) requiring the Appellant to reprint at no cost to the Government some 500,000 40-page pamphlets under its contract identified as Jacket 639-963, Purchase Order F 0868. For the reasons which follow, the Contracting Officer's decision is AFFIRMED and the appeal is DENIED. I. BACKGROUND 1. The contract, calling for the printing of a pamphlet entitled "Caring for Someone with AIDS at Home" for the Centers for Disease Control (CDC), was awarded to Harmony on or about November 2, 1995. The specifications provided that GPO would furnish the copy and fonts to be used in the form of electronic media on a SyQuest cartridge. Rule 4 File, Tab B.1 2. Upon receipt of the cartridge, the Appellant discovered that one of the fonts used for the text of the publication was not included on the cartridge. The Appellant, without discussing the matter with GPO, substituted a font it already had installed on its system. Stipulation of Facts,2 ¶¶ 4, 5. 3. As required by the specifications, the Appellant furnished a set of blueline proofs. The proofs were approved with certain noted corrections attributable to contractor error. Rule 4 File, Tab D. The Appellant printed the pamphlets in accordance with the approved proofs. 4. After delivery of the pamphlets, CDC discovered two errors in the text: on pages 15 and 18, where the text was supposed to read "1/4 cup of bleach," the letter "G" appeared in place of the fraction. Those errors appeared in the blueline proofs, but had not been marked for correction. Stipulation, ¶ 8. 5. The Contracting Officer directed the Appellant to reprint the pamphlets, and the Appellant did so. The Appellant subsequently filed this appeal, seeking reimbursement for its reprinting costs. II. DISCUSSION3 The Appellant asserts that it is not responsible for the error because it was given an "OK to print" after the Government reviewed the proofs and noted the corrections it wanted made. According to the Appellant, the Government assumed the responsibility for any errors in the pamphlets once it approved the proofs and authorized printing based on them. The Respondent takes the opposite position, arguing that it should not be held responsible here because the Appellant unilaterally substituted a font different from the one that should have been on the SyQuest cartridge4 and never brought that fact to the Government's attention, and because blueline proofs are used to review positioning, layout, and bleeds, but not for proofreading the text. Thus, this appeal presents a single issue: Does the Government's approval of the furnished proofs under the circumstances here insulate the Appellant from responsibility for furnishing defective pamphlets when those pamphlets "exactly matched" (Stipulation of Facts, ¶ 10) the approved proof? As the Board has recently noted, the approval of proofs and the ensuing "OK to print" authorization play a crucial role in the performance of contracts for printing services. IPI Graphics, GPOBCA 04-96 (April 9, 1998), slip op. at 6, 1998 WL ______. Under GPO's contract language, without that approval and authorization a contractor is not free to proceed with the final printing job. Id. at 5. (The Appellant's contract, in the specification section captioned "PROOFS", states that "Contractor must not print prior to receiving an 'OK' to print.") GPO imposes this requirement because it reserves the right to make changes to its requirements after it receives proofs, see The George Marr Co., GPOBCA 31-94 (April 23, 1996), slip op. at 48-51, 1996 WL 273662; McDonald & Eudy Printers, Inc., GPOBCA 25-92 (April 11, 1994), slip op. at 23, 1994 WL 275093, and because it uses the "OK to print" on a proof as a quality assurance device to "set 'the standard by which the quality of performance will be measured.'" Fry Communications, Inc., GPOBCA 30-94 (March 30, 1998), slip op. at 5, 1998 WL ______ (quoting The George Marr Co., supra, at 45). The Board's prior decisions make eminently clear that a contractor printing in advance of proof approval and receiving the required "OK to print" must bear the consequences of so proceeding. See IPI Graphics, supra, at 6; Fry Communications, Inc., supra, at 9; Swanson Printing Co., GPOBCA 27-94, 27A-94 (November 18, 1996), slip op. at 25, 1996 WL 812958; The George Marr Co., supra, at 54; McDonald & Eudy Printers, Inc., supra, at 21-22; Serigraphic Arts, Inc., GPOCAB5 22-79 (May 8, 1980), slip op. at 7-8, 1980 WL 81264. This is so not only when there is a contractor production error but also when the error is the Government's (see McDonald & Eudy Printers, Inc., supra (incorrect camera copy furnished to the contractor) or when the Government simply changes its mind about what it wants. See IPI Graphics, supra (agency revised how it wanted lines in a graph to appear) and Serigraphic Arts, Inc., supra (agency changed its color requirements after receiving proofs). The consequences in such cases may be an order to reprint rejected work or otherwise correct the work at the contractor's expense, see IPI Graphics, supra, and McDonald & Eudy Printers, Inc., supra, a contract price reduction, see Fry Communications, Inc., supra, or not getting paid at all for the unauthorized work. See Swanson Printing Co., supra. Thus, there is no question that GPO's printing contracts clearly place the risk of proceeding prematurely squarely on the contractor. In the typical case, the risk initially placed on the contractor will shift once proofs are approved and an "OK to print" authorization is issued. Since the "OK to print" authorizes the contractor to proceed in accordance with the approved proofs, it is the Government, and not the contractor, that necessarily will bear the risk of an error in the proofs. Thus, if the Government, after authorizing the contractor to proceed, discovers an error in the approved proofs or changes its mind about what it wants, the Government cannot refuse to pay for what the contractor produced and will have to reimburse the contractor for any reprint or other corrective action ordered. Not every case, however, is the typical case. In some situations the facts and circumstances do not permit the conclusion that the risk has shifted to the Government notwithstanding that there has been a proof or pre-production approval and an authorization to proceed. For example, in Graphic Litho, GPOBCA 21-84 (February 4, 1985), slip op., 1985 WL 154850, there was a press sheet inspection followed by an "OK to print." GPO subsequently found the paper on which the finished product was printed to be inconsistent with specifications and assessed a price reduction. In holding that GPO was not precluded from taking that action, the Board held that the function and authority of the press sheet inspector was limited to making a visual inspection and did not extend to determining compliance with detailed contract specifications and with the acceptability of the paper stock. In Fry Communications, Inc., supra, the contractor was given blueline proof approval but the Board held that the appellant could not consider that approval to be the equivalent of an "OK to print" because the appellant had not furnished another required proof ( a cromalin or equal) needed to assess color. In IPI Graphics, supra, a case with some similarities to the present appeal, CDC again was the customer agency, again the copy furnished was on a SyQuest cartridge, and again something was missing from the cartridge. There the similarities end-upon examining the blueline proofs, CDC discovered the error (missing graphics for page 9) and directed the contractor to fix the problem based on a furnished "dummy." Using a proof report form, CDC directed the contractor to "[r]evise as indicated and proceed" but also to "fax a copy of page 9, for proofing only with graphics." The contractor then corrected page 9, faxed a copy of the corrected page as instructed, and printed the job. CDC subsequently decided that it wanted the graph lines to be vertical instead of horizontal as they were on the "dummy." The Board held that the contractor was responsible for reprinting with corrected graphics because the "revise ... and proceed" language, while normally an "OK to print" authorization, in this case was subject to the further requirement of submitting a proof, by fax, of page 9 and obtaining approval of that proof before printing. The Appellant argues that it has "long been standard practice in both the printing industry and at the GPO to charge the customer, as the reviewer of the final proof, with the failure to correct errors." While the Appellant's position may reflect the general rule, as the cases discussed above establish, not every aspect of a printing job is encompassed by a proof or pre-production approval, and not every proof approval can be considered an authorization to proceed. In other words, the cases indicate that there is no absolute rule and that whether proof approval and an "OK to print" will shield a contractor from the consequences of producing a defective product will depend on the facts and circumstances of each case. The starting point for any discussion of the facts and circumstances here is the contract itself, as it is the contract that establishes the respective rights and obligations of the Appellant and the Respondent. As indicated above, the "Proofs" section of the specifications requires the Respondent to provide the specified proof (bluelines in this case) to the Government and to await an "OK to print." This clearly places the responsibility for printing in advance of proof approval and the "OK to print" on the Contractor. Implicit in that clause is that once the "OK to print" is given the Contractor is free to proceed and the Government generally will be responsible for errors discovered and changes made after printing has begun. Thus, while the contract places a significant initial risk on the Contractor, the contract also envisions that the risk will shift to the Government during the course of performance. This shifting allocation of risk recognizes both the Government's interest in ensuring that it receives what it wants and the Contractor's need for a final indicator of what it is expected to produce and of the quality standard to which it will be held. Given the purpose of proof approval and issuance of "OK to print" authorizations-ensuring compliance with contract specifications and appropriate quality levels-the initial risk placed on the contractor is obviously intended to shift to the Government when the Government makes a knowing judgment regarding the acceptability of the proofs. In other words, where the Government knows or should know of aspects of the job that should be checked or verified and this can be done by examining the proofs, the Government's obligation is to take those aspects into account when reviewing proofs, and whether it does so or not, its approval of the proofs will operate to shift the risk to the Government if a problem with any of those aspects is subsequently discovered. On the other hand, where the Government has no reason to know of the need to review a particular aspect of the job and the Government would not be expected to discover any problem concerning that aspect during its routine examination of the proofs, the Government's approval of the proofs cannot fairly and reasonably be regarded as knowing approval of what the contractor did. Under those circumstances, in the Board's view, the contract does not envision that proof approval will shift the risk to the Government if there is a later problem concerning that job aspect. The dispute here centers around what is commonly viewed as a typographical error. Under GPO's modern printing contracts, typesetting frequently is not a requirement6-as the Appellant points out, the copy is furnished to the contractor in camera ready form or in the form of negatives or electronic media. Thus, the Government has no reason to proofread for typographical errors when the contractor returns proofs-that proofing presumably is done before the copy is furnished to the contractor. (The Contracting Officer states that here CDC did proof the copy before loading the data onto the SyQuest cartridge.) Because the Government does not envision proofing for typographical errors, the proofs it requires are instead used for other purposes.7 As the Respondent explains in this case, blueline proofs are used to review positioning, layout, and bleeds. See Fry Communications, Inc., supra, at 7, and The GATF Encyclopedia of Graphic Communications 89 (bluelines are used to evaluate pagination and location of page elements, such as text, photos, and other illustrations). Bluelines, says the Respondent, are simply not intended to detect the error that was made here. While that may be so, the issue cannot be resolved simply by looking at the purpose of blueline proofs. For example, in a situation where, unknown to both the Government and the contractor, the camera ready copy, negatives, or electronic media furnished by the Government contain typographical errors which remain undetected after review of blueline proofs, the ultimate responsibility for those errors in the final product would remain with the Government as the contractor, not knowing of the errors (and with no obligation to detect a typographical error in the furnished data that the Government was supposed to have found and corrected before ever providing the data to the contractor) and having waited for an "OK to print" before proceeding, would have done all it was required to do under the contract. Thus, in that circumstance, and even though the Government was unaware of the error, the fact that the Government does not use bluelines to find typographical errors would not absolve the Government of the ultimate responsibility for the error. In other circumstances, however, such as where a contractor, under a contract where the Government furnishes all copy in electronic or other form and no typesetting is required, takes it upon itself to change the copy, either to correct an error it discovers or for some other reason, the answer necessarily will be different. The Government, not anticipating a copy change, would have no reason to review the bluelines to try to determine the acceptability of the copy change unless the contractor notifies the Government that a change has been made. In the absence of that notification, the Government's approval of the bluelines would extend to the matters normally considered during blueline review, but obviously would not reflect a knowing approval of the copy change. That is the situation here. The Government furnished the copy for the pamphlets in electronic form, on a SyQuest cartridge; no typesetting was required. The Appellant detected an error-a missing font-in what was furnished to it. The Appellant then substituted its own font for what was missing. In so doing, however, it remained silent, failing to advise the Government of the error or of the action taken to correct it. The Government therefore did not know and had no reason to know that the copy might have changed. By remaining silent, the Appellant deprived the Government of the opportunity to verify that what the Appellant did was acceptable-while bluelines may not normally be used for reviewing lines of type, had the Government been placed on notice of what had occurred it could have used the blueline proofs to review what the Appellant had done.8 Moreover, the Appellant had a separate and distinct contractual obligation to notify the Respondent when it discovered the error on the SyQuest cartridge. The contract's "Government Furnished Property (GFM)" clause, GPO Contract Terms, Solicitation Provisions, Supplemental Specifications, and Contract Clauses, GPO Pub. 310-2 (Rev. 9-88), Contract Clauses, ¶ 7, requires the contractor to examine the GFM and notify the Respondent, prior to performing any work, if there are defects or other problems. See Braceland Brothers, Inc., GPOBCA 01-93 (August 8, 1997), slip op. at 28, 1997 WL 772400, and cases cited therein. The Appellant gave no such notice to the Respondent. Under the circumstances, the Board holds that the approval of the blueline proofs in this case did not transfer to the Government the risk of defects in the final product attributable to the Appellant's substitution of its own font before producing the pamphlets. Accordingly, the Contracting Officer's final decision is AFFIRMED and the appeal is DENIED. It is so ordered. July 6, 1998 Ronald Berger Ad Hoc Chairman GPO Board of Contract Appeals _______________ 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 April 26, 1996. It is referred to as the Rule 4 File, with an appropriate Tab letter also indicated. The Rule 4 File consists of 13 tabs identified as Tab A through Tab M. 2 The parties entered into a joint Stipulation of Facts (hereafter Stipulation). 3This decision is based on the Complaint, the Answer, the Rule 4 File, the Appellant's Brief, and the Respondent's Reply Brief with accompanying Declarations of the Contracting Officer and of GPO Digital Information Specialist Scott A. Stovall. 4 Mr. Stovall in his Declaration describes the cartridge as "a high capacity floppy disk in a cartridge designed by the manufacturer to run on their proprietary external drive." 5 Prior to the creation of the Board in 1984, ad hoc panels heard and decided disputes between GPO and its contractors. The Board cites the decisions of these ad hoc panels as GPOCAB. See Rose Printing Inc., GPOBCA 32-95 (December 16, 1996), slip op. at 27, n.28, 1996 WL 812880. 6 For a contract where some typesetting was required, see Qualitype, Inc., GPOBCA 21-95 (April 21, 1998), slip. op., 1998 WL ______, recon. denied, June 24, 1998, 1998 WL ______. 7 The Respondent in its brief explains that if this had been a typesetting contract and the Government wanted to review output for typographical errors it would have required galley proofs. 8 Alternatively, had the Appellant notified the Respondent of the missing font before the Appellant took any other action, the Government may have simply provided a replacement cartridge.