FRY COMMUNICATIONS, INC. INFOCONVERSION JOINT VENTURE

GPO BCA 9-85
JACKET NO. 421-710 (878-85-067)
PURCHASE ORDER 33846
July 29, 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 January 23, 1984, reaffirming the
   correctness of his November 8, 1984, interpretation of the
   measurement and payment for data capture provisions of a
   certain contract between the parties identified as Purchase
   Order 33846, Jacket 421-710 and otherwise known as GPO Program
   400-S (878-85-067). 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.

Background

   On February 9, 1984, Appellant, a joint venture between Fry
   Communications, Inc., Mechanicsburg, PA 17055 (hereinafter
   "Fry"), and InfoConversion, a division of Grumman Data
   Information Services, Inc., Woodbury, NY (hereinafter
   "InfoConversion"), 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 and
   under Step Two to formally bid with price quotations. 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 contract, under "Part Two Invitation for Bids"
   (hereinafter "IFB") in parts pertinent to this appeal,
   provides that:

DEFINITIONS:
. . .

Updating and Editing: Any deviation from the original copy made
at the direction of the ordering agency after initial
keyboarding, and may consist of:

(1) Change or Addition - A single move or addition of word(s).
May be a code, a word, a phrase, a sentence, a paragraph, or a
block of continuous reading matter inserted at one place.

(2) Deletion - An elimination at a single place.

. . . .

Global Search Alteration: Altering a specific letter group (word
or words), figure group or code throughout a data base via the
use of machine generated data manipulation capabilities.

Transaction: The act of making an update or edit in the data
base. It includes searching the data base for the location of the
alteration and the movement or deletion of existing data.

. . . .

Measurement and Payment for Data Capture:

. . . .

Measurement of and Payment for Updating and/or Editing:

(1) The maximum charge allowable for updating and or editing on
any page shall be an amount equal to the cost of initial data
capture for that page.

(2) The charge for deleting or transposing typed lines without
setting and inserting new material will be one "per transaction"
charge for each group, regardless of the number of lines in a
group. Proofs of any deleted matter must be submitted with the
voucher to obtain payment.

(3) If, after the pages are made-up, the contractor is required
to transpose type from one column to another, or from one page to
another, he will be entitled to charge only two "per transaction"
charges per transposition. (Including deletion and insertion.)
under item I.2(a).

(4) If contractor is required to transpose within a madeup page
such components as a table or space for an illustration, he will
be entitled to charge two "per transaction" charges under item
I.2(a) for each affected column. For example, transposition of a
table printing across three columns will result in a charge for
six "transactions".

(5) The data base masterfile will consist of many inividual [sic]
titles, with each title considered as a separate entity, even
though they are often combined within the same publication. For
this reason, the parameters for making a global search alteration
must be by individual title, when required, and by complete
masterfile, when required. When a change is required that may be
made by a global search alteration, and the Government so
directs, it must be charged for as a single transaction, except
that a charge for any affected page to be re-photocomposed will
be allowed, where applicable.

Appeal File, hereinafter "R4 File," Tab A, page 6 of 18, Part Two
IFB, dated January 9, 1984.

SCHEDULE OF PRICES

. . . .

I. FILE CREATION AND MAINTENANCE. . .

. . . .

NOTE: The per 1,000 character measurement for all data capture
will be based on output characters.

. . . .

9. Updating and/or editing:
(a) Flat charge for making a deletion, a change, or an
addition   per transaction   $_____

(b) Adding characters to file from manuscript, reprint copy, or
proofs:
(1) Text   per 1,000 characters   $_____
(2) Tabular   per 1,000 characters   $_____

(c) Adding characters to file from word processing media:
(1) Text   per 1,000 characters   $_____
(2) Tabular   per 1,000 characters   $_____

(d) Adding characters to file from magnetic tape:
(1) Text   per 1,000 characters   $_____
(2) Tabular   per 1,000 characters   $_____

(e) Adding characters to file through teleprocessing:
(1) Text   per 1,000 characters   $_____
(2) Tabular   per 1,000 characters   $_____

Rule 4 File, Tab A, Part Two IFB, page 10, 11, and 12 of 18 dated
January 9, 1984.

   Subsequent to the award of the contract and the creation of
   the systems required thereunder, Appellant was issued certain
   print orders for data capture including "updating and/or
   editing" certain material. Thereafter, Appellant submitted
   vouchers to Respondent for its work. Following that,
   Respondent by letter of November 8, 1984, advised Appellant
   that:

[V]ouchers submitted for payment for data capture under Program
400-S are being submitted by your firm in error . . . .

. . . .

. . . .

. . .[P]age 6 of 18 of Step Two of the contract under measurement
and payment for data capture, and page 11 of 18 item I.9(a) under
Schedule of Prices, . . . are interpreted as follows:

   1. A single transaction charge may be made when a word or
   group of words is deleted or added or replaced. The act of
   removing and adding in a single location does not constitute
   two transactions.

   2. The maximum charge allowable for updating or editing on any
   page may not exceed the cost of initial data capture for that
   page.

R4 File, Tab B

   Appellant by letter of Donald B. Mandery, InfoConversion,
   dated November 29, 1984, disagreed with Lee stating instead
   that:

   The plain wording of the contract documents supports the
   interpretation which we have made, which we used to price the
   contract and to submit bills on the 400-S Program.

   The applicable clauses appear in Step 2 dated January 9, 1984,
   pages 5 and 6 of 18. They read:

"Updating and Editing: Any deviation from the original copy made
at the direction of the ordering agency after initial
keyboarding, and may consist of:

(1) Change or Addition - A single move or addition of word(s).
May be a code, a word, a phrase, a sentence, a paragraph, or a
block of continuous reading matter inserted at one place.

(2) Deletion - An elimination at a single place.

"Transaction: The act of making an update or edit in the data
base[.] [It includes searching the data base] for the location of
the alteration and the movement or deletion of existing data."

. . . .

. . . .

   Clearly, the deletion of words from a location and an addition
   of words in the same location is two transactions. A
   transaction is making an update or edit. Making an update or
   edit may be a "Change or Addition" or a "Deletion". A "Change
   or Addition" is not the replacement of words by other words at
   a single place, it is a move or addition of words. The
   definition of "deletion" is obvious. In your letter you have
   erroneously introduced the new term, "replaced". The contract
   documents do not discuss replacement, only deletions and
   additions.

   The UPDATE publishing process has an unique way of identifying
   new change in a publication. The text that is being changed is
   struck-through and the new text is underscored. If this same
   change was made using traditional methodology the word being
   changed would just be replaced.

   Therefore when we where [sic] pricing this program it made
   complete sense that the word replacement did not appear in the
   definition of Changes. The impetus of this program has been
   one of getting changes handled electronically. The contractor
   in assisting the governemnet [sic] in the achievement of this
   goal had to design a system that would seperate [sic]
   additions and deletions and to handle them as individual
   transactions not as transactions that are done in conjunction
   with each other.

R4 File, Tab C

   Lee by final decision letter to Mandery of January 23, 1985,
   replied that:

   On page two of your letter in the paragraph beginning with the
   word "Transaction", you have omitted several words that could
   change the meaning of the contract. The paragraph in the
   contract reads, "Transaction: The act of making an update or
   edit in the data base. It includes searching the data base for
   the location of the alteration and the movement or deletion of
   existing data."

   The paragraph clearly defines a transaction as the act of
   making an edit or update in the data base and "includes"
   searching the data base etc. It does not say that it is
   limited to searching and moving or deleting.

   Under the definition of updating and editing there are three
   distinct processes; change or addition and deletion. The
   latter is self explanatory [sic]. According to Webster,
   "change" means change to another.

   In the act of removing a word or group of words from a single
   place in the text and adding new words in that same place; in
   effect, replacing the old words with the new; it is required
   that the contractor search the data base to find the spot,
   remove the words that are to be deleted, and then rekey the
   new words in that same spot. The searching and removal
   constitutes a transaction. The keying in of the new material
   may be charged for as adding characters to the file. No
   further search is required to find the spot where the words
   are to be keyed in; therefore, charging for an additional
   transaction here when payment is to be made under "adding
   characters" would have the effect of allowing the contractor
   to charge twice for the same effort.

   According to your letter, the update publishing process has a
   unique way of identifying new changes; by striking through
   that part to be changed or replaced, and underscoring new
   material to be added. This method, however, is to show the
   reader what is being changed; the changes are made in the
   publishing base in the same way that any other change is made;
   i.e., searching the date [sic] base to find the spot and then
   making the required change, addition, or deletion that is to
   be reflected in the printed publication.

R4 File, Tab D

   After noting its appeal Appellant filed its formal Complaint
   wherein among other things it alleged:

   7. In preparing its bid for the subject Contract, Appellant
   reasonably interpreted this language as allowing a one
   transaction charge for a change or addition and a second
   transaction charge for a deletion, even if these two
   transactions occurred at the same location in the text.

   8. In its definition of the word "change", the Government
   clearly altered the ordinary meaning of that word, making it a
   single move or addition of word(s), rather than a replacement
   of a word or words by other words at the same location. This
   indicates a purposeful intent by the Government to allow one
   transaction charge for an addition, and another for a
   deletion, even where they occur in the same location.

   9. This concept is consistently applied throughout the subject
   Contract. In setting forth the rules for the "Measurement of
   and Payment for Updating and/or Editing", the Contract
   provides, in part:

(2) The charge for deleting or transposing type lines without
setting and inserting new material will be one "per transaction"
charge for each group, regardless of the number of lines in a
group.

   It follows that if new material is inserted in the location
   where lines were deleted, another "per transaction" charge
   would be allowed. Accordingly, the Appellant reasonably
   interpreted this rule as a limitation on its ability to charge
   for more than one transaction where whole lines of text are
   deleted or transposed, rather than a clause which enabled it
   to charge one "per transaction:" charge for a deletion only if
   at least a line of text was deletion [sic], but not if less
   than a line was deleted.

   10. The Appellant's interpretation is further supported by the
   physical process required to achieve the deletion of a word or
   words at a location and the addition of words at the same
   location. Under this program, a deleted word isn't simply
   typed over when it is being replaced by another word. The
   deleted word remains in the data base and must be specially
   coded so that it appears in the printed copy as the word, with
   dashes through each letter to show that it has been deleted.
   The new word or words must then be coded so that they appear
   in the printed text underscored, so that the reader will
   recognize the change.

   11. For the foregoing reasons, the Contracting officer's [sic]
   decision represents a breach of contract, and as a result of
   said breach, Appellant has been damaged in an amount in excess
   of $15,000, and will continue to be damaged throughout the
   life of the Contract.

Official File, Tab 8

   Respondent specifically denied each of these allegations
   adding in its answer to Appellant's paragraph 10 that:

The method used to show material being removed from the
Regulation (shown by words being struck through in the printed
version), and material to be added to the Regulation (shown by
words being underscored in the printed version), has no relevance
to the definition or method of payment of a "transaction" under
this contract. This method of showing changes has been used in
Congressional bills and other documents for many years,
regardless of whether composition has been computerized or not.

Official File, Tab 11

   At a Prehearing Conference held July 23, 1985, the parties
   filed Cross Motions for Summary Judgment. These were followed
   by briefs in support and/or opposition thereof. The case is
   before the Board in this format for decision.

Issue

   Whether Appellant is entitled to one or two "per transaction"
   update and editing charges when in nearly simultaneous
   sequence it must make both a deletion and an addition to the
   data base at precisely the same physical point in the data
   base file.

Decision

   The issue presented is solely one of contract interpretation.
   Such matters have been deemed to be questions of law (Langer
   v. Iowa Beef Packers, Inc., 420 F.2d, 365 (8th Cir. 1970))
   over which the Federal courts retain jurisdiction pursuant to
   the Wunderlich Act, 41 U.S.C. 321, 322. Notwithstanding such
   fact, it is wholly appropriate for a Board of Contract
   Appeals, such as this, to render its opinion regarding the
   dispute applying the same rules of interpretation and
   reasoning which the courts themselves would apply. The
   parties, being aware of this, have presented briefs wherein
   they espouse their respective positions and urge the
   application of certain rules of interpretation. Ironically,
   both parties have argued that the "plain language" of the
   contract governs but have framed diametrically opposing
   viewpoints as to what that "plain language" means. Appellant
   argues that the operative meaning of the word "change" as it
   is used in the definitional portion of the contract relating
   to "Updating and Editing" is itself contractually defined
   therein as either being "synonymous with the word 'addition'
   and therefore means 'a single move or addition . . .'," or as
   . . . "a single move . . . leaving the word 'addition' to be
   defined as 'addition'". (Official File, Tab 14, page 3)
   Appellant further argues that its interpretation is "within
   the zone of reasonableness"; that well settled law requires
   "that where a contractor's interpretation or construction of
   the government drafted contract is reasonable, the
   contractor's interpretation will govern"; and that Appellant
   is entitled therefore to a Summary Judgment as a matter of
   law. The Respondent in turn argues that the word "change" has
   no special contractual meaning but should be given its
   dictionary meaning; i.e., "to replace with another". (Official
   File, Tab 13, page 8) The Respondent supports its argument by
   citation to principles of contract interpretation gleaned from
   the Restatement of Contracts and case law. Respondent states
   that in interpreting a contract, words should be given their
   plain, ordinary meaning, unless it is apparent that they are
   special terms which are to be given special meaning; that the
   contract writings are to be interpreted together, as a whole,
   and not as "individual sections or clauses"; and that "the
   provisions should, if possible, be interpreted so as to be in
   harmony with each other." Furthermore, Appellant also asserts
   that, "[s]ince language derives its meaning largely from the
   context in which it appears, an attempt to interpret a word,
   term, or clause independent of the remainder of the contract
   document may distort its meaning and thus not accurately
   reflect the intention of the parties."

   These varying approaches to interpreting the "plain language"
   of the contract presents an obvious dilemma for this Board and
   the courts. To aid itself in this regard this Board has turned
   to the guidance of Professors John D. Calamari and Joseph M.
   Perillo, hornbook on The Law of Contract (West Publishing Co.,
   St. Paul, MI (1977)) wherein they examine the various
   approaches to contract interpretation including those of the
   Restatement of Contracts, supra, and those eminent authorities
   Williston on Contracts and Corbin on Contracts.

   Among those approaches is Professor Williston's "standard of
   reasonable expectation" which this Board favors. This standard
   holds that the contract language should be given "the meaning
   that the party making the manifestation should reasonably
   expect the other party to give it." Calamari and Perillo,
   supra, § 310, at 118. Professors Calamari and Perillo in
   footnote 18, at 118, tell us that:

This test is somewhat similar to, but not exactly the same as,
the test of the reasonable man in the position of the party other
than the one making the manifestation, a standard of reasonable
understanding. See § 2-2 supra. The standard of reasonable
understanding takes into account what the other party knows or
should know, whereas the standard chosen by Williston would take
this into account only where the party making the manifestation
knew or should know of the knowledge of the other party. A
compromise between the two tests is employed by Corbin. See test
at note 35 infra.

Sometimes the test is stated in terms of what a reasonable person
in the position of the parties would have concluded. James v.
Goldberg, 256 Md. 520, 261 A.2d 753 (1970).

   Applying this standard to the case at hand, the Board thinks
   that a "reasonable person in the position of the parties would
   have concluded" that the word "change" was used in its
   "ordinary" sense and not in fact defined itself in the
   contract, although it is employed in the contract to help
   define the technical term "edits and updates". The Board also
   concludes that the meaning of the word "change" as used in the
   context of the contract necessarily comports with the
   following Random House Unabridged Dictionary definitions, and
   that the conventional synonyms and antonyms for the word
   "change" following such definitions strengthen such meaning.
   These definitions, synonyms, and antonyms are:

1. to make the form, nature, content, etc., of (something)
different from what it is or from what it would be if left alone:
. . . .

2. to transform or convert (usually fol. by into): . . .

3. to substitute another or others for; exchange for something
else, usually of the same kind: . . . .

4. to give and take reciprocally; interchange: . . . .

8. to become different: . . . .

9. to become altered or modified: . . . .

10. to become transformed or converted (usually fol. by into): .
. . .

12. to make a change or an exchange: . . . .

27. the supplanting of one thing by another.

28. that which is or may be substituted for another.

   Syn. 1. transmute, transform; vary, mutate; amend, modify.

3. replace, trade.

4. trade.

6. convert.

9. vary, mutate, amend.

20. transmutation, mutation, conversion, . . . .

23. exchange.

27, 28. replacement.

 ---Ant. 9. remain.

20. permanence.

   The Board believes that the word "change" has subsumed in its
   meaning the concomitant correlative concept of "deletion" as a
   necessary process to its accomplishment.

   The Board further believes that what was intended by the
   contract language in having a separate recognition of the word
   "deletion" within the definition of the technical term "edits
   and updates" was to recognize that on occasion the contractor
   might be called upon to search the data base for the sole
   purpose of locating and removing therefrom previously entered
   material without substituting one bit of material for another
   (change) or adding more material to the file (addition).

   The Board believes that the logic of this interpretation is
   buttressed by the global search provisions of the "Updating
   and Editing" portion of the contract, supra, wherein the
   concepts of deletion, change, and addition are clearly an
   integral part of the global search process and payment
   entitlement for a single "per transaction payment" is
   abundantly clear.

Moreover, the Board believes that the payment provisions
respecting the deletion of whole lines or passages referenced by
Appellant are fully consistent with this ruling.

   Thus, the Board holds that under the terms of the contract,
   Appellant is entitled to be paid only one "per transaction"
   update and editing charge when in nearly simultaneous sequence
   it must make both a deletion and an addition to the data base
   at precisely the same physical point in the data base file.
   Appellant's additional entitlement to be paid for adding
   characters to the file as outlined by Mr. Lee in his letter of
   January 23, 1985, are in accordance with Schedule of Prices,
   Sect. I.9(b), (c), (d), and (e), and remain unchanged.

   Accordingly, Appellant's Motion for Summary Judgment is
   denied, while Respondent's Motion for Summary Judgment is
   granted and the decision of the Contracting Officer is
   affirmed.