UNITED STATES GOVERNMENT PRINTING OFFICE CONTRACT APPEALS BOARD Appeal of Cassidy Printing, Inc. Appeal dated October 25, 1983 Decision dated July 2, 1984 Contract Appeals Board Panel 10-83 THOMAS O. MAGNETTI, Chairman CHARLES D. COLLISON GARY J. LAUFFER PRELIMINARY STATEMENT The contractor, Cassidy Printing, Inc., has appealed a final decision of the U.S. Government Printing Office (GPO) Contracting Officer. Pursuant to that decision, the contract which the contractor had with the GPO was terminated for default. The appeal was filed in a timely fashion and in accordance with the contract's "Disputes" clause. Article 2-3, Contract Terms No. 1, GPO Publication 310.2, revised October 1, 1980. The Contract Appeals Board has been granted jurisdiction over this appeal by GPO Instruction 110.10B, entitled "Board of Contract Appeals Rules of Practice and Procedure" and Contract Terms No. 1, supra. Although the contractor requested a hearing, no representative of the contractor appeared on the scheduled date of the hearing, May 31, 1984. As in any case of an unexcused absence of one of the parties, the hearing was convened and the contractor's case was considered as if it had been submitted on the written record. Appeal of Technical Publishing Services, Inc., GPO CAB 1-81, January 20, 1982. At that time, the Appeal File with 19 exhibits was moved into the record and testimony was taken from Arthur Jacobsen, Printing Specialist, Philadelphia Regional Printing Procurement Office. STATEMENT OF FACTS By Purchase Order B5309 dated August 3, 1983, the contractor was awarded a contract to produce a poster, in four color process. According to the specifications, proofs were to be submitted to the Government for approval. After approval was granted, the work was to be shipped by September 20, 1983. In early September, the contractor submitted a set of proofs which were rejected on September 8, 1983, for failing to comply with the specifications as they related to the quality of proofs. The proofs were returned to the contractor with instructions to submit proofs that would comply with the contract's proofing requirements. In a Show Cause Notice dated September 19, 1983, the Contracting Officer warned the contractor that its failure to submit acceptable proofs would cause its performance to be untimely and that the Government was considering terminating the contract for default. The contractor responded that its performance was late because its press broke down and it had other press work to complete. The contractor promised to deliver suitable proofs by September 27, 1983. However, the GPO did not grant any extension in the delivery date. 1/ The contractor did not deliver the proofs by the date it promised. By letter dated September 28, 1983, the Contracting Officer terminated the contract for default because of the contractor's failure to meet the scheduled shipping date. 2/ In that letter, the contractor was informed that it would be held accountable for any excess costs that might arise from the reprocurement of the contracted- for items. In its letter, appealing the default action, the contractor provided two excuses for its failure to comply with the contract schedule: breakdown of a press and the need to run five other jobs before it could run the progressive proofs. DECISION In cases of default terminations, the Government has the initial burden of proving that the contractor.had failed to comply with the contract requirements and that the lack of compliance justified a default action. Once the default has been established, the burden shifts to the contractor to demonstrate that its noncompliance arose out of causes beyond the control of the contractor and without its fault or negligence. The default then becomes excusable. Where it is concluded that the default has not been established by the Government or the contractor's nonperformance was excusable, the termination for default is converted to a termination for the convenience of the Government. In the instant case, the GPO has met its burden of proving that the contractor defaulted on the contract. The contract required delivery of the posters by September 20, 1983. The contractor did not ship in accordance with the contract schedule. According to the contract's "default" clause, the GPO can terminate a contract for default if the contractor fails to make delivery of the supplies within the time specified by the contract or any extension thereof. Article 2-18(a)(l), Contract Terms No. 1, supra. There is nothing in the record that would indicate that the GPO waived the requirement for timely performance by extending the delivery date. Moreover, the GPO did not act improperly when it rejected the proofs on September 8, 1983, for failing to meet the proof requirements. The quality of the proofs were important because the proofs were the standard to be met by the finished product. Exhibit 2, p. 3. The rejected proofs were returned to the contractor. The contractor did not submit another set of proofs until September 28, 1983. Since the contractor was required by the contract to deliver a finished product by September 20, 1984, and did not do so, the GPO could terminate the contract for default. Having established that the GPO was within its contractual rights to default the contractor, the burden shifts to the contractor to prove that its failure to comply with the contract specifications was excusable. The excuses proffered by the contractor do not justify untimely performance. Broken machinery or the need to perform work required by other contracts are not causes beyond the control and without the fault or negligence of the contractor. Failure to have the necessary facilities or means to.perform a contract is not such cause as would excuse untimely delivery. Appeal of Progress Graphics, Inc., GPO CAB 6-82, May 3, 1982; Appeal of Associated Graphics Services, Inc., GPO CAB 76-12, January 12, 1981. The contractor also argues that it should be excused because it had to perform work under other contracts before it could perform the work required by this contract. The scheduling of work is an area that must be deemed to be within the control of a contractor. If the contractor has scheduled work so that it is untimely in the production of other work, the contractor cannot argue that its nonperformance is without its fault or negligence. Assuming arguendo that the GPO had unreasonably delayed in approving or disapproving the proofs which the contractor had submitted on September 2, 1983, the contractor might argue that it was necessary for it to take on other work while it waited for the requisite approvals from the GPO. However, there is nothing in the record to indicate that the GPO did not comply with its contractual obligations. The specifications allow the GPO to withhold proofs for ten working days. The defective proofs were delivered to the GPO on September 2, 1983. They were returned to the contractor on September 8, 1983. This was well within the time allotted to the GPO to keep the proofs. If the contractor ignored the risk that the proofs which it submitted in September were defective and would have to be corrected, leaving little time to produce the final poster in a timely fashion, it must bear the responsibility for the decision to schedule other work ahead of the poster contract. Therefore, the fact that the contractor had other jobs in its plant to which it gave a higher priority than the work to be performed under this contract cannot excuse untimely performance. Based upon the above reasoning, the Board affirms the decision of the Contracting Officer to terminate the contract, known as Purchase Order B5309, for default. Accordingly the contractor's appeal is denied in its entirety. _______________ 1/ The specifications which deal with the submission of proofs state that no additional time beyond the original production schedule established in these specifications would be allowed for fulfilling the requirement to provide proofs. Exhibit 2, p. 3. 2/ The contractor did send revised proofs to the GPO which were received on September 28, 1983. However, the GPO determined that the submission of this material did not meet the specifications because the contractor did not submit the Government-furnished copy with the proofs. Because the Government did not have the copy, there was nothing with which to compare the proofs in order to determine the quality of the proofs. Testimony of Mr. Jacobsen.