BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
MPE BUSINESS FORMS, INC. ) Docket No. GPO BCA 10-95
Program D201-S )
Purchase Order 95695 )
DECISION AND ORDER
I. Statement of the Case
This appeal, timely filed by MPE Business Forms, Inc. (Appellant
or Contractor), 1406-C Sycamore Road, Dekalb, Illinois 60115, is
from the final decision of Contracting Officer Jack Scott, of the
U.S. Government Printing Office's (Respondent or GPO or
Government) Printing Procurement Department (PPD), Washington, DC
20401, dated March 20, 1995, rejecting the Contractor's
interpretation of its contract, identified as Program D201-S,
Purchase Order 95695, with respect to pricing of the forms
covered by the contract (R4 File, Tab L).1 A two-day evidentiary
hearing in the appeal was conducted by the Board on December 4
and 5, 1995, respectively, at which both parties were represented
by counsel, who, thereafter, filed timely briefs on the issues
involved.2 Board Rules, Rules 17 through 24, 26 and 27. Based
on the record in this case, the Board concludes that the
Contracting Officer correctly interpreted the disputed language
in the contract. Therefore, his final decision is AFFIRMED, and
the appeal is DENIED to that extent. However, the Board also
finds that a true express contract was never formed in this case,
and the matter is, therefore, REMANDED to the parties for further
action in accordance with this opinion.3
II. Background
The relevant facts in this appeal are essentially uncontroverted,
and are set forth here as presented in the R4 File, and the
record of the evidentiary hearing, including the exhibits of the
parties.4
1. On September 2, 1994, GPO issued an IFB for Program D201-S, a
single-award, "requirements" contract, involving the printing of
"laboratory reports" for the General Services Administration
(GSA) and the Department of Veterans Affairs (VA), respectively
(Tr. II; 9; R4 File, Tab A). The contract was for a term of one
(1) year, beginning on November 1, 1994, and ending on October
31, 1995. Id.
2. The "laboratory reports" in question were forms consisting of
two (2) and three (3) parts, respectively, and known in the forms
industry by trade names such as "Snap-A-Part," "Snap Out,"
"Speediset," or "E-Z-Out" sets, or in common parlance simply as
"snap sets" (Tr. I: 33-34, 209; II: 8, 34, 39-40; App. Exh. No.
14, at 121).5
3. Among other things, the IFB provided, in pertinent part:
SECTION 1.-GENERAL TERMS AND CONDITIONS
GPO CONTRACT TERMS: Any contract which results from this
Invitation for Bid will be subject to the applicable provisions,
clauses, and supplemental specifications of GPO Contract Terms
(GPO Pub. 310.2, effective December 1, 1987 (Rev. 9-88))
[hereinafter GPO Contract Terms] and GPO Contract Terms, Quality
Assurance Through Attributes Program (GPO Pub. 310.1, effective
May 1979 (revised November 1989)) [hereinafter QATAP].
* * * * * * * * * *
ORDERING: Items to be furnished under the contract shall be
ordered by the issuance of print orders by the Government.
Orders may be issued under the contract from November 1, 1994
through October 31, 1995. All print orders issued hereunder are
subject to the terms and conditions of the contract. The
contract shall control in the event of conflict with any print
order. A print order shall be "issued" for purposes of the
contract, when it is either deposited in the U.S. Postal Service
mail or otherwise furnished to the contractor in conformance with
the schedule.
REQUIREMENTS: This is a requirements contract for the items and
for the period specified herein. Shipment/delivery of items or
performance of work shall be made only as authorized by orders
issued in accordance with the clause entitled "Ordering". The
quantities of items specified herein are estimates only, and are
not purchased hereby. Except as may be otherwise provided in
this contract, if the Government's requirements for the items set
forth herein do not result in orders in the amounts or quantities
described as "estimated", it shall not constitute the basis for
an equitable price adjustment under this contract.
Except as otherwise provided in this contract, the Government
shall order from the contractor all the items set for with are
required to be purchased by the [GSA and VA].
* * * * * * * * * *
Subject to any limitations elsewhere in this contract, the
contractor shall furnish to the Government all items set forth
herein which are called for by print orders issued in accordance
with the "Ordering" clause of this contract.
SECTION 2.-SPECIFICATIONS
SCOPE: These specifications cover the production of 2- or 3-part
carbon interleaved sets, known as snap-outs or similar, requiring
such operations as film making, printing, binding, packing, and
distribution.
TITLE: Laboratory Reports.
FREQUENCY OF ORDERS: Approximately one to ten orders per month.
QUANTITY: Approximately 26,000 to 3,000, 000 sets per order.
QUANTITY VARIATION ALLOWED: For each order, a variation of up to
+ 3% , will be accepted.
NUMBER OF PARTS: Two or three parts per set per order. The term
"Parts" as used herein is defined as one sheet of paper other
than carbon.6
* * * * * * * * * *
GOVERNMENT TO FURNISH:
* * * * * * * * * *
An occasional order will furnish camera copy of type and
identification bars to be reproduced at various focuses.
* * * * * * * * * *
A supply of blue labels and selection certificates for shipping
Departmental Random copies.
Identification markings such as register marks, ring folios,
rubber stamped jacket numbers, commercial identification marks of
any kind, etc., except GPO imprint, form number, and revision
date, carried on copy or film, must not print on finished
product.7
* * * * * * * * * *
STOCK/PAPER: The specifications of all paper furnished must be in
accordance with those listed herein or listed for the
corresponding JCP Code numbers in the "Government Paper
Specification Standards No. 9" dated December 1, 1981, as amended
through June 1, 1992.
All paper used in each copy must be of a uniform shade.
Chemical Wood Writing paper basis weight 60 gsm, (17 x 22", 16
lbs. per 500 sheet) equal to JCP Code D10. . . .For Part 1 of 2-
part sets and for Parts 1 and 2 of 3-part sets.
White Ledger basis weight 90 gsm, (17 x 22", 24 lbs. per 500
sheets) equal to JCP Code J10. For Part 2 of 2-part sets and for
Parts 3 of 3-part sets.
PRINTING: Print face only in one or two ink colors. The base
form prints the same on all parts of each set. The second ink
color, when required, is for identification bars appearing on
forms and will be required on all parts. . . .
* * * * * * * * * *
Copy designations (part-to-part changes) may be ordered printed
as part of the base form or in an additional color, at no
additional cost to the Government.
The printing on each part must be properly aligned so that the
printing on each form will coincide when the forms are gathered
into sets. The forms on all parts must register with + 1 mm
(1/32").
INTERLEAVING CARBONS: Interleave with black, one-time, dual-
purpose carbon paper. Carbon must be of sufficient density and
graded sensitivity to ensure clear, legible copies on all parts,
when part 1 is filled in by manual/electric typewriter or
ballpoint pen.
* * * * * * * * * *
BINDING: Sets are to be held together by a 13 mm (1/2")
internally glued, pasted or forced gummed, perforated stub. For
the purpose of this contract:
* * * * * * * * * *
(2) Forced gumming is defined as attaching the sets at the stub
by adhesive applied to the edge and penetrating between parts and
carbons after the sets have been assembled.
All sets must provide sufficient strength to guarantee parts will
remain together under normal handling and storage, but will
permit ready separation of parts without damage to the parts.
Perforations must be such as to guarantee easy separation of all
parts in one operation, but sufficient strength must be retained
to prevent disengagement of any part under normal handling and
shipping conditions. . . .
* * * * * * * * * *
LABELING AND MARKING:
* * * * * * * * * *
. . . Packages/containers containing multi-part forms must be
marked with the number of parts following the form number {i.e.
SF-557 (3 Part Set)}.
DEPARTMENTAL RANDOM COPIES (BLUE LABEL): All orders must be
divided into equal sublots in accordance with the chart below. A
random copy must be selected from each sublot. Do not choose
copies from the same general area in each sublot. The contractor
will be required to execute a statement furnished by GPO
certifying that copies were selected as directed. The random
copies constitute a part of the total quantity ordered, and no
additional charge will be allowed.
* * * * * * * * * *
These randomly selected copies must be packed separately and
identified by a special government-furnished blue label, affixed
to each affected container. . . .
A copy of the PRINT ORDER/SPECIFICATION and a signed Government-
furnished certificate of selection, must be included.
QUALITY ASSURANCE RANDOM COPIES: In addition to the Department
Random Copies (blue Label), the contractor may be required to
submit quality assurance random copies to test for compliance
against the specifications. . . .When ordered, the contractor
must divide the entire order into equal sublots and select a copy
from a different general area of each sublot. The contractor
will be required to execute a statement furnished by GPO
certifying that copies were selected as directed. Copies will be
paid for at the running rate offered in the contractor's bid and
their cost will not be a consideration for award.
Business Reply Mail labels will be furnished to mailing the
quality assurance random copies. The copies are to be mailed at
the same time as the first scheduled shipment. A copy of the
print order must be included.
* * * * * * * * * *
SECTION 3.-DETERMINATION OF AWARD
The Government will determine the lowest bid by applying the
prices offered in the "Schedule of Prices" to the following units
of production which are the estimated requirements to produce one
year's production under this contract. These units do not
constitute, nor are they to be construed as, a guarantee of the
volume of work which may be ordered for a like period of time.
The following item designations correspond to those listed in the
"Schedule of Prices".
(1) (2) (3) (4)
I. (a) 4 759 4 759
(b) 39 16,581 35 15,495
* * * * * * * * * *
SECTION 4.-SCHEDULE OF PRICES
* * * * * * * * * *
Prices must include the cost of all required materials and
operations for each item listed in accordance with these
specifications.
* * * * * * * * * *
Fractional parts of 1,000 will be prorated at the per 1,000 rate.
I. COMPLETE PRODUCT: Prices offered shall include the cost of
all required materials and operations necessary for the complete
production and distribution (except as specified in item II)
listed in accordance with these specifications.
Films will be furnished on the majority of orders.
Black Ink or a Color Each additional
Other than Black Color of Ink
Makeready Per Makeready Per
and Setup 1,000 and Setup 1,000
Charges Copies Charges Copies
(1) (2) (3) (4)
(a) 2-part sets.......$_____ $_____ $_____ $_____
(b) 3-part sets.......$_____ $_____ $_____
$_____
* * * * * * * * * *
BIDDER'S NAME AND SIGNATURE: Fill out and return three copies of
all pages in "Section 4.-Schedule of Prices", initial or sign
each in the space provided and submit the original and duplicate
copies (parts 1 and 2) of GPO Form 910, "Bid". Do not enter bid
prices on GPO Form 910. . . .
See R4 File, Tab A, at 2-7, 10-12. [Emphasis added.]
4. In addition, the IFB warned potential bidders that: ". .
.[the] specifications have been extensively revised; therefore,
all bidders are cautioned to familiarize themselves with all
provisions of these specifications before bidding[.]" (Tr. II:
109; R4 File, Tab A, at 1). [Emphasis added.] In that regard,
the evidence of record indicates that the changes between the
previous year's contract for Program D201-S and the IFB
essentially concerned housekeeping matters, and were made in an
effort to "clean up" the language and avoid confusion (Tr. II:
80, 93; R4 File, Tabs A and M).8 However, the revision of most
concern in this case was the change made in the IFB to the
pricing mechanism for Program D201-S work; i.e., whereas the
IFB's "Schedule of Prices" language above speaks in terms of a
running rate "per 1,000 copies," pricing of forms produced under
the contract it was to replace was governed by a running rate
"per 1,000 sets" (Tr. I: 51-52; II: 76-77 109-10, 115, 233, 241;
R4 File, Tab M). Thus, for the sake of comparison, the prior
D201-S contract provided, in pertinent part:
SECTION 4.-SCHEDULE OF PRICES
* * * * * * * * * *
Prices must include the cost of all required materials and
operations for each item listed in accordance with these
specifications.
* * * * * * * * * *
Fractional parts of 1,000 will be prorated at the per 1,000 rate.
* * * * * * * * * *
II. PRINTING AND BINDING: Prices offered for line items (a), (b),
(c), and (d) shall be for printing forms in a single ink color.
Prices shall include all preparatory cost for marginal change.
Makeready Running Per
and/or Setup 1,000 Sets
(1) (2)
2-part sets:
(a) Up to 1,000,000 sets......$_______ $_______ (b)
Over 1,000,000 sets...... $_______ $_______
3-part sets:
(c) Up to 1,000,000 sets......$_______ $_______ (d)
Over 1,000,000 sets...... $_______ $_______
Prices offered for items (e), (f), (g), and (h) shall be all
inclusive for printing identification bars in an additional color
in accordance with these specifications.
Makeready Running Per
and/or Setup 1,000 Sets
(1) (2)
2-part sets:
(e) Up to 1,000,000 sets......$_______ $_______ (f)
Over 1,000,000 sets...... $_______ $_______
3-part sets:
(g) Up to 1,000,000 sets......$_______ $_______ (h)
Over 1,000,000 sets...... $_______ $_______
* * * * * * * * * *
See R4 File, Tab M, at 13-14. [Emphasis added.] None of the
Respondent's witnesses at the hearing knew who substituted the
word "copies" for the word "sets" in the IFB's request for
running rate pricing, or why the change was made in the first
place (Tr. II: 77, 80, 94). The record clearly indicates,
however, that neither Marken or Contracting Officer Weiss
directed the alteration, and that most likely the printing
specialist who prepared the IFB authored the change (Tr. II: 77,
93-94; R4 File, Tab R, at 5).
5. The Respondent sent the IFB to 32 potential contractors, and
received four (4) responsive bids-from the Appellant, Belknap
Business Forms (Belknap), Standard Register (Standard), and Elgin
Business Forms (Elgin), the incumbent contractor for Program
D201-S (Tr. I: 123, 163, 189, 199, 205, 220; II: 81; R4 File,
Tabs B, C and E).9 The Appellant's running rate offer for 2-part
sets printed in black ink or a color other than black was $8.05
"per 1,000 copies," and $9.23 "per 1,000 copies" for 3-part sets
(Tr. I: 124, 133-36, 205; R4 File, Tabs B and C). The competing
running rate bids were: (a) Belknap-$7.83 "per 1,000 copies" for
2-part sets and $11.81 "per 1,000 copies" for 3-part sets; (b)
Elgin-$6.93 "per 1,000 copies" for 2-part sets and $9.73 "per
1,000 copies" for 3-part sets;10 and (c) Standard-$10.55 "per
1,000 copies" for 2-part sets and $11.67 "per 1,000 copies" for
3-part sets (Tr. 189; R4 File, Tab B).11
6. The Appellant's bid had been formulated by its current Vice
President for Sales and Marketing, Thomas R. Edwards, although at
the time he was not an employee of the company (Tr. I: 95,
121-23, 187; Tr. II: 114-15; R4 File, Tab C). In that regard,
the bid was the product of a computerized estimating system which
started with the basis of award figures in the IFB and
automatically calculated the total cost of all materials,
makeready, the number of impressions and running time (based on
the Contractor's standard $75.00 hourly rate), perforating,
collating, and delivery charges, added a reasonable markup, and
arrived at a price per sets (Tr. I: 89-90, 122-30).12 However,
because Edwards interpreted the word "copies" in the IFB's
request for a price "per 1,000 copies," in its forms industry
sense; i.e., as a synonym for "part" or "ply" or otherwise
defined component of a set ( Tr. I: 183; R4 File, Tab A, at 5
("Copy Designations" clause), 12 ("Bidder's Name and Signature"
block);App. Exh. No. 5; App. Exh. Nos. 2-2, 2-3 and 13, at 20,
62),13 he made one additional computation, namely, after
subtracting the makeready charges, he divided the figure
generated by the computerized system by the appropriate number of
"copies" in the set in order to comply with the pricing scheme
asked for by the Government (Tr. I: 133-36, 188-89, 207; App.
Exh. No. 3).14 In this manner, the computerized estimate of
$19.78 per 1,000 sets for a 2-part set, became the Appellant's
bid of $8.05 "per 1,000 copies," and the system's figure of
$30.63 for 1,000 sets of a 3-part set, was translated into the
offer of $9.23 "per 1,000 copies" (Tr. I: 133-36, 188-89, 207; R4
File, Tabs B and C; App. Exh. No. 3).15
7. Edward's next step before the bid was submitted to GPO was to
clear his figures with the Appellant's President, McCall (Tr. I:
182, 205, 215, 227; App. Exh. No. 3).16 Although McCall had not
looked at the specifications for the expiring Program D201-S
contract, he checked Edward's computations for the 1994 IFB and
found them to be reasonable, so he signed the bid form (GPO Form
910) and sent it to GPO (Tr. I: 80, 205, 21, 226-27; R4 File, Tab
C). When he submitted the Contractor's offer, McCall, like
Edwards, interpreted the IFB's request for running rate prices
"per 1,000 copies," in its forms industry sense; i.e., as a
synonym for "part," "sheet," or "individual piece of paper," not
as a price "per 1,000 sets," otherwise the Appellant's bid for 2-
part sets would have been twice the offer, while 3-part sets
would have cost three times as much (Tr. I: 205-06, 220-22, 228;
R4 File, Tab C). Furthermore, at the time he saw no ambiguity in
the IFB's request for pricing the product (2-part and 3-part sets
of forms) on a "per copy" because it was consistent with other
GPO contracts (Tr. I: 215-19, 225-26; R4 File, Tab C; App. Exh.
Nos. 4, 5, 6 and 7).
8. When the four (4) responsive bids were abstracted by the
Respondent, it appeared that the Appellant was the low bidder on
the contract (Tr. II: 81; R4 File, Tab B and D). Although he
found no fault in the Contractor's pricing, Contracting Officer
Weiss though it would be useful to discuss the contract with the
Appellant because he had never dealt with it before and it was a
new bidder on Program D201-S (Tr. II; 81). Therefore, on October
5, 1994, Weiss telephoned the Contractor's facility and spoke to
McCall in what is described in the record as a "review and
confirm" discussion concerning the Appellant's bid (Tr. II: 81,
226; II: 5; R4 Files, Tab E and R, at 12). As Weiss recalled the
conversation:
Basically, I informed him that the contract had been abstracted.
He was the apparent low bidder, and I proceeded to go over the
specifications with him. As we went over the specifications, we
also went over the basis of award. We went over the pricing. I
explained to him that the basis of award was in sets. We talked
about how it is priced.
I went so far as to simulate a print order, such as, if he had a
thousand two-part sets print order issued that he would get a
makeready charge, and the bid he put in for per 1,000 copies,
$8.05, is what he would get for running 1,000 sets.
After we went all through this, I asked him he understood all of
that. He told me he did. I asked him if he had any problems
with the bid as submitted. He stated he did not, and I
recommended it for award.
See Tr. II: 81-82 [Emphasis added.]; Res. R. Brf., at 3. See
also Tr. II: 84-86, 89, 94; R4 File, Tab R, at 16 ("Then I
further gave him an example. I said, such as if you had a
thousand two-part sets to run on the black, you would get a make-
ready and you would get a charge per 1,000 copies for that
thousand sets." [Emphasis added.]). However, in response to
Counsel for GPO's question at the hearing asking whether McCall
ever indicated or stated during their discussion that the
Appellant's running rate bid was based on the word "copies" as
meaning "per leaf" or "per part," Weiss answered:
No, he did not state that, and when I went through describing how
a print order would be billed, it was never brought up at that
time.
See Tr. II: 82. Similarly, during cross-examination, although
Weiss flatly denied telling McCall that the Contractor would be
paid at the "copy rate" for the sets which were ordered (Tr. II:
89), the following exchange took place between Counsel for the
Appellant and Weiss:
Question [Mr. Antoun]: Okay. Is it still accurate that your
testimony on pages 16 and 17 where the question is, what he-
relating to Mr. McCall-says that you never got to, either you or
him, was that "copies" to you meant the whole set and "copies" to
him meant one ply?
Answer [Mr. Weiss]: We never discussed it.
Question: He said that was never discussed. "Is he accurate?"
And the answer was, "That is correct."
Answer: Yes.
Question: Your belief, though, is that as a result of your
conversation, the contractor knew that he couldn't bill for a
complete product at a per copy or a per part basis as one might
argue, as we are doing now. Your conclusion is that he
understood that when you got off the phone with him, that he
couldn't bill per part?
Answer: At the time I got off the phone, that never entered into
my mind that there was another way of billing the contract. I
assumed that since we had gone through it, that he understood and
I never thought that it would be billed a second way.
See Tr. II: 90-91. [Emphasis added.]17 In a nutshell, Weiss'
position regarding the parties' conflict over meaning of the word
"copies" in the IFB, was:
The specifications are for a complete product. I feel they are
clear and precise. More important, when I recommended award-I
had no problem in recommending award because I explained and we
fully discussed the specification and how pricing an how the
basis of award was arrived at.
So I don't feel there was any ambiguity. There might have been
an ambiguity if I had never called and the contractor had an
interpretation and I had an interpretation. But the contract was
reviewed, and the basis of award and the pricing was discussed.
So I don't feel-I had no problem signing off on it.
See Tr. II: 83-84. [Emphasis added.] See also Tr. II: 91 ("I
looked at it as a complete product, and there was no doubt in my
mind. I never looked at it the other way.").18
9. Although McCall remembered that a "review and confirm"
discussion took place, his recollection is hazy, at best (Tr. II:
5, 100). Indeed, until Weiss testified and stirred his memory,
McCall could not recall any pre-award conversation whatsoever
(Tr. I: 226). Even when reminded of the discussion, McCall's
answers were vague and imprecise, as for example:
Question [Judge Foss]: Mr. McCall, I only really have one
general question. I would like to hear from you, how do you
recall your conversation with Mr. Weiss on October 5th? Just
describe it in your own words?
Answer (Mr. McCall): Well, there are times where you get review-
an-confirms quite often--
Question: I mean, you got the call on the 5th, right? Who said
what to whom? Do you remember?
Answer: Well, it was just as any other contract, very vague. You
just go over what is the pricing on it, and it was about a 30-
second conversation. It was nothing into any large detail.
Question: Were you told that the pricing would be per sets, do
you recall?
Answer: That it would be per sets?
Question: Yes. Do you recall what Mr. Weiss said to you
specifically, in terms of the pricing and how the could would be
priced?
He called to confirm your pricing, right?
Answer: Right.
Question: Okay. What I am trying to ask you, or trying to get
from you, do you have any recollection of what he said about
pricing?
Answer: Not really, just compare the contract pricing. That was
it.
Question: You have no other recollection other than that?
Answer: It was a brief conversation.
Question: Okay. No further questions. You are excused.
See Tr. II: 104-05. However, when asked by Counsel for the
Appellant whether he comprehended the gist of Weiss' remarks
during their conversation, namely that for pricing purposes
"copies" would mean the same as "sets" in this contract, McCall
replied: "Not that I am aware of, no[.]" (Tr. II: 100).
Furthermore, McCall stated that if he had understood Weiss to be
saying that "copies" would have to be billed as "sets," then
"there would have been a major problem and we would have got out
of the contract[.]" (Tr. II: 100).
10. After speaking to McCall, Weiss sent a memorandum to the
Respondent's Contract Review Board (CRB) recommending award of
the Program D201-S contract to the Appellant (Tr II: 83, 96-97;
R4 File, Tab E).19 Weiss placed the following note on his CRB
memorandum:
Reviewed specs [specifications] & requirements with Mr. McCall.
* Consideration is given to paper price increases over the last
year.
See R4 File, Tab E.20 On October 6, 1994, the CRB gave its
approval for the award of the contract to the Appellant (Tr. II:
83, 98; R4 File, Tab E).
11. Accordingly, on October 11, 1994, Weiss issued Purchase Order
95695 to the Appellant awarding it the Program D201-S contract
for a one (1) year term, beginning on November 1, 1994 (Tr. II:
83, 99; R4 File, Tab F).21 This was the Contractor's first award
for Program D201-S (Tr: I: 80-81).22
12. The record shows that for print orders early in the contract
term, the Appellant billed for the completed work on a "per copy
(part)" basis, and was paid by the Respondent (Tr. I: 40, 54; R4
File, Tab N).23 However, the dispute between the parties
apparently began with Print Order No. 20006, issued by the GSA on
January 5, 1995, for 1,629,470 sets of 3-part forms to be
delivered to the GSA on February 19, 1995 (R4 File, Tab N; App.
Brf., at 1).24 The Appellant's job price was $47,779.27 for
"4,888,410 copies total" of the forms (1,629,470 sets times 3
parts) (R4 File, Tab N).
13. When the Appellant invoiced the Respondent for the work,
David W. Deutscher, an employee in GPO's Financial Management
Service (FMS), Commercial Examination Section (CES), telephoned
Scott, the new Contracting Officer, seeking an interpretation of
the contract specifications because he thought that there was a
billing discrepancy (Tr. II: 9, 70). In order to answer
Deutscher's inquiry, Scott asked Marjorie Bell, the Printing
Specialist for Program D201-S, for a copy of the contract to
review (Tr. II: 9. 71; R4 File, Tab A). In addition, Scott
contacted the representatives of the other three bidders-Belknap,
Standard, and Elgin-asking how they interpreted the running rate
specification in the IFB in formulating their offer, and each of
them said that they understood "per 1,000 copies" to mean "that
they were bidding on a thousand copies of the two-part set, and
thousand copies of the three-part set, not individual leaves or
plies[.]" (Tr. II: 13).25 At Scott's request, the three
competitors confirmed their statements in writing (Tr. II: 13-14,
16; Gov. Exh. No. 1). Based on these responses, and his own
reading of the specifications, Scott determined that payment
should be on the basis of "per 1,000 sets" as a complete product
(Tr. II: 10, 12, 71; R4 File, Tab A, at 11-12).26 However, when
Scott called Deutscher back with his answer, he was advised that
the Contractor was not being reimbursed that way, but rather was
billing the Government on the basis of "per 1,000 copies or
leaves" (Tr. II: 10, 71). Accordingly, Scott first instructed
Deutscher to adjust the Appellant's invoice for proper payment,
and then he telephoned Deutscher's supervisor, Calvin Adgerson,
Chief of the CES, to have the Contractor's previously paid
billings checked and corrected, because they had been reimbursed
at double the rate for 2-part sets and triple for 3-three part
sets (Id.).
14. After talking to Scott, Deutscher recomputed the price of
Print Order No. 20006, and reduced the invoiced amount by
$30,080,01, and authorized only $17,699.26 of the $47,779.27 bill
for payment (App. Brf., at 1).27 The Appellant was informed of
the Government's action on or about February 17, 1995 (App. Brf.,
at 1).28 Thereafter, the FMS, following Scott's directions,
reviewed the Contractor's past invoices, and made appropriate
reductions, recovering approximately $90,000.00 in overpayments
on bills tendered between November 1994 and February 1995 (Tr. I:
55, 59, 212; II: 10-11; App. Brf., at 1-2). However, the
Appellant refused to accept the Respondent's interpretation that
contract pricing was based on "per 1,000 copies" of a "complete
product;" i.e., on a "per set" basis, but rather maintained its
position that "per 1,000 copies" meant "per 1,000 parts or
plies," and it never changed the way it billed for the work on
print orders it continued to receive (Tr. I: 59-60, 213-14).
Consequently, GPO subtracted approximately $168,000.00 more from
the Contractor's invoices over the life of the agreement, raising
total deductions under the contract to $258,939.49 over the life
of the agreement, which is the amount of the Appellant's claim in
this proceeding (Tr. I: 58-59, 213-14; II: 102; App. Brf., at 4,
7).29
15. The record shows that when McCall was notified of the
revision to the Appellant's invoice for Print Order No. 20502, he
immediately telephoned the Respondent and was told that the
correct billing should have been on a "per set" basis, and not
"per copy" (Tr. I: 212-13; II: 102).30 Thereafter, by letter
dated February 22, 1995, McCall wrote to Scott complaining about
the Government's decision (Tr. II: 11; R4 File, Tab G). In his
letter, McCall stated, in pertinent part:
The contract clearly reads that the charges are per 1[,]000
copies, not per 1[,]000 sets.
The previous contract (attached) clearly reads that the charges
were per 1[,]000 sets and also there was an area allowing for
charges per 1[,]000 leaves for each part.
The contract was extensively revised for the new contract period
November 1st., 1994 thru October 31st., 1995. (see attached)
The new contract was condensed, eliminating quantity breaks and
charges per 1[,]000 leaves. The contract was changed from per
1[,]000 sets to per 1[,]000 copies. (see attached)
Clearly, as on many other contract, per 1[,]000 copies or leaves
or parts, mean a charge for each copy is allowed because each
copy within the set is different.
If the intention of the specifications were for sets, there would
not have been a change from per 1[,]000 sets to per 1[,]000
copies.
The entire contract was bid on this obvious basis and billed
correctly.
Please review the attached documents and send me your
interpretation of the previous contract to the new revised
version.
See R4 File, Tab G.
16. Scott's reply to McCall was dated February 23, 1995 (Tr. II:
11; R4 File, Tab H). In his answer, Scott stated, in pertinent
part:
. . . Program D201-S is priced per 1,000 copies of 2 or 3-part
sets as ordered, not per part. I have instructed GPO's Financial
Management Section to make the appropriate reductions in your
current invoices, and any previous invoices that may have been
paid incorrectly.
See R4 File, Tab H.31
17. Thereafter, on March 17, 1995, Counsel for the Appellant
telephoned the Contracting Officer to discuss the dispute (Tr:
II: 12, 28). The record discloses that during their
conversation, Scott said that the Contractor had basically three
(3) options; i.e., it could: (a) refuse to perform the contract
and suffer a default;32 (b) claim a unilateral post-award mistake
in bid, see PPR, Chap. XI, Sec. 6, ¶ 4; or (c) request that he
render a final decision which the Appellant could appeal (Tr. II:
12, 28-29). Based on this discussion, that same day the Counsel
for the Appellant asked the Contracting Officer to issue "a final
decision in the dispute regarding the interpretation of the
pricing schedule" for Program D201-S (Tr. II: 30; R4 File, Tab
K).
18 On March 20, 1995, the Contracting Officer sent a letter,
expressly identified as a "Notice of Final Decision," to the
Counsel for the Appellant, which stated in pertinent part:
This is in response to your letter dated March 17, 1995 on behalf
of MPE Business Forms, Inc. in which you ask for a final decision
regarding the interpretation of the pricing schedule on Program
D201-S.
As I [s]tated to Mr. McCall in our telephone conversation on
February 22, 1995, and my follow[-]up letter to him, dated
February 23, 1995, Program D201-S is priced as a complete
product, per 1,000 copies of 2 or 3-part sets as ordered, not per
part.
This is the final decision of the Contracting Officer. . . .
See R4 File, Tab L.33
19. The Appellant timely appealed the Contracting Officer's final
decision to the Board on March 27, 1995.34
II. POSITIONS OF THE PARTIES
A. Appellant's Position
The Appellant presents two principal arguments for the Board's
consideration in this appeal. First, it contends that the
disputed contract language concerning pricing on the basis of
"per 1,000 copies" is clear and unambiguous (App. Brf., at 6-7).
The Contractor rejects the Respondent's interpretation of the
"Schedule of Prices" provision in which the "complete product"
paragraph modifies the use of the word "copies," and instead
gives "copy" the forms industry's traditional and accepted
meaning; i.e., a "part" or "ply" (App. Brf., at 7, citing Forms
Handbook and Forms Glossary). Since the word "copies" is
"clearly defined and well-understood," the Government should not
be allowed to reinterpret it for its own convenience (Id., citing
Bayou Land & Marine Constructors, Inc. v. United States, 23 Cl.
Ct. 764 (1991). The Appellant also points to a "prior course of
dealing" with the Respondent which it says supports its
interpretation of the dispute contract (App. Brf., at 9, citing
Gresham and Co., Inc. v. United States, 470 F.2d 542 (Ct. Cl.
1972)).35 The Contractor finds such a "prior course of dealing"
in numerous other GPO contracts which it previously performed,
where pricing was asked for, and payment was made, on a "per
copy" basis, notwithstanding that there was other language in the
agreement referring to "complete product," "all inclusive," or
"per set" pricing as well (App. Brf., at 11, citing App. Exh. No.
4 (GPO Programs C10-S, 223-M, D471-S, C484-S, 2069-S and 2270-
S)). In short, the Appellant says that in its previous dealings
with the Respondent, the bills it prepared in accordance with the
pricing method outlined in the contract were always paid by the
Government as submitted; i.e., if a line item was priced "per
copy" or "per part," it was paid "per copy" or "per part," and
not "per set" (Id.). Consequently, the Contractor believes that
this past practice establishes a prior course of dealing between
the parties in which both of them have consistently interpreted
the words "copy" or "copies" to mean the individual parts or
plies comprising a set of forms, and not the set itself, contrary
to the position taken by GPO in this case (Id., citing Gresham
and Co., Inc. v. United States, supra).
Second, the Contractor claims that even if the contract is vague,
the ambiguity is latent and it deserves the benefit of the
doctrine of contra proferentem, which interprets ambiguous
contract terms against the drafter (App. Brf., at 8, citing
Newsom v. United States, 676 F.2d 647, 650-51 (Ct. Cl. 1982)).
In its opinion, nothing in the contract language creates an
ambiguity "so glaringly obvious that it 'blatantly jumps out at
the reader'," warranting the conclusion that a patent ambiguity
exists, which would have imposed a duty on the Appellant to seek
a clarification (Id., Newsom v. United States, supra; Chris Berg,
Inc. v. United States, 455 F.2d 1037, 1045 (Ct. Cl. 1972).
Furthermore, in light of the fact that numerous GPO forms
programs also combine the terms "complete product" and "copies,"
but nonetheless pay for the product on the basis of the industry
definition of "copy," as expressed in the Forms Handbook and the
Forms Glossary, the Appellant finds the Respondent's use of
"complete product" in this case to transform a "copy" into a
"set" inconsistent with its past practice, unreasonable and
otherwise disingenuous (App. Brf., at 8-9, citing Newsom v.
United States, supra; GPO Programs C10-S, 2069-S, and 2987-S).
Accordingly, for all of these reasons, the Appellant asks the
Board to overrule the Contracting Officer and find, in the
context of Program D201-S, that the phrase "per 1,000 copies" is
synonymous with "per 1,000 parts," and not "per 1,000 sets," as
contended by the Respondent, thus entitling Contractor to full
payment in the amount of $258,939.49 for all work performed under
the contract, which was wrongfully deducted or withheld by GPO
(App. Brf., at 12).
B. Respondent's Position
The Respondent's position in this case is equally straight-
forward. First, the Government contends that the evidence does
not support either the Appellant's interpretation of the contract
or its claim that the contract is ambiguous (Res. R. Brf., at 5).
In that regard, GPO's points to record evidence which tells us
that: (1) the Appellant's claim that it prepared its bid prices
relying on the form industry's traditional meaning of the word
"copy" as a synonym for "part" or "leaf" is undercut by the fact
that its three competitors calculated their offers on a "per
1,000 sets" basis, notwithstanding the use of the word "copy" in
the "Schedule of Prices" (Res. R. Brf., at 5-6, citing Maecon,
Inc., ASBCA No. 20104, 76-2 BCA ¶ 11,961; Gov. Exh. No. 1); (2)
in a pre-award conversation on October 5, 1994, Contracting
Officer Weiss expressly told the Contractor's President, McCall,
that payment would be made "per 1,000 sets," not "per 1,000
copies," and the Appellant is bound by the Government's
interpretation (Res. R. Brf., at 4, 6, citing MJW Enterprise,
Inc., ENGBCA No. 5813, 93-1 BCA ¶ 25,405; Arkel International,
Inc., ASBCA No. 37469, 89-3 BCA ¶ 21,965; Quiller Construction
Co., Inc, ASBCA No. 8055, 1963 BCA ¶ 3793); and (3) even though
the "Departmental Random Copies (Blue Label)" clause asked for
random "copies" of sample forms, the Contractor, contrary to its
own interpretation of that word, adopted the Government's
meaning, and supplied complete sets, and not parts or leaves
(Res. R. Brf., at 6).
Second, while the Respondent believes that the contract language
is clear and unambiguous, it asserts and if an ambiguity does
exist, it is patent, and the Contractor had a duty to seek a
clarification before bidding (Res. R. Brf., at 5, 7, citing
Newsom v. United States, supra). GPO claims that in interpreting
agreements, there is a "hierarchy of factors" which must be
considered, and that the three which the Appellant relies
on-"prior course of dealing," "trade custom," and "contra
proferentem" (penalizing the drafter for any latent ambiguities
in the contract)-are inferior to the rules of construction
employed by the Respondent-"the whole instrument," "express
language of the agreement," "conduct of the parties," and
"knowledge of the other party's interpretation" (Res. R. Brf., at
7, citing Lt. Col. Jerome S. Gabig, USAF, and Capt. Charles A.
Cook, USAF, A Guide to Interpreting Contracts, NCMA Journal,
Summer 1989, p. 55). The Government contends that the "whole
instrument" test is satisfied by reading all provisions of the
disputed contract, especially the "Complete Product" clause in
the "Schedule of Prices" and the "Departmental Random Copies
(Blue Label)" specification, which will show that for the
purposes of the agreement, the words "copy" and "copies" mean
sets of the complete product, and not individual parts or leaves
(Res. R. Brf., at 8). By comparison, the Appellant's construing
of the "Schedule of Prices" provision alone violates the well-
settled rule that a contract should "be read as a harmonious
whole with no provision being rejected or treated as meaningless,
if possible[.]" (Res. R. Brf., at 7-8, citing A.F. Luisi
Construction, Inc., VABCA No. 2693, 90-2 BCA ¶ 222,826). As for
the "express language of the agreement" principle, the Respondent
claims that the contract means what it says when it asks bidders
for prices of a complete product based on 1,000 copies of 2-part
sets, and 1,000 copies of 3-part sets, and the Appellant's trade
usage evidence cannot overcome the clear and unambiguous meaning
of the agreement (Res. R. Brf., at 8, citing The George Hyman
Construction Co. v. United States, 832 F.2d 574 (Fed. Cir. 1987),
aff'g, The George Hyman Construction Company, GSBCA No. 7913,
86-3 BCA ¶ 19,200; W. Harley Miller, Inc., VABCA No. 1386, 79-2
BCA ¶ 13,941). Similarly, GPO asserts that the Contractor's
providing of "copies" of sets of "Blue Label" samples, undercuts
its interpretation of the same word in the "Schedule of Prices"
provision as synonymous with "parts" or "leaves," and by its
contradictory actions thereby proves the "conduct of the parties"
element in this case (Res. R. Brf., at 8-9, citing Newsom v.
United States, supra; Drytech, Inc., ASBCA No. 41152, 92-2 BCA ¶
24,809; Tri-States Service Co., ASBCA No. 37058, 90-3 BCA ¶
22,953; Pennsylvania Northeast Laundry Corp., ASBCA No. 9931,
66-1 BCA ¶ 5501. Furthermore, the Respondent says that the last
standard-"knowledge of the other party's interpretation"-is
satisfied by the Contracting Officer's conversation with the
Appellant's President on October 5, 1994, in which Weiss shared
with McCall the meanings ascribed by the Government to the
disputed contract language, and the rule is that a "party who
willingly and without protest enters into a contract with
knowledge of the other party's interpretation is bound by such
interpretation[.]" (Res. R. Brf., at 9, citing Perry and Wallis,
Inc. v. United States, 192 Ct. Cl. 310, 315, 427 F.2d 722, 725
(Ct. Cl. 1968)). Indeed, the Government says that if a
contractor is actually aware of an ambiguity at the time it bids
on a contract, the ambiguity will be held to be patent no matter
how small (Id., citing James A. Mann, Inc. v. United States, 210
Ct. Cl. 104, 535 F.2d 51 (1976); General Elevator Co., VABCA No.
3666, 93-2 BCA ¶ 25,685). Finally, in so reasoning, the
Respondent expressly rejects the Contractor's three
arguments-"prior course of dealing," "trade custom," and "contra
proferentem"-contentions as essentially irrelevant and
insubstantial (Res. R. Brf., at 9-10).36
For these reasons, the Government asserts that under the
traditional rules of contract construction, the Program D201-S
specifications are clear and unambiguous, and permit of only one
meaning; i.e, the Appellant's charges were to be rendered on a
"per set" basis as a "complete product" (Res. R. Brf., at 11).
Consequently, GPO believes that the Contractor is to blame for
any ambiguity in this case because it ignored the terms of the
agreement, the conduct of the parties, and GPO's interpretation
of the contract (of which it was aware), and billed the
Government on "per part" basis (Id.). Accordingly, since such an
ambiguity is, by its nature, patent, and the Appellant did seek a
clarification before submitting its bid, the Respondent urges the
Board to deny the appeal and affirm the decision of the
Contracting Officer (Id.).
III. ISSUES PRESENTED
From the record, the Board sees two questions requiring
resolution in this case, namely:
1. Is the contract ambiguous because the "COMPLETE PRODUCT"
specification in the "Schedule of Prices" section asks for
running rate prices on a "per copy" basis instead of "per sets,"
and if so, is that ambiguity latent or patent? Stated otherwise,
is the Contractor's giving the word "copy" in this contract its
forms industry definition, meaning a "part" or "ply," reasonable
under the circumstances of this case?
2. Even if the express language of the contract is not ambiguous,
do the facts establish that the parties had reached a "meeting of
the minds" about a significant contract term, namely pricing,
prior to award, so that it can be said that a valid contract was
formed, and if not is the Appellant entitled to any additional
compensation under the equitable theory of quantum meruit?
IV. DECISION37
This appeal is the fruit of the parties' dispute over a single
word in the "COMPLETE PRODUCT" specification in the contract's
"Schedule of Prices" section-"copies." The IFB told potential
bidders to make sure their prices "include[d] the cost of all
required materials and operations necessary for the complete
production and distribution . . . ," and that they should figure
their running rate for 2-part and 3-part sets of forms on the
basis of "per 1,000 copies" (R4 File, Tab A, at 11). The crux of
the Appellant's case is that "copies" in this context has the
forms industry's traditional and technical definition, which is
as a synonym for a "parts" or "plies;" e.g., a 2-part form
consists of two "copies" or individual sheets or leaves (App.
Brf., at 7, citing Forms Handbook and Forms Glossary). The
Respondent, on the other hand, gives "copies" its more
commonplace meaning, namely a "full reproduction" or duplicate of
an original, or more particularly, "any number of books,
magazines, engravings, etc., [in this case sets of forms] printed
from the same plates or having the same printed matter;" e.g., a
complete set of a 2-part form is only one "copy" for the purpose
this contract, and not two (Res. R. Brf., at 8).38 See WEBSTER'S
NEW WORLD DICTIONARY, 307 (3rd Coll. Ed. 1988). Not
surprisingly, each party insists that its interpretation of the
disputed language is the only reasonable one under the contract.
Thus, boiled down to its essentials, in order to resolve this
controversy the Board must determine which of two perfectly good
and acceptable meanings of a very simple word, with multiple
definitions, makes sense in the context of this contract, and
depending on its choice the Appellant stands to gain or lose
$258,939.49. This should not be so strange, however, since it
has been said that "[a] single word has sometimes lost or won an
empire. . . .". See John Bartlett, Familiar Quotations, at 492a
(13th ed., 1955) (quoting George Payne Rainsford James,
Richelieu, Chap. 6.) (hereinafter Bartlett's Familiar
Quotations).
Since the parties have drawn different meanings from the
"COMPLETE PRODUCT" specification, the Board's task is simple-it
must decide which of the two conflicting interpretations is
correct, or whether both readings may be reasonably derived from
the contract terms; in other words, is the contract ambiguous?
To answer that question, the Board must examine the disputed
language itself and derive its own interpretation of the
contract. See The George Marr Co., GPO BCA 31-94 (April 23,
1996), slip op. at 40, 1996 WL ______; Professional Printing of
Kansas, Inc., supra, slip op. at 46; Web Business Forms, Inc.,
GPO BCA 16-89 (September 30, 1994) slip op. at 16-17, 1994 WL
837423; McDonald & Eudy Printers, Inc., GPO BCA 25-92 (April 11,
1994), slip. op. at 13, 1994 WL 275093; Shepard Printing, GPO BCA
37-92 (January 28, 1994), slip. op. at 15-16, 1994 WL 275098.
In one sense this case is typical of most contract interpretation
appeals presented to the Board. However, in another way this
dispute is more subtle because the outcome is heavily dependent
on the meaning ascribed to one word, not a group of words such as
a clause, sentence, or paragraph, and therefore, it illustrates
both the beauty and difficulties of English. It has been said
that our mother tongue is a practical language characterized by a
simplicity and flexibility which allows its nouns to become verbs
and verbs nouns, in a way which no other language in the world
can imitate. See Robert McCrum William Cran and Robert MacNeil,
The Story of English, at 47 (Elisabeth Sifton Books/Viking, 1986)
(hereinafter English). The word which is the "bone of
contention" in this case-"copies"-is just one example; i.e., it
can be used both as a noun to describe a duplicate of an original
("Here are two copies of that picture."), or a verb meaning "to
duplicate or imitate" ("He copies that picture."). Thus, one
problem, as the Board sees it, is that the word in
question-"copy" (or "copies" in the plural)-is inherently
ambiguous. See Frigaliment Importing Co., Ltd. v. B.N.S.
International Sales Corp., 190 F.Supp. 116, 117 (S.D.N.Y. 1960)
("The issue is, what is a chicken?").39 This can be illustrated
by the following colloquy between the Board and the Contracting
Officer on the second day of the hearing, which sums up the
essence of this case:
Question (Q) [Judge Foss]: . . . . I would like to ask you just a
couple of definitional questions. In your own mind, what does
the word "set" mean to you? What is a set?
Answer (A) [Scott]: A set is a group of forms.
Q. Now, we have it in the file already at Tab [O], which is the
bid form (GPO Form 910), by way of example.
A. Correct.
Q. So in your mind this is, what, three sheets ply carbons.
A. With or without carbons that could be a-that is a set.
Q. Oh, this is a carbon set. Okay.
A. That is a carbon set.
Q. This is one set, okay?
A. Yes.
Q. Now, what does the word "part" mean to you?
A. Any one of the-not the carbons now, but any one of those-I
guess the carbon really could be a part also-any one of those
individual sheets is a part.
Q. Okay. And what does the word "copy" mean to you?
A. It all depends on what context you use it in. A copy. That
whole thing could be a copy, or one page of that could be a copy.
Q. Okay. You have read the contract in question. Is that
correct?
A. Yes.
Q. The contract refers to copies of blue lines, doesn't it? You
know, proofs.
A. You mean blue label samples?
Q. Samples, I'm sorry.
A. Yes.
Q. What is a copy of a blue label sample?
A. When we ask them to submit-I don't know what the number is in
here, but just let's say it is 100 blue label copies-we are
talking about a complete set. We are not talking about a leaf of
each one of those sets.
Q. So it would be set up, let's say again, like Tab O, it would
be the blue line leaf. Tab O is set up-
A. A complete set, a complete three-part set would be one copy.
If we asked you for 100 of those, we would expect to et 100
three-part sets.
Q. Even though each of the actual forms that are part of this set
are exactly the same?
A. That is correct.
Q. The same color. You know this is just a black-it is printed
on yellow paper and the copies are a lighter yellow than the
original but, I mean, let's assume this is white.
A. Let's put is this way, I would be very surprised if I were to
go [to] the agency and pull one of the boxes of the blue label
samples and find 100 individual forms that had been separated in
there for the blue label samples.
Q. So it is, then-do I hear you testifying to, essentially that a
set has a discreet meaning to you?
A. A set is a group of forms attached, yes.
Q. Right. A part has a discreet meaning to you.
A. Correct.
Q. A part could be also a leaf.
A. Correct.
Q. But the word "copy" is a little bit more amorphous than that?
That differs, or what?
A. To me it does, yes. It all depends on how you use it. Just
like if I said I would like to have copy of that book, I wouldn't
expect somebody to give me 500 individual pages or one page of
the book. I would expect a book that had all 500 pages in it.
See Tr. II: 72-75.40
It is quite clear, that the Contracting Officer's "it all
depends" response when asked about his understanding of the word
"copy," was simply his way of expressing a truism perhaps said
more artfully by Justice Oliver Wendell Holmes, 78 years ago,
namely:
A word is not a crystal, transparent and unchanged, it is the
skin of a living thought and may vary greatly in color and
content according to the circumstances and the time in which it
is used.
See Towne v. Eisner, 245 U.S. 418, 425; 38 S.Ct. 158, 159 (1918)
(quoted in Respectfully Quoted: A Dictionary of Quotations
Requested from the Congressional Research Service, at 378 (Suzy
Platt, ed., Library of Congress, 1989) (hereinafter Respectfully
Quoted). Stated otherwise, when it comes to the medium of human
expression-words-context controls meaning.41 Thus, most
Americans, for example, instinctively know that when General
Anthony C. McAuliffe, the commander of the American forces
defending Bastogne during the Battle of the Bulge in World War
II, rejected the German's surrender ultimatum with one
word-"Nuts!"-he was not talking about pecans.42 Consequently,
there is a premium on using words correctly when communicating in
English, and we are instructed to ". . . insist upon having the
meaning of a word clearly understood before using it, and the
meaning of a proposition before assenting to it; . . .". See
Bartlett's Familiar Quotations, at 518a (quoting John Stuart
Mill's Inaugural Address as Rector, University of St. Andrews
(Scotland), February 1, 1867). This would seem to be especially
true in negotiations for Government contracts such as took place
here, so that the sort of "hidden traps" which the courts have
long sought to protect unsuspecting contractors against can be
avoided. See RD Printing Associates, Inc., supra, slip op. at
36.
In contract interpretation cases, the Board confines the focus of
its inquiry to the contract itself. See The George Marr Co.,
supra, slip op. at 41; Professional Printing of Kansas, Inc.,
supra, slip op. at 46; Web Business Forms, Inc., supra, slip op.
at 17; Universal Printing Co., supra, slip op. at 26, fn. 27, RD
Printing Associates, Inc., supra, slip op. at 9, 13, fns. 9 and
15. Furthermore, the legal principles which are the Board's road
map for deciding this dispute are well-known. First, two
different interpretations of the same contract language raise the
possibility that the specifications may be ambiguous. See
McDonald & Eudy Printers, Inc., supra, slip op. at 13; R.C.
Swanson Printing and Typesetting Co., GPO BCA 31-90 (February 6,
1992), slip op. at 41, 1992 WL 487874, aff'd, Civil Action No.
92-128C (Cl. Ct. October 2, 1992). Second, contractual language
is ambiguous if it will sustain more than one reasonable
interpretation.43 See The George Marr Co., supra, slip op. at
41; Professional Printing of Kansas, Inc., supra, slip op. at 47;
Webb Business Forms, Inc., supra, slip op. at 17; R.C. Swanson
Printing and Typesetting Co., supra, slip op. at 41, fn. 22;
General Business Forms, Inc., GPO BCA 2-84 (December 3, 1985),
slip op. at 16, 1985 WL 154846. See also Neal & Co. v. United
States, 19 Cl. Ct. 463, 471 (1990), aff'd 945 F.2d 385 (Fed. Cir.
1991); Edward R. Marden Corp. v. United States, 803 F.2d 701, 705
(Fed. Cir. 1986); Sun Shipbuilding & Drydock Co. v. United
States, 183 Ct. Cl. 358, 372 (1968). Third, in analyzing
disputed contract language, the courts and contract appeals
boards place themselves in the shoes of a reasonably prudent
contractor, and give the language of the contract that meaning
which a reasonably intelligent contractor acquainted with the
circumstances surrounding the contract would give it. See The
George Marr Co., supra, slip op. at 41-42; Professional Printing
of Kansas, Inc., supra, slip op. at 47; McDonald & Eudy Printers,
Inc., supra, slip op. at 14; General Business Forms, Inc., supra,
slip op. at 18 (citing, Salem Engineering and Construction Corp.
v. United States, 2 Cl. Ct. 803, 806 (1983)). See also Norcoast
Constructors, Inc. v. United States, 196 Ct. Cl. 1, 9, 448 F.2d
1400, 1404 (1971); Firestone Tire and Rubber Co. v. United
States, 195 Ct. Cl. 21, 30, 444 F.2d 547, 551 (1971).
A dispute over contract language is not resolved simply by a
decision that an ambiguity exists-it is also necessary to
determine whether the ambiguity is latent or patent. Courts will
find a latent ambiguity where the disputed language, without
more, admits of two different reasonable interpretations. See
Fry Communications, Inc./InfoConversion Joint Venture v. United
States, 22 Cl. Ct. 497, 503 (1991) (citing Edward R. Marden
Corporation v. United States, supra, 803 F.2d at 705); The George
Marr Co., supra, slip op. at 42; Professional Printing of Kansas,
Inc., supra, slip op. at 48; Web Business Forms, Inc., supra,
slip op. at 18; R.C. Swanson Printing and Typesetting Co., supra,
slip op. at 41, fn. 22. In such cases, the doctrine of contra
proferentem applies and the dispute language will be construed
against the drafter, see Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl. Ct. at 503 (citing
William F. Klingensmith, Inc. v. United States, 205 Ct. Cl. 651,
657 (1974)); The George Marr Co., supra, slip op. at 42, fn. 33;
Professional Printing of Kansas, Inc., supra, slip op. at 48, fn.
64; Web Business Forms, Inc., supra, slip op. at 18, fn. 18; R.C.
Swanson Printing and Typesetting Co., supra, slip op. at 41, fn.
22, if the non-drafter can show that he/she relied on the
alternative reasonable interpretation in submitting his/her bid,
see Fry Communications, Inc./ InfoConversion Joint Venture v.
United States, supra, 22 Cl. Ct. at 510 (citing Fruin-Colon Corp.
v. United States, 912 F.2d 1426, 1430 (Fed. Cir. 1990); Lear
Siegler Management Services v. United States, 867 F.2d 600, 603
(Fed. Cir. 1989)); Professional Printing of Kansas, Inc., supra,
slip op. at 48, fn. 64; Web Business Forms, Inc., supra, slip op.
at 19, fn. 18. On the other hand, a patent ambiguity would exist
if the contract language contained a gross discrepancy, an
obvious error in drafting, or a glaring gap, as seen through the
eyes of a "reasonable man" on an ad hoc basis. See Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl. Ct. at 504 (citing Max Drill, Inc. v.
United States, 192 Ct. Cl. 608, 626, 427 F.2d 1233 (1967); WPC
Enterprises, Inc. v. United States, 163 Ct. Cl. 1, 6, 323 F.2d
874 (1963); The George Marr Co., supra, slip op. at 42-43;
Professional Printing of Kansas, Inc., supra, slip op. at 48;
Webb Business Forms, Inc., supra, slip op. at 19; General
Business Forms, Inc., supra, slip op. at 17 (citing Enrico Roman,
Inc. v. United States, 2 Cl. Ct. 104, 106 (1983)). Where there
are such discrepancies, errors, or gaps, the contractor has an
affirmative obligation to ask the contracting officer to clarify
the true meaning of the contract language before submitting its
bid. See Fry Communications, Inc./InfoConversion Joint Venture
v. United States, supra, 22 Cl. Ct. at 504 (citing Newsom v.
United States, supra, 230 Ct. Cl. at 303); The George Marr Co.,
supra, slip op. at 43, fn. 34; Professional Printing of Kansas,
Inc., supra, slip op. at 48-49, fn. 65. See also Interstate
General Government Contractors, Inc. v. Stone, 980 F.2d 1433
(Fed. Cir. 1992); Enrico Roman, Inc. v. United States, supra, 2
Cl. Ct. at 106; S.O.G. of Arkansas v. United States, 212 Ct. Cl.
125, 546 F.2d 367 (1976); Beacon Construction v. United States,
314 F.2d 501 (Ct. Cl. 1963)); Universal Construction Co., NASA
BCA No. 83-1092, 93-3 BCA ¶ 26,173; Harwood Construction Co.,
NASA BCA No. 1165-45, 68-1 BCA ¶ 6768.
However, the rules governing ambiguous contract language come
into play only if the meaning of the disputed terms are not
susceptible to interpretation through the usual rules of contract
construction. See The George Marr Co., supra, slip op. at 43;
Professional Printing of Kansas, Inc., supra, slip op. at 49;
Webb Business Forms, Inc., supra, slip op. at 19; McDonald & Eudy
Printers, Inc., supra, slip op. at 16; Shepard II, supra, slip
op. at 19; R.C. Swanson Printing and Typesetting Co., supra, slip
op. at 42. The most basic principle of contract construction is
that the document should be interpreted as a whole.44 See Hol-
Gar Manufacturing Corp. v. United States, 169 Ct. Cl. 384, 388,
351 F.2d 972, 975 (1965); The George Marr Co., supra, slip op. at
43; Professional Printing of Kansas, Inc., supra, slip op. at 49;
Webb Business Forms, Inc., supra, slip op. at 19-20; General
Business Forms, Inc., supra, slip op. at 16. Hence, all
provisions of a contract should be given effect and no provision
is to be rendered meaningless. See The George Marr Co., supra,
slip op. at 43-44; Professional Printing of Kansas, Inc., supra,
slip op. at 49-50; Webb Business Forms, Inc., supra, slip op. at
20; General Business Forms, Inc., supra, slip op. at 16 (citing,
Raytheon Co. v. United States, 2 Cl. Ct. 763 (1983)). See also
Pacificorp Capital, Inc. v. United States, 25 Cl. Ct. 707, 716
(1992), aff'd 988 F.2d 130 (Fed. Cir. 1993); Avedon Corp. v.
United States, 15 Cl. Ct. 771, 776 (1988); Fortec Constructors v.
United States, 760 F.2d 1288, 1292 (Fed. Cir. 1985); United
States v. Johnson Controls, Inc., 713 F.2d 1541, 1555 (Fed. Cir.
1983); Jamsar, Inc. v. United States, 442 F.2d 930 (Ct. Cl.
1971); Martin Lane Co. v. United States, 193 Ct. Cl. 203, 215,
432 F.2d 1013, 1019 (1970); Grace Industries, Inc., ASBCA No.
33553, 87-3 BCA ¶ 20,171. In other words, a contract should be
interpreted in a manner which gives meaning to all of its parts
and in such a fashion that the provisions do not conflict with
each other, if this is reasonably possible. See The George Marr
Co., supra, slip op. at 44; Professional Printing of Kansas,
Inc., supra, slip op. at 50; Webb Business Forms, Inc., supra,
slip op. at 20. Accord Granite Construction Co. v. United
States, 962 F.2d 998 (Fed. Cir. 1992); B. D. Click Co. v. United
States, 614 F.2d 748 (Ct. Cl. 1980). That is, an interpretation
which gives a reasonable meaning to all parts of a contract will
be preferred to one which leaves a portion of it "useless,
inexplicable, inoperative, void, insignificant, meaningless,
superfluous, or achieves a weird and whimsical result." See The
George Marr Co., supra, slip op. at 44-45 (citing Gould, Inc. v.
United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991), quoting
Arizona v. United States, 216 Ct. Cl. 221, 235-36, 575 F.2d 855,
863 (1978)); Professional Printing of Kansas, Inc., supra, slip
op. at 50-51. See also ITT Arctic Service, Inc. v. United
States, 207 Ct. Cl. 743, 524 F.2d 680, 684 (1975) (contract
interpretation should be "without twisted or strained out of
context [and without] regard to the subjective unexpressed intent
of one of the parties. . ."). An interpretation that effectively
deletes a major portion of the contract cannot and will not be
sanctioned. See Avedon Corp. v. United States, supra, 15 Cl. Ct.
at 776 (citing W.G. Cornell Co. v. United States, 179 Ct. Cl.
651, 666-67, 376 F.2d 299, 309 (1967)).
Apart from this overarching principle, there are several specific
rules of contract construction which apply when interpreting an
agreement, one of which-"trade usage"-is particularly relevant
here. See generally The George Marr Co., supra, slip op. at 44,
fn. 36; Professional Printing of Kansas, Inc., supra, slip op. at
50, fn. 67. First, within the contract itself, it is well-
established that where the provisions of a contract are phrased
in clear and unambiguous language, "the words of those provisions
must be given their plain and ordinary meaning by the court in
defining the rights and obligations of the parties. . . ." See
The George Hyman Construction Company v. United States, supra,
832 F.2d at 579 (quoting Elden v. United States, 617 F.2d 254,
260-61 (Ct. Cl. 1980); accord American Science and Engineering,
Inc. v. United States, 663 F.2d 82, 88 (Ct. Cl. 1981)); Julius
Goldman's Egg City v. United States, 697 F.2d 1051, 1057 (Fed.
Cir. 1982), cert. denied, 464 U.S. 814, 104 S.Ct. 68, 78 L.Ed.2d
83 (1983). Similarly, technical terms are given their technical
meaning. See Coastal Drydock and Repair Corp., ASBCA No. 31894,
87-1 BCA ¶ 19,618; Industrial Finishers, Inc., ASBCA No. 6537,
61-1 BCA ¶ 3,091. Likewise, terms special to Government
contracts will be given their technical meanings. See General
Builders Supply Co. v. United States, 187 Ct. Cl. 477, 409 F.2d
246 (1969) (meaning of "equitable adjustment"). As for extrinsic
evidence of the intent of the parties, the rules of construction
allow, inter alia, custom and trade usage to explain undefined
terms. See Haehn Management Company v. United States, 15 Cl. Ct.
50, 59 (1988) (citing Moore v. United States, 196 U.S. 157, 166,
25 S.Ct. 202, 203-04, 49 L.Ed. 428 (1905); Northwestern
Industrial Piping, Inc. v. United States, 199 Ct. Cl. 540,
550-51, 467 F.2d 1308, 1314 (1972); W.G. Cornell Co. v. United
States, supra); Harold Bailey Painting Co., ASBCA No. 27064, 87-1
BCA ¶ 19,601 (definition of "spot painting"). However, custom
and trade usage may not contradict plain contractual language, or
clear and unambiguous terms. See Avedon Corp. v. United States,
supra, 15 Cl. Ct. at 778 (citing The George Hyman Construction
Company v. United States, 215 Ct. Cl. 70, 81, 564 F.2d 939, 945
(1977)); WRB Corp. v. United States, 183 Ct. Cl. 409, 436 (1968).
See also Chevron U.S.A., Inc., ASBCA No. 32323, 90-1 BCA ¶
22,602, at 113,426 ("Since the term ["FOB destination"] was clear
in the contract and defined by [the] FAR, there is no need to
resort to trade custom or practice at all." Citing Sea-Land
Service, 553 F.2d 651 (Ct. Cl. 1977), cert. denied, 434 U.S. 1012
(1978)).
When the Board applies these rules of interpretation to the
record, exhibits, and the parties' briefs in this case, it
reaches the following conclusions:
A. Contrary to the Appellant's belief, when the contract is read
as a whole the meaning of the word "copies" in the phrase "per
1,000 copies" in the "Schedule of Prices" section's "COMPLETE
PRODUCT" specification is not ambiguous, and clearly contemplates
running rate charges on a "per set" basis, not "per part" or "per
ply." Thus, the Contractor's interpretation based on the forms
industry meaning of the word "copy" is not reasonable. Moreover,
even if the Board thought that the contract was ambiguous with
respect to the basis for running rate charges, it would also find
that the ambiguity was patent, and the Appellant's failure to
seek a clarification from the Contracting Officer before
submitting its bid would bar its claim.
As previously indicated, there are two contract interpretation
issues in this case. First, the parties, while both contending
that the disputed contract language is clear, unambiguous and
capable of just one reasonable meaning, disagree on what
precisely the contract language says. Second, in the event that
the Board finds that the contract is ambiguous, they are divided
over whether the ambiguity is latent (Appellant) or patent (GPO).
The Board will dispose of each of these questions in turn.
The Appellant's principal claim is that both the trade usage of
the word "copy" within the forms industry,45 and the parties'
prior course of dealings on other forms contracts,46 shows
clearly and unambiguously that the contract provision for a
running rate charge "per 1,000 copies" in the "COMPLETE PRODUCT"
specification of the "Schedule of Prices" section means that its
is entitled to be paid for the forms it produces on "per part" or
"per ply" basis. The Respondent, however, says that the disputed
language clearly means running rate charges are to be calculated
"per 1,000 copies of complete sets," and the Contractor knows it
because Contracting Officer Weiss explained the billing formula
to McCall in their pre-award conversation on October 5, 1994.
Additionally, GPO dismisses the Contractor's "trade usage"
argument as particularly weak since its three competitors
properly figured their running rate offers on a "per 1,000 sets"
basis, despite the use of the word "copy" in the "COMPLETE
PRODUCT" specification.47 The Government also notes that the
Appellant is inconsistent in its narrow interpretation of the
word "copy," because it complied with the "Departmental Random
Copies (Blue Label)" clause in the contract by sending copies of
complete sets of forms, not parts or leaves. As for the
Contractor's reliance on a "prior course of dealing" between the
parties as an interpretative device, the Government simply
rejects the claim as irrelevant because the other GPO forms
contracts used as supporting evidence have completely different
terms from the disputed agreement.
The Board's duty in this case is to interpret the agreement as a
whole, and give effect and meaning to all of its parts, if that
is reasonably possible. See The George Marr Co., supra, slip op.
at 43-44; Professional Printing of Kansas, Inc., supra, slip op.
at 49-50; Webb Business Forms, Inc., supra, slip op. at 19-20;
General Business Forms, Inc., supra, slip op. at 16. Accord
Fortec Constructors v. United States, supra, 760 F.2d at 1292;
United States v. Johnson Controls, Inc., supra, 713 F.2d at 1555;
Pacificorp Capital, Inc. v. United States, supra, 25 Cl. Ct. at
716; Avedon Corp. v. United States, supra, 15 Cl. Ct. at 776;
Martin Lane Co. v. United States, supra, 193 Ct. Cl. at 215, 432
F.2d at 1019; Hol-Gar Manufacturing Corp. v. United States,
supra, 169 Ct. Cl. at 388, 351 F.2d at 975. In performing this
task, the Board must not leave any portion of the contract
"useless, inexplicable, inoperative, void, insignificant,
meaningless, superfluous. . .". See The George Marr Co., supra,
slip op. at 44-45; Professional Printing of Kansas, Inc., supra,
slip op. at 50-51. Accord Gould, Inc. v. United States, supra,
935 F.2d at 1274; Arizona v. United States, supra, 216 Ct. Cl. at
235-36, 575 F.2d at 863. Furthermore, the Board will take a
common sense approach in interpreting the contract, and apply the
traditional rules of construction to the facts before it. See
The George Marr Co., supra, slip op. at 44, fn. 36; Professional
Printing of Kansas, Inc., supra, slip op. at 50, fn. 67. Two of
those rules are particularly pertinent in this dispute, namely,
ordinary terms in the contract are to be given their plain and
ordinary meaning, see The George Hyman Construction Company v.
United States, supra, 832 F.2d at 579; Elden v. United States,
supra, 617 F.2d at 260-61; Julius Goldman's Egg City v. United
States, supra, 697 F.2d at 1057; American Science and
Engineering, Inc. v. United States, supra, 663 F.2d at 88, and
custom and trade usage can be used to explain undefined terms
within the agreement, see Haehn Management Company v. United
States, supra, 15 Cl. Ct. at 59; Northwestern Industrial Piping,
Inc. v. United States, supra, 199 Ct. Cl. at 550-51, 467 F.2d at
1314; W.G. Cornell Co. v. United States, supra, 179 Ct. Cl. at
666-67, 376 F.2d at 309, but not contradict plain contractual
language, or clear and unambiguous terms, see Avedon Corp. v.
United States, supra, 15 Cl. Ct. at 778; WRB Corp. v. United
States, supra, 183 Ct. Cl. at 436; Chevron U.S.A., Inc., supra,
90-1 BCA at 113,426.
The Board begins its analysis by noting that two things stand out
about the use of the word "copies" in the disputed pricing
provision of the contract, which have some bearing on this
controversy. First, the phrase "per 1,000 copies" is a change
from the previous year's Program D201-S agreement, which based
running rates on prices "per 1,000 sets" (Tr. I: 51-52; II: 76-77
109-10, 115, 233, 241; R4 File, Tab M, at 13-14). However, there
is nothing in the record to indicate why the change from "sets"
to "copies" was made muchless who authored it (the agency's
contracting officials who testified denied responsibility), and
the "best guess" of the witnesses is that the author was the
printing specialist who prepared the IFB (who did not testify)
(Tr. II: 77, 80, 93-94; R4 File, Tab R, at 5). Second, as
already mentioned, "copy" is an inherently ambiguous word, and
for the Board to attempt to gauge its meaning in isolation,
without placing it in some sort of context, would be like a
sailor taking a navigational fix on a shooting star. Indeed, the
disputed contract uses "copy" (or its plural, "copies") at least
three acceptably defined ways: (1) in its traditional graphic
arts sense, namely, as something used in the production of
printing (popularly called an "original"); e.g., camera copy
("GOVERNMENT TO FURNISH" specification); (2) as describing the
duplicate of a printed original; e.g.,random sample copies for
the purposes of quality control ("GOVERNMENT TO FURNISH,"
"DEPARTMENTAL RANDOM COPIES (BLUE LABEL)," and "QUALITY ASSURANCE
RANDOM COPIES" specification), "legible copies" ("INTERLEAVING
CARBONS" specification); and (3) in its trade or forms industry
sense as another word for "part," "ply" or "leaf;" e.g., "copy
designations (part-to-part changes)" ("PRINTING" specification),
and "duplicate copies (parts 1 and 2)" ("BIDDER'S NAME AND
SIGNATURE" block).48 On the other hand, just because one word
has multiple meanings in a contract, it does not necessarily
follow that the contract itself is incapable of a clear and
unambiguous interpretation. Since the disputed contract is an
integrated agreement, the relevant question here, therefore, is
how is the word "copies" used in the "COMPLETE PRODUCT"
specification of the "Schedule of Prices" section and where does
it fit in the entire contractual scheme?49 Stated otherwise,
considering the language of that specification in light of the
agreement as a whole, is the Appellant's narrow application of
"copies" reasonable under the circumstances? From its evaluation
of all parts of the contract, the Board finds itself in agreement
with the Respondent that notwithstanding the trade definition of
"copies," for the purposes of the "Schedule of Prices" section
the word has the exact meaning with respect to running rate
charges that the Government says it has-"copies of complete sets
of forms." When a contract admits to only one construction, it
is not ambiguous. See Professional Printing of Kansas, Inc.,
supra, slip op. at 54; Webb Business Forms, Inc., supra, slip op.
at 21; R.C. Swanson Printing and Typesetting Co., supra, slip op.
at 43-48. Accord Falcon Jet Corp., DOTBCA No. 78-32, 82-1 BCA at
76,693 (citing Martin Lane Co. v. United States, supra; General
Dynamics Corp., DOT CAB 76-29, 79-1 BCA ¶ 13,858).
In the Board's view, neither the Appellant's the trade usage of
the word "copy" nor its "course of dealings" argument has merit
in this case. Undoubtedly, custom and trade usage, as
interpretative device, is a valuable tool for explaining
undefined terms in an agreement, see Haehn Management Company v.
United States, supra, 15 Cl. Ct. at 59; Northwestern Industrial
Piping, Inc. v. United States, supra, 199 Ct. Cl. at 550-51, 467
F.2d at 1314; W.G. Cornell Co. v. United States, supra, 179 Ct.
Cl. at 666-67, 376 F.2d at 309, and may be useful in analyzing
the reasonableness of the Contractor's position, see Avedon Corp.
v. United States, 15 Cl. Ct. at 778. In this case, however, the
Appellant's "trade usage" argument must fail because the contract
itself defines the critical term. In that regard, the contract's
"NUMBER OF PARTS" specification clearly provides "[t]he term
'Parts' as used herein is defined as one sheet of paper other
than carbon[.]" (R4 File, Tab A, at 4). Furthermore, the record
indicates the individual sheets of forms, which the Appellant
identifies as "copies," have always been defined as "parts" in
Program D201-S contracts (R4 File, Tab M, at 5 (previous year's
agreement); Gov. Exh. No. 3, at 4 (following year's contract)).
Moreover, the word "parts" is used consistently throughout the
contract when referring to the component leaves of 2-part and 3-
part forms. The following specifications, inter alia, are prime
examples of the use of "parts" as a synonym for "copies" in the
contract:
* * * * * * * * * *
STOCK/PAPER:
* * * * * * * * * * *
Chemical Wood Writing paper basis weight 60 gsm, (17 x 22", 16
lbs. per 500 sheet) equal to JCP Code D10. . . .For Part 1 of 2-
part sets and for Parts 1 and 2 of 3-part sets.
White Ledger basis weight 90 gsm, (17 x 22", 24 lbs. per 500
sheets) equal to JCP Code J10. For Part 2 of 2-part sets and for
Parts 3 of 3-part sets.
PRINTING: Print face only in one or two ink colors. The base
form prints the same on all parts of each set. The second ink
color, when required, is for identification bars appearing on
forms and will be required on all parts. . . .
* * * * * * * * * *
The printing on each part must be properly aligned so that the
printing on each form will coincide when the forms are gathered
into sets. The forms on all parts must register with + 1 mm
(1/32").
INTERLEAVING CARBONS: Interleave with black, one-time, dual-
purpose carbon paper. Carbon must be of sufficient density and
graded sensitivity to ensure clear, legible copies on all parts,
when part 1 is filled in by manual/electric typewriter or
ballpoint pen.
* * * * * * * * * *
BINDING:
* * * * * * * * * *
(2) Forced gumming is defined as attaching the sets at the stub
by adhesive applied to the edge and penetrating between parts and
carbons after the sets have been assembled.
All sets must provide sufficient strength to guarantee parts will
remain together under normal handling and storage, but will
permit ready separation of parts without damage to the parts.
Perforations must be such as to guarantee easy separation of all
parts in one operation, but sufficient strength must be retained
to prevent disengagement of any part under normal handling and
shipping conditions. . . .
* * * * * * * * * *
LABELING AND MARKING:
* * * * * * * * * *
. . . Packages/containers containing multi-part forms must be
marked with the number of parts following the form number {i.e.
SF-557 (3 Part Set)}.
* * * * * * * * * *
See R4 File, Tab A, at 5-6 [Emphasis added.]
As indicated above, the contract contains only two exceptions to
this uniform application of the word "parts" where it can be said
that the word "copies" is used as the Appellant intended-the
sentence beginning "Copy designations (part-to-part changes" in
the "PRINTING" specification, and in the "BIDDER'S NAME AND
SIGNATURE" block at the end of the IFB, instructing to the bidder
to "submit the original and duplicate copies (parts 1 and 2) of
GPO Form 910, 'Bid'" (R4 File, Tab A, at 5, 12). However, in
both instances, as can be seen, the drafter placed the words
"part" and "parts" in a parenthetical phrase immediately after
"copy designation" and "copies," respectively, so that there
would be no confusion as to his/her meaning that the words
"copies" and "parts" were interchangeable in those provisions
(Tr. I: 62-63). Such is not the case with the drafter's "stand
alone" use of the word "copies" in the phrase "per 1,000 copies"
in the "COMPLETE PRODUCT" specification of the "Schedule of
Prices" section (R4 File, Tab A, at 11). It seems to the Board
that if the writer of the IFB intended the word "copies" in "per
1,000 copies" to mean the same thing as "parts," he/she would
have followed the same drafting formula and placed "parts" in
parentheses after the word "copies;" e.g., "per 1,000 copies
(parts)." In the Board's view, the drafter's omission of the
word "parts" in this context is clear evidence that the word
"copies" in "per 1,000 copies" was meant to be given its ordinary
and plain meaning, namely, a duplicate of complete 2-part and 3-
part sets, and not any technical or trade definition.50 This is
especially true with respect to the forms industry's meaning of
"copies," since the drafter would have known that running rate
charges on the basis of "parts," "plies," or "leafs would have
made the contract price substantially more costly (Tr. I:
199-200; II: 10). Furthermore, when the Appellant supplied
complete sets of forms in satisfaction of the blue label sample
"copies" requirement in the contract, it was acknowledging that
the unmodified word "copies" was being used in its commonplace
sense, and not any special way (Tr. I: 224).51 Consequently, it
is not now at liberty to pick and choose a different meaning for
the "stand alone" word "copies" for its own benefit and
convenience.
But, the Appellant says that the reason it gave the word "copies"
its "trade usage" meaning in the disputed contract was because
the Respondent itself reenforced that idea by its interpretation
of similar or the same language in other GPO forms contracts.
Thus, the Contractor believes that the IFB's substituting the
phrase "per 1,000 copies" for the previous year's "per 1,000
sets," as the pricing standard for running rate charges is
especially significant, because GPO has always interpreted
"copies" as synonymous with "part" or "leaf" for payment purposes
(App. Brf., at 11, citing Tr. I: 53-54, 102-03). By way of
example, the Appellant has supported its "prior course of
dealings" argument with copies of the relevant pricing pages from
thirteen (13) other forms contracts (Tr. I: 38-39, 41, 52-53, 63,
73, 75-76, 99-117; R4 File, Tab P; App Exh. Nos. 4-1 through
4-25).52 The Board's own examination of this documentary
evidence, however, shows the Contractor's proof to be a weak
foundation for building a "prior course of dealings" theory.
In Publishers Choice Book Manufacturing Co., a factually similar
case (discussed in detail infra), where the contractor and GPO
were locked in a dispute over the meaning of the descriptive
words "single map sheet" in a "requirements" contract for the
printing of "Soil Survey Maps" for the Department of Agriculture
(Agriculture) (Program B365-M), the Board admitted, over the
Government's objection, materials from the contractor relating to
a companion program (identified as Program 198), which it said
established a "prior course of dealing" that it reasonably relied
on in fashioning its Program B365-M bid. See Publishers Choice
Book Manufacturing Co., GPO BCA 4-84 (August 18, 1986), slip op.
at 7, 9-10, 1986 WL 181457. Finding in effect that the
contractor's evidence was of little probative value, the Board
said the following about the use of "course of dealings" as an
interpretive device in contract interpretation cases:
On the question of the weight to be given a course of prior
dealings, Professors Nash and Cibinic in examining the principal
case of L.W. Foster Sportswear, Co. v. United States, 186 Ct. Cl.
499, 405 F.2d 1,285 (1969), tell us that in Government contract
law "[w]here the parties to an interpretation dispute have
interpreted, either expressly or by their actions, the provisions
of a similar, previously performed contract in a certain manner,
they will be presumed to have intended the same meaning for those
provisions in the disputed contract. This presumption is
rebuttable by clear evidence that the parties have changed their
intent or are in disagreement at the time they enter into the
disputed contract. See, e.g., Lock[h]eed Aircraft Corp. v.
United States, 192 Ct. Cl. 36, 426 F.2d (1970)." Ralph C. Nash,
Jr. and John Cibinic, Jr., Federal Procurement Law, Third
Edition, The George Washington University, 1980, at 969 n.1
(emphasis added).
They further tell us in footnote 2 that "[w]hen the contract
language is clear and precise, the court or board will normally
give lesser weight to a prior course of dealing. [T]he governing
factor in such cases is the degree of clarity or exactness with
which the disputed term or clause is written, Robert McMullan &
Sons, Inc., ASBCA [No.] 21455, 77-1 BCA [¶] 12,456 (1977) . . .
however, superficially exact language may not correctly express
the parties agreement. Generally more convincing evidence of a
course of prior dealing will be required to controvert contract
language which is stated precisely. Cf. Doyle Shirt
Manufacturing Corp. v. United States, 199 Ct. Cl. 150, 462 F.2d
1150 (1972)." Id. at 970, n.3.
In addition, they tell us that "[t]he parties may be bound by
their interpretation of prior contracts even though the language
of the disputed contract has been altered." Id. at 971, n.3.
Lastly, they tell us that "[t]he reasoning underlying the prior
course of dealing rule requires that both parties have actual
knowledge of the prior course of dealing and of its significance
to the contract. Clearly, it would be unreasonable to find that
a party had agreed to a term which he was not aware." Id. at
972, n.5 (emphasis added).
See Publishers Choice Book Manufacturing Co., GPO BCA 4-84
(August 18, 1986), slip op. at 10-11. [Original emphasis.] See
generally, Cibinic & Nash, Administration, at 206-09.
Here, the Appellant points to six (6) other contracts it has or
had with the Respondent in particular-GPO Programs C10-S, 223-M,
D471-S, C484-S, 2069-S and 2270-S-where the agreement used
phrases such as "complete product," "all inclusive," or "per set"
for pricing purposes, but it was nonetheless paid on a "per
copy," as forming the basis for its "prior course of dealings"
claim (App. Brf., at 11; App. Exh. Nos. 4-1 to 4-4, 4-9 to 4-14,
and 4-16 to 4-18).53 However, an examination of the App. Exh.
No. 4 excerpts from these contracts reveals that just three of
them-Programs 223-M, C484-S and 2069-S-involve the production of
multiple-part carbon interleaved forms sets like the disputed
contract (App. Exh. Nos. 4-2 to 4-4, 4-11 to 4-14, and 4-16. Two
of the other three agreements are for a different type of form
product (Programs D471-S and 2270-S), and one of them is not
even a forms contract, but rather involves the manufacture of
letterheads and notepads (Program C10-S) (App. Exh. Nos. 4-1,
4-9, and 4-17 and 4-18). Furthermore, of the comparable forms
programs, Programs 223-M and C484-S state running rate charges
in terms of "per sets"-only Program 2069-S expressly provides a
running rate price on a "per part" basis.54 The Board has found
the identical "per copies" running rate language in just one of
the forms contracts cited by the Appellant-Program 2270-S-which
covers the production of sheet forms, not multiple-part carbon
interleaved forms as here (App. Exh. Nos. 4-17 and 4-18).
Furthermore, the Board cannot help noting that in the two cases
where the running rates are expressed in terms of "per parts" and
"per copies"-Programs 2069-S and 2270-S-the "per copy" and "per
part" number is much smaller (100); i.e., it is only 1/10 of the
"per copy" number in this case (1,000). Compare R4 File, Tab A,
at 11 with App. Exh. Nos. 4-16 to 4-18. See also Program C384-S
(R4 File, Tab P, at 12; App. Exh. Nos. 4-7 to 4-8). On the other
hand, where the running rate is given as "per sets" (or "per
forms" for that matter) the number is exactly the same as the
"per copy" number here. See Programs 223-M, D471-S, and C484-S
(App. Exh. Nos. 4-2 to 4-4, and 4-9 to 4-14). See also Programs
A349-M, 2562-S, and 2882-S (App. Exh. Nos. 4-5 to 4-6, and 4-19
to 21).
When the Board views all of the Appellant's exhibits, as a whole,
it sees no pattern or consistency of practice which would warrant
the conclusion that just because the Contractor may have been
paid on "per part" or "per leaf" basis under other GPO contracts
where the running rate was expressed in "per copy" terms, a
"prior course of dealings" was established which would foreclose
the Government from insisting that "per copies" in agreement
meant "per copies of complete sets." Simply stated, apart from
the fact the contracts (with one exception) concern the
production of forms, the Board finds that there is no correlation
between the various agreements which would support the
Appellant's theory; i.e., the pricing of the forms covered by the
contracts seem to reflect the work requirements involved in
producing it and the needs of the particular agency ordering it.
See Industrial Pump and Compressor, Inc., ASBCA No. 35104, 90-1
BCA ¶ 22,359. See also Wiggins Plumbing & Heating Co., Inc.,
VABCA No. 2937, 90-1 BCA ¶ 22,461 (there can be no waiver of a
contract requirement if the earlier contracts does not have a
similar provision). Furthermore, where, as here, the contract
for the production of multiple-part carbon interleaved forms
specifically defines the critical term "parts" for its purposes,
it will take something more convincing than the pricing history
of three comparable contracts, only one of which expresses a
running rate price on a "per part" basis, to construct a "prior
course of dealings" based on a strict application of the word
"copies." See Publishers Choice Book Manufacturing Co., supra,
slip op. at 11 (citing Doyle Shirt Manufacturing Corp. v. United
States, supra). See also, Cibinic & Nash, Administration, at
207. This is especially true where those three contracts
represent just 23 percent of the prior agreements presented to
the Board for review, and the few contracts which do express
running rates in terms of "per parts" or "per copies" figure
prices on the basis of a substantially smaller number than
contracts with running rates calculated "per set." See Kvaas
Construction Co., ASBCA No. 45965, 94-1 BCA ¶ 26,513 (no waiver
found even though Government had approved a deviation on four
prior contracts); General Secretarial Services Corp., GSBCA No.
11381, 92-2 BCA ¶ 24,897 (no waiver found although the Government
had approved a specification deviation on six prior contracts);
Western States Construction Co., ASBCA No. 37611, 92-1 BCA ¶
24,418 (no waiver by course of dealing on two prior contracts-one
with another contractor). See also, Cibinic & Nash,
Administration, at 206.
In the Board's opinion, after all of the Appellant's arguments
are considered, it is readily apparent that acceptance of the
Contractor's "trade usage" definition of the word "copies,"
solely for the purpose of calculating the running rate prices
under the "COMPLETE PRODUCT" specification, would result in the
negation of substantial portions of the contract, and be contrary
to the Board's duty to interpret the contract as a whole, and not
leave any portion of the contract "useless, inexplicable,
inoperative, void, insignificant, meaningless, superfluous. . .".
See The George Marr Co., supra, slip op. at 43-45; Professional
Printing of Kansas, Inc., supra, slip op. at 49-51; Webb Business
Forms, Inc., supra, slip op. at 19-20; General Business Forms,
Inc., supra, slip op. at 16. Accord Gould, Inc. v. United
States, supra, 935 F.2d at 1274; Fortec Constructors v. United
States, supra, 760 F.2d at 1292; Avedon Corp. v. United States,
supra, 15 Cl. Ct. at 776; Arizona v. United States, supra, 216
Ct. Cl. at 235-36, 575 F.2d at 863; Hol-Gar Manufacturing Corp.
v. United States, supra, 169 Ct. Cl. at 388, 351 F.2d at 975.
Indeed, for all practical purposes, such an interpretation would
"eviscerate" the entire contractual scheme. See Avedon Corp. v.
United States, supra, 15 Cl. Ct. at 778. Moreover, for the Board
to give the word "copies" its trade meaning in this context, it
would in effect be rewriting the agreement altogether, which it
does not have the authority to do. See The George Hyman
Construction Company v. United States, 832 F.2d at 580-81. Thus,
since it is well established that evidence of trade usage and
custom cannot be used to vary or contradict the terms of a
contract, for no other reason the Appellant's attempt to apply
the forms industry's meaning of the word "copy" in this case
cannot prevail over the express definition and use of the word
"part" in the disputed contract. Id. See also Avedon Corp. v.
United States, supra, 15 Cl. Ct. at 778; Astro-Space Labs., Inc.
v. United States, 470 F.2d 1003, 1009 n. 6 (Ct. Cl. 1972); WRB
Corp. v. United States, supra, 183 Ct. Cl. at 436; Chevron
U.S.A., Inc., supra, 90-1 BCA at 113,426. Accordingly, the Board
finds and concludes that the word "copies" in the phrase "per
1,000 copies" in the "COMPLETE PRODUCT" specification of the
"Schedule of Prices" section of the contract, clearly and
unambiguously refers to copies of complete sets of 2-part and 3-
part forms.
Finally, even if the Board was to find that the use of the phrase
"per 1,000 copies" in the "COMPLETE PRODUCT" specification was
confusing and ambiguous, it would also have to conclude that the
ambiguity was patent and not latent. In a way, but for the
Board's finding that the disputed contract language is clear and
unambiguous, this would be a classic patent ambiguity case
because by using the terms "sets" and "copies" in same
specification, the drafter presented the Appellant, with its
trade industry mind set, with two separate and contrasting
concepts. Indeed, the fact that the Contractor gave the word
"copies" its commonplace meaning in the "DEPARTMENTAL RANDOM
COPIES (BLUE LABEL)" specification, but imparted the trade
definition to "copies" in the "COMPLETE PRODUCT" specification,
is enough to show that despite the use of the same word, two
parts of the contract are saying very different things.55 See
Newsom v. United States, supra. Clearly, what happened here was
an inadvertent error in drafting which should have been obvious
to the Contractor when it prepared its bid. In fact, the record
indicates that Edward's, who prepared the bid, noticed the change
in the pricing formula from the prior year's of "per 1,000 sets"
to "per 1,000 copies" in the IFB, but saw no reason to ask for a
clarification because his extensive experience in the forms
industry and his personal knowledge of the printing specialist
who drafted the IFB, Bell, made the change as "clear as a bell;"
i.e., the trade definitions of "sets" and "copies" were to apply
(Tr. II: 110-12, 115). However, in light of the fact that the
contract also specifically defined the word "parts," and used it
consistently throughout, it seems to the Board that a reasonable
contractor would have sought a clarification from the Contracting
Officer about whether "copies" was synonymous with "parts" for
pricing purposes, and not just assume it was so.
As the Board sees it, this situation is precisely the sort of
"obvious error in drafting," "gross discrepancy" or "glaring gap"
which the courts and contract appeals boards had in mind when
they created an affirmative duty on the part of a contractor to
ask the contracting officer to clarify the true meaning of the
ambiguous contract language before submitting its bid. See Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl. Ct. at 504 (citing Max Drill, Inc. v.
United States, supra, 192 Ct. Cl. at 626; Newsom v. United
States, supra, 230 Ct. Cl. at 303); The George Marr Co., supra,
slip op. at 42-43, fn. 34; Professional Printing of Kansas, Inc.,
supra, slip op. at 48-49, fn. 65; Webb Business Forms, Inc.,
supra, slip op. at 19; General Business Forms, Inc., supra, slip
op. at 17. Accord Enrico Roman, Inc. v. United States, supra, 2
Cl. Ct. at 106; WPC Enterprises, Inc. v. United States, supra,
163 Ct. Cl. at 6. In other circumstances, the Appellant's
failure to ask the Contracting Officer to clarify the meaning of
"copies" in the pricing scheme of the disputed contract would
have forfeited its right to recover under the doctrine of contra
proferentem. See MWK International, Ltd. v. United States, 2 Cl.
Ct. 206 (1983); S.O.G. of Arkansas v. United States, supra, 212
Ct. Cl. at 131. However, in light of the "review and confirm"
discussion between Contracting Officer Weiss and the Appellant's
President, McCall, on October 5, 1994, concerning the
Contractor's bid, if this was a true ambiguous language case the
patent ambiguity issue would be moot (Tr. II: 5, 81-82, 84-86,
89, 94, 226; R4 Files, Tab E and R, at 12, 16). Cf. Shepard
Printing, GPO BCA 23-92 (April 29, 1993), slip op. at 13-14, 1993
WL 526848 (although a "cure notice" is not required where a
contract is to be terminated because of the contractor's failure
to timely deliver or perform, the contracting officer gave the
contractor a chance to cure the defects anyway). Also cf. Web
Business Forms, Inc., GPO BCA 31-89 (July 22, 1994), slip op. at
15, 1994 WL 488523 (where the contract's "GOVERNMENT FURNISHED
PROPERTY (GFP)" clause imposes a duty to inquire if there is a
discrepancy between the contract specifications and the GFP, the
Government cannot be held responsible for a contractor's failure
to ask the right questions or otherwise make a complete inquiry.
Citing Printing Unlimited, GPO BCA 21-90 (November 30, 1993),
slip op. at 14, 1993 WL 516844; Custom Printing Co., GPO BCA
10-87 (May 10, 1988), slip op. at 13, 1988 WL 363328).
Accordingly, for all of these reasons, the Board finds and
concludes that the disputed contract language clearly and
unambiguously states that the Appellant is only allowed running
rate charges based on "per 1,000 copies" of complete sets.
Consequently, the Contractor's contrary interpretation based on
the forms industry meaning of the word "copy" is not reasonable
Furthermore, while the contract is not ambiguous, if an ambiguity
existed concerning the running rate language in the "Schedule of
Prices" section's "COMPLETE PRODUCT" specification, it is patent,
not latent. Thus, the Appellant's failure to seek a
clarification from the Contracting Officer before submitting its
bid would bar its claim. Therefore, insofar as the Contractor's
claim in this dispute is based on an interpretation of the terms
of the contract, it is DENIED.
B. Although the express language of the contract is not
ambiguous, the facts disclose that the parties, prior to award,
failed to reach a "meeting of the minds" about a significant
contract term, namely running rate pricing. Consequently, a true
express contract was never formed. However, under the theory of
implied-in-fact contracts, the Appellant is entitled to any
additional compensation, as it were, under the equitable
principle of quantum meruit.
If this appeal was a typical contract interpretation case, the
matter would end with the Board's decision that the Respondent's
commonplace reading of the disputed contract language was
correct, and the Appellant's contrary technical version was
without merit. However, during the processing of this case, it
became readily apparent to the Board that a more fundamental
issue is involved in this dispute; namely, whether or not the
parties had formed an express agreement in the first place. That
question concerns not contract interpretation, but rather
contract construction, a very different animal, indeed. The
distinction between the two concepts was explained, in pertinent
part, by Professor Corbin in his classic treatise on Contract
Law:
. . . [T]he word interpretation is commonly used with respect to
language itself-to the symbols (the words and acts) of
expression. In about the same degree, we speak of the
construction of a contract. . . . By "interpretation of language"
we determine what ideas that language induces in other persons.
By "construction of the contract," as that term is used here, we
determine its legal operation-its effect upon the action of
courts and administrative officials. [footnote omitted.] If we
make this distinction, then the construction of a contract starts
with the interpretation of its language but does not end with it;
while the process of interpretation stops wholly short of a
determination of the legal relations of the parties. [footnote
omitted.] When a court gives a construction to the contract as
that is affected by events subsequent to its making and not
foreseen by the parties, it is departing very far from mere
interpretation of their symbols of expression, although even then
it may claim somewhat erroneously to be giving effect to the
"intention" of the parties.
See 3 CORBIN ON CONTRACTS § 534 (1960), at 8-9. [Original
emphasis.] See also Western States Construction Co., ASBCA No.
16003, 72-2 BCA ¶ 9508 (1972), at 44,302 ("In this case we need
to draw a distinction between contract interpretation and
contract construction. . . . Interpretation is determining the
meaning of symbols of expression, that is, ascertaining the
meaning manifested by the contract; contract construction is
determining the legal operative effect of the contract. Citing 3
CORBIN ON CONTRACTS § 534 (1960)).
The problem has its roots in Contracting Officer's Weiss' "review
and confirm" discussion with McCall, the Appellant's President,
on October 5, 1994, and is well illustrated by the excerpts from
the hearing transcript set forth in paragraphs 8 and 9 in the
"Background" section of this opinion. A look at the testimony of
both Weiss and McCall shows that they have very different
recollections of their telephone conversation. While Weiss gave
a clear account of the discussion, McCall barely had any memory
of the conversation at all (Tr. II: 5, 81-82, 84-86, 89, 94, 100;
R4 File, Tab R, at 16). Specifically, Weiss testified that he
went over the contract's pricing and billing scheme with McCall
in detail, going so far as to give an example on how the
Appellant would be paid for a 2-part set, and said that McCall
indicated he understood Weiss' explanation. Although flatly
denying telling McCall that form sets could be billed at the
"copy rate," Weiss also said that the matter of the Appellant's
contrary interpretation "was never brought up at that time," so
he was unaware that the Contractor had bid the running rate
intending the word "copies" to mean "per part," or "per leaf,"
and not the "whole set," Weiss' reading of the term (Tr. II: 82;
R4 File, Tab R, at 16-18). Consequently, when he was finished
Weiss assumed that McCall understood that the running rate
charges were to be billed on a "per set" basis, and not "per
part;" indeed, he stated that it "never entered into my mind that
there was another way of billing the contract[.]" (Tr. II:
90-91.).
McCall's version, on the other hand, could not be more different
from Weiss'. He recalled the telephone discussion as rather
standard, very brief and without much detail (See Tr. II:
104-05).56 Although he remembered that they discussed the matter
of contract pricing, and that he confirmed his bid, McCall
insisted that he never understood Weiss to say that for the
purpose of billing running rate charges the word "copies" would
mean the same as "sets" (Tr. II: 100). Indeed, he remarked that
if that was Weiss' meaning then the Appellant would have
withdrawn its bid and not accepted the contract. (Tr. II: 100).
While McCall's faulty memory might be important if credibility
were at issue in this case, the simple fact is that it is not.
From its own observation of their testimony, the Board has no
doubt whatsoever that Weiss may have said that by "copies" the
disputed contract language meant "copies of complete sets," but
that McCall, firmly fixed on the trade concept of "copies" as
"parts," "plies,' or "leaves," did not comprehend Weiss'
explanation, and seemed to hear the Contracting Officer's words
as "copies in complete sets." Because Weiss, probably believing
that the meaning of "copies" was as obvious to the Appellant was
it was to him, never thought to ask McCall how he read the phrase
"per 1,000 copies," and find out if they understood the critical
words the same way, assuming rather that they did, the problem
was exacerbated. In summary, it is clear that the parties in
this instance were talking past one another. Perhaps the warden
in the movie "Cool Hand Luke" described it best, "What we have
here is a failure to communicate."
If the Appellant had entered the agreement knowing or with a
reason to know that the Respondent had a different interpretation
of the disputed contract language than it did, and did not
disclose that fact at the time of the bargain, then the
Contractor would be bound by the Government's interpretation, and
a valid contract would have come into effect. See Optic-
Electronic Corp., ASBCA No. 24962, 83-2 BCA ¶ 16,677; Tera
Advanced Services Corp., GSBCA No. 6713-NRC, 83-1 BCA ¶ 16,300;
RESTATEMENT (SECOND) OF CONTRACTS § 201 (1981).57 Stated
otherwise, the operative principle is that:
"In ascertaining a party's meaning, paramount importance is
placed on the intention actually manifested by that party, by
words or conduct, rather than on any different undisclosed
intention. Therefore, although the expectation and understanding
of one party must be taken into account, the other party is not
bound by the first party's meaning unless he has reason to known
of it. RESTATEMENT (SECOND) OF CONTRACTS § 200 comment b; see
Firestone Tire & Rubber Co. v. United States [16 CCF ¶ 80,450],
195 Ct. Cl. 21, 444 F.2d 547 (1971)."
See General Electric Co., ASBCA No. 24913, 83-1 BCA ¶ 16,130, at
80,110.58 See also Perry and Wallis, Inc. v. United States,
supra; Broyles v. Broyles, Inc., GSBCA No. 5694, 81-1 BCA ¶
14,969; Globe Construction Co., ASBCA No. 21365, 78-2 BCA ¶
13,486.
However, where as here, neither the Appellant nor the Respondent
knew or had reason to know that the other party had a different
interpretation of the terms, then the traditional judicial
response is to say there was "no meeting of the minds." See
Chicago Litho Plate Graining Co., Ltd. v. Allstate Can Co., 838
F.2d 928, 930 (7th Cir. 1988) (where two parties disagree over a
major contract term such as price, there is no agreement or
"meeting of the minds," and agreement is not a valid contract.
Citing United Paperworkers International Union v. Wells Badger
Industries, 835 F.2d 701, 704 (7th Cir. 1987)); Oswald v. Allen,
417 F.2d 43, 45 (2d Cir. 1969) (where a prospective buyer
believed that he had offered to purchase all Swiss coins owned by
a coin collector while the owner reasonably understood the offer
which she accepted related to those of her Swiss coins as had
been segregated in particular collection denominated by her as
the "Swiss Coin Collection", no contract for sale of coins came
into existence). The rule is well-stated by Professor Corbin:
When two parties have reduced their agreement to writing, using
the words that each of them consciously intends to use, it is
often no sufficient ground for declaring that the agreement is
void or subject to cancellation by the court that the parties
subsequently gave different meanings to the agreed language, or
even that they gave different meanings thereto at the time that
the agreement was expressed. If the meaning that either one of
them gave to the words was the only reasonably one under the
existing circumstances, as the other party has reason to know,
the latter is bound by that meaning and there is a contract
accordingly. [footnote omitted.] If one of the parties gave a
meaning to the language that is not the only reasonable one under
the circumstances, and the other expressed assent knowing that
the first party was giving it this meaning, that is the meaning
that the court should adopt, and there is a contract accordingly.
But if the parties had materially different meanings, and neither
one knew or had reason to know the meaning of the other, there is
no contract. [footnote omitted.]59
See 1 CORBIN ON CONTRACTS § 4.10 (1993), at 617-18. [Emphasis
added.] Expanding on the principle, Professor Corbin also said,
in pertinent part:
It takes two to make a "bargain," although there are some
"unilateral" contracts that can be made without any expression of
assent by the promisee. [footnote omitted.] The great majority of
contracts are bargaining contracts, the purpose of which is to
effect an exchange of promises or of performances. To attain
this purpose, there must be mutual expressions of assent to the
exchange. These expressions must be in agreement, but it is not
necessary that they shall consist of identical words or identical
acts. Their words and acts are called "expressions" because they
are external symbols of the thoughts and intentions of one party,
symbols that convey these thoughts and intentions to the mind of
the other party. The symbols so used by one party may be ill-
chosen, or the experience and intelligence of the other party may
be so variant from that of the first that the understanding of
the second is materially different from that of the first. When
this is the case, it cannot be said that there has been a
"meeting of the minds" or that the parties are in "agreement," in
the sense in which those terms are usually understood. [footnote
omitted.]
. . . [A] "meeting of the minds" is not an unvarying prerequisite
to an enforceable contract. But if it is made clear that there
has in fact been no such "meeting of the minds," the court will
not hold a party bound by a contract varying from the party's own
understanding unless this party's own words and conduct were in a
context giving the party reason to know that the other party
would be and was in fact misled. . . .
There is no actual "meeting of the minds," even though the terms
of the bargain are reduced to writing and signed by both parties,
if one of them did not in fact read or understand the written
terms. . . .
See 1 CORBIN ON CONTRACTS § 4.13 (1993), at 634-36.
As can be seen, to say that the parties must reach a "meeting of
the minds" for a contract to be formed simply means that they
each gave their mutual assent to the terms of the agreement;
i.e., both parties agreed to the same thing at the same time.
Clearly, given the disagreement between the Appellant and the
Respondent over the pricing scheme for the Program D201-S
contract, a major contract term, the conclusion is warranted that
no such "meeting of the minds" occurred in this case. As a
consequence, express contract they entered, which is the basis of
this dispute, is invalid. See Chicago Litho Plate Graining Co.,
Ltd. v. Allstate Can Co., supra, 838 F.2d at 930.
On the other hand, as indicated by Professor Corbin, even though
there was no "meeting of the minds" here, that does not mean,
ipso facto, that the Appellant and the Respondent have no
contract whatsoever. As the Court of Claims said in WPC
Enterprises:
. . . The inconclusive discussions between the parties show, it
may be said, that there was no "meeting of the minds" on the
issue which concerns us, and therefore no valid contract. There
was no subjective coming together, it is true, but an enforceable
contract came into being nevertheless. The design of the
contract can be picked from the terms and words of the
invitation, objectively read with the aid of rules of contract
construction (which are distillates of the common experience and
the common sense of justice). It is a normal characteristic of
the class of cases in which the courts have held ambiguities
against the drafter that the parties' minds have failed to meet
on the specific point in dispute. That gap has not been
permitted to swallow the whole contract except where the gulf is
far closer to the bounds of the entire consensual perimeter than
here. For a contract to exist there does not have to be, and
rarely is, a subjective "meeting of the minds" all along the
line. [Citation omitted.]
See WPC Enterprises, Inc. v. United States, supra, 163 Ct. Cl. at
11, 323 F.2d at 879. See also 1 CORBIN ON CONTRACTS § 410
(1993), at 622 (". . . [T]here may be a valid contract even
though there is no actual "meeting of the minds", but for such a
result there must agreement in expression, interpreted in
accordance with the understanding of one of the parties, an
understanding that the other party had reason to know.").
In this case, the Appellant has fully performed the terms of the
contract, the Government has received the ordered forms, and the
only "blank" which needs to be filled-in is the purchase price.
In such circumstances, the courts would usually invoke the
doctrine of "quasi contract."60 See 1 CORBIN ON CONTRACTS § 4.10
(1993), at 620-21, fn. 11 (citing Anderco, Inc. v. Buildex
Design, Inc, 538 F.Supp. 1139 (D.D.C. 1982)). However, as the
Board recently explained:
. . . [I]t is settled that the jurisdiction of agency boards of
contract appeals over implied contracts is limited, and does not
extend to so-called "quasi contracts." See Embarcadero Center,
Ltd., GSBCA No. 8526, 89-1 BCA ¶ 21,362, at 107,681 ("The Board
lacks jurisdiction over contracts that are implied in law; i.e.,
that are implied as a matter of equity to avoid injustice.").
Boards do have jurisdiction over implied-in-fact contracts
because they have the same elements as an express contract
(offer, acceptance and consideration), and the parties must
engage in a pattern of conduct that establishes a mutual intent
to enter into a binding agreement or shows a tacit understanding
that such an agreement exists. Id. (citing, Hatzlachh Supply Co.
v. United States, 444 U.S. 460, 465, fn. 5 (1980); Fincke v.
United States, 675 F.2d 289, 295 (Ct. Cl. 1987); Tree Farm Corp.
v. United States, 585 F.2d 493, 500 (Ct. Cl. 1978); Russell Corp.
v. United States, 537 F.2d 474, 481-82 (Ct. Cl. 1976), cert.
denied, 429 U.S. 1073 (1977); Parking Co. of America, Inc., GSBCA
No. 7654, 87-2 BCA ¶ 19,823, at 100,925). . . . [T]he Board . . .
[will] review [such a] matter under quantum meruit principles. .
. .
See B & B Reproductions, GPO BCA 09-89 (June 30, 1995), slip op.
at 13-14, fn. 16, 1995 WL 488447. [Emphasis added.] Implied-in-
fact contracts have been found to exist when the Government and
the contractor have unsuccessfully attempted to form an express
contract. See John Cibinic, Jr. and Ralph C. Nash, Jr.,
Formation of Government Contracts, at 183 (The George Washington
University, 1986) (citing Hughes Transportation, Inc. v. United
States, 128 Ct. Cl. 221, 121 F.Supp. 212 (1954)) (hereinafter
Cibinic & Nash, Formation). Similarly, when the Government and a
contractor enter into an incomplete agreement, but have
nonetheless exhibited contractual intent, an implied-in-fact
contract will be found to exist. See Cibinic & Nash, Formation,
at 183-84 (citing Western States Construction Co., supra).
Indeed, in Western States Construction Co., the Armed Services
Board of Contract Appeals, confronted with a situation where,
like here, the parties could not agree on a contract price,
reasoned:
In this case there was no manifestation of mutual assent or
"meeting of the minds" as to the contract price. Appellant took
the firm position that the legal contract price was $1,208,300,
and the Government knew it. The Government took the equally firm
position that the correct legal contract price was $1,098,300,
and appellant knew it. Each party clearly manifested to the
other party its position as to the correct contract price, and
each party manifested to the other party its disagreement with
the other party's position as to the contract price. It does not
follow, however, that the failure of the parties to arrive at a
meeting of the minds on the contract price resulted in there
being no contract. An agreed on contract price is not essential
to the existence of a contract when there is agreement on all the
other terms of contract and a manifestation of intent to make a
contract, such as we have here.
Accord Western States Construction Co., supra, 72-2 BCA at
44,302.
The Board has been over this ground before. As previously
mentioned, it was presented with a factually similar case in
Publishers Choice Book Manufacturing Co., supra. That appeal
involved two consecutive year's GPO multiple-award "requirements"
contracts for the printing of Agriculture's "Soil Survey Maps"
(Program B365-M)-from August 1, 1983 to July 31, 1984, and from
August 1, 1984 to July 31, 1985. Among other things, the
"Schedule of Prices" section contained two line items captioned
"Single Map Sheet Trim Size," and "Sheets Printed on Two Sides,"
respectively. The contractor submitted the second lowest offer
on the first contract, and following a pre-award survey and a
"review and confirm" discussion with the contracting officer, it
was one of the three contractors chosen for award. Thereafter,
the contractor received print orders in its turn, completed the
work, submitted its bills to GPO, and was paid in full in
accordance with its bid prices. The contractor also submitted a
bid for the second year's contract, and again after it "reviewed
and confirmed" its prices with the contracting officer, as the
lowest bidder (by $268,512.15) it was one of the two contractors
selected. Two months into the second contract, after the
contractor had fulfilled six (6) print orders and been paid,
GPO's FMS notified the contracting administrator that they had
been examining a batch of the contractor's previously submitted
vouchers and had discovered what appeared to be a billing error.
Specifically, the FMS told him that it seemed the contractor "had
billed double the amount they believed [the contractor] to be
entitled to bill for map sheets printed two sides to a sheet
under the Schedule of Prices provisions of the contract." See
Publishers Choice Book Manufacturing Co., supra, slip op. at 6.
The contracting administrator immediately called the contractor
to ask why he was billing twice for maps printed on a single
sheet. In response, the contractor said that "in bidding and
billing it had interpreted the words 'map sheet' on the Schedule
of Prices language to be virtually synonymous with the word 'map'
and therefore based its bid on a per map basis, and thus was
entitled to bill map sheets printed on two sides on a per map
basis." Id. Following this conversation, the contract
administrator discussed the matter with the contracting officer,
who determined that the contractor's interpretation of the
contract provision in question was incorrect. A meeting between
the contractor and the contracting officer failed to reconcile
their differences over the disputed contract language.
Accordingly, the contracting officer issued a final decision
which: (1) rejected the contractor's interpretation of the
descriptive words "single map sheet;" (2) explained GPO's reading
of the disputed language, namely that it only described the trim
size which allowed for variations in the product price for
differing sizes of single sheets ; (3) noted that "the language
under the 'Schedule of Prices' pertains to completed products;"
and (4) informed the contractor that "adjustments must be made to
incorrectly paid invoices and future invoices if found
incorrect." Id., at 7. [Emphasis added.]
On appeal, the contractor advanced three arguments: (1) based on
its experience with a companion program (Program 198), it had
reasonably interpreted the disputed contract language and was
entitled to the benefit of the principles of contra proferentem;
(2) in the alternative, it was entitled to reasonable
compensation under the theory of quantum meruit if the Board
found that no contract had been formed because there was no
"meeting of the minds;" and (3) GPO should be barred by doctrine
of equitable estoppel from recouping the alleged overpayments
because it was on notice of contractor's interpretation when the
first vouchers were submitted, and its failure to raise the
matter earlier resulted in the contractor's detrimental reliance
on the Government's silence. Id., at 7-8. From the record,
including the hearing testimony, the Board found that the
contractor, in good faith, had relied on its working knowledge of
Program 198 to interpret "map sheet" as synonymous with "map,"
developed its bid on that basis, believed its offer to be correct
and confirmed it, and thus clearly demonstrated that its bid was
intentional and not a mistake. Id., at 9-11. However, when the
Board applied the usual rules of contract interpretation,
including "prior course of dealings" principles, and gave the
disputed term in the two agreements at issue its plain and
ordinary meaning, it concluded that the contract language was not
ambiguous. Id., at 11-13 (citing Opalack v. United States, 5 Cl.
Ct. 349, 359 (1984); Fry Communications, Inc./InfoConversion
Joint Venture, GPO BCA 9-85 (July 29, 1986), 1986 WL 181456,
rev'd, Fry Communications, Inc./InfoConversion Joint Venture v.
United States, supra, 22 Cl. Ct. at 511, on remand Fry
Communications, Inc./InfoConversion Joint Venture, GPO BCA 9-85
(August 5, 1991); John D. Calamari and Joseph M. Perillo, The Law
of Contracts, § 310 (1977), at 118). The Board reasoned that:
The term "sheets" clearly represents the concept of a piece of
paper or a "sheet" having both a "face" and a "back," either or
both of which may be printed upon. The vertical references to
"sheets" clearly and precisely convey the same thought.
Moreover, this concept of "sheet" is conveyed throughout the
contract document. The fact that the word "sheet" is coupled
with the word "map" in the horizontal captions does not transform
the concept of a "2-sided" piece of paper into a "map," a concept
generally conveying the thought of a one-sided, flat
representation of a geographic area. As such, the Board rules
that the language is susceptible to being given only one
reasonable meaning; that being the interpretation given the
language by Respondent.
See Publishers Choice Book Manufacturing Co., supra, slip op. at
12-13. [Emphasis added.]
With the ambiguity issue disposed of in favor of GPO, the Board
then addressed the issue of whether or not the parties had
entered an express contract. As it viewed the evidence, the
Board concluded that, in fact, the parties had failed to reach a
"meeting of the minds," and hence there was no contract. See
Publishers Choice Book Manufacturing Co., supra, slip op. at 13.
In that regard, the Board's explained:
Having accepted the truthfulness of Appellant's claim as to its
construction for the Schedule of Prices language and having found
the meaning of such language to be unambiguous and as contended
by Respondent, the Board necessarily finds that there was no
contract since there was no mutuality of assent to the quantum of
consideration. This being the case, the Board further rules that
the Appellant is entitled to be compensated for its work on the
basis of quantum meruit, since to do otherwise would result in
unjust enrichment to the Government.
Id. Accordingly, in light of its holding, the Board remanded the
matter to the parties with instructions to negotiate a settlement
under guidelines which it set forth for them in its decision.
Specifically, the Board directed payment to the contractor for
its reasonable costs, including a reasonable for work actually
performed, subject to an audit by GPO's Office of Inspector
General, and established the parameters of recovery at "not be
less than the next lower bid price or contract then in being, nor
more than the next higher bid price, as applicable."61 Id.
In the Board's view, its Publishers Choice Book Manufacturing Co.
holding is dispositive of this case. First, the Board has found
that like the contractor in that case, the Appellant, in good
faith, based on its experience with other GPO forms contracts,
honestly but erroneously gave the disputed word "copies" its
"trade usage" meaning of "per part" or "per ply" when it
prepared its bid for the IFB. Second, the Board concludes that
the Appellant, like the contractor in Publishers Choice Book
Manufacturing Co., believed its offer to be correct at the time
it was submitted, and by confirming the bid clearly showed it was
intentional and not a mistake. Third, here as there, the Board
has found that the contract under review is not ambiguous, and
that the Respondent's interpretation is the only reasonable
meaning of the disputed language in the "Schedule of Prices"
section. Fourth, in this case, as in Publishers Choice Book
Manufacturing Co., the Board has concluded that the parties
failed to reach a "meeting of the minds" about a significant
contract term, namely running rate pricing. Accordingly, since a
valid express contract was never formed, the Appellant is
entitled to quantum meruit compensation under the theory of
implied-in-fact contracts. Accordingly, the appeal will be
remanded to the parties for the purpose of negotiating a
settlement of the dispute with instructions to apply the
guidelines in Publishers Choice Manufacturing Co. guidelines, if
applicable.
ORDER
The Board finds and concludes that: (a) contrary to the
Appellant's belief, the "COMPLETE PRODUCT" specification in the
"Schedule of Prices" section of the contract is not ambiguous and
clearly contemplates running rate charges on a "per set" basis,
not "per part" or "per ply;" and (b) even if the contract is
ambiguous with respect to the basis for running rate charges, the
ambiguity is patent, not latent, thus barring the Contractor's
claim because it failed to seek a clarification from the
Contracting Officer before submitting its bid. THEREFORE, since
the Contracting Officer correctly interpreted the disputed
language in the contract, his final decision of March 20, 1995,
is AFFIRMED, and the appeal is DENIED to that extent.
FURTHERMORE, the Board also finds and concludes that although the
contract is not ambiguous, the parties, prior to award, failed to
reach a "meeting of the minds" about a significant contract term,
namely running rate pricing, and therefore, a true express
contract was never formed. ACCORDINGLY, the matter is REMANDED
to the parties for the purpose of negotiating a settlement for
quantum meruit relief consistent with this opinion.
It is so Ordered.
August 16, 1996 STUART M. FOSS
Administrative Judge
_______________
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 May 5, 1994. GPO Instruction 110.12,
Subject: Board of Contract Appeals Rules of Practice and
Procedure, dated September 17, 1984, Rule 4(a) (Board Rules). It
will be referred to hereafter as the R4 File, with an appropriate
tab letter also indicated. As originally submitted to the Board,
the R4 File contained twelve (12) documents, identified as Tabs
A-L. Subsequently, at the prehearing conference in this appeal
on August 29, 1995, four (4) more documents-a copy of the
Invitation for Bid (IFB) for Program D201-S, dated September 10,
1993; a complete set of print orders, including the Appellant's
work estimates and other backup material, for the fiscal year
1995 Program D201-S contract awarded to the Contractor; a blank
bid form (GPO Form 910), and a copy of the page containing the
"Bidder's Name and Signature" block from the disputed contract;
and a copy of the specifications for Program 384-S and Purchase
Order 98396, dated November 30, 1994, awarding that contract to
the Appellant- were added to the R4 File, and labeled Tabs M-P,
respectively. During the hearing on December 5, 1995, two
additional documents-the bid abstract for the 1996 Program D201-S
contract, and the deposition of the Mr. Richard Weiss, the first
Contracting Officer for the contract in dispute-were made part of
the R4 File, as Tabs Q and R, respectively.
2 The court reporter's transcript for December 4, 1995, shall
be referred to hereinafter as "Tr. I," followed by a colon
and an appropriate page number thereafter. The transcript for
December 5, 1995, shall be referred to hereinafter as "Tr.
II," followed by a colon and an appropriate page number
thereafter. The Appellant's brief, which was submitted to
the Board on February 29, 1996, will be referred to
hereinafter as "App. Brf.," with an appropriate page citation
thereafter. The Respondent's reply brief was filed with the
Board on April 10, 1996, and will be cited as "Res. R. Brf."
with an appropriate page number thereafter. Furthermore, at
the hearing both the Contractor and the Government introduced
additional documentary evidence, which shall be referred to
hereinafter as "App. Exh. No.," and "Gov. Exh. No.,"
respectively, with an appropriate number thereafter.
3 On December 1, 1995, prior to the hearing in this matter, the
Respondent filed a motion in limine with the Board seeking to
prevent the Appellant from introducing any evidence relative to
the Government's modification of its multi-part forms
specifications, on the ground that such matters are excluded by
Rule 407 of the Federal Rules of Evidence as "subsequent remedial
measures." See Motion in Limine, dated December 1, 1995, at 2
(citing Noble v. McClatchy Newspapers, 533 F.2d 1081 (9th Cir.
1975); Boeing Airplane v. Brown, 291 F.2d 310 (9th Cir. 1961);
FED. R. EVID. 407). At the hearing, it was evident that the
motion, which was marked as "Government Motion No. 1" (Tr. I:
10), was directed at App. Exh. No. 9, which concerned changes in
the language of Program C369-S, a different multi-part forms
contract than the one at issue (Tr. I: 10-11, 217-18). The
thrust of the Respondent's argument was that to the extent that
App. Exh. No. 9 was meant to prove the Government's "negligence
or culpability" with respect to Program D201-S, it was
inadmissible under Rule 407, which has as its primarily objective
the protection of a party's right to make changes without fear
that its litigation position will be adversely affected (Tr. I:
15). See Motion in Limine, at 1-2. The Appellant, on the other
hand, argued that GPO's reliance on Rule 407 was misplaced in
this case because its principal use is in negligence cases, not
disputes involving the interpretation of contract language, as
here (Tr. I: 12-13). Moreover, the Contractor claimed that App.
Exh. No. 9 had one purpose only, namely, "to show that the
Government interprets the word 'copies' to be different from the
word 'sets,'" and its "implication is that a reasonable
individual would not make a substantial change in wording on a
contract if that wording-if the two words had identical
meaning[.]" (Tr. I: 13-14). Before the close of the hearing on
December 4, 1995, when the evidence showed conclusively that
Program C369-S was not the "follow on" contract to the one in
dispute, and was not otherwise in the chain of Program D201-S
contracts, the Board granted the Respondent's motion in limine,
and rejected App. Exh. No. 9 (Tr. I: 238-41). The Board's ruling
rested primarily on two grounds. First, it shared GPO's doubts
about the relevancy of Program C369-S' contract language in the
context of this case (Tr. I: 238). See Professional Printing of
Kansas, Inc., GPO BCA 02-93 (May 19, 1995), slip op. at 23-24,
fn. 38, 1995 WL 488488 (copies of samples printed by another
contractor, and copies of forms subsequently printed by the
appellant and approved in a press-sheet inspection were
irrelevant to a dispute involving rejected forms); Universal
Printing Co., GPO BCA 9-90 (June 22, 1994), slip op. at 26, fn.
27, 1994 WL 377586 (price quotation from a company which did no
work for contractor was inadmissible); RD Printing Associates,
Inc., GPO BCA 2-92 (December 16, 1992), slip. op. at 10, 13, fns.
11, 15, 1992 WL 516088 (memorandum from customer-agency employee
supporting contractor's interpretation of the contract, and the
revised pricing specification from the succeeding contract were
inadmissible). Cf. Sterling Printing, Inc., GPO BCA 20-89 (March
28, 1994), slip op. at 8, 35, fns. 13, 47 (report on quality of
paper from contractor's paper supplier was admissible). Accord
Tecom, Inc., ASBCA Nos. 44122, 44123, 44516, 44959, 45158, 45555,
45800, 94-1 ¶ 26,483; Fireman's Fund Insurance Co., ASBCA No.
39666, 91-1 BCA ¶ 23,372 (citing, Delco Electronics Corp. v.
United States, 17 Cl. Ct. 302 (1989)); Atlantic Electric Co.,
GSBCA No. 6016, 83-1 BCA ¶ 16,484; Hildebrand and Day, AGBCA No.
82-183-1, 82-188-1, 83-1 BCA ¶ 16,321. Second, and perhaps more
importantly, as the Board explained during the hearing,
regardless of any relevancy considerations, its narrow
jurisdictional mandate prevents it from considering matters
outside the scope of the disputed contract (Tr. I: 16-17, 239).
See Asa L. Shipman's Sons, Ltd., GPO BCA 06-95 (August 29, 1995),
slip op. at 14, fn. 19, 1995 WL 818784, reconsid. denied,
February 13, 1996; Universal Printing Co., supra, slip op. at 26,
fn. 27; Shepard Printing, GPO BCA 23-92 (April 29, 1993), slip
op. at 7, fn. 11, 1993 WL 526848; B. P. Printing and Office
Supplies, GPO BCA 14-91 (August 10, 1992), slip. op. at 14-15,
1992 WL 382917. See generally Matthew S. Foss, U.S. Government
Printing Office Board of Contract Appeals: The First Decade, 24
PUB. CONT. L. J. 579, 585-86 (A.B.A. 1995). A narrow exception
to this jurisdictional prohibition, as indicated above, is that
the Board may look at other related contracts, e.g., Program
D201-S contracts, in order to the see how certain contract
language was interpreted in the past (Tr. I: 17, 239). See R4
File, Tabs A, M and Q, and Gov. Exh. No. 3. See also, e.g.,
Professional Printing of Kansas, Inc., supra, slip op. at 2, fn.
4 (exhibits relating to a previous printing of the security
prescription forms at issue in the case by another contractor).
4 It should be noted that a number of exhibits duplicate one
another; e.g., both R4 File, Tab Q and App. Exh. No. 8 are
copies of the same bid abstract for the 1996 Program D201-S
contract (Tr. II: 60). Similarly, while R4 File, Tab P is a
copy of the complete specifications for Program C384-S, dated
November 1995, App. Exh. Nos. 4-7 and 4-8 are pages 12 and 13
of the same IFB. Indeed, some of the Appellant's own
exhibits duplicate each other; e.g., App Exh. No. 1-2 is
identical to App. Exh. No. 14.
5 App. Exh. No. 14 is an excerpt from The Business Forms
Handbook: An Illustrated Guide to Business Forms and Business
Systems (National Business Forms Association, 4th ed.)
(hereinafter Forms Handbook), relating to the subject of "unit
sets." Ms. Twyla S. Edwards, one of the Appellant's Vice
Presidents, testified that the Forms Handbook is a standard
reference resource in the trade and basically establishes
guidelines for the business forms industry (Tr. I: 33).
Technically, a "unit set," as defined in the Forms Handbook is "a
multiple-part carbon-interleaved or carbonless form whose parts
are fastened in a common glued stub that provides for easy
separation of all parts (paper and carbon, if applicable)[.]"
(Tr. I: 34; App Exh. Nos. 1-2 and 14, at 121). The Forms
Handbook also tells us that "[t]he government product class code
for unit sets is SIC-27612[.]," and that "[f]or statistical
purposes, the government defines a unit set as a 'loose or bound
carbonless, carbonized, or carbon-interleaved form with an
original and one or more copies, with or without stubs, but not
in a continuous form[.]" (Tr. I: 35-36; App. Exh. Nos. 1-2 and
14, at 121). In addition to the Forms Handbook, the Appellant
also introduced relevant portions of the Business Forms Glossary
of Design and Production Terms (National Business Forms
Association & [International Business Forms Industries], 3rd ed.)
(hereinafter Forms Glossary), which was identified by its
witnesses as the standard dictionary of terms used in the
business forms industry (Tr. I: 28, 183-85, 196, 203, 208, 229;
App. Exh. No. 13). The Forms Glossary defines a "unit set" as "a
form set, normally non-continuous, that is carbon interleaved or
carbonless, with glued stub construction designed for rapid
removal of carbon and form separation in one operation[.]" (Tr.
I: 31-32; App. Exh. No. 13, at 88). However, the record also
indicates that within the business forms industry a "unit set" is
simply called a "form" or a "set," which refers to a single
document (Tr. 32, 183-85, 196, 203, 209, 229).
6 By comparison, the Forms Glossary defines a "part" as "one
ply or copy within a unit set or continuous form[.]" (Tr. I:
30; App. Exh. Nos. 2-3 and 13, at 62). Similarly, a
secondary definition of the word "copy" in the Forms Glossary
is that it is "a synonym for part or ply[.]" (Tr. 29; App.
Exh. Nos. 2-2 and 13, at 20). [Original emphasis.] Thus, in
the forms industry the terms "copy," "part," "ply," and even
"leaf" are used interchangeably (Tr. I: 61, 64, 104, 112).
7 The "Government to Furnish" clause employs the word "copy" in
its traditional graphic arts sense, namely, as "[a]ny material
furnished by the customer (typewritten manuscript, pictures,
artwork, etc.) to be used in the production of printing. The
popular but inaccurate term for original." See Glossary of
Graphic Arts Terms (U.S.G.P.O., December 1967), at 4. Similarly,
the primary definition of the word "copy" in the Forms Glossary
is "manuscript, text, photographs, and other types of artwork
furnished for reproduction[.]" (App. Exh. Nos. 2-2 and 13, at
20).
8 The record identifies Mr. Jack G. Marken, Assistant Supervisor
in the PPD's Term Contracts Division as the author of the changes
(Tr. II: 80, 93). That is, we are told by Weiss that Marken
"reviews all contracts coming back for renewal[.]" and in this
case, "[h]e listed numerous changes, what to eliminate, what line
items to take out, and how to restructure the contract, because
he felt it was confusing the previous year and could lead to
mistakes[.]" (Tr. II: 80). The actual changes were made by the
specification writer (Tr. II: 80).
9 The record discloses that MPE is a comparative newcomer to the
business forms industry, and at the time of the hearing, it had
been in existence only four (4) years, and a GPO contractor for
two (2) (Tr. I: 203-04). Indeed, Contracting Officer Weiss
stated that he had never dealt with MPE before it bid on the
disputed contract (Tr. II: 81; R4 File, Tab R, at 12). Also,
compared to its competitors, MPE is a small firm, with only
fifteen (15) employees and gross sales of $2.4 million (Tr. I:
148).
10 The record discloses that Elgin's comparable running rates
under the expiring contract were $6.17 "per 1,000 sets" for 2-
part sets and $8.67 "per 1,000 sets" for 3-part sets (R4 File,
Tab B).
11 As for the running rate "per 1,000 copies" for the line item
relating to printing additional colors of ink, all four bidders
bid "no charge" for both 2-part and 3-part sets (R4 File, Tab B).
12 Because the IFB did not contain a paper price adjustment
clause, Edwards testified in computing the paper charges over the
life of the contract he used a "rule of thumb" he referred to as
a "SWAG," which roughly defined is a "scientific wild-ass guess"
(Tr. I: 130-32).
13 According to Edwards, in his 27 years of experience in the
forms business he never saw a contract where the word "copies"
was defined as "sets" for billing purposes (Tr. II: 110-11).
Although he noticed immediately that the pricing formula of "per
1,000 sets" in the prior Program D201-S contract had been changed
to "per 1,000 copies" in the replacement agreement on which the
Appellant was bidding, Edwards saw no reason to question the
basis of award or ask for a clarification (Tr: II: 110-12). In
his view, the change was "as clear as a bell[.]" (Tr. II: 112).
As he explained, in pertinent part: "There is a very big
difference between copies and sets. In the business forms
industry-this is the reason why we have the glossary of terms-a
copy is a part of a unit set. A unit set has its own identity,
similar to a human being does . . ., except it doesn't have a
personality. A form that has copies within the set. The only
copies are within the set. . . . It is as simple as that." Id.
Moreover, he said that when compared the IFB with the old
contract: ". . . and saw that Marjorie Bell was the original
contract writer and the [specifications] were changed from 'sets'
to 'copies,' I understood exactly what she meant, and bid it
accordingly. . . .Because of other contracts that read exactly
the same way. Copies always is a part, and it always has been in
this industry[.]" (Tr. II: 115). See also Testimony of Ms. Twyla
S. Edwards and Mr. Robert C. McCall, the Appellant's President,
regarding the difference in meaning between the terms "copies"
and "sets" in the business forms industry (Tr. I: 50, 64-65,
206).
14 From his review of a number of GPO forms programs, Edwards
concluded that since it determines the pricing format in any
IFB, the Government can require a "complete product" and
still ask for prices based on the products component parts
(Tr. I: 99-117; App Exh. Nos. 4-1 through 4-25 (Programs C10-
S, 223-M, A349-M, C384-S, D471-S, C484-S, 1026-M, 2069-S,
2270-S, 2562-S, 2882-S, 2987-S, and 3522-S)). See also
Testimony of Ms. Twyla S. Edwards concerning Program C384-S
(Tr. I: 38-39, 41, 52-53, 63, 73, 75-76; R4 File, Tab P; App.
Exh. Nos. 4-7 and 4-8).
15 As a simple example, Ms. Twyla S. Edwards testified that if a
2-part set was priced at $2.00, then each part would cost $1.00,
or stated otherwise, a price "per 1,000 copies" means a price for
"500 sets" (Tr. I: 81-84; R4 File, Tabs A and M). Similarly, she
said that 100, 4-part sets priced at $1.00 per copy, would cost
$4.00 a set, or $400.00 for the 100 sets (Tr. I: 40-41, 101).
16 In response to a question from the Board, Edwards testified
that he thought the Government's estimates were low, and that as
he calculated the contract price-by "copies" instead of complete
"sets"-the award value would be, as in fact it turned out, larger
than $180,000.00 (Tr. I: 199-200). There is nothing in the
record to indicate that Edwards conveyed his suspicions about the
Government's work estimates to McCall. On the other hand, even
if Edwards had made McCall aware of his doubts about the accuracy
of the Government's estimates, it is not at all clear that the
Appellant would have been obligated to raise the matter with the
GPO since the basis of award figures were deemed to be "estimates
only," and the actual amount of work under the contract could
have been either more or less than the estimated quantities (R4
File, Tab A, at 10, Tab R, at 18).
17 The pages referred to by Counsel for the Appellant in his
questioning are pages 16 and 17 of Weiss' deposition of June 30,
1995, which is in the record as R4 File, Tab R. See note 1
supra. On that occasion, the comparable exchange between Weiss
and Counsel for the Appellant, in pertinent part, was as follows:
Question [Mr. Antoun]: . . . [H]e says that you never got to,
either you or him, was that copies to you meant the whole set,
and copies to him meant one ply. He said that was never
discussed. Is he accurate?
Answer [Mr. Weiss]: That is correct.
Question: So it could very well have been that you both left that
conversation feeling that you were in perfect synch with each
other, not knowing that you weren't.
Answer: When I told the man that the basis of award figure-take a
number of 1,000-was multiplied by the price he bid, which was
lets say, eight dollars-
Question: Right.
Answer: -then, as far as I'm concerned, there can be no mistake
because if it was per leaf, it would have been doubled.
Question: Right.
Answer: And we did discuss the pricing. We did discuss how much
it was. We did discuss the difference between the old
contractor, which was-I forgot the name now-who he was $500
difference from.
So, if that what he says, no, we did not discuss, particularly,
leaves making up a set, but I did explain to him that his price
he submitted, which eight dollars and something, was multiplied
against that figure, and that figure was sets.
Question: The figure at the end of the contract.
Answer: The figure in the basis of award.
See R4 File, Tab R, at 16-18. [Emphasis added.]
18 Weiss explained that his reason for not thinking the Appellant
would interpret the contract differently was because its price
was "right in line" with the incumbent contractor's (Elgin) bid
(Tr. II: 92).
19 Under GPO's procurement regulation, approval of the CRB is
required for all awards in excess of $50,000.00. See
Printing Procurement Regulation, GPO Pub. 305.3 (Rev. 10-90),
Chap. I, Sec. 10, ¶ 4.a(vii) (hereinafter PPR). In this
case, the basis for awarding the contract to the Contractor
was its total bid of $180,507.20 (net) (R4 File, Tab E).
20 Weiss says he wrote this note on October 5, 1994, immediately
after talking to McCall (Tr. II: 97).
21 Issuing the purchase order was Weiss' last official connection
with this contract. Afterwards, because of an illness he was on
sick leave starting in early February 1995 (Tr II: 83, 99). He
was replaced as Contracting Officer for Program D201-S by Jack
Scott (Tr. II: 8).
22 The following month the Appellant was awarded another forms
contract by GPO-Program C384-S involving the production of
"multi-part sets (carbonless paper)" for the National Institutes
of Health (NIH) (R4 File, Tab P (Purchase Order No. 98396, dated
November 30, 1994)). Like the Program D201-S contract, the NIH
agreement was a single-award, "requirements" contract for a one-
year term, in this case from December 1, 1994, to November 30,
1995, and provided for running rate charges on a "per copy" basis
("per 100 copies") (Tr. I: 98-100, 102; R4 File, Tab P (IFB,
dated October 27, 1994, at 1, 3, and 12)). However, while
Program D201-S involved the production of "snap sets," the
Program C384-S forms were of a type known as "fan apart" (R4
File, Tab P (IFB, dated October 27, 1994, at 4)).
23 As previously noted, Tab N was made part of the record at
the prehearing conference on August 29, 1995, and consists of
a complete set of print orders received by the Appellant
while it was the contractor for Program D201-S, including the
Contractor's work estimates and other backup material. See
note 1 supra. In all, the Appellant received 35 print orders
under the contract-14 from the VA (Print Order Nos. 20501 to
20508, 20510 to 20514, and 20518), and 21 from the GSA (Print
Order Nos. 20001 to 20021).
24 At the hearing, the Appellant also introduced a print order
from the VA for 2-part forms-Print Order No. 20502-which Edwards
said was representative of the orders placed under the contract
(Tr. I: 140; II: 9; R4 File, Tab N; App. Exh. No. 6 Tr. 140; R4
File, Tab N).
25 During the hearing, the Board asked Scott to explain his
understanding of the words which form the heart of this
dispute. In that regard, Scott defined a "set" as a group of
forms, and a "part" as an individual sheet or "leaf," perhaps
including carbons (Tr. II: 72-73, 75). The word "copy," on
the other hand, had a more amorphous connotation, and
"depend[ed] on what context you use it in. . . . That whole
thing could be copy, or one page of that could be a copy. . .
. It all depends on how you use it[.]" (Tr: II: 73, 75). For
example, however, Scott referred to the contract's
requirement for "blue label sample copies," and said that ".
. . a complete 3-part set, would be one copy. If we ask you
for 100 of those, we would expect to get 100 3-part sets[.]"
(Tr. II: 74). See also Tr: I: 224 (McCall's testimony).
26 As Scott read the contract specifications, which he says are
"clear as written," the Government was purchasing 1,000 copies of
either a 2-part or 3-part set of forms as "a complete buy" (Tr.
II: 12-13, 30, 37). In his view, because the pricing columns are
preceded by a paragraph which states "[p]rices offered shall
include the cost of all required materials and operations
necessary for the complete production and distribution . . .
listed in accordance with these specifications," indeed the words
"complete product," are in capital letters at the beginning of
that paragraph, it is obvious that the Government is purchasing a
"complete product" (Tr. II: 35, 38-39). Here, the complete
product is either a 2-part or 3-part set of forms, and the words
"per 1,000 copies" modify that 2-part or 3-part set requirement.
Id. That is, the basic product under the contract is a "complete
product" and never changes (Tr. II: 41). Stated otherwise, Scott
equates "complete product" with "unit set." See note 5 supra.
27 Edwards testified that in preparing the Appellant's bid, he
took into consideration that 3-part forms constituted the
majority of jobs under the contract (Tr. I: 138). Therefore, to
enhance the Contractor's chances of receiving the contract, he
followed standard business practice and developed an offer in
which work on 2-part forms would be performed at a small loss,
while the Contractor's profit would come from 3-part work (Tr.
138-39, 143; II; 113; App. Exh. Nos. 3-6 and 3-12). Edwards
calculated the average profit for 3-part forms at 15 percent (Tr.
I: 143, 195; App Exh. No. 3-12). The Government's price
adjustment simply increased the Appellant's loss on 2-part sets,
and also made 3-part sets unprofitable because, inter alia, GPO's
interpretation substantially increased the Contractor's material
costs; i.e., every print order became a loser (Tr. II: 106--07,
113-14). Thus, for example, the Government adjusted Print Order
No. 20502, see note 24 supra, by reducing the invoiced amount
$829.15 to $1,198.65, took its 5 percent prompt payment discount,
and paid the Contractor $1,138.72, thereby converting its planned
operating profit of 26.8 percent on this 2-part form job to an
operating loss of 23.8 percent, a swing of 50.6 percent (Tr: I:
140-41, 143; R4 File, Tab C; App. Exh. Nos. 6-7, 6-9, 6-10 and
6-15). Similarly, an example of the impact on a 3-part form is
provided by Print Order No. 20017, issued June 1, 1995, for which
the Appellant billed the Government $5,627.10, only to have the
amount lowered by GPO to $2,204.43, a reduction of $3,422.67,
which changed the Contractor's projected operating profit of 38.5
percent to an operating loss of 57.3 percent, a difference of
95.8 percent (Tr. I; 145, 190; App. Exh. Nos. 7-1, 7-3, 7-8, 7-9,
7-10, 7-11 and 7-16).
28 As for Print Order No. 20502, see note 24 supra, the CES
informed the Appellant of the decrease in the contract price
on or about February 23, 1995 (Tr. I: 54-55, 59, 211; App
Exh. No. 6-8).
29 The record shows that the Appellant accounts for these
deductions on its books (through October 31, 1995) as "income not
collected" (Tr. I: 193-94). Furthermore, since the Contractor's
accounting method attributes earnings of $303,025.06 to the
disputed contract, if the "income not collected" figure of
$258,939.49 is omitted, then Program D201-S' contribution to its
gross sales was only $44,085.57, which would reduced its profit
on all work for fiscal year 1995 from 15.8 percent to 2 percent
(Tr. I: 194-95).
30 The record shows that about the same time that McCall was
contacting the Respondent, Ms. Twyla S. Edwards was also talking
to GPO personnel both at the main plant and in its regional
offices (Tr. I: 65). Her purpose, it seems, was to check what
sources GPO used for definitions for forms work, and she was told
that the Government relied on the same reference books as the
Appellant; i.e., the Forms Handbook and the Forms Glossary (Tr.
I: 65-66).
31 Scott felt so strongly about recouping the perceived
overpayments that without being asked, he formally opposed
Counsel for the Appellant's request to FMS that either: (a)
deductions of any alleged excess billings be postponed until the
Board could resolve the parties' dispute; or (b) a repayment plan
be established which would allow the Government to recover any
amounts due in monthly installments over a one-year period (Tr.
II: 11-12, 24, 25-28; R4 File, Tabs I and J).
32 The Appellant also indicates that there was some talk about a
fourth option, namely terminating the contract for the
convenience of the Government (Tr. I: 56, 213-214). See GPO
Contract Terms, Contract Clauses, ¶ 19. However, Scott does not
recall a convenience termination being mentioned during the
conversation (Tr: II; 29).
33 The record shows that Scott was also the Contracting Officer
on the Appellant's other GPO forms contract at this time-Program
C384-S-indeed, it was he who had signed and issued Purchase Order
No. 98396, on November 30, 1994 (R4 File, Tab P). As previously
indicated, the specifications for that forms program, like
Program D201-S, expressed running rate charges in terms of a
price "per copy," and apparently the Government had not
questioned the Appellant's invoices calculated on that basis. See
note 22 supra. Therefore, at the hearing, Counsel for the
Appellant asked him to explain why he interpreted the running
rate differently for Programs D201-S and C384-S when the contract
specifications in both of them allowed "per copy" charges; i.e.,
in one case (Program D201-S) "copy" meant a "set" to him, while
in the other (Program C384-S) "copy" was synonymous with "leaf"
or "part" (Tr. II: 31-32). In response, Scott stated that the
two programs were not similar, and the differences accounted for
the variation in the pricing formula (Tr. II; 32). Scott
explained, in pertinent part: "[In] Program [C]384[-S], we are
buying . . . 100 copies of a cut form, meaning one sheet or leaf.
In the [D]201[-S] contract we are buying a thousand copies [of] .
. . a complete product of a two- or three-part set per thousand
copies of that complete product, a two- or three-part set[.]"
(Tr. II: 32-33). Later, he reiterated that: ". . . [Program]
201[-S] is priced out as a complete part because we are always
buying either a two- or three-part set. Those are the only two
options. On [Program]384[-S], we are buying from a one-part form
to a seven-part set on that same-and they are priced out on a per
leaf, or a per ply, however you want to say, per cut form, in
this case[.]" (Tr. II: 35). See also Tr. II: 52-53.
34 The record discloses that the 1996 Program D201-S contract
contains the same "Schedule of Prices" specification as the
predecessor contract which is in controversy (Tr. I: 159; R4
File, Tabs A, at 11; Gov. Exh. No. 3, at 11). However, because
of this dispute, the Appellant did not submit a bid on the 1996
contract (Tr. I: 158; App. Exh. No. 8-1). In that regard, the
Contractor calculated that under GPO's interpretation of the "per
1,000 copies" language, its price for 2-part forms would double
(from $8.05 to $16.97 "per 1,000 copies" (with makeready costs
subtracted)), and 3-part forms would cost three times as much
(from $9.23 to $27.69 "per 1,000 copies") (Tr. 160, 187-88).
Consequently, the Appellant figured that it would have to charge
a total gross price of $492,268.22 for the 1996 contract, or a
net of price $467,654.81, after a 5 percent discount (Tr. I: 161;
App. Exh. Nos. 8-1 and 8-2). The record also shows that the
Respondent received four (4) bids-from Belknap, Standard, Elgin
and Moore Business Forms (Moore)-for the 1996 Program D201-S
contract (R4 File, Tab Q; App. Exh. Nos. 8-2 and 8-3). The
offers, from the highest to the lowest, were as follows: (a)
Moore-$732,237.65 (no discount); (b) Standard-$462,616.14 (no
discount); (c) Belknap-$374,100.09 (after a 1 percent discount);
and (d) Elgin-$198,146.87 (after a 5 percent discount) (Tr. I:
161-62; R4 File, Tab Q; App. Exh. Nos. 8-2 and 8-3). After Elgin
confirmed that it had predicated the "per 1,000" running rate in
its bid on the basis of "sets" not "copies or parts," it was
awarded the 1996 contract by the Respondent (Tr. II: 17-18; Gov.
Exh. No. 2). Even so, it was clear at the hearing that there had
been a noticeable increase in Program D201-S pricing between the
1995 and 1996 contracts (Tr. I: 156). While Elgin's 1996 offer
of $198,146.87 was only about 10 percent higher than its 1995 bid
of $181,007.53, Belknap and Standard, the other two bidders for
the 1995 contract, had raised their 1996 prices substantially;
i.e.,, Belknap's bid of $374,100.09 was over 50 percent greater
than its 1995 offer of $242,537.15, and Standard's price of
$462,616.14 for 1996 was approximately 130 percent more than its
1995 bid of $201,507.72 (Tr. II: 60-64; R4 File, Tabs B and Q;
App. Exh. Nos. 8-2 and 8-3). None of the witnesses could explain
this significant prices increase between 1995 and 1996, although
both Edwards and Scott thought that an increase in paper prices
had something to do with it (Tr. I: 198; Tr. II: 66, 117).
Edwards also had another theory, namely that the other offerors
read the 1995 contract the same way as the Appellant and bid it
accordingly, only to discover that GPO's position was different
when Scott called them in the process of resolving the dispute
over the Contractor's vouchers (Tr. II: 119-20). He said that by
siding with the Respondent to injure a competitor (the
Appellant), the other bidders are now "caught in a box," and
since they must bill "per 1,000 sets" based on the Government's
interpretation, there has been an appropriate increase in their
pricing. Id. Apart from the fact that this idea does not
explain why Elgin's bid was only marginally higher in 1996,
Edwards' belief is mere conjecture and speculation. Moreover, to
the extent that he ascribes evil motives to the Appellant's
competitors and thereby raises the specter of "bad faith,"
suffice to say there is no evidence that the Respondent was a
party to such malevolence, and hence the required "irrefragable
proof" of a specific intent to injure the Contractor on the part
of the Government is absent in this case. See New South Press &
Assoc., Inc., GPO BCA 14-92 (January 31, 1996), slip op. at 36,
1996 WL 112555; Asa L. Shipman's Sons, Ltd., GPO BCA 06-95
(August 29, 1995), slip op. at 12, fn. 16, 1995 WL 818784,
reconsid. denied February 13, 1996; Professional Printing of
Kansas, Inc., supra, slip op. at 43, fn. 58; Universal Printing
Co., supra, slip op. at 24, fn. 24; B. P. Printing and Office
Supplies, supra, slip op. at 16; Stephenson, Inc., GPO BCA 2-88
(December 1991), slip op. at 54, 1991 WL 439274; The Standard
Register Co., GPO BCA 4-86 (October 28, 1987), slip op. at 12-13,
1987 WL 228972. Accord Solar Turbines, Inc. v. United States, 23
Cl. Ct. 142 (1991); Kalvar Corp. v. United States, 543 F.2d 1298,
1302 (Ct. Cl. 1976), cert. denied 434 U.S. 830 (1977); Brill
Brothers, Inc., ASBCA No. 42573, 94-1 BCA ¶ 26,352; Karpak Data
and Design, IBCA No. 2944 et al., 93-1 BCA ¶ 25,360; Local
Contractors, Inc., ASBCA No. 37108, 92-1 BCA ¶ 24,491.
35 The Appellant tells us that in the context of a particular
contract or transaction, a "prior course of dealing" generally
refers to "a sequence of previous conduct between the parties . .
. which is fairly to be regarded as establishing a common basis
of understanding for interpreting their expressions and other
conduct[.]" (App. Brf., at 9 citing RESTATEMENT (SECOND) OF
CONTRACTS § 223 ("agreement"); U.C.C. § 1-205 (1977)
("transaction")). Thus, the rule is that the Government will not
be allowed to suddenly change its long-standing interpretation of
contract language to the detriment or prejudice of a contractor
who has acted in reliance on that historic meaning or contractual
practice (App. Brf., at 10, citing Gresham and Co., Inc. v.
United States, supra; Western Avionics, Inc., ASBCA No. 33158,
88-2 BCA ¶ 20,662).
36 In that regard, the Government believes that the
Appellant's "prior course of dealing" claim, which it
supports with excerpts from other GPO forms contracts, is
irrelevant because those agreements are different from the
contract at issue, and besides the Contracting Officer
properly interpreted the Program D201-S language for the
Contractor in their pre-award conversation (Res. R. Brf., at
9-10). Similarly, GPO says that the Contractor's reliance on
"trade custom" is equally unavailing because, for reasons
already stated, its bidding competitors did not read the
critical words the same way, and moreover, trade usage or
industry practice cannot cancel the clear and unambiguous
meaning of the agreement (Res. R. Brf., at 10, citing The
George Hyman Construction Co. v. United States, supra). On
the other hand, the Respondent contends that any ambiguity in
the contract would be patent in light of the "glaring
contradiction" between the Appellant's trade understanding of
the word "copy" and the meaning of "copy" for the purpose of
"Blue Label samples, as well as the definition supplied by
Weiss in his October 5, 1994, telephone conversation with
McCall (Id., citing Newsom v. United States, supra).
Finally, the Government dismisses the Appellant's claim to
the benefit of the doctrine of "contra proferentem" as a
"talismanic slogan," and a "rule of last resort," which is
not entitled to any weight in light of the evidence
supporting the factors in the hierarchy relied on by the
Respondent-"the whole instrument," "express language of the
agreement," "conduct of the parties," and "knowledge of the
other party's interpretation" (Id., citing Gateway Center
Corp. v. United States, 766 F.2d 494, 498 (Fed. Cir. 1985);
Optic Electronic Corp., ASBCA No. 24962, 84-3 BCA ¶ 17,565,
at 87,530).
37 The Board's decision is based on the following record: (a) the
Appellant's Notice of Appeal, dated March 10, 1995; (b) the
Appellant's Complaint, dated April 4, 1995; (c) the Respondent's
Answer, dated June 23, 1995; (d) the R4 File; (e) the record
transcript and documentary evidence presented at the hearing on
December 4 and 5, 1995; and (f) the formal briefs filed by the
parties.
38 Suffice it to say, the parties have not exhausted all possible
definitions of the word because, for example, as a graphic arts
term "copies" can mean "[the] material furnished by the customer
(typewritten manuscript, pictures, artwork, etc.) to be used in
the production of printing[.]," see Glossary of Graphics Arts
Terms, at 4 (U.S.G.P.O. 1967) (also "[t]he popular but inaccurate
term for [an] original"); Pocket Pal: A Graphic Arts Production
Handbook, at 188 (International Paper Co. (14th ed. 1989), or
"everything that will be printed: art, photographs, and graphics
as well as words[.], " see Mark Beach Steve Shepro, Ken Russon,
Getting It Printed: How to Work with Printers and Graphic Arts
Services to Assure Quality, Stay on Schedule and Control Costs,
at 197 (Coast to Coast Books 1986). Furthermore, in military
jargon, "copy" is used as a simple short-hand for "I understand"
or "message received or acknowledged and understood."
39 Frigaliment Importing Co. involved an agreement for the
sale of a large quantity of frozen chickens to the plaintiff.
In performing the contract, the defendant supplied less
valuable "stewing chickens," and not the "young fryers,"
which the plaintiff had expected. In a suit for breach of
warranty, the plaintiff buyer claimed that "chicken" meant "a
young chicken, suitable for boiling and frying." The
defendant, however, said that "chicken" meant any bird of
that genus that met the contract specifications on weight and
quality, including the less valuable "stewing chicken," which
the plaintiff referred to as a "fowl," The court noted that
"[a]ssuming that both parties were acting in good faith, the
case nicely illustrates [Justice Oliver Wendell] Holmes'
remark 'that the making of a contract depends not on the
agreement of two minds in one intention, but on the agreement
of two sets of external signs-not on the parties having meant
the same things but on their having said the same thing.'"
See Frigaliment Importing Co., Ltd. v. B.N.S. International
Sales Corp., supra, 190 F.Supp. at 117 (quoting Oliver
Wendell Holmes, The Path of the Law, in Collected Legal
Papers, at 178). Observing that the word "chicken" standing
alone is ambiguous, the court searched for some indication of
the parties intent in both the contract and trade usage, but
without success. Id., 190 F.Supp. at 118-19. The
plaintiff's "trade usage" argument was particularly
unavailing because the defendant was new to the business, and
therefore covered by the principle that "when one of the
parties is not a member of the trade or other circle, his
acceptance of the standard must be made to appear" by proving
either that he had actual knowledge of the usage or that the
usage is "so generally known in the community that his actual
knowledge of it may be inferred." Id., 190 F.Supp. at 119
(citing 9 WIGMORE, EVIDENCE § 2464 (3rd ed. 1940)). Without
such evidence, the court held that the plaintiff had not
sustained its burden of persuasion that the contract used
"chicken" in the narrower sense, and dismissed the case.
Id., 190 F.Supp. at 121. United Steelworkers of America,
AFL-CIO-CLC v. North Bend Terminal Co., 752 F.2d 256, 261
(6th Cir. 1985) ("We hold that, where there is a mutual
misunderstanding as to a contract term and the options
discussed in the previous paragraph [declaring that there was
no contract or simply supplying a missing term] are not open
to the court, the court will rule against the party bearing
the burden of proof."). The rule as stated by Professor
Corbin is: "If the parties gave different meanings to the
words of a fully 'integrated' contract, either party who sues
for enforcement in accordance with his own meaning has the
burden of proving that the other party knew or had reason to
know what that meaning was and that he himself had no reason
to know that the other party gave the words a different
meaning." 1 ARTHUR LINTON CORBIN, CORBIN ON CONTRACTS § 4.10
(1993), at 619, fn. 6 (Citing Frigaliment Importing Co., Ltd.
v. B.N.S. International Sales Corp., supra; and United
Steelworkers of America, AFL-CIO-CLC v. North Bend Terminal
Co., supra) [hereinafter CORBIN ON CONTRACTS]. It should be
noted that both Frigaliment Importing Co. and United
Steelworkers of America, AFL-CIO-CLC are exceptions to the
traditional judicial response once a mutual misunderstanding
emerges, namely to say that there was no contract, and the
courts' decisions rely on the peculiar facts in each case.
See United Steelworkers of America, AFL-CIO-CLC v. North Bend
Terminal Co., supra, 752 F.2d at 261 (citing Flower City
Painting Contractors v. Gumina Construction Co., 591 F.2d 162
(2d Cir. 1979; Raffles v. Wichelhaus, 2 Hurl. & C. 906, 159
Eng. Rep. 375 (Ex. 1864)).
40 See also note 25 supra.
41 English, with its polyglot roots, is marked by an adaptability
not possessed by other languages, and is proficient at absorbing
new words and giving new meanings to old ones; indeed, the modern
telecommunications and computer ages themselves have added
immensely to the lexicon; e.g., e-mail, fax, high-tech, input,
interface, internet, modem, radar screen, software, video screen,
etc. See English, at 37. This invests very simple words with a
power for rich and dynamic expression, and thus, English has been
described as "a living language, with many different shades of
meaning." See English, at 134.
42 "But 'glory' doesn't mean 'a nice knock-down argument,'" Alice
objected. "When I use a word," Humpty Dumpty said, in rather a
scornful tone, "it means just what I choose it to mean-neither
more nor less." The question is," said Alice, "whether you can
make words mean so many different things." "The question is,"
said Humpty Dumpty, "which is to be master-that's all." See
Bartlett's Familiar Quotations, at 659a (quoting Lewis Carrol
(Charles L. Dodgson), Through the Looking-Glass, chap. 6, p. 205
(1934) (more popularly known as Alice in Wonderland, which was
first published in 1872)). See also Respectfully Quoted, at 377.
43 The United States Claims Court has observed that: "[a] mere
dispute over the terms does not constitute an ambiguity, and an
interpretation which is merely possible is not necessarily
reasonable." Ceccanti, Inc. v. United States, 6 Cl. Ct. 526, 528
(1984). An ambiguity must have two or more reasonable
interpretations and the intent of the parties must not be
determinable by the normal rules of interpretation. See McDonald
& Eudy Printers, Inc., supra, slip op. at 14, fn. 12; R.C.
Swanson Printing and Typesetting Co., supra, slip op. at 42. See
also International Business Investments, Inc. v. United States,
17 Cl. Ct. 122 (1989), aff'd, 895 F.2d 1421 (Fed. Cir. 1990)
(contract terms are not rendered ambiguous by the mere fact that
the parties disagree as to their meaning; there must be
reasonable uncertainty of meaning); Perry & Wallis, Inc. v.
United States, supra, 192 Ct. Cl. at 315, 427 F.2d at 725
(quoting Bishop Engineering Co. v. United States, 180 Ct. Cl.
411, 416 (1967)).
44 The purpose of any rule of contract interpretation is to carry
out the intent of the parties. Hegeman-Harris & Co., 194 Ct. Cl.
574, 440 F.2d 1009 (1971). The test for ascertaining intent is
an objective one; i.e., the question is what would a reasonable
contractor have understood, not what did the drafter subjectively
intend. Corbetta Construction Co. v. United States, 198 Ct. Cl.
712, 461 F.2d 1330 (1972). See also Salem Engineering and
Construction Corp. v. United States, supra, 2 Cl. Ct. at 806.
The provisions of the contract itself should provide the evidence
of the objective intent of the parties.
45 The Contractor's evidence regarding the trade definition
of "copy" and "copies" consisted of testimony about the forms
industry meaning of the words from its three witnesses, all
of whom had extensive experience in the business, and
pertinent excerpts from the forms industry's standard
references-the Forms Handbook and the Forms Glossary (Tr. I:
28-36, 61, 64, 104, 112, 183-85, 196, 203, 208-09, 229; App.
Exh. Nos. 13 and 14). However, the contract does not
incorporate either of the two publications relied on by the
Appellant in support of its position. Thus, the Board finds
the portions of the Forms Handbook and the Forms Glossary
submitted by the Contractor to be irrelevant and not to
control the questions presented with regard to the use of the
word use of the word "copies" in the phrase "per 1,000
copies" in the "COMPLETE PRODUCT" specification of the
"Schedule of Prices" section of the contract. See Hogan
Construction, Inc., ASBCA No. 39679, 95-1 BCA ¶ 27, 428 (the
board rejected as irrelevant portions of two publications
submitted by the parties as evidence of industry standards
for the thickness of the sand base to be used under
replacement sidewalks because the contract in question did
not incorporate those publications). See also Oakcreek
Funding Corp., GSBCA No. 11244-P, 91-3 BCA ¶ 24,200 (the
board dismissed a contention the term "routine" in the
context of maintaining computers meant "test software"
although there was evidence that the term was so understood
in the industry, because there was no evidence that the term
referred exclusively to software). On the other hand, trade
usage can be proved by the testimony of experts referring to
specific instances of actual practice. Cf. Sinclair Oil
Corporation, EBCA Nos. 416-8-88, 417-8-88, 90-1 BCA ¶ 22,462,
at 112,775 (citing Eder Electric Co., ASBCA No. 6692, 61-1
BCA ¶ 3096, aff'd sub nomine Eder Electric Co. v. United
States, 205 F.Supp. 305 (E.D. Pa. 1962)). In this case, the
long experience of the Contractor's three witnesses in the
forms industry qualified them to give expert testimony of the
trade meaning of the word "copies." See Bruce-Anderson
Company, Inc., ASBCA No. 29460, 88-3 BCA ¶ 20,998.
46 The authorities tell us that in Government contracts law proof
of a "prior course of dealing" is an important type of extrinsic
evidence which can be used by a party in two ways: (a) as an aid
to interpretation of ambiguous contract language; or (b) as an
estoppel or waiver to demonstrate that an explicit requirement of
the contract is not binding because the requirement was not
enforced in the past. See John Cibinic, Jr. and Ralph C. Nash,
Jr., Administration of Government Contracts, at 199 (The George
Washington University, 3rd ed. 1995) (hereinafter Cibinic & Nash,
Administration). The Appellant's reliance on Gresham and Co.,
Inc. v. United States, seems to indicate that the Contractor is
raising a "prior course of dealing" as a waiver claim rather than
as an interpretive device. See Cibinic & Nash, Administration,
at 206.
47 To the extent that the Respondent seeks to impeach the
Appellant's "trade usage" claim with statements from the
Contractor's three competitors made after the contract was
awarded, its documentary evidence is of little probative value
and evidentiary weight outside of argument (Tr. II: 13-14, 16;
Gov. Exh. No. 1). See Board Rules, Rule 13(c). See also
Universal Printing Co., supra, slip op. at 26, fn. 27 (price
quotation from a competitor introduced to show contractor's
prices for the same work were in accord with prices in the
industry, and hence reasonable); RD Printing Associates, Inc.,
supra, slip op. at 10 and 13, fns. 11 and 15 (memorandum from
customer-agency employee supporting contractor's interpretation
of the contract, and revised pricing specification from the
succeeding contract). In effect, the meaning given to the
disputed words by Belknap, Standard, and Elgin is irrelevant to
how the Appellant read them when it was submitting its bid. The
same holds true for Elgin's written statement, introduced by the
Government at the hearing, confirming that its running rate bid
prices for the follow-on contract were figured on a "per set"
basis, and not "per copy" (Gov. Exh. No. 2). Id. Besides,
Elgin's confirmation statement is outside the scope of the
disputed contract. See note 3 supra (citing Asa L. Shipman's
Sons, Ltd., supra, slip op. at 14, fn. 19; Universal Printing
Co., supra, slip op. at 26, fn. 27; Shepard Printing, supra, slip
op. at 7, fn. 11; B. P. Printing and Office Supplies, supra,
slip. op. at 14-15).
48 The "STOCK/PAPER" specification directs, inter alia, that
"[a]ll paper used in each copy must be of a uniform shade[.]"
(R4 File, Tab A, at 5). The specification then provides that
"[p]art 1 of 2-part sets and . . .[p]arts 1 and 2 of 3-part
sets" are to be printed on "Chemical Wood Writing paper . . .
equal to JCP Code D10[.]" Id. It also says that "[part 2 of
2-part sets and . . .[p]art 3 of 3-part sets" are to be on
"White Ledger" paper "equal to JCP Code J10." Id. However,
in this context, the Board is unable to tell whether for the
purposes of the ""STOCK/PAPER" specification the phrase "each
copy" refers to each "part" or "leaf;" e.g., Part 1 of all
forms and Part 2 of the 3-part form set must be of a uniform
shade of "Chemical Wood Writing paper," and Part 2 of the 2-
part form and Part 3 of the 3-part set must be of a uniform
shade of "White Ledger" paper, or whether it means that the
paper ("Chemical Wood Writing" and "White Ledger") in the
copies of all sets must be of a uniform quality and weight,
as required in the contract.
49 The addition of the "COMPLETE PRODUCT" specification to the
Program D201-S IFB seems to have been one of the "housekeeping"
or "cosmetic" changes made to the prior contract by GPO, referred
to by the witnesses, in an effort to "clean up" and tighten the
language (Tr. II: 80, 93). Thus, unlike the "Schedule of Prices"
section in the previous year's contract, which contained separate
line items for "FILMS," "PRINTING AND BINDING," "PACKING AND
DISTRIBUTION," "PAPER," and "ADDITIONAL OPERATIONS," the
"Schedule of Price" in the IFB which the Appellant bid on had
only two line items-"COMPLETE PRODUCT" and "ADDITIONAL
OPERATIONS" (R4 File, Tabs A, at 11-12, M, at 13-14). On the
other hand, the "Schedule of Prices" section in both the IFB and
the previous year's contract contain the following sentence:
"Prices must include the cost of all required materials and
operations for each item listed in accordance with these
specifications."
50 For the same reason that the forms industry's meaning of
"copies" does not fit, likewise the traditional graphic arts
definition (an "original") makes no sense in this context.
51 Indeed, the drafter's use of the word "copy" in its technical
graphic arts sense, employs the precise description of "camera
copy" (R4 File, Tab A, at 4 "GOVERNMENT TO FURNISH"
specification).
52 See note 14 supra. One forms contract exhibit, Program 1026-
M, for the production of marginally-punched continuous forms, is
missing the bid page, although it shows that prices are requested
"per 1,000 sets" (App. Exh. No. 4-15).
53 During the hearing, the Contractor attempted to show that a
seventh contract-Program C384-S-also supported its "course of
dealings" theory, because like the disputed agreement it provided
for running rate charges on a "per copy" basis ("per 100 copies")
(Tr. I: 98-100, 102; R4 File, Tab P; App. Exh. Nos. 4-7 to 4-8).
While Contracting Officer Scott explained the differences between
Programs D201-S and C384-S and how they accounted for the
variations in the respective pricing formulas (Tr. II: 31-33, 35,
52-53), see notes 22 and 33, supra, the simple fact is that
Program C384-S is irrelevant because it was awarded after the
contract at issue here. See Tecom, Inc., supra, cited at note 3
supra. Therefore, the Appellant could not have relied on Program
C384-S when it bid on the IFB for Program D201-S. Id., at
131,821. The same would hold true for two other of the
Appellant's exhibits- App. Exh. No. 4-23 (Program 2987-S, dated
6/97) and App. Exh. No. 4-25 (Program 3522-S, dated 8/96).
54 The "Schedule of Prices" section in Program 2069-S also
defines the term "part" as "one leaf (sheet) of stock (non-carbon
paper)[.]" and tells contractors that "[t]he number of parts
charged equals the number of multiple-part sets ordered
multiplied by the number of parts per set[.]" (App. Exh. No. 16).
See also Program 2987-S (App. Exh. Nos. 4-22 and 24).
Furthermore, for the purposes of this comparison, the Board has
only looked at the running rates for the various contracts
presented by the Appellant, since that is the line item at issue
in this case. In doing so, it recognizes that other line items
such as paper, numbering, and other "Additional Charges" may be
priced in different ways; e.g., Program 223-M prices paper "per
1,000 leaves," Program C484-S prices drilling/punching "per 1,000
parts," etc. (App. Exh. Nos. 4-2 to 4-4, and 4-11 to 4-14).
55 There is at least one other indicia of a patent ambiguity in
this case, namely, the ratio of recovery sought by the Appellant
(its claim for an additional $258,939.49 on a contract awarded
for a $180,507.20 bid, represents an approximately 70 percent
increase in the contract price). See Gelco Builders v. United
States, 177 Ct. Cl. 1025, 369 F.2d 992 (1966); Transco
Contracting Co., ASBCA No. 25315, 82-1 BCA ¶ 15,516. The courts
and contract appeals boards will also look at whether other
bidders requested a clarification during the bidding period. See
Gaston & Associates, Inc. v. United States, 27 Fed. Cl. 243
(1992); Tennessee Valley Service Co., ASBCA No. 22822, 79-1 BCA ¶
13,579; L.B. Samford, Inc.,ASBCA No. 19138, 76-1 BCA ¶ 11,684. In
that regard, however, the Board has already declared that the
three statements obtained by the Respondent from the Contractor's
three competitors are essentially irrelevant to the issues in
this case, and are entitled to little evidentiary weight outside
of argument (Gov. Exh. No. 1). See note 47 supra. Cf. W.M.
Schlosser Co., VABCA No. 1802, 83-2 BCA ¶ 16,630. See generally,
Cibinic & Nash, Administration, at 233-34.
56 McCall's statement that his discussion with Weiss "was
about a 30-second conversation," should not be taken
literally (Tr. II: 104). Rather, the Board sees his remark
as a "short-hand" way of saying the "review and confirm"
discussion was not long.
57 Section 201 of the Restatement states: "(1) [w]here the
parties have attached the same meaning to a promise or agreement
or a term thereof, it is interpreted in accordance with that
meaning; (2) [w]here the parties have attached different
meanings to a promise or agreement or a term thereof, it is
interpreted in accordance with the meaning attached by one of
them if at the time the agreement was made (a) that party did not
know of any different meaning attached by the other, and the
other knew the meaning attached by the first party; or (b) that
party had no reason to know of any different meaning attached by
the other, and the other had reason to know the meaning attached
by the first party; (3) Except as stated in this Section, neither
party is bound by the meaning attached by the other, event though
the result may be the failure of mutual assent." In essence, the
question posed by the Restatement is "whose meaning prevails."
See Tera Advanced Services Corp., supra, 83-1 BCA at 81,005.
58 The relevant meaning for interpretation purposes is the
meaning attached by the parties at the time the contracts
were made, not some later meaning propounded by a party. See
General Electric Company, supra, 83-1 BCA at 80,106.
59 The rule has its genesis in Raffles v. Wichelhaus, an
English case well-known to most first year law students. In
that case, a buyer and a seller made what appeared to be an
agreement for the purchase and sale of a stated amount of
cotton to arrive by the ship "Peerless" from Bombay, India.
By chance, there were two ships then at Bombay, both named
the "Peerless". The buyer knew of only one of these ships,
and depended on the arrival of the cotton on that ship in
October. The seller knew only of the other ship, the one on
which he shipped the cotton. When the buyer refused to
receive the cotton on its arrival in December, the seller
sued for breach of contract. The court held that no contract
existed and that the seller had no right to damages. See
Raffles v. Wichelhaus, 2 Hurl. & C. 906, 159 Eng. Rep. 375
(Ex. 1864), cited at note 39 supra. See also Oswald v.
Allen, supra, 417 F.2d at 45 (applying Raffles v. Wichelhaus
on the basis of the Restatement of Contracts § 71(a), which
adopts the rule of the case). Professor Corbin notes that
Raffles v. Wichelhaus "applies [only] when both parties hold
different understandings of an agreement, do not disclose
their respective positions to each other, nor have any reason
to know of any difference of interpretation." See 1 CORBIN
ON CONTRACTS § 4.10 (1993), at 622, fn. 13 (citing Murphy v.
Gutfreund, 583 F.Supp. 957, 962, n. 6 (S.D.N.Y. 1984);
Prudential Insurance Co. v. Miller Brewing Co., 789 F.2d 1269
(7th Cir. 1986)).
60 The dictionary tells us that a "quasi contract" is "an
obligation which law creates in the absence of an agreement;
it is invoked by courts where there is an unjust enrichment.
[Citation omitted.]" BLACK'S LAW DICTIONARY 1245 (6th ed.
1990). It is sometimes referred to as an implied-in-law
contract (a legal fiction) to distinguish it from an implied-
in-fact contract (a voluntary agreement inferred from the
parties' conduct), and its function is to create a legal duty
where in fact the parties made no promises, without regard to
any apparent intention on their part. Id.
61 Finally, since the Board ruled that the contractor was
entitled to compensation based on quantum meruit, it held
that the theory of equitable estoppel was inapplicable to the
case. See Publishers Choice Book Manufacturing Co., supra,
slip op. at 13.