U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
Appeal of Printing Corporation of the Americas, Inc.
GPO BCA 14-84
January 28, 1985
MICHAEL F. DiMARIO, Administrative Law Judge
OPINION
This appeal is from the decision of J. G. Marken, Government
Printing Office Contracting Officer, dated April 11, 1984,
terminating a contract with Printing Corporation of the
Americas, Inc. (PCA), for default for "failure to produce
acceptable proofs in time to meet the scheduled shipping
date." The Board denies the appeal and affirms the decision
of the contracting officer.
FINDINGS OF FACT
On March 2, 1984, appellant, PCA, was awarded a contract
identified as Purchase Order 31968, Jacket No. 432-384, by
respondent, United States Government Printing Office (GPO)
(Exhibit 5). The award was based upon a telephone bid by
appellant of February 29, 1984, made in response to its
receipt of specifications and Invitation for Bids issued by
respondent on February 23, 1984 (Exhibit 2), and an amendment
thereto telegraphically issued February 27, 1984 (Exhibit 3).
The bid quote by appellant of $17,240 with shipping from its
Pompano Beach, Florida plant (Exhibit 4) was the lowest
competitive bid (Exhibit 1). The telephone bid, GPO
specifications, and GPO Publication 110.2, "Contract Terms No.
1," were incorporated into the contract by reference thereto
in the Purchase Order (Exhibits 2, 4, & 5). The contract
called for the production of 112,139 folded 4-color forms
entitled "License Plates 1984" for the United States
Department of Transportation per its requisition no. 4-00630
to be shipped by March 26, 1984, F.O.B. destination (Exhibits
2, 3, 4, & 5). The specifications required the respondent to
provide the appellant with certain materials; e.g., art work,
camera ready copy, and a sample from a previous printing of
the form to use as a folding dummy (Exhibit 2, page 1). The
appellant was to receive these materials by March 5, 1984
(Exhibit 2, page 6). In turn the appellant, before receiving
an "OK to print", was to furnish the respondent with two sets
of full color proofs and "one progressive proof book of face
and two top sheets only of back." (Exhibit 2, page 2) The
appellant was to submit the proofs as soon as it deemed
necessary to comply with the shipping schedule (Exhibit 2,
page 6). The proofs were to "be withheld 5 workdays from
receipt in the GPO to receipt in contractor's plant." (Exhibit
2, page 6) The GPO shipping schedule set a due date for proofs
from the appellant of March 12, 1984 (Exhibit 10). The
specifications contained a paragraph (Exhibit 2, page 2)
cautioning that:
If any contractor's errors are serious enough in the opinion of
the GPO to require revised proofs, the revised proofs are to be
provided at no extra expense to the Government. No extra time
can be allowed for this reproofing; such operations must be
accomplished within the original production schedule allotted in
the specifications."
The respondent issued the Purchase Order (Exhibit 5) and
prepared to mail the materials to the appellant on March 2,
1984 (Exhibit 5A). The Purchase Order and materials were in
fact mailed on March 5, 1984 (Exhibit 7). Appellant claimed
receipt of material on March 8, 1984, at 2:45 p.m. (Exhibit
9) some 3 days after the date of March 5 provided for in the
specifications (Exhibit 2, page 6). The appellant asserts
that because of this late receipt of materials, he telephoned
respondent on March 12 at 10 a.m. to ask for an extension of
time and was advised by a Mr. Vollmer that such extension
would be automatic upon respondent's receiving the [certified
mail] returned receipt. The appellant was in fact granted an
extension of time for the late copy (Exhibit 6 & 9). The
extension was to the final product shipping date which was
revised from March 26, 1984 to April 3, 1984.
On March 13, 1984, the Contract Compliance Section issued a
computer generated Exception Report (Exhibit 6). A
handwritten note thereon states: 1/ & 2/
K claims proofs will ship 3-19-84 from FLA 1 & 2
3-19 + 5 day hold = 3-26-84
3-26 is ship date
On March 14, 1984, based upon this calculation, Mr. R. C.
Pearson, Contract Compliance Section, recommended corrective
action (Exhibit 6). The Contracting Officer then directed
that a Show Cause Notice be sent to the appellant. The Notice
telegrammed on March 15, 1984, stated that "since you have
failed to perform the schedule requirements . . . the
government is considering terminating said contract . . . "
for default. Appellant was given 5 days from receipt of the
Notice to present extenuating factors (Exhibit 8).
The appellant received the Notice on March 16, 1984 (Exhibit
9) and responded in writing that same day setting forth the
essence of his conversation of March 12, 1984, with Mr.
Vollmer concerning the purported late receipt of materials and
his request for an extension. The appellant's response also
stated: "Proofs shipped this date via Air Express." (Exhibit
9)
The proofs were received from the appellant on March 19
(Exhibit 10). They were then routed through respondent's
Office of Typography and Design (T&D) (Exhibit 10) as required
by the specifications (Exhibit 2, page 3).
Mr. Whitmore, T&D, "rejected the proofs because of blue cast
overall due to cyan dot doubling. Cyan out of register. All
inks printing heavy and slurring problems." (Exhibit 19.)
Whitmore claimed to have "contacted printer about all the
problems, and he assured me they would be corrected on second
set of proofs." (Exhibits 10 & 19.) The proofs were returned
to the appellant from T&D by certified mail on March 22, 1984.
That same date, as a result of the need for revised proofs,
Mr. Pearson, Contract Compliance, recommended that corrective
action be taken (Exhibit 10). As a result, the contracting
officer on March 23, 1984, directed that a Cure Notice be sent
appellant (Exhibit 10). The Notice telegrammed March 23,
1984, stated that respondent
considers your inability to deliver satisfactory proofs within
time to meet specified delivery date . . .. a condition that is
endangering performance of the contract in accordance with its
terms. . . . you are . . . afforded the opportunity to present,
in writing, in 5 days from receipt thereof, the measures adopted
which have cured such condition. Unless such condition has been
cured, the
Government may terminate . . . for default . . . . (Exhibit 13)
The telegram was delivered to appellant on March 27, 1984, at
11:38 a.m. (Exhibit 13).
Appellant claims receipt of returned proofs on March 29, 1984
(Exhibit 20). However, the return receipt shows a Pompano
Beach, Florida, USPS registry stamp dated March 27, 1984, a
signature of appellant's recipient, and handwritten, undated
time entry of 10:45 a.m. (Exhibit 12).
The appellant then made color corrections and on April 3,
1984, sent a second set of proofs to respondent (Exhibit 20).
The proofs were received on April 5, 1984 (Exhibit 14) at
which time they were forwarded to T&D (Exhibit 14). On April
6, 1984, Mr. Whitmore, T&D, rejected the second set of proofs
due to doubling on magenta and cyan poor registration (stripping
problem). . . . Also, only one top chart was sent in on second
set of proofs. (Exhibit 19)
He also contacted the appellant the same day concerning the
rejection. He was told that there was a press problem. He
then told the appellant he would need a third set of proofs
(Exhibits 14 and 19). Mr. Whitmore in his "MEMO FOR THE
RECORD" (Exhibit 19) states:
The second set of proofs came back from the department marked "OK
to print." I reviewed these proofs, realized it would be
impossible to match on press, contacted Mr. Ed Zolek who agreed
we should see a third set of proofs. 3/
Mr. Whitmore then proceeded to return the rejected proofs to
appellant. Indeed, the materials were delivered to the
respondent's mail room on April 9, 1984, where they were
stopped at the request of the contracting officer (Exhibit
14).
Appellant claims that:
A phone call to Contract Compliance on the morning of April 9,
1984, indicated that the proofs were approved by the Agency, and
would be returned to us the next day. We did have a discussion
about the "doubling in red and blue," and I indicated that we had
a press problem on our 38/4 color for which we had flown in a
Miller mechanic for 5 days to successfully eliminate the
"doubling" . . . and we were in a position to immediately go-to-
press with this undertaking. 4/ (Exhibit 20.)
On April 11, 1984, the contracting officer, through his
contract administrator, advised the respondent's Contract
Review Board that the contractor is currently in default,
asked for concurrence to default, and recommended
reprocurement because of appellant's failure to meet scheduled
shipping date. All in accordance with Part II, 2-18, Default
of Contracts Terms No. 1. (Exhibit 15.)
The Contract Review Board by a vote of 4 to 0 gave its
concurrence that same date (Exhibit 15).
The appellant was notified of the termination for default by
letter dated April 11, 1984 (Exhibit 16) "because [sic] your
failure to produce acceptable proofs in time to meet the
scheduled shipping date." By letter of April 12, 1984, the
respondent advised appellant of its reprocurement from another
contractor at $17,795, and that the excess costs for this
action would be deducted from appellant's account (Exhibit
17).
Appellant, by letter of April 19, 1984, filed a timely Notice
of Appeal to the termination for default (Exhibit 20). The
Notice does not request a hearing but does set forth some
seven numbered facts upon which appellant relies. 5/ It also
sets out objections to the termination for
default for the following reasons:
1) Late arrival of artwork.
2) Late return of proofs on the part of the Government and
asserts that:
. . . upon receipt of "OK to print," in conjunction with the
"Press Inspection" indicated in the contracts, I am certain that
completed product would be consistent with GPO approved standards
and shipments would be started within five (5) days and the job
completed within 8 working days.
The appeal comes to the Board in this form for decision on the
written record. 6/
ISSUES PRESENTED
1. Did the late delivery of artwork and purported late return
of rejected proofs by respondent operate to deny the
government entitlement to terminate the contract for default
for "failure to produce acceptable proofs in time to meet the
scheduled shipping date."
2. Did the request of respondent's T&D agent for a third set
of proofs modify the contract terms with respect to
appellant's time of performance.
DISCUSSION
The original production schedule was set forth in the
specifications substantially as follows:
1) Materials to contractor by March 5, 1984.
2) Contractor to submit proofs as soon as contractor deems
necessary to comply with the shipping schedule (Exhibit 2,
page 6).
3) Proofs to "be withheld 5 workdays from receipt in the GPO
to receipt in the contractor's plant." (Exhibit 2, page 6)
("Workday" is defined as Monday through Friday of each week
exclusive of the days on which Federal Government holidays are
observed. U.S. Government Printing Office Contract Terms No.
1, paragraph 2-1.)
4) Complete final product to be shipped on or before March 26,
1984.
No express date was set in the specifications for the
contractor to ship the proofs to the respondent. Such a date,
March 12, 1984, was established, however, in the GPO shipping
schedule on the compliance record presumably for compliance
monitoring purposes only (Exhibit 10). The contract
specifications contained an express provision concerning the
effect on time of failure to produce acceptable proofs within
the established production schedule:
No extra time can be allowed for this reproofing; such operations
must be accomplished within the original production schedule
allotted in the specifications. (Exhibit 2, page 2)
Thus, the original schedule gave the contractor 22 calendar days
from and including date of receipt of furnished Government
materials until and including the date of shipment of complete
final product with no additional time for reproofing.
The appellant received the material on March 8th, 3 days later
than the date set forth in the specifications (Exhibit 9).
Because of this late receipt of material the final shipping
date was extended from March 26 to April 3. Extensions of
schedules are governed by GPO Contract Terms No. 1, paragraph
2-11(c) (1) as follows:
(c) Extension of schedules.
(1) In the event a delay is caused by any action of the
Government, including failure to furnish purchase/print order,
copy and/or materials as scheduled, the shipping schedule
will be extended automatically by the total number of workdays
that work was delayed PLUS 1 workday for each day of delay; such
period of grace not to exceed 3 workdays. For example:
Order, etc., 1 workday late + 1 workday
grace = 2 workdays extension
Order, etc., 2 workdays late + 2 workdays
grace = 4 workdays extension
Order, etc., 3 workdays late + 3 workdays
grace = 6 workdays extension
Order, etc., over 3 workdays late: total
number of workdays late + 3 workdays
grace = total number of workdays
extension."
Thus, it appears that with respect to the first Government delay,
appellant was adequately compensated within the terms of the
contract.
Now let us examine the facts with respect to the second
Government delay. The contractor made the shipment of the
first set of proofs to the respondent on March 16, 1984, 8
days after his receipt of the materials from respondent.
Respondent received the materials March 19, 1984, 3 days after
transmittal by the appellant and some 7 days after the
original internal GPO scheduled date for receipt of the
materials. At this point 11 days of the contractor's allotted
time from receipt of materials to shipment of final product
had been consumed.
The proofs were rejected by the respondent and returned to
appellant on March 22, 1984. The appellant received them on
either March 27, 1984 as shown by the postal registry stamp or
March 29th as claimed by appellant. In either event, it is
clear that the period "from receipt in the GPO until receipt
in the contractor's plant" was a period greater than 5
workdays. 7/ Arguably, the appellant, at that point in time,
was entitled to 1, 2, or 6 days additional time for its
performance depending upon the date used for actual receipt
and the construction given the grace period limitations clause
of the Extension of Schedule Provisions,
supra. The respondent, using the March 27th date and construing
the grace period limitation to be a sum total of 3 days
irrespective of the number of delays occasioned by the
Government, granted a l-day extension to "4-4" as shown on its
compliance record (Exhibit 14). However, using the same date of
receipt but construing the grace period limitation to apply to
each and every delay caused by the Government would result in a
2-day extension to April 5, 1984. Using the contractor's claimed
date of receipt and the latter construction would result in a 6-
day extension to April 9, 1984.
The Board finds that there is substantial evidence in the
documented postal registry stamp date and the wording of the
Extension of Schedule provision as applying to "a delay" to
support the second construction. Thus, the final shipping
date should have been extended to April 5, 1984, the date
respondent received the second set of proofs.
It is clear, however, that at that point in time the appellant
was in fact in default and could have been right there and
then terminated by the contracting officer. Appellant's
argument that the termination for default should be reversed
because of this second Government delay is thus without merit.
Rather than terminate the contract, respondent availed itself
of its right to a second 5-day withholding period in order to
examine the second set of proofs, whereupon finding them to be
defective, it so notified the contractor. In doing so, its
agent, Mr. Samuel Whitmore, a laboratory technician, may have
conveyed an impression to the appellant that the contract was
continuing. Be that as it may, the express terms of the
contract with respect to delays caused by reproofing were
still in effect.
Moreover, the appellant could not lawfully rely upon Mr.
Whitmore's representations with respect to additional time for
performance, if any were in fact made, since any actual authority
he possessed was circumscribed by his assignment to the
Typography and Design Division, an entity in respondent's
organization separate from its Printing Procurement Department.
The record is devoid of any evidence showing that Mr. Whitmore or
the T&D Division were held out to possess any contracting
authority with respect to the time elements of the contract.
It is well established Federal procurement law that the
Government is not bound by unauthorized agents. Federal Crop
Insurance Corp. v. Merrill, 332 U.S. 380 (1947). In order to
bind the Government, employees who act as its agents must have
actual authority. Jackson v. United States, 216 Ct. Cl. 25,
41, N. 2, 573 F.2d 1189, 1197, N. 2, (1978), and proof or
acknowledgment of that authority is necessary to a claim.
Robert P. Lewis, Sr. v. United States, 231 Ct. Cl. 799 (1982).
Moreover, the appellant must show that the Government employee
upon whom it relied had actual authority to bind the
Government in the specific regard in question. Alabama Rural
Fire Insurance Company v. United States, 215 Ct. Cl. 442,
458-59; 572 F.2d 727, 736 (1978). No such proof,
acknowledgment, or showing has been proffered by the
appellant.
CONCLUSION
The Board finds that the appeal is without merit and thus
affirms the decision of the contracting officer.
_______________
1/ Presumably, the symbol K is used for its common procurement
and legal shorthand meaning of contractor.
2/ The revised shipping date had not yet been entered on the
compliance record, since respondent had not yet received the
certified mail return receipt, and indeed it was not received
until March 27th at 11:17 a.m. (Exhibit 5A).
3/ Mr. Zolek is the Department of Transportation's
representative.
4/ This apparently was the same call identified by Mr. Whitmore
as being April 6, 1984.
5/ The appellant's facts, not controverted by the submissions of
respondent, are substantially incorporated in this Statement of
Findings where relevant to the issues presented. They are
identified by parenthetical reference to the Notice of Appeal
(Exhibit 20). Where such facts are controverted they are
included together with the relevant evidence submitted by
respondent.
6/ Appellant did not affirmatively avail itself of its right to a
hearing. Accordingly, the right was deemed waived pursuant to
the Board's rules (letter to Appellant dated November 22, 1984).
7/ March 24th and 25th, 1984, were a Saturday and Sunday,
respectively, and thus not "workdays" as such term is defined in
the contract.