U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
WASHINGTON, DC 20401
In the Matter of )
)
The Appeal of )
)
MCDONALD & EUDY PRINTERS, INC. ) Docket No. GPO BCA 25-92
Program C696-S )
Purchase Order 91372 )
Print Orders 40023, 40024 )
and 40026 )
DECISION AND ORDER
By letter dated July 22, 1992, McDonald & Eudy Printers, Inc.
(Appellant or Contractor), 4509 Beech Road, Temple Hills,
Maryland 20748, filed a timely appeal from the July 2, 1992,
final decision of Contracting Officer Jack Scott, of the U.S.
Government Printing Office's (Respondent or GPO or Government)
Printing Procurement Department, Washington, DC 20401,
rejecting the Appellant's request for an equitable adjustment
of $2,127.80 for reprinting text signatures under its contract
identified as Program C696-S, Purchase Order 91372, Print
Orders 40023, 40024, and 40026, because the Government-
furnished camera copy for six (6) pages was incorrect (R4
File, Tab H).1 Instead, the Contracting Officer allowed the
claim only in the total amount of $727.42 for the three print
orders involved (R4 File, Tab H). For the reasons which
follow, the decision of the Contracting Officer is hereby
AFFIRMED, and the appeal is DENIED.2
FINDINGS OF FACT3
1. On May 10, 1991, the Respondent solicited bids for a
single-award "requirements" contract, covering the period from
July 1, 1991 through June 30, 1992, to produce and distribute
"Defense Language Proficiency Test Booklets (DLPTBs)" for the
Department of the Army's Publications and Printing Command
(Army) (R4 File, Tab A, p. 1).4
2. Among other specifications, the Invitation for Bids (IFB)
contained the following clauses and provisions:
QUANTITY: Approximately 4,000 copies per order.
Occasionally an order may be placed for more or less than
4,000 copies.
NUMBER OF PAGES: Approximately 12 to 52 pages per order.
* * * * * * * * * *
GOVERNMENT TO FURNISH: Camera copy consisting of line art
for text, line illustrations, and reprint copy to be
reproduced same size.
Film negatives.
A supply of blue labels and selection certificates for
shipping Departmental Random copies.
One reproduction proof (image size 7-7/8 x 6-1/8") for
shipping container labels.
Identification markings such as register marks, ring
folios, rubber stamped jacket numbers, commercial
identification marks of any kind, etc., expect GPO imprint,
form number, and revision date, carried on copy or film,
must not print on finished product.
* * * * * * * * * *
FILMS: The contractor must make all films not furnished by
the Government. Films may be opaqued on either the
emulsion or non-emulsion side. The films delivered to the
Government must be the final films used for printing. They
must be suitable for making press plates for subsequent
reprinting without any retouching, opaquing, surprinting or
any other hand or camera work.
The contractor must not print prior to receipt of any "OK
to print."
PRIOR TO PRODUCTION SAMPLES: The sample requirement for
this contract is not less than 4 serially numbered printed
construction samples. Each sample shall be printed and
constructed as specified and must be of the size, kind, and
quality that the contract will furnish.
Samples will be inspected and tested and must comply with
the specifications as to construction, kind and quality of
materials.
Prior to the commencement of production of the contract
quantity, the contractor shall submit samples numbered
000001 and 000002 to [the Army's Alexandria, Virginia
facility] and samples numbered 000003 and 000004 to [the
Army's Monterey, California facility].
Four samples will be tested for conformance to
specifications. . . . The samples must be submitted in
sufficient time to allow Government testing of the samples
and production and shipment in accordance with the shipping
schedule.
The Government will approve, conditionally approve, or
disapprove the samples within 10 workdays of the receipt
thereof. Approval or conditional approval shall not
relieve the contractor from complying with the
specifications and all other terms and conditions of the
contract. A conditional approval shall state any further
action required by the contractor. A notice of disapproval
shall state the reasons therefor.
* * * * * * * * * *
Manufacture of the final product prior to approval of the
sample submitted is at the contractor's risk. Samples will
not be returned to the contractor. All costs, including
the costs of all samples shall be included in the contract
price for the production quantity.5
See, R4 File, Tab A, pp. 5-6. [Emphasis added.]
3. The Contractor submitted a low bid of $37,616.04 (R4 File,
Tab B). On June 17, 1991, the Respondent issued Purchase
Order 91372 awarding the contract to the Appellant (R4 File,
Tab C).
4. On March 31, 1992, the Army issued Print Orders 40023,
40024, and 40026 to the Appellant for the production of 4,000
copies each of three separate DLPTBs relating to Persian
language listening, reading and speaking comprehension,
respectively (R4 File, Tab D). Since the delivery date for
the DLPTBs was May 11, 1992, the Print Orders also required
the Appellant to furnish four (4) sets of advanced proofs to
the Government by April 6, 1992, with April 20, 1992, being
established as the date for the return of the proofs to the
Contractor (R4 File, Tab D). Furthermore, each Print Order
contained the following statement, in capital letters and
emphasized by four stars preceding the words:
****FINAL PRODUCTION IS CONTINGENT UPON APPROVAL OF
ADVANCE COPIES.
(R4 File, Tab D).
5. The Appellant furnished the required proofs for the three
DLPTBs on time. However, when the Army reviewed them it
discovered that "[d]ue to departmental error, incorrect camera
copy [had been] furnished[.]," and six (6) pages overall
needed correction- specifically, page 13 of the DLPTB for
Persian listening comprehension (Print Order 40023), pages 10,
12, 17, and 24 of the DLPTB for Persian reading comprehension
(Print Order 40024), and page 17 of the DLPTB for Persian
speaking comprehension (Print Order 40026) (R4 File, Tab E).6
Consequently, the Army furnished corrected camera copy for
these pages, and told the Contractor to send new advanced
copies of the DLPTBs to its Alexandria, Virginia and Monterey,
California facilities, as provided in the Print Orders (R4
File, Tab E). The Army also informed the Appellant that it
was forwarding "[m]atters regarding contractual discrepancies"
to GPO "for review and possible modifications[.]" (R4 File,
Tab E).
6. On May 12, 1992, prior to receiving the Army's written
confirmation of the page errors in the three Print Orders and
instructions on how to proceed, the Appellant had already
written to the Respondent requesting an equitable price
adjustment and a contract modification for "reprinting of text
pages due to [Army] errors[.]" (R4 File, Tab F).7 In that
regard, the Contractor calculated its total price adjustment
claim of $2,127.80, as follows:
Print Order 40023-Reprint 16-page signature:
II. C. 1. [Makeready and Set Up
Charges]...................... $168.00
C. 2. [Running Charges]....... 332.80
Total $500.80
Print Order 40024-Reprint 32-page signature:
II. C. 1. [Makeready and Set Up
Charges]...................... $336.00
C. 2. [Running Charges]....... 665.00
Total $1,001.00
Print Order 40026-Reprint 16-page and 4-page signatures:
II. C. 1. [Makeready and Set Up
Charges]...................... $210.00
C. 2. [Running Charges]....... 416.00
Total $626.00
See, R4 File, Tab F. The running charges shown in Appellant's
claim represents the cost of reprinting the entire 4,000 copies
of each of the three DLPTBs affected by the camera copy error.
7. On June 22, 1992, in response to the equitable adjustment
claim, the Contracting Officer issued Contract Modification
No. 1, and sent it to the Appellant for signature (R4 File,
Tab G). The proposed modification accepted the Contractor's
makeready and set up charges, but rejected the Appellant's
claim for reprinting the entire quantity of all three DLPTBs.
As recomputed by the Contracting Officer, the Appellant was
offered an equitable adjustment, as follows:
Print Order 40023
2 pieces of film @ $2.00 each..... $ 4.00
Makeready (16 pages @ $10.50
each).............................. 168.00
Running (4 copies of 16 pages
@ .52 per 100 copies).............. .33
Total $172.33
Print Order 40024
2 pieces of film @ $2.00 each..... $ 4.00
Makeready (32 pages @ $10.50
each)............................. 336.00
Running (4 copies of 32 pages
@ .52 per 100 copies)............. .67
Total $340.67
Print Order 40026
2 pieces of film @ $2.00 each..... $ 4.00
Makeready (20 pages @ $10.50
each)............................. 210.00
Running (4 copies of 20 pages
@ .52 per 100 copies)............. .42
Total $214.42
See, R4 File, Tab G. The total equitable price adjustment
recalculated by the Contracting Officer was $727.42 (R4 File, Tab
G). The Contractor disagreed and refused to sign Contract
Modification No. 1.
8. On July 2, 1992, after several telephone conversations
between the parties about the proper amount of an equitable
adjustment, the Contracting Officer issued a final decision
disallowing the Appellant's overall claim of $2,127.80, and
authorizing total reimbursements of $727.42, as computed in
Contract Modification No. 1 (R4 File, Tab H). The Contracting
Officers reasoned, in pertinent part, as follows:
On pages 5 and 6 of the contract specifications under
"Prior to Production Samples" it states that the sample
requirement is for not less than four serially numbered
prior to production samples. These four samples are to be
submitted prior to the commencement of production of the
contract production quantity. These samples will be tested
for conformance to specifications. Manufacture of the
final product prior to approval of the samples submitted is
at the contractor's risk. Therefore, I cannot allow your
request for reprinting signatures for the whole print order
quantities, since by the terms of the contract at this
stage of production, you were only authorized to print four
copies of each product.
* * * * * * * * * *
The total additional compensation authorized for your
performance on these three [P]rint [O]rders is $727.42.
The submission of the new camera copy for the six text
pages was accomplished in accordance with Contract Clause
4[,] Changes, GPO Contract Terms (GPO Pub. 310.2), which is
a part of this contract.8
See, R4 File, Tab H, pp. 1, 2. [Emphasis added.]
9. The Contractor timely appealed the Contracting Officer's
final decision to the Board.
ISSUE PRESENTED
Is the Appellant entitled to an equitable adjustment for
reprinting the entire quantity of the DLPTBs affected by
the page changes necessary to correct the errors in the
camera copy furnished by the Government for Print Orders
40023, 40024, and 40026, or is the Contracting Officer
right in limiting the amount of the adjustment for each
Print Order to a reprint of the four (4) copies required by
the "Prior to Production Samples" specification of the IFB?
POSITION OF THE PARTIES9
Reduced to its essentials, this appeal involves the proper
interpretation of the agreement between the parties, primarily
the "Prior to Production Samples" clause of the contract. The
Appellant maintains that the plain meaning of so much of that
clause which says that "[s]amples will be inspected and tested
and must comply with the specifications as to construction,
kind and quality of materials[.]," means that so long as the
initial samples conformed to the original specifications, the
Government was not at liberty to reject them simply because of
an author's error. Complaint, p. 1; RPC, p. 4. Therefore,
according to the Contractor, when the Army had to make page
changes in the three affected DLPTBs because the original
Government-furnished camera copy contained errors, the
"Changes" clause of the contract allows full compensation for
reprinting the text. Complaint, p. 1. Indeed, the Appellant
notes that if the Government had not amended the initial
samples, all of the DLPTBs it printed in anticipation of an
"OK to print" would have been accepted and paid for by the
Respondent. RPC, pp. 4-5. Furthermore, the Contractor
contends that the customary practice in the trade is to print
the entire quantity ordered to save costs, instead of first
preparing pre-production samples and removing the job from the
presses until the samples are approved for final printing.
RPC, p. 5. Accordingly, for these reasons, the Appellant
believes that it is entitled to recover its entire equitable
adjustment claim of $2,127.80. Id.
The Respondent, on the other hand, argues that the Appellant's
interpretation of the contract is unsupported by the plain
meaning of the words of the agreement. R. Brf., p. 3; RPC, p.
5. In that regard, notwithstanding the Contractor's purported
reliance on the industry practice of printing the entire
ordered quantity at one time to save money, and its contention
the Government must accept and pay for the entire quantity
since the DLPTBs met the original specifications, GPO contends
that the "Prior to Production Samples" clause of the contract
clearly provides that: (1) samples shall be submitted to the
Army "[p]rior to the commencement of production of the
contract quantity, . . ."; and (2) the Contractor bears the
risk of manufacturing the final product prior to approval of
the sample. R. Brf., p. 3 (citing, R4 File, Tab A, pp. 5-6).
Furthermore, the Respondent points out that the "Films" clause
of the contract expressly forbids the Contractor from printing
prior to receipt of an "OK to print," and indeed, each Print
Order warns that "[f]inal production is contingent upon
approval of advance copies." Id. (citing, R4 File, Tab A, p.
5, Tab D). Consequently, according to GPO, when the
Appellant, in the face of these clear contractual clauses and
provisions, printed all of the production quantities before
receiving an "OK to print," it assumed responsibility for any
additional costs which it incurred. Id. Finally, GPO
argues that the "Changes" clause of the contract allowed the
Government to correct the page errors and equitably adjust the
contract price. RPC, p. 4. Accordingly, the Respondent
believes that its adjustment offer to the Appellant of $727.42
is equitable under the circumstances, and it asks the Board to
affirm the Contracting Officer's decision. R. Brf., p. 4;
RPC, p. 4.
CONCLUSIONS10
As indicated previously, the single issue raised by the facts
in this case can be resolved by a proper interpretation of the
contract, especially the "Prior to Production Samples" clause.
Since the parties have drawn different meanings from the
disputed language, 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?11
Shepard Printing, GPO BCA 37-92 (January 28, 1994), Sl. op. at
15-16.
Since the focus of inquiry in this case is confined to the
contract itself, see, RD Printing Associates, Inc., supra, Sl.
op. at 9, 13, fns. 9 and 15; B. P. Printing and Office
Supplies, GPO BCA 14-91 (August 10, 1992), Sl. op. at 15,
certain legal principles should be kept in mind at the outset.
When the parties confront the Board with two different
interpretations of the same contract language they raise the
possibility that the specifications may be ambiguous. R.C.
Swanson Printing and Typesetting Company, GPO BCA 31-90
(February 6, 1992), Sl. op. at 41, aff'd on other grounds,
Richard C. Swanson, T/A R.C. Swanson Printing and Typesetting
Company v. United States, Cl.Ct. No. 92-128C (October 2,
1992). Contractual language is ambiguous if it will sustain
more than one reasonable interpretation.12 Fry
Communications, Inc./InfoConversion Joint Venture, GPO BCA
9-85, Decision on Remand (August 5, 1991), Sl. op. at 9; R.C.
Swanson Printing and Typesetting Company, supra, Sl. op. at
41, fn. 22; General Business Forms, Inc., supra, Sl. op. at
16. See also, Fry Communications, Inc./InfoConversion Joint
Venture v. United States, supra, 22 Cl.Ct. at 503 (citing,
Edward R. Marden Corporation v. United States, 803 F.2d 701,
705 (Fed. Cir. 1986); Sun Shipbuilding & Drydock Co. v. United
States, 183 Ct.Cl. 358, 372 (1968)). In analyzing disputed
contract language, the courts and contract appeals boards
place themselves in the shoes of a reasonably prudent
contractor; i.e., the language of the contract must be given
that meaning which a reasonably intelligent contractor
acquainted with the circumstances surrounding the contract
would derive. General Business Forms, Inc., supra, Sl. op. at
18 (citing, Salem Engineering and Construction Corporation v.
United States, 2 Cl.Ct. 803, 806 (1983)). See also, Norcoast
Constructors, Inc. v. United States, 448 F.2d 1400, 1404, 196
Ct.Cl. 1, 9 (1971); Firestone Tire and Rubber Company v.
United States, 444 F.2d 547, 551, 195 Ct.Cl. 21, 30 (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.13 Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl.Ct. at 503
(citing, Edward R. Marden Corporation v. United States, supra,
803 F.2d at 705); R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 41, fn. 22. 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.14 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 (1970); WPC Enterprises, Inc. v. United
States, 163 Ct.Cl. 1, 6 (1963)); General Business Forms, Inc.,
supra, Sl. op. at 17 (citing, Enrico Roman, Inc. v. United
States, supra, 2 Cl.Ct. at 106).
However, the rules concerning 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. Shepard Printing, supra, Sl. op. at
19; R.C. Swanson Printing and Typesetting Company, supra, Sl.
op. at 42. The most basic principle of contract construction
is that the document should be interpreted as a whole.15 Hol-
Gar Manufacturing Corporation v. United States, 169 Ct.Cl.
384, 388, 351 F.2d 972, 975 (1965); General Business Forms,
Inc., supra, Sl. op. at 16; Restatement (Second) Contracts, §
202(2) (1981). Hence, all provisions of a contract should be
given effect and no provision is to be rendered meaningless.
Pacificorp Capital, Inc. v. United States, supra, 25 Cl.Ct. at
716; United States v. Johnson Controls, Inc., 713 F.2d 1541,
1555 (Fed. Cir. 1983); Fortec Constructors v. United States,
760 F.2d 1288, 1292 (Fed. Cir. 1985); Jamsar, Inc. v. United
States, 442 F.2d 930 (Ct.Cl. 1971); Grace Industries, Inc.,
ASBCA No. 33553, 87-3 BCA ¶ 20,171; General Business Forms,
Inc., supra, Sl. op. at 16 (citing, Raytheon Company v. United
States, 2 Cl.Ct. 763 (1983)). 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.16
B. D. Click Company v. United States, 614 F.2d 748 (Ct.Cl.
1980). When these principles to the facts in the record, it
is clear that:
The Appellant assumed the risk of printing all of the
DLPTBs before receiving the required approval from the
Government. Therefore, the Contractor must bear the cost
of its premature unilateral act, and is not entitled to an
equitable adjustment based on its reprinting of the entire
order. Accordingly, the Contracting Officer correctly
limited the amount of the Appellant's adjustment solely to
the cost of reprinting the four (4) advance copies required
by the "Prior to Production Samples" clause for each of the
three Print Orders affected by the page changes.
This is a very simple case. Notwithstanding the painstaking
efforts of the Appellant to construe the contract's "Prior to
Production Samples" clause, the Board does not see any
ambiguity in its terms. Cf., Shepard Printing, supra, Sl. op.
at 20; R.C. Swanson Printing and Typesetting Company, supra,
Sl. op. at 43-44; Export Packing & Crating Company, ASBCA No.
16133, 73-2 BCA ¶ 10,066, at 47,215. In the Board's view,
nothing could be clearer than the express requirements of that
clause which state that samples should be submitted "[p]rior
to the commencement of production of the contract quantity,"
and "in sufficient time to allow Government testing . . . and
production . . . in accordance with the shipping schedule,"
and that "[m]anufacture of the final product prior to approval
of the sample submitted is at the contractor's risk[.]" (R4
File, Tab A, pp. 5-6). Furthermore, as if that is not
enough, the "Films" clause provides that "[t]he contractor
must not print prior to receipt of any 'OK to print[.]'," and
each Print Order says, in capital letters, that "[f]inal
production is contingent upon approval of advance copies[.]"
(R4 File, Tab A, p. 5 and Tab D). There is nothing obtuse or
hazy about this language. No conjecture or speculation is
necessary to interpret these contract words and terms. They
are clear ex facie, and mean what they say. Thus, the
documentary record is peppered with numerous "yellow lights"
cautioning the Contractor not to print the entire ordered
quantity of DLPTBs unless and until an "OK to print" has been
given following the review and approval of the sample advance
copies by the Government. A reasonably aware contractor
ignores these warnings at its peril.
There is a paucity of cases in the Board's volumes concerning
premature printing by GPO contractors. The Board's exhaustive
research of its own decisions and those of its predecessor ad
hoc panels,17 reveals only one case analogous to the present
situation-Serigraphic Arts, Inc., GPOCAB 22-79 (May 8, 1980).
In that case, the contractor appealed a final decision denying
its claim for certain additional costs associated with its
printing of 465,000 numbered, pressure sensitive adhesive
decals for the Department of Transportation (DOT). The
contract in dispute contained a "Proofs" clause which required
the contractor, in pertinent part to:
Submit 5 proofs of each item representative of the finished
product per these specifications (unnumbered) along with
the furnished copy for approval before printing . . .
Submit the proofs as soon as possible to allow for the
possibility of necessary corrections. The proofs are
scheduled to be back at the contractor's plant within 9
working days after receipt at the GPO.
Serigraphic Arts, Inc., supra, Sl. op. at 6. Although the
proofs, as originally submitted by the contractor, complied with
the contract specifications, DOT requested a substantial color
change. However, because the contractor misunderstood a
telephone conversation it had with a GPO employee (not the
contracting officer), it thought it had been given verbal
approval to print the job in accordance with the original proofs,
and did so before it received the amended proofs back from GPO.
Consequently, after reprinting the decals, as changed, the
contractor alleged that it had incurred extra costs amounting to
over $5,000.00 which, in addition to the contract price, the
Government should pay. The contracting officer disagreed,
contending that since the contractor had not been authorized to
print the job as provided for by the procedures within the
contract specifications, the additional costs which it had
incurred by printing the contract prematurely could not be
reimbursed. Affirming the contracting officer's denial of the
claim for additional costs, the ad hoc panel pointed to the
"Proofs" clause and reasoned:
. . .[T]o make sense of the first sentence of this
provision it is necessary to read it in conjunction with
the rest of the contract clause. Daniel H. Foster, Jr.,
ASBCA No. 21965, 78-2 BCA ¶ 13,541, on reconsideration,
79-2 BCA ¶ 14,161. If verbal approval of the proofs would
have been sufficient to begin to print then it would not
have been necessary for the GPO to return the proofs to the
contractor within a certain number of days as required by
the last sentence of the clause. When one reads the entire
clause together, the reasonable interpretation is that the
contractor must receive the proofs prior to printing. To
begin printing without such authorization is to act
unilaterally and to assume the risk of incorrectly
interpreting the contract. California Shipbuilding and Dry
Dock Company, ASBCA No. 21394, 78-1 BCA ¶ 13,168.
. . . [The contractor's] action, albeit taken under the
time limitations of the contract, risked the possibility
that some alteration of the proofs would be necessary.
Serigraphic Arts, Inc., supra, Sl. op. at 7-8. [Emphasis added.]
As indicated in the ad hoc panel's decision, the rule which
allocates the risk of a contractor's disregard of contract
specifications and resulting premature performance to the
contractor, is consistently applied in Government contract law.
See, e.g., Hobbs Construction and Developement, Inc., ASBCA Nos.
30432, 32151, 91-2 BCA ¶ 24,014; Gibson Hart Company, VABCA No.
2847, 89-2 BCA ¶ 21,830.
The only explanation offered by the Appellant for prematurely
printing the entire ordered quantity of DLPTBs in this case is
its contention that it followed the customary practice in the
trade to save costs. RPC, p. 5. However, as previously
mentioned, the settled rule of construction is that custom and
trade usage may not contradict clear or unambiguous terms.18
WRB Corporation v. United States, supra, 183 Ct.Cl. at 436.
Furthermore, in a recent decision the Board rejected a
contractor's argument based upon its adherence to the
commercial standards of the private sector, on the ground that
they are of no relevance in a Government procurement.
Sterling Printing, Inc., GPO BCA 20-89 (March 28, 1994), Sl.
op. at 25, fn. 38. Thus, the Board believes that the
Appellant's alleged reliance on industry practice as an excuse
for disregarding the express specifications in its contract,
even if true, is not enough to shift risk of its premature act
to the Government, especially in light of well-settled
procurement law principles.19 See, e.g., Hobbs Construction
and Developement, Inc., supra, 91-2 BCA ¶ 24,014; Gibson Hart
Company, supra, 89-2 BCA ¶ 21,830; Serigraphic Arts, Inc.,
supra.
In the final analysis, the Board believes that this case is a
rarity in the annals of the Board and the ad hoc panels,
because the meaning of the key contract provisions are so
obvious that a reasonable contractor could have no doubt as to
their meaning-they are impossible to misconstrue or
misunderstand. The only reasonable reading of the relevant
contractual words and phrases discloses a production sequence
under which the Appellant was not authorized to print the
entire ordered quantity of DLPTBs until it was expressly told
to do so by receipt of an "OK to print" following the review
and approval of the pre-production samples by the Government.
Furthermore, the Contractor was expressly told that it bore
the risk of final performance in advance of such approval.
This contract language is so clear as to warrant no contrary
interpretation. Indeed, any construction that shifts the risk
of premature performance to the Government in light of this
language, would not merely strain the contract, it would
rewrite it. The Board is not only unwilling to distort the
contract language in this case, but even if it had a mind to
do so, it lacks the authority to amend the agreement. Cf.,
Shepard Printing, supra, Sl. op. at 9, fn. 8; The Wessel
Company, Inc., supra, Sl. op. at 32-33; Bay Printing, Inc.,
GPO BCA 16-85 (January 30, 1987), Sl. op. at 9; Peake
Printers, Inc., GPO BCA 12-85 (November 12, 1986), Sl. op. at
6.
Lastly, it should be clear that although the contract and the
Print Orders were drafted by the Respondent, the ultimate
beneficiary of strict adherence to the relevant language
should have been the Appellant. In the Board's view, the
contractual procedure was there to protect against just the
sort of increased costs experienced by the Contractor when, as
here, the Government, for whatever reason, makes changes to
the product after examining the original sample. Since the
Appellant chose to disregard these provisions, under the
express terms of the contract, it assumed the risk of any
increased costs which might have occurred from those changes.
Accordingly, the appeal is denied in its entirety.
ORDER
The Board finds and concludes that by printing the entire
quantity of DLPTBs before receiving the required approval
from the Government, the Appellant, in accordance with the
express language of the contract and the Print Orders,
assumed the risk and bears the cost of its premature
unilateral act. THEREFORE, the decision of the Contracting
officer is AFFIRMED, and the appeal is DENIED.20
It is so Ordered.
April 11, 1994 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 August 28, 1992. 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 hereinafter as the R4 File,
with an appropriate Tab letter also indicated. The R4 File
consists of eight (8) documents identified as Tabs A through
H.
2 By letter dated September 17, 1992, the Appellant advised
the Board that it had selected the optional Accelerated
Procedure to process its appeal. Board Rules, Rules 12.1(b)
and 12.3.
3 Decisions under the Accelerated Procedure are normally
brief and contain only summary findings of fact and
conclusions. Board Rules, Rule 12.3(b). In this case,
however, the Board believes that the nature of the
controversy entitles the parties to a fuller explanation of
the facts, issues, and reasons for the Board's decision than
would be found in a typical Accelerated Procedure case. See,
McDonald & Eudy Printers, Inc., GPO BCA 40-92 (January 31,
1994), Sl. op. at 2, fn. 3; Shepard Printing, GPO BCA 37-92
(January 28, 1994), Sl. op. at 2, fn. 3; Hurt's Printing
Company, Inc., GPO BCA 27-92 (January 19, 1994), Sl. op. at
2, fn. 3. The Board also notes that this decision, unlike
its opinions under the Small Claims (Expedited) Procedure,
may be cited as precedent in future appeals. Cf., Graphics
Image, Inc., GPO BCA 13-92 (August 31, 1992), Sl. op. at 2,
fn. 3; Board Rules, Rule 12.2(d).
4 The "Ordering" clause of the contract provided, in
pertinent part, that: "Items to be purchased under the
contract shall be ordered by the issuance of print orders by
the Government[.]" (R4 File, Tab A, p. 4). Furthermore, the
contract was a "direct-deal" arrangement, and the Army was
responsible for issuance of the Print Orders during the term
of the agreement (R4 File, Tab A, p. 3). See, Printing
Procurement Regulation, GPO Publication 305.3 (September 1,
1988), Chap. XII, Sec. 1, ¶ 2 (hereinafter PPR).
5 Apart from the usual specifications pertaining to printing,
binding and delivery of the publications in question, the
contract was also governed by applicable articles of GPO
Contract Terms, GPO Publication 310.2, effective December 1,
1987 (Rev. 9-88) (GPO Contract Terms), and GPO's Quality
Assurance Through Attributes Program, GPO Publication 310.1,
effective May 1979 (revised November 1989) (QATAP), which
were incorporated by reference in the Purchase Order (R4
File, Tab A, p. 2).
6 Tab E is a letter from the Army to the Appellant, dated May
27, 1992, confirming a previous conversation concerning the
page errors discovered in the proofs furnished under the
three Print Orders. The letter refers to Print Orders 40020
through 40027, and except for the three in dispute, approves
the others-Print Orders 40020, 40021, 40022, 40025, and
40027-for printing and distribution (R4 File, Tab E).
7 Tab F refers to an attached letter from the Army, which is
not part of the file. Tab E contains the only letter from
the Army in the record, and it is dated May 27, 1992, or 15
days later than the Appellant's correspondence seeking an
equitable adjustment. See, note 6 supra.
8 See, note 5 supra. The standard GPO "Changes" clause
provides, in pertinent part: "(a) The Contracting Officer may
at any time, by written order, . . . , make changes within
the general scope of this contract in . . . (1) Drawings,
designs, or specifications when the supplies to be furnished
are to be specially manufactured for the Government in
accordance with the drawings, designs, or specifications. . .
.(b) If any such change causes an increase or decrease in the
cost of, or the time required for, performance of any part of
the work, whether or not changed by the order, the
Contracting Officer shall make an equitable adjustment in the
contract price, the delivery schedule, or both, and shall
modify the contract." GPO Contract Terms, Contract Clauses,
¶¶ 4(a),(b) (Changes).
9 Only the Respondent submitted a written brief in this
appeal. See, Respondent's Brief, dated March 1, 1993
(hereinafter R. Brf.). The Board's understanding of the
positions of the parties is based on the Appellant's
Complaint, dated July 22, 1992, the Respondent's Answer,
dated October 19, 1992, the discussions at the presubmission
conference on December 8, 1992, as reflected in the Report of
Presubmission Conference, dated February 17, 1993
(hereinafter RPC), and the Respondent's brief.
10 The record on which the Board's decision is based consists
of: (1) the Appellant's letter, dated July 22, 1992, noting
an appeal from the Contracting Officer's decision and
containing its Complaint; (2) the R4 File (Tabs A-H); (3) the
Respondent's Answer, dated October 19, 1992; (4) the Report
of Presubmission Conference, dated February 17, 1993; and (5)
the Respondent's Brief of March 1, 1993.
11 Contract interpretation is clearly a question of law, see,
e.g., Pacificorp Capital, Inc. v. United States, 25 Cl.Ct.
707, 715 (1992), aff'd 988 F.2d 130 (Fed. Cir. 1993); Fortec
Contractors v. United States, 760 F.2d 1288, 1291 (Fed.Cir.
1985); P.J. Maffei Building Wrecking Company v. United
States, 732 F.2d 913, 916 (Fed. Cir. 1984); Fry
Communications, Inc.-InfoConversion Joint Venture v. United
States, 22 Cl.Ct. 497, 503 (Cl.Ct. 1991); Hol-Gar Mfg. Corp.
v. United States, 169 Ct.Cl. 384, 386, 351 F.2d 972, 973
(1965); General Business Forms, Inc., GPO BCA 2-84 (December
3, 1985), Sl. op. at 16 (citing, John C. Grimberg Company v.
United States, 7 Ct.Cl. 452 (1985)); RD Printing Associates,
Inc., GPO BCA 02-92 (December 16, 1992), Sl. op. at 13, as is
definition of the contract. See, Ralph Construction, Inc. v.
United States, 4 Cl.Ct. 727, 731 (1984) (citing, Torncello v.
United States, 681 F.2d 756, 760 (Ct.Cl. 1982). Any decision
by this Board concerning such a matter is reviewable by the
Courts under the Wunderlich Act, 41 U.S.C. §§ 321, 322. Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 501, fn. 6; General Business
Forms, Inc., supra, Sl. op. at 16.
12 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.
R.C. Swanson Printing and Typesetting Company, supra, Sl. op.
at 42.
13 In such cases, the doctrine of contra proferentem applies
and the dispute language will be construed against the
drafter, 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)); R.C. Swanson Printing and Typesetting
Company, supra, Sl. 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. Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 510 (citing, Fruin-Colon
Corporation 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).
14 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. Fry
Communications, Inc./InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 504 (citing, Newsom v. United
States, 230 Ct.Cl. 301, 303 (1982)); Enrico Roman, Inc. v.
United States, 2 Cl.Ct. 104, 106 (1983); S.O.G. of Arkansas
v. United States, 546 F.2d 367, 212 Ct.Cl. 125 (1976); Beacon
Construction v. United States, 314 F.2d 501 (Ct.Cl. 1963).
15 The purpose of any rule of contract interpretation is to
carry out the intent of the parties. Hegeman-Harris and
Company, 440 F.2d 1009 (Ct.Cl. 1979). 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 Company v. United States, 461 F.2d 1330, 198
Ct.Cl. 712 (1972). See also, Salem Engineering and
Construction Corporation v. United States, 2 Cl.Ct. 803, 806
(1983). The provisions of the contract itself should provide
the evidence of the objective intent of the parties.
16 It is unnecessary to set forth in detail the rules of
contract construction which apply when interpreting an
agreement. Suffice it to say that, within the contract
itself, ordinary terms are to be given their plain and
ordinary meaning in defining the rights and obligations of
the parties. Elden v. United States, 617 F.2d 254, 223
Ct.Cl. 239 (1980). Similarly, technical terms are given
their technical meaning. Coastal Drydock and Repair
Corporation, 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. General Builders Supply Company v.
United States, 409 F.2d 246, 187 Ct. Cl. 477 (1969) (meaning
of "equitable adjustment"). As for extrinsic evidence of the
intent of the parties, the rules of construction allow, among
other things, custom and trade usage to explain or define
terms. W. G. Cornell Company v. United States, 376 F.2d 199,
179 Ct. Cl. 651 (1967); Harold Bailey Painting Company,
ASBCA No. 27064, 87-1 BCA ¶ 19,601 (used to define "spot
painting"). However, custom and trade usage may not
contradict clear or unambiguous terms. WRB Corporation v.
United States, 183 Ct.Cl. 409, 436 (1968). On the other
hand, the Board is not bound by what the parties call a
contract, Ralph Construction, Inc. v. United States, supra,
4 Cl.Ct. at 731 (citing, Torncello v. United States, supra,
681 F.2d at 760; Mason v. United States, 222 Ct.Cl. 436, 444,
615 F.2d 1343, 1346-47 (1980)), and the understanding and
actions of officials administering an agreement are not
dispositive, Salem Engineering & Construction Corporation v.
United States, supra, 2 Cl.Ct. at 808.
17 The Board was created by the Public Printer in 1984. GPO
Instruction 110.10C, Subject: Establishment of the Board of
Contract Appeals, dated September 17, 1984. Prior to that
time, appeals from decisions of GPO Contracting Officers were
considered by ad hoc panels of its predecessor, the GPO
Contract Appeals Board (GPOCAB). The Board has consistently
taken the position that it is a different entity from the
GPOCAB. See, The Wessel Company, Inc., GPO BCA 8-90
(February 28, 1992), Sl. op. at 25, fn. 25. Nonetheless, it
has also been the Board's policy to follow the holdings of
the ad hoc panels where applicable and appropriate, but the
Board differentiates between its decisions and the opinions
of those panels by citing the latter as GPOCAB. See, e.g.,
Shepard Printing, supra, Sl. op. at 11, fn. 10; Stephenson,
Inc., GPO BCA 02-88 (December 20, 1991), Sl. op. at 18, fn.
20; Chavis and Chavis Printing, GPO BCA 20-90 (February 6,
1991), Sl. op. at 9, fn. 9.
18 See, note 16 supra.
19 The Appellant's belief that as long as the initial samples
conformed to the original specifications, the Government was
prevented from rejecting them merely because of an author's
error, and thus the Contractor is entitled to full
compensation under the "Changes" clause for reprinting the
text, Complaint, p. 1, RPC, pp. 4-5, is simply so without
merit as to warrant no discussion. Serigraphic Arts, Inc.,
supra, Sl. op. at 7-8. Under the Appellant's theory, the
Government could never correct an honest error without, in
effect, paying double for the privilege of doing so. The
Board finds no basis in Government procurement law for
assessing such a penalty where, as here, the Government is
acting in accordance with the contract, and it is the
contractor who has ignored the express language of the
specifications.
20 In the absence of any evidence in the record whatsoever to
the contrary, the Board accepts the Contracting Officer's
determination that $727.42 was a reasonable equitable
adjustment in this case. Cf., McDonald & Eudy Printers,
Inc., GPO BCA 9-88 (March 8, 1990), Sl. Op. at 1.