BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
SWANSON PRINTING COMPANY ) Docket Nos. GPO BCA 27-94
Program D404-M ) GPO BCA 27A-94
Purchase Order 93869 )
Print Order Nos. 86087 and 86144
CONSOLIDATED DECISION AND ORDER
I. Statement of the Cases
By letter dated July 27, 1994, Swanson Printing Company
(Appellant or Contractor), 5205 York Road, Baltimore, Maryland
21212, filed a timely appeal of the final decisions of
Contracting Officer Richard Weiss, dated April 5, 1994, and July
21, 1994, respectively, of the U.S. Government Printing Office's
(Respondent or GPO or Government), Printing Procurement
Department, Washington, DC 20401. See GPO Instruction 110.12,
Subject: Board of Contract Appeals Rules of Practice and
Procedure, dated September 17, 1984, Rule 1(a) and 2 (Board
Rules). The Contracting Officer's final decision of April 5,
1995 (GPO BCA 27-94), rejected the Appellant's equitable
adjustment claim of $3,710.00 for the costs incurred in the
second printing of a Department of Justice (DOJ or customer
agency) brief under Print Order 86087. See R4 File I, Tab O.1
See also Report of Prehearing Telephone Conference, dated July
10, 1995, at 1-2 (RPTC-1).2 Similarly, in his final decision of
July 21, 1994 (GPO BCA 27A-94), the Contracting Officer denied
two claims from the Contractor for additional work performed for
the DOJ under Print Order 86144-(1) a "back to press" claim of
$776.00 for printing 100 extra copies of the DOJ's Petition in
Rison v. Demjianjuk; and (2) a $7,220.00 claim for 100 additional
copies of the Appendix in the same case-and instead offered to
settle the matter for $2,540.00. See R4 File II, Tab U.3 See
also Report of Prehearing Telephone Conference, dated September
1, 1995, at 8 (RPTC-2).4 Although the appeals were docketed
separately, at the request of the parties they were consolidated
by the Board for the purpose of hearing and the issuance of a
decision. See Notice of Hearing, dated October 31, 1995, at 4.
See also Board Rules, Rules 17 and 18. For the reasons which
follow, the final decision of the Contracting Officer in GPO BCA
27-94 is hereby AFFIRMED, and the appeal is DENIED. With respect
to GPO BCA 27A-94, the Contracting Officer's final decision is
also AFFIRMED, and the appeal DENIED, except that the matter is
REMANDED to the Respondent with instructions to pay the Appellant
$2,540.00-the amount offered by the Contracting Officer by way of
settlement in his final decision letter of July 21, 1994-for the
extra work performed.
II. Background
The relevant facts in these consolidated appeals are essentially
uncontroverted, and are set forth here as presented in R4 File I,
R4 File II, RPTC-1, RPTC-2, the transcript of the hearing held by
the Board on December 12, 1995,5 and the stipulations of the
parties,6 as amended at the hearing (Tr.: 10-26).7 In that
regard, it should be noted that while the stipulations describe
the events in this case in their chronological sequence, the
Board has reworded, combined or reformatted some stipulations for
stylistic reasons, or changed their placement for smoother
reading. However, in doing so the Board has been careful not to
alter the content of the stipulations in any way.
A. The Contract
1. On July 12, 1993, the Respondent issued an Invitation for
Bids (IFB) for Program D404-M, which involves the production of
two categories of saddle-stitched and perfect bound legal
publications (i.e., briefs) for the DOJ (R4 Files I and II, Tab
A, at 1, 5).8 As indicated in the IFB, Program D404-M covers
operations such as composition and proofs (Category 1 only),
film-making, printing, binding, packing, and delivery (R4 Files I
and II, Tab A, at 5). The contract resulting from the IFB was to
be a multiple award term contact for the period beginning with
the date of award and ending July 31, 1994 (R4 Files I and II,
Tab A, at 1). The contract anticipated that orders for work
could be issued to the contractor directly by the customer
agency, the DOJ (R4 Files I and II, Tab A, at 11).9 See Stips. 1
and 2, ¶ 1. See also RPTC-2, at 2-3; Tr.: 112-13.
2. Category 1 work (briefs from manuscript copy) required the
Government to furnish:
The majority of the text will be unprepared typewritten
manuscript and printed pages, furnished as manuscript for
composition. In addition, a few scattered pages will be
furnished as reproduction proofs, and previously printed pages as
camera copy to be reproduced same size or with reduction.
See R4 Files I and II, Tab A, at 5; Stips. 1 and 2, ¶ 2. See
also RPTC-2, at 3. Similarly, Category 2 work included:
Camera ready copy, or reprint copy to reproduce same size or with
reduction.
See R4 Files I and II, Tab A, at 5; Stips. 1 and 2, ¶ 2. See
also RPTC-2, at 3. With respect to finishing attributes,
Category 1 orders could be bound in a variety of ways, including
saddle-wire stitch or perfect bound with a wraparound cover,
whereas Category 2 provided only for saddle-wire stitch binding
(R4 Files I and II, Tab A, at 8-9). See Stips. 1 and 2, ¶ 2.
Furthermore, Category 1 orders could be between 4 and 1,200
pages, although the majority were between 4 and 96 pages, while
Category 2 orders would be between 4 and 76 pages per order (R4
File, Tab A, at 5). See Stips. 1 and 2, ¶ 2.
3. The contract also required proofs for Category 1 work, and
specifically provided that "[t]he contractor must not print prior
to receipt of an 'OK to print'[.]" (R4 Files I and II, Tab A, at
7-8). See Stips. 1 and 2, ¶ 2.
4. Finally, the contract incorporated by reference all relevant
provisions of GPO Contract Terms, Solicitation Provisions,
Supplemental Specifications, and Contract Clauses, GPO
Publication 310.2, Effective December 1, 1987 (Rev. 9-88)
(hereinafter GPO Contract Terms), as well as GPO Contract Terms,
Quality Assurance Through Attributes Program, GPO Publication
310.1, Effective May 1979 (Revised November 1989) (hereinafter
QATAP) (R4 Files I and II, Tab A, at 2). See RPTC-2, at 3.
5. On July 30, 1993, the Appellant, who has done Program
D404-M work before, see R.C. Swanson Printing and Typesetting
Co.,GPO BCA 15-90 (March 6, 1992), 1992 WL 487874,
supplemental decision (July 1, 1993), 1993 WL 56638,
reconsid. granted (December 20, 1993), aff'd sub nom. Richard
C. Swanson and Larry A. Ford, d.b.a. Swanson Printing &
Typesetting Co. v. United States, Civil Action No. 94-185C
(U.S. Court of Federal Claims, August 15, 1996)
(unpublished),10 submitted its bid to the Respondent (R4
Files I and II, Tab B).11 Thereafter, on August 10, 1993,
GPO issued Purchase Order No. 93869 to the Appellant making
it one of the contractors for Program D404-M for the term
beginning August 14, 1993, and ending July 31, 1994 (R4 File,
Tab D).12 See Stips. 1 and 2, ¶ 3. See RPTC-2, at 2.
6. Prior to awarding Purchase Order No. 93860, the Contracting
Officer, by letter dated August 9, 1994, specifically informed
the Contractor:
For this program, direct contact between your company and the
ordering agency is authorized for transmitting print orders, copy
and other required materials. Representatives of the ordering
agency do not have authority to alter or change the
specifications, contract terms, or the print orders, once issued.
Changes and any resulting costs can only be authorized by a
Government Printing Office contracting officer.
See R4 File II, Tab D. [Emphasis added.]. See also Stip. 1, ¶
3; RPTC-2, at 5-6; Tr.: 79-80.
B. GPO BCA 27-94
1. On January 3, 1994, the DOJ issued Print Order 86087 to the
Appellant for the production of 208 copies of the Appendix only
for a brief in the matter of United States v. National Treasury
Employees Union (R4 File I, Tabs E and H). Among other things,
the Print Order established a delivery date of January 19, 1994,
and required the Appellant to submit eight (8) sets of page
proofs to the customer agency by January 7, 1994, which would be
returned to Appellant by January 18, 1994. See Stip. 2, ¶ 4;
Tr.: 120-23.
2. The Appellant prepared the proofs of the Appendix and
submitted them to the DOJ. On January 14, 1994, the customer
agency returned the corrected Appendix proofs to the Appellant
for printing (R4 File I, Tab F). However, with the corrected
Appendix the DOJ also sent 23 additional manuscript pages-the
brief's Petition-to the Appellant for typesetting and preparation
of proofs (R4 File I, Tab F). The customer agency asked the
Appellant to send it eight (8) proofs of the Petition by Tuesday,
January 18, 1994, so that the final printed brief would be ready
by the contract due date of January 19, 1994.13 Since the
Appendix and the Petition, when bound together, constituted the
complete brief, the Appellant was instructed to "wait until
Monday for the o.k. to print the Appendix" (R4 File I, Tab F).
Also that same day, the DOJ asked GPO to make the appropriate
change to its printing and binding requisition (R4 File I, Tab
G). See Stip. 2, ¶ 5; Tr.: 121-22.
3. The Appellant did not contact Richard Weiss, the Contracting
Officer for Program D404-M during this period, regarding any
additional work that it says it was required to do to meet the
requirements of the print order.14 Instead, on January 27, 1994,
the Appellant submitted a payment voucher for the completed work
(R4 File I, Tab H). Included in its bill were charges totaling
$3,710.00 for a "2nd printing" of the brief. These charges were
disallowed by GPO's Financial Management Service, and the
Appellant was told to contact the Contracting Officer (R4 File I,
Tab H). The Appellant was also asked "to submit proof of
reprinting with an explanation of what happened[.]" (R4 File I,
Tab I.).15 See Stip. 2, ¶ 6; Tr.: 123, 127, 147.
4. On February 18, 1994, Appellant wrote to Weiss contending
that the charges for the second printing were appropriate (R4
File I, Tab I). The Appellant's argument was that it had printed
the Appendix, as corrected on January 18, 1994, after receiving
assurances from the DOJ's agents that there would be no other
changes, only to discover when the proofs of the Petition were
subsequently returned that the customer agency had also made
additional alterations in the Appendix (R4 File I, Tab I). The
Appellant claims that it had to print the Appendix a second time
in order to make the extra changes (R4 File I, Tab I). On March
29, 1994, the Appellant sent a follow-up letter to the
Contracting Officer asking him to expedite payment of its claim
which "is properly due" (R4
5. In the interim, the Contracting Officer had contacted those
DOJ employees involved with this contract, and was told that the
customer agency had not authorized two printings of the Appendix
(R4 File I, Tabs K and L).16 Accordingly, by letter dated April
5, 1995, entitled "Notice of Final Decision," the Contracting
Officer denied the Appellant's claim for recovery of the costs
for a second printing the Appendix (R4 File I, Tab O).17 See
Stip. 2, ¶ 8; Tr.: 135, 142.
6. On June 13, 1994, the Appellant wrote the Contracting
Officer concerning his determination to reject the Contractor's
claim for payment of the additional work allegedly performed on
Print Order 86087, as well as on another job-Print Order 86144
(R4 File I, Tab P). The Contracting Officer reaffirmed his
decision to deny additional payments for this Print Order in
letters dated June 17, 1994, and July 13, 1994, respectively (R4
File I, Tabs Q, T). Appellant formally appealed this decision by
letter to the Contracting Officer, dated July 27, 1994 (R4 File
I, Tab U). See Stip. 2, ¶ 9; Tr.: 150-51.
C. GPO BCA 27A-94
1. On May 10, 1994, the DOJ issued Print Order 86144 to the
Appellant for the production of 208 copies of the brief and
Appendix in the matter of Rison v. Demjanjuk. The Print Order
required proofs and designated the job as being in Category 1 (R4
File II, Tab E).18 On May 16, 1994, the Appellant submitted
proofs of the Appendix to the DOJ. On May 19, 1994, the DOJ
returned the corrected proofs to the Appellant for final printing
and delivery by May 23, 1994, the original ship/delivery date (R4
File II, Tab E). Also on May 19, 1994, the DOJ requested that
the Petition portion of the brief (32 pages, including 31 pages
of manuscript) be produced under separate cover (R4 File II, Tabs
P and U.) See Stip. 1, ¶ 4; Tr.: 30. See also RPTC-2, at 6.
2. The record indicates that when it returned the proofs, the
DOJ also asked the Contractor to produce an additional 100 copies
for delivery by May 24, 1994 (R4 File II, Tabs H and I). See
RPTC-2, at 6; Tr.: 31. Since that the initial order of 208
copies was scheduled to be delivered on time (May 23, 1994), the
Appellant told the DOJ's representative, Roye Stroman, that a
written "change order" would be necessary to perform the
additional work (R4 File II, Tabs K19 and L, Letter from the
Appellant to GPO, dated June 2, 1994.). See Tr.: 30-32, 42-43,
81.
3. Without first contacting the Contracting Officer, and
relying only on the assurance from the representatives of the DOJ
that a "change order" would be issued, the Appellant proceeded to
print and deliver the additional copies requested by the customer
agency. The Appellant contends that it received a "change order"
providing for the additional printing, however, the R4File
reflects that the Appellant is referring to a DOJ "Request for
Change on Printing and Binding Requisition" (Request for Change)
addressed to GPO, dated May 24, 1994, and not to a change order
issued by the GPO Contracting Officer (R4 File II, Tabs H, I and
L).20 See Stip. 1, ¶ 5; Tr.: 43-44, 52-54, 78-79, 81, 83-84,
113-14. See also RPTC-2, at 6.
4. On May 25, 1994, the Appellant submitted a voucher for
payment of the completed work. Included in its bill were charges
totaling $7,996.00 for "back to press" charges for the additional
copies (R4 File II, Tab J).21 Subsequently, on June 8, 1994, the
Appellant wrote to GPO requesting that a change order be issued
(R4 File II, Tab M). See Stip. 1, ¶ 6; Tr.: 32-33, 50-51. See
also RPTC-2, at 7-8.
5. On June 13, 1994, the Appellant wrote to Weiss contending
that its charges of $7,996.00 to go "back to press" were
appropriate (R4 File II, Tab Mc).22 After receiving additional
information from the DOJ, Weiss indicated that the Appellant's
claim was under review (R4 File II, Tab O). On June 30, 1994,
Weiss wrote to the Appellant advising that the evidence received
from the DOJ did not support its claims for additional
compensation. Instead, Weiss contended that the evidence
indicated that the DOJ indicated their need for an additional 100
copies of the Appendix before
Appellant went to press; i.e., at the proofing stage (R4 File II,
Tab R).23 See Stip. 1, ¶ 7; Tr.: 75, 115-16.
6. In his final decision addressing this situation, dated July
21, 1994, the Contracting Officer found that the additional work
for which the Appellant sought recovery was outside the contract
terms, that the Appellant never contacted the Contracting Officer
for a modification of the original print order, and that the
charges the Appellant sought to recover from the Government were
neither fair nor reasonable for the work performed.24 The
Contracting Officer offered to pay the
Appellant $2,540.00 (R4 File II, Tab U). By letter dated July
27, 1994, Appellant appealed this decision (R4 File II, Tab W).
See Stip. 1, ¶ 8; Tr.: 75-77, 110.
III. ISSUES PRESENTED
The ultimate issue in GPO BCA 27-94 is:
1. Has the Appellant proved its equitable adjustment claim
under Print Order 86087 for costs in the amount of $3,710.00 for
printing the Appendix of the DOJ's brief in the matter of United
States v. National Treasury Employees Union a second time in
order to incorporate additional author's alterations made by the
customer agency after the first printing had been run and was
ready for delivery by the contract due date of January 19, 1994?
However, subsumed in that question is another one, namely:
2. Did the Contractor print the Appendix without authorization
in the face of unambiguous contract language which states that
"[t]he contractor must not print prior to receipt of an 'OK to
print'[.]"?
As for GPO BCA 27A-94, three questions surfaced from the
discussions at the prehearing telephone conference on July 6,
1995, namely:
1. Did the Contracting Officer correctly decide that the
Appellant's production and delivery of 100 additional copies each
of the Petition and the Appendix, pursuant to Print Order No.
86144 issued by the DOJ, was outside the scope of the contract,
and if so, was he justified in denying the Contractor's request
for payment at the rates established under the contract for
Category 1 work?
2. Was the Contractor entitled to bill for the production of
additional quantities of the Petition and Appendix as "back to
press" charges under the contract, and to what extent, if any, do
the past payment practices of GPO affect the Contractor's claim?
3. What is the appropriate amount of compensation which should
be awarded to the Appellant as an equitable adjustment in this
case?
See RPTC-2, at 9-10.
IV. POSITIONS OF THE PARTIES25
A. The Appellant
The Appellant presents two equitable adjustment claims in this
appeal, each premised on a different Print Order-Print Order
86087 and Print Order 86144. However, the Contractor's position
is basically the same for both. In that regard, reduced to its
essentials, the Appellant's argument, as extrapolated from its
brief is:
Swanson had a contract to perform the work at issue, with prices
for various operations. The work was requested by the customer
agency [DOJ] and Swanson performed the work. Swanson submitted
invoices for on the work performed in accordance with the
schedule of prices contained in the contract.
* * * * * * * * * *
A simple reading of the contract and its accompanying schedule of
prices and comparing those to Swanson's invoice for the two jobs
at issue show that all prices and operations were allowed under
the contract and that the Government's continued refusal to pay
is completely with out merit.
See App. Brf., at 1-2. The Contractor says the circumstances in
this case are no different from other Print Orders processed
under Program D404-M in the past, and there is an established
prior course of dealing whereby it is allowed to make last minute
changes in a brief pursuant to instructions from the DOJ, and the
Respondent, in effect, ratifies this action by paying for the
work at the contract prices. See App. Brf., at 1; App. Exh. No.
1. See RPTC-2, at 9. Furthermore, the Appellant dismisses as
irrelevant the Respondent's contention that the work was
unauthorized because the Contracting Officer had not given his
prior approval, by observing that the job involved was performed
outside of normal GPO hours which made securing the Contracting
Officer's permission impossible. See App. Brf., at 1. Finally,
the Contractor believes that after the Contracting Officer
certified the Appellant's contract prices to be fair and
reasonable when the bid was accepted, it is now "disingenuous"
for him to attempt to "negotiate" lower prices for the work after
it is completed. See App. Brf., at 2. Accordingly, for these
reasons, the Contractor urges the Board to overturn the
Contracting Officer's final decisions on these claims and direct
the Respondent to pay the invoices, as submitted.
B. The Respondent
The Respondent's position equally uncomplicated. The Government
says that non-payment of the two claims in this case is justified
because, contrary to the express provisions of the contract, the
Appellant failed to obtain the Contracting Officer's prior
approval to perform the work.26 See R. Brf., at 10-11 (citing R4
Files I and II, Tab A at 2 [incorporating by reference GPO
Contract Terms, Contract Clauses, ¶ 1 (Contractual
Responsibility)]; R4 File II, Tab D). In that regard, GPO
observes that Board precedent firmly establishes this principle
for direct deal contracts such as the one here.27 See R. Brf.,
at 11 (citing RD Printing Associates, Inc., GPO BCA 02-02
(December 16, 1992), slip op. at 10, fn. 6, 1992 WL 516088; R.C.
Swanson Printing & Typesetting Co., GPO BCA 31-90 (February 6,
1992), slip op. at 6, fn. 5, 1992 WL 487874; Castillo Printing
Co., GPO BCA 10-90 (May 8, 1991), slip op. at 3-4). As for the
Appellant's contention that the parties have a prior course of
dealings which, in effect, renders meaningless the contract's
clear prohibition against implementing changes without first
obtaining the Contracting Officer's approval, the Respondent
simply states that the Contractor has not proved its case.28 See
R. Brf., at 11. In so many words, GPO asserts that apart from
the fact that Print Order 86020, which the Contractor relies on,
is readily distinguishable from Print Orders 86087 and 86144 in
terms of the substantial difference in the amounts involved
($416.00 versus $3,710.00 and $7,996.00, respectively), it is
well-settled that a single deviation does not, in and of itself,
create an exception to the general rule that the Contracting
Officer must approve the work beforehand in order for a
contractor to be paid. See R. Brf., at 11-12 (citing Wheatly
Associates, ASBCA No. 24760, 83-2 BCA ¶ 16760; Doyle Shirt
Manufacturing Corp. v. United States, supra; App. Exh. No. 1).
Accordingly, for these reasons, the Respondent
asks the Board to sustain the Contracting Officer's final
decisions in these two appeals. See R. Brf., at 12.
V. DECISION29
Once again, the parties appear before the Board with their
request to solve a problem relating to Program D404-M. Their
last dispute, which at various times involved questions
concerning the Board's jurisdiction over breach of contract
claims, the proper cost basis for figuring a convenience
termination settlement, and the nature of GPO's multiple-award
"requirements" term contracts, took more than four (4) years to
finalize, counting from the date the Board issued its initial
opinion (March 6, 1992) to the day the U.S. Court of Federal
Claims denied the Contractor's appeal from the Board's final
decision (August 15, 1996). See R.C. Swanson Printing and
Typesetting Co., supra. The issues in this appeal are more
commonplace. The controversy with respect to Print Order 86987
involves a simple question-is the Appellant is entitled to an
equitable adjustment under the circumstances; i.e., has it
supported its right to claim extra compensation?-the claim amount
itself has not been challenged by the Respondent. On the other
hand, the issue presented by Print Order 86144 is just the
reverse-is the amount of additional compensation claimed by the
Contractor fair and reasonable?-the Contracting Officer seems to
accept the fact that the Appellant is entitled to some equitable
adjustment under the circumstances.
However, notwithstanding ordinary nature of these issues three
things stand out about this dispute which deserve comment.
First, Program D404-M is a very special kind of contract. The
product it covers-DOJ legal briefs-can be instrumental in shaping
the course of American jurisprudence.30 Second, the customer
agency is the Government's lawyer, playing a role which has the
significant impact and influence on the relationship between the
Government and the people, as well as the private lives of all
Americans. Third, the testimony of the witnesses at the hearing
only confirmed what the Board itself has observed in 28 years of
practice-the production of legal briefs is often an exercise in
crisis management. Typically, in the time just before a brief is
due, an attorney will find him or herself reviewing the text with
one eye, while keeping the other on the clock, and making
compromises between the best legal arguments which can be
mustered and the filing deadline. Consequently, it is an
unfortunate, but nonetheless real, characteristic of the practice
of law that briefs are notoriously "last minute" documents-every
drop of allotted time will be consumed before a brief is filed.31
Because of these factors, the Board has no trouble believing that
the DOJ frequently ignores the express terms of its "direct-deal"
authority when it comes to getting its briefs ready for court.
No other conclusion can be drawn from the Contracting Officer's
admission at the hearing that the DOJ has been admonished by the
Respondent "numerous times" for doing so. Tr.: 108-09. Indeed,
it seems clear that by not rejecting the Appellant's vouchers
outright, the Contracting Officer tacitly took into account the
DOJ's method of operation and gave the Appellant the benefit of
the doubt that the customer agency had ordered further changes
after normal working hours. In the final analysis, perhaps a
"direct-deal term contract" creates an environment in which
innocent contractors will occasionally have to confront a true
dilemma as businessmen and businesswomen-how do I satisfy the
demands and needs of my customer and at the same time comply with
the requirements of the contract? The Board has lots of sympathy
but no easy answers for a contractor facing this quandary. On
the other hand, the Board in another context has cautioned GPO
contracting officers that their "wish to mollify a customer-
agency is no basis for defaulting a contractor." See Graphics
Image, Inc., GPO BCA 13-92 (September 1, 1992), slip op. at 28,
1992 WL 487875; Colorgraphics Corp., GPO BCA 16-87 (March 31,
1987), slip op. at 24. Likewise, the Board believes that in a
"direct-deal" situation, a contractor's understandable desire to
satisfy the customer agency's needs is no basis for ignoring the
express requirements of its contract with GPO.32
With these thoughts in mind, the Board reaches the following
findings and conclusions concerning the issues in this appeal:
A. GPO BCA 27-94: The Appellant has not shown by a preponderance
of the evidence that the DOJ authorized it either to print or
reprint the Appendix of the customer agency's brief in the matter
of United States v. National Treasury Employees Union.
Accordingly, there is insufficient proof to support the
Contractor's equitable adjustment claim for costs in the amount
of $3,710.00 under Print Order 86087.
As indicated above, the issue with respect to Print Order
86087 boils down to a simple matter of entitlement; i.e., do
the facts show that the Appellant, indeed, had to print the
Appendix in United States v. National Treasury Employees
Union a second time to accommodate additional DOJ changes,
and thus obligating the Government to pay it additional
compensation as an equitable adjustment? However, before
addressing this question, certain elemental principles
concerning equitable adjustments should be restated so that
the parties may have a clear understanding of the guideposts
followed by the Board in resolving this dispute.
First, an equitable adjustment is basically a corrective measure
designed to keep a contractor whole when the Government modifies
a contract. See Universal Printing Co., GPO BCA 09-90 (June 22,
1994), slip op. at 39, 1994 WL 377586; Banta Co., supra, slip op.
at 25. Accord J.F. Shea Co., Inc. v. United States, 10 Cl. Ct.
620, 627 (1986) (citing, Bruce Construction Corp. v. United
States, 163 Cl. Ct. 97, 100, 324 F.2d 516, 518 (1963)); Dick &
Kirkman, Inc., VABCA Nos. 1545, 1581, 84-3 BCA ¶ 17,662, at
88,082; CRF, A Joint Venture of CEMCO, Inc. and R.R.
Communications, Inc., ASBCA No. 17340, 76-1 BCA ¶ 11,857, at
56,805 (hereinafter CRF, A Joint Venture).
Second, the purpose of an equitable adjustment is to place a
contractor in the position it would have been in had the change
not occurred; i.e., the adjustment also should not alter the
contractor's profit or loss position from what it was before the
change occurred.33 See Universal Printing Co., supra, slip op. at
39; Banta Co., supra, slip op. at 26. Accord J.F. Shea Co. Inc.
v. United States, supra, 10 Cl. Ct. at 627; Pacific Architects &
Engineers, Inc. v. United States, 203 Ct. Cl. 499, 508, 491 F.2d
734, 739 (Ct. Cl. 1974); Nager Electric Co., Inc. and Keystone
Engineering Corp. v. United States, 194 Ct. Cl. 835, 851-53, 442
F.2d 936, 945-46 (1971) (hereinafter Nager Electric); Keco
Industries, Inc. v. United States, 176 Ct. Cl. 983, 999-1002, 364
F.2d 838, 849-850 (1966), cert. denied, 386 U.S. 958 (1967);
CRF, A Joint Venture, supra, 76-1 BCA at 56,804; Hensel Phelphs
Construction Co., ASBCA No. 15142, 71-1 BCA ¶ 8,796. See
generally John Cibinic, Jr. and Ralph C. Nash, Jr.,
Administration of Government Contracts 3rd ed., (The George
Washington University, 1995), at 672-73 (hereinafter Cibinic &
Nash).
Third, the burden of proof in establishing the total amount of an
equitable adjustment falls on the party who is claiming the
benefit of the adjustment. See Universal Printing Co., supra,
slip op. at 40. See also Cibinic & Nash, at 698. Thus, a
contractor has the affirmative burden of proving the amount of
money to which it is entitled. See Universal Printing Co.,
supra, slip op. at 40. See also New South Press & Associates,
GPO BCA 14-92 (January 31, 1996), slip op. at 49, 1996 WL 112555;
R.C. Swanson Printing and Typesetting Co., supra (Supplemental
Decision), slip op. at 19 (termination for convenience cases).
Accord Michael-Mark, Ltd., IBCA Nos. 2697, 2890, 2891, 2892,
2893, 2894, 2895, 94-1 BCA ¶ 26,453; Lemar Construction Co.,
ASBCA Nos. 31161, 31719, 88-1 BCA ¶ 20,429; Lawrence D. Krause,
AGBCA No. 76-118-4, 82-2 BCA ¶ 16,129; Onetta Boat Works, Inc.,
ENGBCA No. 3733, 81-2 BCA ¶ 15,279; Globe Construction Co., ASBCA
No. 21069, 78-2 BCA ¶ 13,337. Meanwhile, the Government must
establish the amount of the credit it took, if any. See Universal
Printing Co., supra, slip op. at 40; Banta Co., supra, slip op.
at 28. Accord Michael-Mark Ltd., supra; Zurfluh Enterprises,
Inc., VABCA No. 1941, 85-1 BCA ¶ 17, 789; CRF A Joint Venture,
supra; Hudson Garment Co., Inc., ASBCA No. 4645, 60-1 BCA ¶
2,628. In fulfilling this burden of proof, the party must
establish both the reasonableness of the costs claimed and their
causal connection to the alleged even on which the claim is
based. See Universal Printing Co., supra, slip op. at 40; R.C.
Swanson Printing and Typesetting Co., supra (Supplemental
Decision), slip op. at 19. See also New South Press &
Associates, supra, slip op. at 49; Banta Co., supra, slip op. at
43. Accord S.W. Electronics and Manufacturing Corp., ASBCA No.
20698, 77-2 BCA ¶ 12,631, aff'd, 228 Ct. C. 333, 655 F.2d 1078
(1981); Triple "A" Machine Shop, Inc., ASBCA No. 21561, 78-1 BCA
¶ 13,065; Cal Constructors, ASBCA No. 21179, 78-1 BCA ¶ 12,992.
Whether that burden has been met is determined by the
"preponderance of the evidence" test.34 See Universal Printing
Co., supra, slip op. at 40. Accord Teledyne McCormick-Selph v.
United States, 214 Ct. Cl. 672, 558 F.2d 1000 (1977); Wilbur
Smith & Associates, Inc., ASBCA No. 35301, 89-3 BCA ¶ 22,025.
See Cibinic & Nash, at 698.
Fourth, the preferred method for establishing the amount of an
equitable adjustment is through the introduction of actual cost
data.35 See Universal Printing Co., supra, slip op. at 40-41;
Banta Co., supra, slip op. at 37. Accord Dawco Construction,
Inc. v. United States, supra, 930 F.2d at 882; American Line
Builders, Inc. v. United States, 26 Cl. Ct. 115 (1992); Cen-Vi-Ro
of Texas v. United States, 210 Ct. Cl. 684 (1976); Cherry Hill
Construction, Inc. v. General Services Administration, GSBCA No.
12087-REIN, 93-2 BCA ¶ 25,810; Buck Brown Contracting Co., IBCA
No. 1119-7-76, 78-2 BCA ¶ 13,360; Engineered Systems, Inc.,
DOTCAB No. 75-5, 76-2 BCA ¶ 12,211; Bregman Construction Corp.,
ASBCA No. 15020, 72-1 BCA ¶ 9,411. See generally Cibinic & Nash,
at 703. As a rule, actual costs are proved through the
introduction of the contractor's accounting records, which will
be accepted if they have been audited by the Government and are
unrebutted. See Universal Printing Co., supra, slip op. at 41;
Banta Co., supra, slip op. at 37-38. Accord Celesco Industries,
ASBCA No. 22251, 79-1 BCA ¶ 13,604. However, if the accounting
records are not available due to no fault of the contractor, the
costs may be established on the basis of estimates, if they are
supported by detailed, substantiating data.36 See Universal
Printing Co., supra, slip op. at 41; Banta Co., supra, slip op.
at 38. Accord R. G. Robbins & Co., ASBCA No. 27516, 83-1 BCA ¶
16,420; Leopold Construction Co., ASBCA No. 23705, 81-2 BCA ¶
15,277; Bailey Specialized Buildings, Inc., ASBCA No. 10576, 71-1
BCA ¶ 8,699.
Finally, the touchstone for determining the amount of an
equitable adjustment is the difference between what it reasonably
would have cost to perform the work as originally required and
what it reasonably cost to perform the work as changed.37 See
Universal Printing Co., supra, slip op. at 41-42. Accord General
Builders Supply Co. v. United States, 187 Ct. Cl. 477 (1969);
Michael-Mark Ltd., supra; Zurfluh Enterprises, Inc., supra; Dick
& Kirkman, Inc., supra; Lawrence D. Krause, supra; Celesco
Industries, supra; Jack Picoult, VABCA No. 1221, 78-1 BCA ¶
13,024. Whether a contractor's costs are reasonable is a
question of fact depending on the circumstances.38 See Universal
Printing Co., supra, slip op. at 42 (citing Nager Electric,
supra).
Applying these principles to the Appellant's equitable adjustment
claim with respect to Print Order 86087, it is clear that the
Contractor has failed to prove its case. First, as a threshold
matter, for the Appellant to receive extra compensation it was
required to show that it was authorized to perform the second
printing of the Appendix. The disputed contract, like many other
GPO agreements, states in unambiguous terms that "[t]he
contractor must not print prior to receipt of an 'OK to
print'[.]" (R4 Files I and II, Tab A, at 7-8). See Stips. 1 and
2, ¶ 2. Although the Appellant insists that the DOJ had given it
the required approval to reprint the Appendix (Tr.: 122, 126-27,
135), the documentary record shows that when the Contracting
Officer contacted the customer agency to find out if this was so,
he was told that it had never authorized two printings; i.e., the
DOJ only authorized one printing of the Appendix-the final
version (R4 File I, Tabs K and L; Tr.: 135, 142-43). The
Contractor, on the other hand, believes that the DOJ's January
14, 1994, memorandum
to it is sufficient proof that it had the customer agency's
permission to proceed (R4 File I, Tabs F, I and N). That
memorandum states, in pertinent part:
Attached herewith is additional manuscript in [United States v.
National Treasury Employees Union]. Please type set copy and
return 8 proofs by [Tuesday, January 18, 1994, at 9:00 a.m.] for
sure.
This additional manuscript will precede the Appendix portion
which is being returned for correcting and printing. Please wait
until Monday [January 17, 1994] for the o.k. to print the
Appendix. The Appendix and the petition should be bound under
one cover as one complete brief.
(R4 File I, Tab F). [Emphasis added.] Clearly, the Appellant
understood so much of the memorandum which says: " . . . the
Appendix . . . which is being returned for correcting and
printing. . . .", as a promise from the DOJ that there would be
no further changes to the Appendix even though the "O.K. to
print" would not be forthcoming until January 17, 1994.
However, the Board, like the Respondent, sees nothing in this
memorandum as making such a sweeping commitment. Indeed, the
Board agrees with the Contracting Officer, that the principal
purpose of the memorandum was to give the Contractor
instructions regarding typesetting, proofing, and the placement
of the additional manuscript copy [the Petition] within the
brief-the memorandum is silent with respect to printing,
initially or otherwise (R4 File I, Tab O). Consequently, if the
Appellant printed the Appendix before the DOJ approved the final
version of the brief, then it did so on its own without the
required authorization, and it cannot expect the Government to
pay for it. In that regard, the Board has consistently held
that a contractor who "jumps the gun" and begins printing
without proper authorization assumes the risk that a reprint may
be required because of customer agency changes. See e.g., The
George Marr Co., supra, slip op. at 49-51; McDonald & Eudy
Printers, Inc., GPO BCA 25-92 (April 11, 1994), slip op. at
18-19, 1994 WL 275093. See also Seriagraphic Arts, Inc., GPOCAB
22-79 (May 8, 1980), slip op. at 7-8, 1980 WL 81264.39 The
Appellant has offered no reason to hold otherwise in this case.
An even more daunting obstacle to the Contractor's recovery in
this case is the fact that it has failed to comply with the
payment provisions of the contract. In that regard, incorporated
by reference in the contract is GPO Contract Terms, Contract
Clauses, which provides, in pertinent part:
24. Payments on Purchase Order.
(a) Payment will be made to the contractor upon submission of a
proper voucher (Standard Form 1034, Public Voucher for Purchases
and Services Other than Personal), in accordance with GPO Form
199, "Billing Instructions." Vouchers should be mailed to the
U.S.
Government Printing Office, Examination and Certification-Stop:
FMCE, Washington, DC 20401. The following are required in
support of the charges:
* * * * * * * * * *
(4) One completed copy of the specified product (exception
classified documents).
(5) A copy of the print order or purchase order as applicable.
* * * * * * * * * *
[Emphasis added.] Thus, even if the DOJ had given a verbal "go
ahead" to the Appellant, as the Contracting Officer was willing
to assume,40 the simple matter is that in seeking payment for
reprinting the Appendix, the Contractor was not able to provide
the Respondent with a copy of the first printing. The
Appellant's excuse is that all copies were disposed of pursuant
to instructions from the customer agency. See Tr. 131, 135-36.
Thus, the problem confronting both the Contracting Officer and
the Board is illustrated by the following colloquy from the
hearing:
Mr. Spaulding: And you denied the additional payment that Swanson
sought with its voucher, and can you explain why?
Mr. Weiss: It was denied in accordance with regulations. The
department said they did not ask for a reprint. Normally, if
there is a reprint, and it has happened before on the 404
contract where covers or something else had to be reprinted, we
had an employee in the case of the other one, was Mr. John
Sagner, who lived in Baltimore, go out an just verify they had
been run. It was a normal practice anytime there is a reprint.
It is just for GPO to verify that the work was actually
performed.
Then, it is our decision what we want to do with the copy.
Mr. Swanson said he did not have any copy for us to look at, it
was all thrown away. I had no copy to look at from any billing.
So what I had, what I was faced with was the contractor saying
that they had no copy at all to show me, the department saying
they did not request it.
I had no choice in making the decision I made.
Mr. Spaulding: Now, speaking specifically -- may I misunderstood
or I didn't hear correctly -- with regard to Mr. Sagner and the
fact that he lived in Baltimore, that was in connection with
contracts or rather work that might be prepared by Swanson?
Mr. Weiss: No, it was with regard to in the past, I know at least
one incident where there was a reprint, where Mr. Swanson called
me, and we verified it, and a modification was issued.
Mr. Spaulding: In your view, what should have happened in this
particular instance?
Mr. Weiss: Normally, on all jobs where there is a mistake or a
reprint, the contractors call the contracting officer, explain
what happened, show the work that was done, hold onto it, in
other words, not destroy the work, and then a decision would be
reached by the contracting officer.
Now, sometimes if the work has been done, the decision may be to
split the cost because we cannot specifically say it was one
person's fault or the other, but in every case, the work is held
onto until it is verified that it actually was produced.
Judge Foss: Let me interject here for a minute. When you say
"hold onto the copies," what copies, the copies of the first
printing or the second?
Mr. Weiss: The copies of the first printing.
Judge Foss: Okay.
Mr. Weiss: The second printing has been delivered.
Judge Foss: That is what I thought.
See Tr.: 142-44. [Emphasis added.] See also Tr.: 148 (Mr.
Weiss: ". . . I am simply saying I have been asked to okay a
reprinting, and I have nothing to show that reprinting was ever
done.").
The Board has held that GPO is entitled to insist on a
contractor's strict adherence to the record keeping provisions of
the contract and its responsibility to provide adequate
supporting documentation before the Government is obligated to
pay for the ordered supplies. See B. P. Printing and Office
Supplies, GPO BCA 14-91 (August 10, 1992), slip op. at 24, 1992
WL 382917.41 In the Board's view, while maintaining the
appropriate documentation may seem mundane and ministerial, it is
nonetheless an important duty relating to the contract. Id., at
28. Consequently, it is unavailing for a contractor to argue
that the Government's acceptance of less than adequate records
in the past amounts to a waiver of its right to require proper
documentation forevermore. Id., at 26.
Furthermore, insofar as the Appellant claims that there is an
established "prior course of dealing" with respect to Program
D404-M in which the Respondent simply endorses the last minute
changes ordered by the DOJ, see App. Brf., at 1; App. Exh. No. 1;
RPTC-2, at 9, the Contractor has misconstrued the nature of that
doctrine. In the first place, the "prior course of dealing"
principle is an interpretative device which applies to situations
where the parties are divided over the meaning of contract
language.42 See Olympic Graphic Systems, GPO BCA 01-92
(September 13, 1996), slip op. at 32, 1996 WL _____; MPE
Business Forms, Inc., GPO BCA 10-95 (August 16, 1996), slip op.
at 59, 1996 WL_____; Publishers Choice Book Manufacturing Co.,
GPO BCA 4-84 (August 18, 1986), slip op. at 10-11, 1986 WL
181457.43 See generally, Cibinic & Nash, at 206-09. This appeal
is not a contract interpretation dispute-the contract
specifications are clear and unambiguous and the parties know
exactly what they mean. Second, and perhaps most importantly, as
the Respondent suggests (R. Brf., at 11-12), one prior deviation
from the contract (App. Exh. No. 1) is not enough evidence to
establish a "prior course of dealing." See Olympic Graphic
Systems, supra, slip op. at 33; MPE Business Forms, Inc., supra,
slip op. at 62; Publishers Choice Book Manufacturing Co., supra,
slip op. at 11 (citing Doyle Shirt Manufacturing Corp. v. United
States, supra). Accord 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, at 206-07.
In the final analysis, this case is not about any "prior course
of dealings" regarding what criteria the Government applies in
paying for print orders, see Olympic Graphic Systems, supra; MPE
Business Forms, Inc., supra, but rather how does the Contractor
prove that the work for which it claims payment was actually
performed. Quite frankly, the Board is simply astonished that
the Appellant, an experienced Government contractor, did not
retain the required documentation-copies of the Appendix-from the
first printing of Print Order 86087, notwithstanding the DOJ's
instructions to destroy them. In light of the customer agency's
denial that it ordered a reprint of the Appendix, it was
incumbent on the Contractor to prove otherwise, and it has failed
to do so. Its excuse is that the evidence has been destroyed and
is no longer available.44 However, without such proof the
Contractor's case is essentially an unverified assertion that it
reprinted the Appendix. Such a contention is little more than
argument, which standing alone cannot substitute for proof. See
Univex International, GPO BCA 23-90 (July 31, 1995), slip op. at
31, 1995 WL 488438, reconsid. denied, 1996 WL 112554 (February 7,
1996). Cf. Reese Manufacturing, Inc., ASBCA No. 35144, 88-1 BCA
¶ 20,358. Indeed, the Board has never allowed such
unsubstantiated contentions to form the basis of recovery. See
Univex International, supra, slip op. at 31-32; B & B
Reproductions, supra, slip op. at 39; Stephenson, Inc., supra,
slip op. at 57. Accord Singleton Contracting Corp., GSBCA No.
8548, 90-2 BCA ¶ 22,748; Tri-State Services of Texas, Inc., ASBCA
No. 38019, 89-3 BCA ¶ 22,064)); Gemini Services, Inc., ASBCA No.
30247, 86-1 BCA ¶ 18,736. Accordingly, the Board concludes that
under the circumstances of this case, the Contracting Officer
properly refused to pay for a second printing of the Appendix,
and his decision is AFFIRMED.
B. GPO BCA 27A-94
1. When the DOJ asked the Appellant to produce and deliver an
additional 100 copies of the brief in Rison v. Demjanjuk it was
requesting work not "within the general scope of [the] contract,"
as that language is understood in the "Changes" clause.
Furthermore, the Contractor proceeded with performance without
proper authorization from the Contracting Officer. Consequently,
the extra work was produced in violation of the contract.
Nonetheless, the Appellant is entitled to some payment for
producing the 100 additional copies of the Appendix to the brief.
Unlike the situation involving Print Order 86087, there is no
question that the Appellant performed the all of the work
requested by the DOJ under Print Order 86144. Instead, the
issues basically concern whether the work was properly
authorized, and how to pay for it, if at all. These questions
bring into play a provision of the contract, namely the
"Contractual Responsibility" clause of GPO Contract Terms, and
the Respondent's regulations relating to "Contract Modifications"
in the PPR.45
The "Contractual Responsibility" Clause states:
Awards by GPO for printing, binding, and related services are the
sole responsibility of GPO and not of its customer agencies.
Modifications shall have no force or effect unless addressed
before the fact to and subsequently confirmed in writing by the
Contracting Officer. Failure to comply with this article may be
cause for nonpayment of additional costs incurred or rejection of
the order.
GPO Contract Terms, Contract Clauses, ¶ 1 (Contractual
Responsibility). [Emphasis added.] The clear purpose of this
contract clause is to implement so much of GPO's printing
procurement regulation which says the only person authorized to
enter into, administer and terminate contracts, and to make
related determinations and findings is the Contracting Officer.
See PPR, Chap. I, Sec. 2 (Definition of "Contracting Officer"),
Sec. 3, ¶ 2(d) (Procurement Authority-Contracting Officers). See
also B & B Reproductions, supra, slip op. at 37-39; RD Printing
Associates, Inc., supra, slip op. at 10, fn. 11; Castillo
Printing Co., supra, slip op. at 48. Indeed, the clause was
reenforced by Weiss in his letter of August 9, 1994, accompanying
the Purchase Order awarding the contract, when he warned the
Contractor that: " . . . Representatives of the ordering agency
do not have authority to alter or change the specifications,
contract terms, or the print orders, once issued. Changes and
any resulting costs can only be authorized by a Government
Printing Office contracting officer." See R4 File II, Tab D.
[Emphasis added.]. See also Stip. 1, ¶ 3; RPTC-2, at 5-6; Tr.:
79-80.1.
As for GPO's regulations concerning the use and processing of
contract modifications, they state, in pertinent part:
1. General
a. Definition. Contract modifications are defined as any changes
to any existing contract. They include alterations in the
specifications [footnote omitted], delivery point, rate of
delivery, contract period, price, quantity, or other provision of
the contract. Modifications can be accomplished by a written
bilateral agreement or by a written unilateral action in
accordance with a contract clause. Examples of contract clauses
that give the Government a unilateral right to change a contract
are the "Changes", "Paper Price Adjustment", and "Extended Term".
b. Contracting Officer decision. It is not mandatory for the
Contracting Officer to make the requested change and modify the
contract. When the Contracting Officer deems that it would be in
the best interest of the Government, such as where the
modification would significantly change the product, he/she has
the option to terminate the original contract for the convenience
of the Government and readvertise with revised specifications.
In such cases, the termination shall be made in accordance with
XIV-2.
c. Bilateral Agreements, Unilateral Actions, and Administrative
Changes.
(1) Bilateral agreements are required when the proposed
modifications affect substantial/material aspects of the contract
not covered in the original contract. Substantial/material
aspects of the contract include, but are not limited to,
quantity, contract provisions, contract period, etc. To
consummate the bilateral agreement a supplemental agreement shall
be issued requiring the signature of both the Contracting Officer
and the contractor. A supplemental agreement shall include a
description of the modified or additional requirement and the
agreed upon consider for its performance.
(2) If the modification is authorized by a contract provision,
the Contracting Officer has the unilateral right to issue a
change order. Before issuing a change order under the "Changes"
clause, the Contracting Officer shall try to reach an equitable
adjustment and issue a supplemental agreement in accordance with
the above paragraph. . . . Change orders require the signature of
the Contracting Officer only. The contractor is required to
comply with the requested change regardless of whether a
bilateral agreement has been reached. . . .
2. Processing
a. CRB concurrence. All proposed modifications involving an
increase or decrease in excess of 25 percent of the contract or
print order price (if the increase/decrease exceeds $5000), or
any modification increasing or decreasing the contract or print
order price by $10,000 or more must be submitted to the central
office CRB [Contract Review Board].
b. GPO Form 913. All contract modifications shall be issued by
the Contracting Officer in writing on GPO Form 913, "Contract
Modification,". . .
* * * * * * * * * *
e. Checkboxes on GPO Form 913. The appropriate box shall be
checked to distinguish between a change order and supplemental
agreement on GPO Form 913. The authority for issuing the change
order/supplemental agreement shall be stated on the appropriate
line. Change orders may be issued pursuant to the "Changes"
clause or other contract provision. Supplemental agreements are
entered into pursuant to mutual agreement.
* * * * * * * * * *
5. Examples of Contract Modifications (not all inclusive).
* * * * * * * * * *
b. Supplemental Agreement
(1) Quantity has been increased.
* * * * * * * * * *
See PPR, Chap. XII, Sec. 2, ¶¶ 1(a)-(c), 2(a)-(b), (e), 5
(Contract Modifications). [Emphasis added.] Recently, in
GraphicData, Inc., the Board examined and discussed the meaning
of the term "change order" in the above regulation, and the
circumstances in which it applied.46 See GraphicData, Inc.,
supra, slip op. at 101-02. This case involves a situation in
which a "supplemental agreement" would be appropriate.
The facts pertinent to this issue are simple, straight-forward,
and undisputed. They can be summarized as follows: (1) Print
Order 86144, which was issued by DOJ on May 10, 1994, ordered 208
copies of the brief and Appendix in Rison v. Demjanjuk, a
Category 1 job, for delivery by May 23, 1994; (2) the Appellant
submitted the required proofs to the customer agency on May 16,
1994; (3) the DOJ returned the corrected proofs on May 19, 1994,
for final printing and delivery in accordance with the
specifications; (4) at the same time, the customer agency asked
the Contractor to produce an additional 100 copies for delivery
on May 24, 1994, the day after the contract due date for the
initial 208 copies; (5) the Appellant told the DOJ
representative, Stroman, that a written "change order" would be
necessary to perform the additional work; (6) the customer agency
sent a Request for Change form to GPO on May 24, 1994, asking for
a "Change in Quantity" and authorizing "back to press for an
additional 100 copies;" (7) based on DOJ's promise to seek a
modification (which it did), the Appellant proceeded to print and
deliver the extra copies for the customer agency; and (8) only to
have its voucher for the additional work in the amount of
$7,996.00 rejected by GPO on the grounds that (a) the work was
outside the contract terms, (b) the Contractor had not asked the
Contracting Officer for a modification first, and (c) besides the
claimed "back to press" charges were not fair or reasonable for
the work performed since, inter alia, the DOJ had indicated its
need for an additional 100 copies of the brief at the proofing
stage before it was printed. See Stip. 1, ¶¶ 4-8; R4 File II,
Tabs E, H, I, J, K, L, R, and U; Tr.: 30-33, 42-44, 50-54, 75-79,
81, 83-84, 113-16; RPTC-2, at 6-8.
From these facts at least four critical things stand out. First,
it is clear that the Appellant recognized that when the DOJ
increased the quantity of the original order by 100 copies it was
asking for work which is generally considered outside the scope
of the contract,47 see Cibinic & Nash, at 390 (". . . [A] change
adding quantities above the contractual maximums was found to be
outside the scope [of competition]." Citing Liebert Corp., 70
Comp. Gen. 448 (B-232234.5), 91-1 CPD ¶ 413), and that a contract
modification would be required for the purposes of performance
and payment, id., at 394 (Although the authors say that "[i]
ncreases in quantity of the major items to be furnished are
generally thought not be authorized by the Changes clause,"
citing P.L. Saddler v. United States, supra; 30 Comp. Gen 34,
supra; 15 Comp. Gen. 573, supra, they add that "increases in the
quantity of subsidiary items are generally authorized by the
[Changes] clause unless a variation is so large that it alters
the entire bargain[,]" citing Symbolic Displays, Inc., Comp. Gen.
Dec. B-182847, 75-1 CPD ¶ 278) (the addition of a quantity of new
lights was within the general scope of a contract for the
manufacture of aircraft)).
Second, the DOJ representative who ordered the increased
quantities knew that his direct-deal powers were limited and did
not include a delegation of authority from the Contracting
Officer to issue contract modifications. See B & B
Reproductions, supra, slip op. at 38; Professional Printing of
Kansas, Inc., supra, slip op. at 34, fn. 50. Accord American
Electronic Laboratories, Inc. v. United States, 774 F.2d 1110,
1115-16 (Fed. Cir. 1985); Max Drill, Inc. v. United States, 192
Ct. Cl. 608, 625, 427 F.2d 1233, 1243 (1970). Therefore, he
promised the Appellant that he would seek a contract modification
from the Contracting Officer, and in fact did so by sending a
Request for Change form to GPO. See R4 File II, Tabs H and L.
Although the customer agency sent a second Request for Change
form directly to the Appellant (R4 File II, Tab I), there is
nothing in the record to indicate that the DOJ was purporting to
issue a contract modification itself, or if it was, that the
Contracting Officer has ratified its unauthorized act. See B & B
Reproductions, supra, slip op. at 38; Castillo Printing Co.,
supra, slip op. at 44, fn. 27. Accord California Sand & Gravel,
Inc. v. United States, 22 Cl. Ct. 19, 27 (1990), aff'd, 937 F.2d
624 (Fed. Cir. 1991); Durocher Dock & Dredge, Inc., ENG BCA No.
5768, 91-3 BCA ¶ 24,145; Tymeshare, PSBCA No. 206, 76-2 BCA ¶
12,218. See also Metcalf & Associates, GSBCA No. 3190, 72-2 BCA
¶ 9516 (the board held that a contracting officer's award of
compensation to a contractor for certain changes directed by
unauthorized representatives did not constitute a ratification
but was an attempt at settlement not binding upon the
Government). But cf. Allen Wayne, Ltd., GPO 6-87 (November 20,
1987) slip op. at 11, 12, fn. 1, 1987 WL 228973 (acquiescence
found). Also cf., T.W. Cole, PSBCA No. 3076, 92-3 BCA ¶ 25,091
(acceptance of work with knowledge of order to modify it); Henry
Burge & Alvin White, PSBCA No. 2431, 89-3 BCA ¶ 21,910
(acceptance of work with knowledge of modification); Norwood
Precision Products, ASBCA No. 24083, 80-1 BCA ¶ 14,405 (payment
for products accepted after a default termination indicated the
official's adoption of the inspector's unauthorized acceptant);
Mil-Pak Co., GSBCA No. 5849, 83-1 BCA ¶ 16,482 (contracting
officer ratified a "change order by unilaterally fixing the
amount of the equitable adjustment"). See generally Cibinic &
Nash, at 53. Rather, this second Request for Change form serves
more or less as a confirmation letter.48
Third, there is no doubt that the Appellant produced the extra
copies without the required contract modification. Instead, the
Contractor performed the work solely the basis of the DOJ's
promise that it would take the necessary steps to secure one from
GPO, and it made no attempt on its own to contact the Respondent.
The conundrum for the Appellant is that it printed the additional
copies before the Contracting Officer authorized the work or
issued a contract modification; indeed, to date no such
modification has been issued in this matter. In that regard, as
the Board stated with respect to Print Order 86087, above, the
risk is on the contractor who begins printing without proper
authorization. See e.g., The George Marr Co., supra, slip op. at
49-51; McDonald & Eudy Printers, Inc., supra, slip op. at 18-19;
Seriagraphic Arts, Inc., supra, slip op. at 7-8.
And fourth, the Appellant's mistake was in assuming that the
Respondent would automatically issue a contract modification when
it receive the customer's agency's Request for Change form.
However, since the right to change a contract is vested solely in
the Government, contractors, as a rule, have no right to receive
contract modifications. See Hunkin Conkey Construction Co. v.
United States, 198 Ct. Cl. 638, 461 F.2d 1270 (1972) (contracting
officer permitted to buy changed work from another contractor
after finding that the contractor's price for the changed work
was unacceptably high); Bridgewater Construction Corp., VABCA
2936, 91-2 BCA ¶ 24,273 (contracting officer allowed to buy items
inadvertently omitted from the specifications from a vendor after
obtaining an engineering change proposal from the contractor).
Perhaps more importantly, as indicated above, GPO's regulations
clearly state that "[i]t is not mandatory for the Contracting
Officer to make the requested change and modify the contract[,]"
but rather if the Contracting Officer determines that it would be
in the best interest of the Government, ". . . he/she has the
option to terminate the original contract for the convenience of
the Government and readvertise with revised specifications. . . .
".49 See PPR, Chap. XII, Sec. 2, ¶ 1(b) (Contract
Modifications).
When the Board considers all of the above, it is compelled to
conclude that in ordering, printing and delivering the extra
copies of the brief in Rison v. Demjanjuk, both the Appellant and
the DOJ completely disregarded the contract's requirements for
managing this procurement. Furthermore, it is also clear that
their conduct deprived the Respondent of its right to seek a
price for the additional work that was "in the best interest of
the Government" from another source.50 See Hunkin Conkey
Construction Co. v. United States, supra; Bridgewater
Construction Corp., supra. Indeed, it can be argued that the
Contracting Officer, if he so chose, could have properly refused
to pay anything at all for the additional copies. See e.g., The
George Marr Co., supra; McDonald & Eudy Printers, Inc., supra;
Seriagraphic Arts, Inc., supra (premature printing). See also
Editors Press, Inc., GPO BCA 03-90 (September 4, 1991), 1991 WL
439271 (GPO not obligated to pay for a contractor's additional
costs arising from the delay which occurred when it unilaterally
stopped production while it sought a retest of the paper stock
from GPO). However, where, as here, a contractor agrees to
perform work which is beyond the scope of the contract, and
thereby waives its right to object to a cardinal change,51 the
Government is obligated to pay for it. See Mac-Well Co., ASBCA
No. 23097, 79-2 BCA ¶ 13,895; Edward E. Harwell, ASBCA No. 9624,
66-1 BCA ¶ 5329; Aston-Mardian Co., ASBCA No. 7912, 1963 BCA ¶
3836, reh'g denied, 1963 BCA ¶ 3928; Texas Trunk Co., ASBCA No.
3681, 57-2 BCA ¶ 1528. See generally Cibinic & Nash, at 399. In
other words, there is no basis on this record for concluding that
just because a contract modification was not issued, the
Contractor was, as far as performance of the additional work is
concerned, a "volunteer."52 Cf. Editors Press, Inc., supra, slip
op. at 19 (citing Calculus, Inc., ASBCA No. 37155, 89-1 BCA ¶
21,520; Norflor Construction Corp., ASBCA No. 31579, 88-2 BCA ¶
20,649; Shedd B. Smith, DOT CAB No. 1381, 83-2 BCA ¶ 16,780;
Control Temp, Inc., ASBCA No. 23380, 80-1 BCA ¶ 14,443); Celia
Translations, Inc., GPO CAB 10-79 (February 6, 1981), slip op. at
7, 1981 WL 95443). Such a conclusion would fly in the face of
common sense and experience since contractors do not, as a rule,
voluntarily perform work not called for by the contract. See
Chris Berg, Inc. v. Untied Sates, 197 Ct. Cl. 503, 455 F.2d 1037
(1972); M.S.I. Corp., GSBCA No. 2428, 68-2 BCA ¶ 7262; Brown
Construction Co., ASBCA No. 22648, 79-1 BCA ¶ 13,745; Sigma
Construction Co., ASBCA No. 37040, 91-2 BCA ¶ 23,926. See
generally Cibinic & Nash, at 436. The record shows that the
Contracting Officer did, in fact, attempt to negotiate a fair and
reasonable price for the extra work, but his offer of $2,540.00
was rejected by the Appellant. Accordingly, the Board must also
decide the second issue involving Print Order 86144, namely, what
is a fair and reasonable price for the 100 additional copies of
the brief in Rison v. Demjanjuk?
2. The Appellant has failed to carry its burden of showing both
the total amount of its actual costs, and that its costs were
reasonable, the sine qua non of an equitable adjustment recovery.
The Respondent, on the other hand, has demonstrated that the
Contracting Officer's settlement offer of $2,540.00, contained in
his final decision letter of July 21, 1994, constituted fair and
reasonable compensation for the extra copies of the Appendix to
the brief under the circumstances. Therefore, the Board will
remand the case with instructions to the Respondent to pay the
Appellant that amount as an equitable adjustment.
At the outset, the Board should make clear that in deciding the
fair pricing issue in this case, it is not dealing with a
"constructive change." The "constructive change" doctrine is the
mechanism used to direct the Government to retroactively
compensate a contractor for work which could have been properly
compensated under the "Changes" clause during the term of the
contract by means of a "change order." See GraphicData, Inc.,
supra, slip op. at 103 (citing Merchant Service Co. [No GPO CAB
No.] (February 11, 1980), slip op. at 16, 1980 WL 81262). See
also Cibinic & Nash, at 429 ("A constructive change occurs when
the contract work is actually changed but the procedures of the
Changes clause have not been followed."). However, the Board has
already noted that the Government's order for increased
quantities of a product is not a matter generally covered by the
"Changes" clause. See P.L. Saddler v. United States, supra;
Liebert Corp., supra. See also Cibinic & Nash, at 390. Instead,
the appropriate mechanism for paying the Appellant for the extra
work in this case was by means of a "supplemental agreement"
arrived at under the "Contract Modification" procedures in the
PPR. In that regard, the PPR not only defines contract
modifications as "any changes to any existing contract," and
expressly includes "alterations in . . . quantity[,]" see PPR,
Chap. XII, Sec. 2, ¶ 1(a) (Contract Modifications), it also tells
GPO contracting officers that when proposed modifications affect
the "substantial/material aspects of the contract" which are not
covered in the original agreement, then "[b]ilateral agreements
(or supplemental agreements) are required," id., ¶ 1(c)(1).53
The term "substantial/material aspects of the contract" is
defined to include, inter alia, "quantity." Id.
The substance of this dispute is the Appellant's view that the
100 additional copies of the brief and Appendix in Rison v.
Demjanjuk were properly billed as "back to press" charges, and
the Contracting Officer's conclusion that such charges were
neither fair nor reasonable. As the Board understands the
Appellant's reimbursement theory, it seems to be predicated on
the idea that once the original 208 copies of the brief and
Appendix were delivered on time, any additional copies produced
for delivery at a later date (in this case the next day) are
reprints for which "back to press" charges equal to the amount of
the original printing are appropriate. See RPTC-2, at 9.
Furthermore, the Contractor tells us that GPO has accepted this
method of paying for additional copies of a publication in the
past, and is now bound by that "past practice." Id. In the
Board's opinion, however, the Appellant's analysis is simply not
supported by the facts or the law.
That the Appellant incurred some additional costs and is entitled
to some compensation for the extra work is not in dispute.
However, as the Board sees it, the real problem for the
Contractor in this case is that it has failed to carry its dual
burden of showing the total amount of its actual costs, see New
South Press & Associates, supra, slip op. at 49; Universal
Printing Co., supra, slip op. at 40; R.C. Swanson Printing Co.,
supra, Supplemental Decision, slip. op. at 19; Banta Co., supra,
slip op. at 43, fn. 53, and perhaps more importantly,
demonstrating that its costs were reasonable. New South Press &
Associates, supra, slip op. at 49; Banta Co., supra, slip op. at
43. Accord S.W. Electronics and Manufacturing Corp., supra;
Triple "A" Machine Shop, Inc., supra; Cal Constructors, supra.
As previously indicated, the amount of an equitable adjustment is
determined by the difference between what it reasonably would
have cost to perform the original work and what it reasonably
cost to perform the work as changed. See New South Press &
Associates, supra, slip op. at 49-50; Universal Printing Co.,
supra, slip op. at 41-42. Accord General Builders Supply Co. v.
United States, supra; Michael-Mark Ltd., supra; Zurfluh
Enterprises, Inc., supra; Dick & Kirkman, Inc., supra; Lawrence
D. Krause, supra; Celesco Industries, supra; Jack Picoult, supra.
Indeed, it is upon the shoals of "reasonableness," the touchstone
of an equitable adjustment, that the Appellant's "back to press"
analysis founders.
In that regard, the undisputed facts show that the DOJ's request
for an additional 100 copies was made during the proofing stage
of the production process, and that only the customer agency's
establishing May 24, 1994, as the due date for the extra copies,
while leaving undisturbed May 23, 1994, as the shipment date for
the original 208 copies, prevented this from being one continuous
order (R4 File II, Tabs H, I and P). See RPTC-2, at 6; Tr.: 31.
Thus, for that reason, there is absolutely no basis for a "back
to press" claim with respect to the Petition in Rison v.
Demjianjuk; instead, any compensation at all would be for the
extra copies of the Appendix. Second, there is unrefuted
evidence in the record which indicates that at the time the DOJ
made its request and was told by the Appellant that a "change
order" would be needed to perform the work, the Contractor ". . .
had not completed printing the original order-208 copies nor had
[it] bound the copies[.]" (R4 File II, Tab K).54 Indeed, the
Appellant's witness, Larry Ford, testified at the hearing, in
response to a question from Counsel for GPO, that if the job had
been a single order of 308 copies the Government's cost would
have been $9,197.00. Tr.: 51. Third, for reasons already
stated, the Contractor's claim of a "prior course of dealings"
between the parties as support for its "back to press" charges
fails for want of proof. See Olympic Graphic Systems, supra,
slip op. at 33; MPE Business Forms, Inc., supra, slip op. at 62;
Publishers Choice Book Manufacturing Co., supra, slip op. at 11
(citing Doyle Shirt Manufacturing Corp. v. United States, supra).
Accord Kvaas Construction Co., supra; General Secretarial
Services Corp., supra; Western States Construction Co., supra.
Moreover, the Appellant's reliance on Print Order 86020 (App.
Exh. No. 1), the one instance brought to the Board's attention
where it appears that GPO allowed "back to press" charges for
additional copies of a brief ordered by DOJ, is clearly
misplaced. In that case, the records show that more than a month
had elapsed between the shipment/delivery date for the original
order (September 17, 1993) and the issuance of a contract
modification authorizing an additional 75 copies (October 19,
1993) for delivery about a week later (October 25, 1993), and
besides the amount involved was relatively small ($416.00).
Here, the gap between the original and "back to press"
shipment/delivery dates is just one day (May 23, 1994, and May
24, 1994, respectively), and the amount in dispute is
comparatively large ($7,996.00).
When these facts are measured against the foregoing equitable
adjustment principles, the Board can find no justification for
"back to press" charges equal to the amount of the initial
printing costs, particularly where, as here, the number of
additional copies is less than half of the original order (48
percent). To be blunt, the Contractor's "back to press" claim
does not inspire much trust or confidence as a proper claim under
the regulations,55 because it exactly doubles the price of the
work for the Government. Thus, the Appellant's claim here is
analogous to the contractor's claim rejected by the Board in
Universal Printing Co., because:
On the surface, . . . rather than being an accurate and complete
statement of the Appellant's costs as reflected in its accounting
ledgers, or at least a rational and honest estimate of them, the
revised makeready/setup charge looks suspiciously like the result
of some arbitrary formula. Claims prepared on such a basis are
uniformly rejected by agency boards of contract appeals.
[Footnote omitted.] See e.g., Ordnance Materials, Inc., ASBCA No.
32371, 88-3 BCA ¶ 20,910 (a contractor's appeal for an equitable
adjustment was denied because his claim was based on the
arbitrary formula he used in preparing his bid rather than on the
actual increase in his costs stemming from the Government's
change order).
See Universal Printing Co., supra, slip op. at 36. See also New
South Press & Associates, supra, slip op. at 51-52 ("On the one
hand, the Appellant's simple expedient of merely applying its
standard charges for stripping and bluelines to the operations in
question, is analogous to figuring the costs for those tasks on
the basis of some arbitrary formula. The Board has previously
noted that claims prepared on such a basis are uniformly rejected
by boards of contract appeals. See Universal Printing Co.,
supra, slip op. at 36 (citing Ordnance Materials, Inc., supra).")
56 For that reason alone, the Contractor's "back to press" claim
is rejectable.
On the other hand, at the hearing the Contracting Officer
explained in detail how he reached a figure-$2,540.00-which he
thought was fair and reasonable compensation for the extra 100
copies under the circumstances:
There was a question as to whether [the Appellant was] notified
ahead of time about this. I did not want to get into a big
argument about that, and I was really trying to work out an
agreement between us where we could pay for it. I just felt that
the money that we were being requested to pay was way too high,
and I also felt that it included a composition charge which, in
prior negotiations, Mr. Swanson and I had agreed was a $15[.00] a
page charge that was added in there.
We have had occasion[s] where work was done and stopped for
binding, and we agreed that $15[.00] was a fair and reasonable
composition charge. So for that reason, I deducted that amount,
that $15[.00] that I felt was composition, added the charge, and
there was only a limited number of charges that Mr. Swanson had
bid.
He had no charge to composition, and obviously, there was
composition, so that price is included someplace. And that's the
reason I came up-took that from the $22.50 per page [makeready]
price, which left me with $7.50 per page, and added in the
$200[.00] [makeready] cost, [and it] came out [$2,540.00].
See Tr.: 76-77.57 In the Board 's view, the Contracting
Officer's analysis is logical and rational. The Board also
believes that his approach comes closer to an "honest estimate"
of the true costs for reprinting the additional copies of the
Appendix than the Appellant's.
In the Board's mind, a critical weakness in the Contractor's
position has always been its internal inconsistency. There is a
stark contrast between the Appellant's contention that it cost
$7,996.00 to reprint the extra copies of the brief and Appendix
for shipment on May 24, 1994, and its statement that if they had
been produced as part of the original order for delivery a day
earlier, the additional cost would only have been $1,201.00
($9,197.00 - $7,996.00 = $1,201.00). The Contractor has failed
to explain to the Board's satisfaction why a mere 24 hour delay
would increase the production costs for these extra copies by a
factor of nearly 6-1/2 times, or 650 percent, when it seems that
the time frame is so brief that the Contractor would have had to
expended little effort in fulfilling the DOJ's order (the major
tasks and the bulk of the work having been accomplished in
producing the original 208 copies). The Contracting Officer's
analysis suffers from no such logical infirmity. Indeed, his
settlement offer of $2,540.00, which is more than double the
$1,201.00 the Appellant says it would have cost to print the 100
extra copies as part of the original order, seems reasonable and
generous by the Board's standards.
Although the Contracting Officer's "final decision" letter states
that his offer "is withdrawn upon apppeal [sic] of the
contracting officer[']s final decision," see R4 File, Tab U, at
3, his hearing testimony implied that the offer was still "on the
table." Tr.: 74-77. In the Board's judgment the Contracting
Officer's calculations establish a fair and reasonable basis for
compensating the Appellant for the extra copies under the
circumstances. See McDonald & Eudy Printers, Inc., GPO BCA 06-91
(May 6, 1994), slip op. at 39, 1994 WL 377581; R.C. Swanson
Printing and Typesetting Co., GPO BCA 15-90 (December 20, 1993),
Decision on Motion for Reconsideration and Order, slip op. at 14,
1993 WL 668317; Banta Company, supra, slip op. at 61. Therefore,
the Board adopts his calculations and rationale as its own, and
will remand the appeal to the Respondent with instructions to pay
the Contractor the amount of $2,540.00 as an equitable adjustment
for the additional copies of the Appendix under Print Order.
86144.58
VI. ORDER
For the above reasons, the Board finds and concludes with regard
to GPO BCA 27-94 that: (1) the Appellant has not shown by a
preponderance of the evidence that the DOJ authorized it either
to print or reprint the Appendix of the brief in United States v.
National Treasury Employees Union; and (2) thus, there is
insufficient proof to support the Contractor's equitable
adjustment claim for costs in the amount of $3,710.00 under Print
Order 86087. ACCORDINGLY, the final decision of the Contracting
Officer rejecting the claim is hereby AFFIRMED, and the appeal is
DENIED. With respect to GPO BCA 27A-94, the Board finds
and concludes that: (1) the DOJ's request that the Appellant
produce and deliver an additional 100 copies of the brief in
Rison v. Demjanjuk was not "within the general scope of the
contract," as that language is understood in the "Changes"
clause; (2) the Contractor proceeded with performance without
proper authorization from the Contracting Officer; (3) therefore,
the extra work was produced in violation of the contract; (4)
because the DOJ ordered the extra 100 copies during the proofing
stage of the production process, there is no foundation for a
"back to press" claim with respect to the Petition; (5)
nevertheless, the Appellant is entitled to some payment for
producing the 100 additional copies of the Appendix to the brief;
(6) however, the Appellant has not shown by a preponderance of
the evidence the total amount of its actual reprinting costs, or
demonstrated that those costs were reasonable, which are basic to
support an equitable adjustment recovery; and (7) the Respondent,
on the other hand, has shown that the Contracting Officer's
settlement offer of $2,540.00 constitutes a fair and reasonable
compensation for the 100 additional copies of the Appendix under
the circumstances. THEREFORE, the Contracting Officer's final
decision is also AFFIRMED, and the appeal is DENIED, except that
matter is REMANDED to the Respondent with instructions to pay the
Appellant $2,540.00 for the extra work performed. See Universal
Printing Co., supra, slip op. at 56; McDonald & Eudy Printers,
Inc., supra, slip op. at 40; R.C. Swanson Printing and
Typesetting Co., supra, slip op. at 15; Banta Co., supra, slip.
op. at 62; RD Printing Associates, Inc., supra, slip op. at 37;
General Business Forms, Inc., GPO BCA 2-84 (December 3, 1985),
slip op. at 23, 1985 WL 154846.
It is so Ordered.
November 18, 1996 STUART M. FOSS
Administrative Judge
_______________
1 The Contracting Officer's appeal file in GPO BCA 27-94 was
assembled pursuant to Rule 4 of the Board's Rules of Practice and
Procedure, and delivered to the Board on September 12, 1994.
Board Rules, Rule 4(a). It will be referred to hereafter as R4
File I, with an appropriate tab letter also indicated. As
originally submitted to the Board, R4 File I contained twenty two
(22) documents, identified as Tabs A-V.
2 The prehearing telephone conference in GPO BCA 27-94 was
conducted by the Board on July 6, 1995. However, the discussions
at the conference were not directed at the merits of the
controversy, but rather focused on whether or not the appeal was
timely filed since the date on the Notice of Appeal, July 27,
1994, was more than 90 days after the Contracting Officer's final
decision of April 5, 1994. See RPTC-1, at 2. In that regard,
the Government argued that the appeal was untimely, while the
Appellant contended the Contracting Officer's reconsideration of
his initial final decision effectively extended the time the
Contractor had to file an appeal. See RPTC-1, at 2-3. The
parties agreed that the jurisdictional issue needed to be
answered before other issues in the case were considered, and it
was decided that the appropriate method to decide the question
was by means of a motion to dismiss from GPO and a response from
the Appellant. See RPTC-1, at 3. Therefore, the Board
established a schedule for the Respondent to file a motion to
dismiss, for the Appellant to respond to the motion, and for GPO
to reply to the Contractor's response. Pursuant to that
schedule, the Board received the following documents from the
parties: (1) "Respondent's Motion to Dismiss with Points and
Authorities in Support Thereof," dated July 28, 1995; (2)
"Respondent's Supplement to Motion to Dismiss," dated August 1,
1995; and (3) "Appellant's Opposition to Respondent's Motion to
Dismiss and Respondent's Supplement to Motion to Dismiss," dated
August 8, 1995. On September 29, 1995, after carefully
considering the submissions of the parties, the Board concluded
that: (1) a letter from the Appellant to the Contracting Officer,
dated July 6, 1994, constituted a validly filed, timely Notice of
Appeal (R4 File I, Tab S); and (2) regardless of the effect of
the Contractor's letter, the Contracting Officer's actions
between April 5, 1994, and July 13, 1994, gave a reasonable
appearance that he was reconsidering his final decision. See
Decision and Order Accepting Appeal and Denying Motion to
Dismiss, dated September 29, 1995, slip op. at 15. Accordingly,
the Board DENIED the Government's motion to dismiss. Id., at 23.
3 The Contracting Officer's R4 File in GPO BCA 27A-94, was also
delivered to the Board on September 12, 1994. Board Rules, Rule
4(a). It will be referred to hereafter as R4 File II, with an
appropriate tab letter also indicated. As originally submitted to
the Board, R4 File II contained twenty four (24) documents,
identified as Tabs A-W, including Tab "Mc."
4 The prehearing telephone conference in GPO BCA 27A-94 was also
conducted by the Board on July 6, 1995. For this appeal,
however, the discussions at the conference concentrated on the
merits of the dispute.
5 The reporter's transcript of the hearing shall be referred to
hereinafter as "Tr.," followed by a colon (:) and an appropriate
page number.
6 Separate stipulations were submitted for Docket Nos. GPO BCA
27-94 and GPO BCA 27A-94. The stipulations were identified by
the parties at the hearing as "Stip. 2" and "Stip. 1,"
respectively, and shall be so cited here, followed by an
appropriate paragraph number.
7 As a rule, a party is bound by its stipulations, and such
evidentiary agreements freely entered into are controlling and
conclusive on all issues of fact. See GraphicData, Inc., GPO BCA
35-94 (June 14, 1996), slip op. at 7-8, fn. 11, 1996 WL ______;
The George Marr Co., GPO BCA 31-94 (April 23, 1996), slip op. at
3, fn. 3, 1996 WL ______; Banta Co., GPO BCA 03-91 (November 15,
1993), slip op. at 52-53, 1993 WL 526843 (citing Morelock v. NCR
Corp., 586 F.2d 1096, 1107 (6th Cir. 1978), cert. denied 441 U.S.
906, 99 S.Ct. 1995 (1979); Bromley Contracting Co., Inc. v.
United States, 14 Cl. Ct. 69, 74 (1987), aff'd 861 F.2d 729 (Fed.
Cir. 1988); Gresham & Co. v. United States, 200 Ct. Cl. 97, 112,
470 F.2d 542, 551 (1972); FED. R. CIV. P. 16). While a court or
board may reject a factual stipulation if it is "demonstrably
false" or contrary to the record evidence, the record here fails
to disclose any facts which would contradict the stipulations in
this case. See Professional Printing of Kansas, Inc., GPO BCA
02-93 (May 19, 1995), slip op. at 43, fn. 57, 1995 WL 488488
(citing Dillon, Read & Co., Inc. v. United States, 875 F.2d 293
(Fed. Cir. 1989); Bromley Contracting Co., Inc. v. United States,
supra, 14 Cl. Ct. at 74; Kaminer Construction Corp. v. United
States, 203 Ct. Cl. 182, 197, 488 F.2d 980, 988 (1973)). See
also GraphicData, Inc., supra, slip op. at 7-8, fn. 11; The
George Marr Co., supra, slip op. at 3, fn. 3; Banta Co., supra,
slip op. at 53.
8 The two categories were: (a) Category 1, which covered briefs
from manuscript copy; and (b) Category 2, which involved briefs
from camera copy only. See R4 Files I and II, at 13
(Determination of Award and Placement of Work). See also RPTC-2,
at 4. The specific product in both categories was "Supreme Court
Briefs." Id., at 2.
9 Under GPO's regulations, this sort of arrangement is called a
"direct-deal term contract." See Printing Procurement
Regulation, GPO Publication 305.3 (Rev. 10-90), Chap. XII, Sec.
1, ¶ 2 (hereinafter PPR). As defined in the regulations, a
"direct-deal term contract" is one which: ". . . allow[s] the
customer agency to place print orders (GPO Form 2511) directly
with contractors rather than routing them through the GPO for
placement." See GPO Agency Procedural Handbook, GPO Publication
305.1, dated March 1987, Sec. IV, ¶ 1, at 8 (hereinafter GPO
Handbook). The purpose of this method of contract administration
is: ". . . to ensure that agency printing needs are met in the
most effective and efficient manner possible." Id. It should be
noted, however, that an agency's direct-deal authority: ". . .
extends only to the placement of print orders and to the
transmission of copy and proofs. . . . All other authority rests
with GPO's Contracting Officers." See GPO Handbook, Sec. IV, ¶
2, at 9. {Emphasis added.] See also Graphicdata, Inc., supra,
slip op. at 60-61, fn. 54; B & B Reproductions, GPO BCA 09-89
(June 30, 1995), slip op. at 3, fn. 5, 1995 WL488447; McDonald &
Eudy Printers, Inc., GPO BCA 40-92 (January 31, 1994), slip op.
at 3, fn. 4, 1994 WL 275096; Shepard Printing, GPO BCA 37-92
(January 28, 1994), slip op. at 2, fn. 4, 1994 WL 275077.
10 According to the record, at the time of the IFB the first
contractor for Category I work under Program D404-M was Wilson-
Epes. Balmar Printing was the first contractor for Category II.
See R4 Files I and II, Tab C. See also Stips. I and II, at 2,
fn. 2. The record also indicates that at the time of the
hearing, the Appellant had been a contractor for Program D404-M
for approximately eight (8) years. Tr.: 41.
11 Based upon the anticipated needs over the contract term, the
Contractor's bid, after discounting for prompt payment, was
calculated at $363,242.70 for Category I work, and $20,189.40 for
Category II, the lowest offer in both categories. See R4 Files I
and II, Tab C. See also Stips. I and II, at 2, fn. 3.
12 The contract was awarded to the Appellant at the following
estimated contract prices: (a) $290,594.16 (for Category I work);
and (b) $16,151.52 (for Category II work). See R4 Files I and
II, Tab D. See also Stips. I and II, at 2, fn. 4. The
Appellant's total estimated contract price was $306,655.68. See
RPTC-2, at 2.
13 The days of the week in question were Friday (January 14,
1994), Tuesday (January 18, 1994), and Wednesday (January 19,
1994). Furthermore, Monday, January 17, 1994, was the "Martin
Luther King's Day" holiday. See Stip. 2, at 2-3, fn. 5.
14 At the hearing, the Appellant testified that the reason the
Contracting Officer was not notified was that DOJ made its
changes late at night (around 11:40 p.m.), and there was no one
at GPO to contact. See R4 File I, Tab J; Tr.: 122, 126, 134,
136-37.
15 The Appellant identified Karen Biehl, a Printing Specialist in
GPO's Term Contracts Division, as the employee who asked him to
provide proof of reprinting. See Tr.: 129-30.
16 From the testimony at the hearing, it is clear that this is
the critical factual dispute with regard to Print Order 86087.
In that regard, the Appellant was adamant that DOJ did authorize
a second printing of the Appendix (at 11:40 p.m. on January 18,
1994), and that the customer agency was in a rush because the
brief had to be filed with U.S. Supreme Court at 10:00 a.m. the
next day. Tr.: 122, 126-27, 135. The Contracting Officer, on
the other hand, was told by DOJ representatives that the customer
agency did not ask for or authorize a reprint (R4 File I, Tabs K
and L). Tr.: 135, 142-43. However, in response to a question
from the Board, the Contracting Officer said that he was not
challenging the fact the Contractor may have received a verbal
"O.K. to print" from the customer agency, but rather his position
was that under GPO's regulations the Appellant was obligated to
submit certain things to support a claim, and it did not comply.
Tr.: 148, 150-1, 153.
17 The crux of the Contracting Officer's position was that
because the Appellant failed to retain the briefs from the first
printing, he was left with no choice but to deny the claim. Tr.:
142-44. As he explained it, in pertinent part: "Mr. Swanson said
he did not have any copy for us to look at, it was all thrown
away. I had no copy to look at from any billing. So what I had,
what I was faced with was the contractor saying that they had no
copy at all to show me, [and] the department saying they did not
request it. . . . Normally, on all jobs where there is a mistake
or a reprint, the contractors call the contracting officer,
explain what happened, show the work that was done, hold onto it,
in order words, not destroy the work, and then a decision would
be reached by the contracting officer. Now, sometimes if the
work has been done, the decision may be to split the cost because
we cannot specifically say it was one person's fault or the
other, but in every case, the work is held onto until it is
verified that it actually was produced." Tr.: 142-43. [Emphasis
added.] See also Tr.: 148-51. As indicated in the Contracting
Officer's testimony, the Appellant says that the DOJ told it to
dispose of the copies of the first printing, and it did so. Tr.
131, 135-36.
18 Although the Print Order estimated the Appendix at 288 text
pages per copy, the actual number of pages was 312 per copy (R4
File II, Tabs E and U). See RPTC-2, at 6, fn. 2. See also Tr.:
44-45. Furthermore, the job was designated as Category 1 work
because the brief was more than 76 pages. See Tr.: 34-35.
19 The Contracting Officer's notes regarding the job contains the
following undated entry: "Mr. Swanson inform[ed] the agency [DOJ]
he could not go back to press unless he had it in writing. He
said at [the] time of the request he had not completed printing
the original order-208 copies nor had he bound the copies[.]" (R4
File II, Tab K).
20 There are two DOJ Request for Change forms, dated May 24,
1994, in the record, and it is unclear to the Board which one the
parties are referring to in their stipulation (R4 File II, Tabs H
and I). Both are addressed to GPO, signed by Stroman, and have a
check mark in the "Change of Quantity" box. However, one (R4
File II, Tab H), states, in pertinent part: "P.O. #86144 . . .
The Department has authorized back to press for an additional 100
copies. The Department must have final printed copies on 5-24-94
by 3:00 PM as per our originally established schedule[.]", and
appears to have been sent by facsimile transmission directly to
GPO, where it was received in the Customer Service Department on
June 1, 1994. See R4 File II, Tab K; Tr.: 84-87. A copy of this
Request for Change form was sent to the Contractor (R4 File II,
Tab L). The other Request for Change form (R4 File II, Tab I),
which simply says, in pertinent part: "This is to authorize back
to press for an additional 100 copies[.]", seems to have been
sent to the Appellant, and is in the nature of a confirming
letter. Obviously, both Request for Change forms were prepared
and mailed after the original ship/delivery date. See Tr.: 32,
87.
21 Basically, the Appellant billed for the extra copies as if
they were new publications, claiming the full contract rate of
$22.50 per page, which included the costs of composition,
printing and binding, even though no composition work was
involved. See RPTC-2, at 8. However, the record also indicates
that the Contractor and the Contracting Officer had previously
agreed to $15.00 as the appropriate per page charge. See Tr.:
76-77. See also note 26 infra.
22 The Contractor reasoned that "back to press" charges were
appropriate because the 100 additional copies were requested
after the original order had been shipped. See Tr.: 51.
23 The Contracting Officer testified that: " . . . in reviewing
the notes I had from the [DOJ] and from Mr. Roye Stroman and
Shirley Anderson, it seemed to show me that they were notified
prior to running the 32-page portion (the Petition) and that
initially they ran the 32-page[s] when the [DOJ] had requested
proofs, and when they went back, asked them to review the portion
that they had printed, use it as a proof. The records that I
received from the Department showed that they were notified at
that time, so therefore, I did not authorize payment for the
additional 100 copies on that, but I did authorize payment for
the 32-page [Petition]." See Tr.: 75. In that regard, his notes
contain the following entries: (a) "6/3/94. Call[ed] Roye
Stroman of [DOJ], inform[ed] him what the cost was for the 100
[additional copies] when the [Contractor], Swanson [Printing] had
to go back to press ($7,996.00) . . .;" and (b) "6/7/94. Called
A. Hyde to call agency. Need memo OKing cost of going back to
press for above print order[.]" (R4 File II, Tab K). The appeal
file shows that the DOJ furnished two memoranda in response to
the Contracting Officer's request (R4 File II, Tabs N and P).
The first memorandum, dated June 15, 1994, is from Stroman to
Alvin Hyde of GPO's Customer Service Department, and describes
the DOJ's dealings with the Appellant on Print Order 86144, and
says "[DOJ's Office of the Solicitor General (OSG), which placed
the order with the Appellant "after hours" without the knowledge
of the customer agency's Printing Procurement Unit (PPU)] is
requesting that this cost of $7,996[.00] should not be billed to
them[.]" (R4 File II, Tab N). The second memorandum, dated June
21, 1994, is from G. Shirley Anderson, OSG's Supervisory
Paralegal, to Charles Hurd, Acting Chief of the PPU (a copy of
which was provided to Hyde on June 24, 1994, and confirms
Stroman's factual description regarding how the Print Order was
handled, and states, in pertinent part: "The reprinting affected
only the [Petition] portion and not the [Appendix]. Since the
brief had been printed under separate covers, the printer did not
incur any expense for reprinting the [Appendix] portion. The
[DOJ] does not authorize payment of any reprinting costs incurred
by the printer in reprinting the [Petition] portion . . ." (R4
File II, Tab P). [Original emphasis.]
24 In addressing the Appellant's contention at the hearing that
if it did not carry out the DOJ's instructions it could be
defaulted, the Contracting Officer testified that the
Contractor's fear was groundless, and it should have told the DOJ
that its request was "out of the scope of the contract, and [the
Contractor] cannot proceed until the [C]ontracting [O]fficer
gives them authority." See Tr.: 88-90. Indeed, the Contracting
Officer stated: "As long as [contractors] obey [GPO Contract
Terms] and don't do anything without a contract modification,
they can never be hurt." See Tr.: 110. Finally, the Contracting
Officer also noted that if he had been informed ahead of time
about the DOJ's request for 100 additional copies of the brief,
he would have had to get the approval of GPO's Contract Review
Board (CRB) to issue a contract modification because the
Appellant's proposed increase in the cost of Print Order 86144
was in excess of $5,000.00. See Tr.: 82. See also PPR, Chap. I,
Sec. 10, ¶ 4.b(iv).
25 Both parties filed a closing brief in these consolidated
cases. The Appellant's closing brief, dated February 15, 1996,
shall be referred to herein as "App. Brf.," with an appropriate
page number thereafter. The Respondent's closing brief, dated
March 4, 1996, shall be cited herein as "R. Brf.," followed by an
appropriate page. In addition, the Contractor submitted an
exhibit at the hearing consisting of documentation relating to
another Program D404-M order, Print Order 86020, for the purpose
of establishing a prior course of dealing between the parties.
Tr.: 57-68. The Appellant's Exhibit shall be referred to as
"App. Exh. No. 1."
26 Indeed, regarding the appeal in GPO BCA 27-94, the Respondent
alleges that the Appellant has not even established that it
performed the extra work for which it now seeks additional
compensation. See R. Brf., at 12. No such doubts exist with
respect to GPO BCA 27A-94. In that appeal, the Government
concedes the extra work was performed, but challenges the
Contractor's method of charging for it. See R. Brf., at 10, fn.
8. Basically, GPO argues that the Appellant's accounting for the
additional 100 copies of the brief as "back to press" charges,
and in effect billing for them as if they were new publications,
was unreasonable, although the Government could also understand
the Contractor's economic incentive for doing so; i.e., if the
extra copies had been part of the original order it would not
have received any additional compensation because its bid prices
did not include a separate running charge. Id. (Citing Tr.:
50-52; R4 Files I and II, Tab A, at 5, 16). See also RPTC-2, at
8. Instead, the Respondent believes that its offer of $2,540.00
is a fair and reasonable price for the added work performed, and
offers that amount as an equitable adjustment for Print Order
86144. See RPTC-2, at 8-9; R4 File II, at Tab U.
27 The Respondent contends with respect to the appeal in GPO BCA
27A-94, specifically, that the Appellant had ample opportunity to
obtain the Contracting Officer's prior approval for the extra
copies sought by the DOJ, and its failure to do so deprived the
Government from exercising its discretion to pay the Contractor's
"steep additional charges" or procure the work from other
sources. See R. Brf., at 10. See also RPTC-2, at 8 (The
Appellant's "back to press" charges were "grossly inflated.").
28 In this respect, the Government has a better grasp of the law
on this issue than the Contractor. Contrary to the Appellant's
belief that the Respondent was responsible for producing evidence
or testimony distinguishing the Print Orders in dispute from "the
myriad of orders previously ordered and paid for involving
reprints and/or camera ready copy[.]," see App. Brf., at 2, it
had the burden of proof because it was the party raising the
issue and seeking the benefit of the "prior course of dealings"
doctrine. See R. Brf., at 12 (citing Doyle Shirt Manufacturing
Corp. v. United States, 199 Ct. Cl. 150, 158, 462 F.2d 1150
(1972). See also J.W. Bateson Co., ASBCA No. 26617, 83-2 BCA ¶
16,682; Watson Electrical Construction Co., GSBCA No. 4260, 76-1
BCA ¶ 11,912; Lake State Manufacturing Corp., ASBCA No. 17286,
73-2 BCA ¶ 10,190, reconsid. denied, 74-1 BCA ¶ 10,462.
29 The Board's decision is based on the following record: (a) the
Appellant's Notices of Appeal, dated July 27, 1994; (b) the
Appellant's Complaints, dated May 11, 1995; (c) the Respondent's
Answers, dated June 8, 1995; (d) R4 Files I and II; (e) RPTC-1
and RPTC-2; (f) the record transcript and documentary evidence
presented at the hearing on December 12, 1995; and (g) the
closing briefs filed by the parties.
30 Thus, Print Order 86087 covered the production of DOJ's brief
in United States v. National Treasury Employees Union, a case in
which the U.S. Supreme Court overturned on First Amendment
grounds so much of the Ethics in Government Act of 1978, as
amended, prohibiting receipt of honoraria by Federal Government
employees. See United States v. National Treasury Employees
Union, ___U.S.___, 115A S.Ct. 1003 (1995). Print Order 86144 was
for the brief in Rison v. Demjanjuk, a matter on certiorari to
the U.S. Supreme Court involving allegations made by an accused
Nazi war criminal, who had been extradited to Israel and
acquitted of capital charges there, that Federal Government
attorneys had engaged in prosecutorial misconduct by failing to
disclose to the courts and to him exculpatory information in
their possession during the extradition process. See Demjanjuk
v. Petrovsky, 10 F.3d 338 (6th Cir. 1993), cert. denied sub nom.,
Rison v. Demjanjuk, ___U.S. ___, 115 S.Ct. 295 (1994).
31 Reasons of strategy also dictate this practice-a party who
files an early brief runs the risk of allowing his or her
opponent to submit what amounts to a reply brief.
32 The Board has stated on numerous occasions when a "direct-deal
term contract" is at issue, the contractor and GPO are the only
parties to it, and "while [the customer agency is] certainly an
active 'participant' in the contract by virtue of its 'direct-
deal' authority, it [is] not a party . . .". See Graphicdata,
Inc., supra, slip op. at 60. See also B Reproductions, supra,
slip op. at 37-38; RD Printing Associates, Inc., supra, slip op.
at 10, fn. 11.
33 The reason for this approach was stated in Bruce Construction
Corporation: "Since the purpose underlying such adjustments is to
safeguard the contractor against increased costs engendered by
the modification, it appears patent that the measure of damages
cannot be the value received by the Government, but must be more
closely related to and contingent upon the altered position in
which the contractor finds himself by reason of the
modification." Bruce Construction Corp. v. United States, supra,
163 Ct. Cl. at 100, 324 F.2d at 518.
34 "Preponderance of the evidence" simply means such evidence as,
when weighed against that opposed to it, is more convincing that
something is more likely so than not. See Fry Communications,
Inc./InfoConversion Joint Venture, GPO BCA 9-95 (August 5, 1991),
slip op. at 31, 1991 WL 439272 (Decision on Remand) (citing
Hopkins v. Price Waterhouse, 737 F.Supp. 1202, 1204, fn. 3
(D.D.C. 1990). To meet this standard of proof a party is
required to present evidence sufficient to persuade the trier of
fact that the proposition is more likely to be true than not
true. See Fry Communications, Inc./InfoConversion Joint Venture,
supra, slip op. at 31-32 (citing Hopkins v. Price Waterhouse, 737
F.Supp. at 1206; E. Devit, C. Blackmar, M. Wolff, Federal Jury
Practice and Instructions § 7-2.02 (4th ed. 1987).
35 The reason for this bias was clearly stated by the Federal
Circuit in Dawco Construction, Inc. v. United States, when it
said: ". . . the 'actual cost method' is preferred because it
provides the court, or contracting officer, with documented
underlying expenses, ensuring that the final amount of the
equitable adjustment will be just that-equitable-and not a
windfall for either the [G]overnment or the contractor." See
Dawco Construction, Inc. v. United States, 930 F.2d 872, 882
(Fed. Cir. 1991), rev'g, 18 Cl. Ct. 682 (1990).
36 While the contractor's original or bid estimate can be used to
determine the cost of the work, later evidence, such as purchase
order prices or vendor quotations, are normally better evidence
of the costs that the contractor would have incurred. See, e.g.,
Atlantic Electric Co., GSBCA No. 6016, 83-1 BCA ¶ 16,484. If
there is no such evidence, the bid estimate may be considered the
best available proof of this amount. See Select Contractors,
Inc., ENGBCA No. 3919, 82-2 BCA ¶ 15,869; Dawson Construction
Co., Inc. v. General Services Administration, GSBCA No.
5672(5308)-REIN, 81-2 BCA ¶ 15,387, aff'd on reconsid., 82-2 BCA
¶ 15,914; Onetta Boat Works, Inc., supra; Pruitt, Inc., ASBCA No.
18344, 73-2 BCA ¶ 10,213. Cf. Ordnance Materials, Inc., ASBCA
No. 32371, 88-3 BCA ¶ 29,910. However, the use of estimates does
not change the burden of proof. Cf. Lagarelli Brothers
Construction Co., Inc., ASBCA No. 34793, 88-1 BCA ¶ 20,363; Clary
Corp., ASBCA No. 19274, 74-2 BCA ¶ 10,927.
37 In Condor Reliability Services, Inc., the ASBCA stated: "The
rule applicable to the price is . . . 'the difference between the
reasonable cost of performing without the change or deletion and
the reasonable cost of performing with the change or deletion.'
[Citation omitted.] The result should not change the
contractor's loss or profit position before the change occurred.
In other words, there should be no repricing of the contract as a
whole." Condor Reliability Services, Inc., ASBCA No. 40538, 90-3
BCA ¶ 23,254, at 116,675-76. [Emphasis added.]
38 As explained by the Claims Court: "The search for
'reasonability' . . . , is not limited to inquiry of such factors
as 'fair market value' or 'historical cost.' . . . The reasonable
cost concept includes both 'objective' and 'subjective' elements
. . . The objective focus is on the costs that would have been
incurred by a prudent businessman placed in a similar overall
competitive situation . . . However, unless it also takes into
account the subjective situation of the contractor, a test of
'reasonable cost' is incomplete. . . .". See Nager Electric,
supra, 194 Ct. Cl. at 851-53, 442 F.2d at 945-46.
39 Seriagraphic Arts, Inc., was decided by one of the ad hoc
appeals panels which considered disputes between contractors and
GPO prior to the establishment of the Board in 1984. See GPO
Instruction 110.10C, Subject: Establishment of the Board of
Contract Appeals, dated September 17, 1984. While the Board is
not bound by their decisions, its policy is to follow the rulings
of the ad hoc panels where applicable and appropriate. See The
George Marr Co., supra, slip op. at 50, fn. 40; Shepard Printing,
GPO BCA 23-91 (April 29, 1993), slip op. at 14, fn. 19, 1993 WL
526848; Stephenson, Inc., GPO BCA 02-88 (December 21, 1991), slip
op. at 18, fn. 20, 1991 WL 439274; Chavis and Chavis Printing,
GPO BCA 20-90 (February 6, 1991), slip op. at 9, fn. 9, 1991 WL
439270.
40 The Appellant says that on January 18, 1994, it received
verbal assurances from either Davis or Stroman at the DOJ that
there would be no other changes to the Appendix, and that proofs
were only required for the Petition. However, the Appendix was
returned with additional changes along with the Petition proofs
(R4 File I, Tabs I). Neither Davis nor Stroman were called by
the Contractor as witnesses at the hearing. On the other hand,
while the Contracting Officer was willing to assume that the
Appellant may have received the DOJ's verbal approval to proceed,
he testified that normally an "O.K. to print" will be in writing.
See Tr.: 152-53. See also R. Brf., at 10, fn. 7.
41 B. P. Printing and Office Supplies involved a contractor's
appeal protesting a contracting officer's final decision reducing
the contract price by $74.20 because of a shortage in the number
of books delivered. The contract in question contained a so-
called "Receipt for Delivery" clause which set forth, in detail,
the type of information which the contractor had to provide to
receive payment for the work performed, including: (1) the GPO
jacket, program, and print order numbers; (2) the total quantity
delivered; (3) the number of cartons, and quantity per carton;
(4) the date when delivery made; and (5) the signature of the
Government agent accepting delivery. The contractor claimed that
he had shipped all of the books required by the contract, and
provided the contracting officer with its "shipping list," which
it said was in a form which the Government had accepted as
evidence of shipment in the past. However, the contracting
officer concluded that the "shipping list" did not meet the
requirements of the contract, and made the appropriate adjustment
to the contract price. Specifically, there was nothing to
indicate, on the face of the document, the number of cartons, and
quantity per carton for that order, and who accepted them on
behalf of the customer agency, and the contractor subsequently
providing that information orally could not cure this defect.
The Board affirmed the contracting officer's decision and
dismissed the appeal. Id., at 26-27.
42 "Prior course of dealing" is defined as a sequence of previous
conduct between the parties relating to their former agreements
or transactions which is fairly to be regarded as establishing a
common basis of understanding for interpreting their expressions
and other conduct. See RESTATEMENT (SECOND) OF CONTRACTS § 223
("agreement"); U.C.C. § 1-205 (1977) ("transaction"). 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. See Gresham
and Co., Inc. v. United States, 470 F.2d 542 (Ct. Cl. 1972);
Western Avionics, Inc., ASBCA No. 33158, 88-2 BCA ¶ 20,662).
43 Publishers Choice Book Manufacturing Co. is the Board's lead
case on the issue. In that opinion, it said the following about
the use of "prior course of dealing" 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.,supra,
slip op. at 10-11. [Original emphasis.]
44 Technically, this is not the sort of case which would entitle
the Board to draw a negative inference from the Appellant's
failure to produce the documentation necessary for payment. See
Fry Communications, Inc./InfoConversion Joint Venture, supra,
slip op. at 39 (". . . [B]ecause the Appellant has not introduced
evidence to explain why the documents are missing, the accepted
legal principles allow the Board to draw a negative inference in
favor of the Respondent that the contents would be harmful to the
Appellant's case. Citing Morowitz v. United States, 15 Cl. Ct.
621 (1988); Jen-Beck Associates, VABCA Nos. 2107-10, 2133-2117,
2119-20, 2122, 2124-25, 2127, 2129-35, 2186, 87-2 BCA ¶ 19,831).
Accord Cape Tool & Die, Inc., ASBCA No. 46433, 95-1 BCA ¶ 27,465
at 136,845 ("A recurring problem in appellant's claim is the lack
of documentation. No pre-award records are offered to support
appellant's proposed profit of the anticipated hours for
machining first article casings. No invoices are offered to show
the cost of the Anderson thread gages, while other purchases are
supported by invoices. With regard to settlement expenses
claimed for the labor of appellant's president and unnamed shop
personnel, the hours are estimated and there is no explanation of
what was done. Neither is there a persuasive explanation
tendered for the lack of records. Where such records are not
produced, an inference may be [drawn] against appellant." Citing
2 WIGMORE, EVIDENCE, § 291 (Chadbourn rev. 1979)); KRW,
Incorporated, DOT BCA No. 2572, 94-1 BCA ¶ 26,435, at 131,539
("When the persons having the greatest familiarity with events
are not called, but a litigant seeks to rely on the testimony of
one having lesser familiarity, or when a litigant fails to
produce other relevant evidence known to exist, a tribunal may
draw an inference that the testimony of the person not called or
the evidence not introduced might not support or might actually
be adverse to that litigant." Citing Inter-West, Ltd., DOTBCA
No. 2238, 92-3 BCA ¶ 25,073 (1992); TDC Management Corporation,
DOTBCA No. 1802, 91-2 BCA ¶ 23,815 (1991) at 119,258, affirmed
upon reconsideration, 93-1 BCA ¶ 24,061, affirmed without opinion
sub nom. Skinner v. TDC Management Corporation, 975 F.2d 869
(Fed. Cir. 1992)). Here, the Contractor has told us why the
copies of the brief's first printing are missing, and the Board
accepts its explanation no matter how illogical it sounds.
45 But for the fact that the issue in this case involves a
substantial increase in quantities, it could be argued that GPO's
"Changes" clause also applies. See GPO Contract Terms, Contract
Clauses, ¶ 4 (Changes). See GraphicData, Inc., supra, slip op.
at 98-99; Banta Co., supra, slip op. at 34. Accord United States
v. Aguon, 851 F.2d 1158 (9th Cir. 1988); Van Cleef v. Aeroflex
Corporation, 657 F.2d 1094 (9th Cir. 1981); L.B. Foster v.
Railroad Service, Inc., 734 F.Supp. 818 (N.D. Ill. 1990).
However, the general rule is that increases in quantities are
thought not to be authorized by the "Changes" clause. See P.L.
Saddler v. United States, 152 Ct. Cl. 557, 287 F.2d 411 (1961) (a
change order almost doubling the amount of material required for
an embankment was beyond the scope of a contract to build a
levee); 30 Comp. Gen 34 (B-95069) (1950); 15 Comp. Gen. 573
(A-66501) (1935) (separate buildings may not be added on a
construction project). See also Cibinic & Nash, at 390 (". . .
[A] change adding quantities above the contractual maximums was
found to be outside the scope [of competition]." Citing Liebert
Corp., 70 Comp. Gen. 448 (B-232234.5), 91-1 CPD ¶ 413)).
46 GraphicData, Inc. involved a contractor's claim for an
equitable adjustment under a single-award "requirements" contract
for the printing of patents. As awarded, the contract was
divided into two production periods, the first period in which
patents were to be produced on paper or microfilm, and the second
where CD-ROMs would be substituted for printed patents. Under
this plan, the customer agency's need for printed patents would
be substantially reduced in the second production period, and the
contract estimates reflected that fact. Furthermore, the
invitation for bids had expressly warned potential contractors
that as customers switched to CD-ROM patents the contract's
estimated quantities might be "significantly reduced even
further." The contractor relied on the Government's estimates of
reduced work in the second production period in bidding the job.
However, after award the customer agency canceled its CD-ROM
plan, and required all patents to be printed on paper or
microfilm for the entire contract term. This unexpected
additional work resulted in a financial loss to the contractor
when priced at the contract rates, and it asked for an equitable
adjustment and a repricing of the agreement. GPO denied the
claim on the ground that the contract's "Determination of Award"
figures were estimates only, and GPO's standard "requirements"
clause expressly states that "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."
Appealing to the Board solely on the issue of entitlement, the
contractor advanced three theories in support of its claim: (a)
the Government's estimates were negligently prepared; (b) the
parties had made a mutual mistake; and (c) the customer agency's
cancellation of its CD-ROM program amounted to a "constructive
change" in the contract. Although the Board rejected the
"negligent estimates" and "mutual mistake" arguments, it agreed
with the contractor that there had been a "constructive change,"
i.e., a complete restructuring of the contract, and ruled that
the contractor, therefore, was entitled to an equitable
adjustment. See GraphicData, Inc., supra, slip op. at 95-110.
While not dispositive in the context of the case, the Board also
rejected the Government's position based on the fact that no
formal "change order" pursuant to the "Changes" clause had been
issued by the contracting officer; i.e., GPO Form 913 ("Contract
Modification"). See PPR, Chap. XVI, Procurement Forms, at 176.
The thrust of the Government's position was that unless the
contracting officer received CRB concurrence for the
modification, and informed the contractor of the change by
signing and issuing a copy of GPO Form 913, no "change order"
within the contemplation of GPO's regulations was issued. The
Board disagreed. It held that a letter could be a "change order"
(and there was such a letter in the record) provided it conformed
to the requirements of the "Changes" clause by: (a) being
directed to the contractor by the person with contracting
authority; (b) being in writing; (c) being within the general
scope of the contract and concerning the drawings, designs,
specifications, method of shipment or place of delivery; (d)
providing for an equitable adjustment in case costs are increased
by the change; and (e) informing the contractor that must submit
any "proposal for adjustment" within 30 days from the date of
receipt of the written order. Id., at 99-100 (citing Queens
Lithographing Corp., GPOCAB No. 9-77 (March 30, 1979), slip op.
at 11, 1979 WL 28897). In short, the Board saw nothing in the
"Changes"clause limiting contracting officers to GPO Form 913 for
the purposes of making a change in the contract, particularly
since the drafters of GPO Contract Terms had taken the trouble to
identify various GPO forms in other clauses, including referring
to GPO Form 913 in the "Payment for Accelerated Delivery" clause,
but had not done so in the "Changes" clause. Id., at 102 (citing
GPO Contract Terms, Contract Clauses, ¶ 26 (Payment for
Accelerated Delivery)). See W.H. Armstrong & Co. v. United
States, 98 Ct. Cl. 519 (1943); A.L. Harding, Inc., DCAB PR-44,
65-2 BCA ¶ 5261, reconsid. denied, 66-1 BCA ¶ 5463; Lincoln
Construction Co., IBCA 438-5-64, 65-2 BCA ¶ 5234, reconsid.
denied, 66-1 BCA ¶ 5343; C.A. Logeman Co., ASBCA No. 5692, 61-2
BCA ¶ 3232 (where the only Government defense is the lack of a
written change order, an oral change order will be upheld if the
contracting officer also promised an equitable adjustment once a
fair amount could be determined). But cf. Plumley v. United
States, 226 U.S. 545 (1913); General Bronze Corp. v. United
States, 168 Ct. Cl. 176, 338 F.2d 117 (1964); Comspace Corp.,
GSBCA No. 3550, 72-2 BCA ¶ 9674 Instruments for Industries, Inc.,
DCAB NBS-16, 69-2 BCA ¶ 8025, reconsid. denied, 70-1 BCA ¶ 8169
(lack of a written change order is a reason for denying a claim
for price adjustment). See generally, Cibinic & Nash, at 408-10.
47 Whether changes are beyond the general scope of the contract
is usually determined by comparing the total work performed by
the contractor to the work called for by the original contract.
The usual test is whether the work performed was "essentially the
same work as the parties bargained for when the contract was
awarded." See Aragona Construction Co. v. United States, 165 Ct.
Cl. 382 (1964). See also Keco Industries, Inc. v. United States,
supra; Wunderlich Contracting Co. v. United States, 173 Ct. Cl.
180, 351 F.2d 956 (1965); Akcon, Inc., ENGBCA No. 5593, 90-3 BCA
¶ 23,250.
48 See note 20 supra.
49 A contracting officer's decision about whether to continue
with an existing contract despite extraordinary actions by a
customer agency or to terminate the agreement for the
Government's convenience has never been questioned by the Board,
see Universal Printing Co., supra, slip op. at 32-33 (citing R.C.
Swanson Printing and Typesetting Co. supra); Graphic Litho
Company, Inc., GPO BCA 17-85 (February 23, 1988), 1988 WL 363327,
reconsid. denied, September 30, 1988, particularly where the
contractor has not challenged the exercise of that discretion,
see Universal Printing Co., supra, slip op. at 33 (citing Condor
Reliability Services, Inc., supra; Goetz Demolition Co., ASBCA
No. 39129, 90-3 BCA ¶ 23,241; Kinetic Engineering & Construction,
Inc., ASBCA No. 30726, 89-1 BCA ¶ 21,397; Celesco Industries,
Inc., supra). Therefore, in accordance with its general policy,
and in the absence of some "compelling reason," and none has been
shown, the Board will not disturb the Contracting Officer's
choice of procedure in this case. See Universal Printing Co.,
supra, slip at 34 (citing Shepard Printing, supra, slip. op. at
14-15, fn. 20; Stephenson, Inc., supra, slip op. at 19-20, fn.
22; Stabbe Senter Press, GPO BCA 13-85 and 19-85 (May 12, 1989),
slip op. at 53, 1989 WL 384977).
50 At the hearing, when asked on direct examination, "Indeed,
were there other ways that you could have gotten this work
produced?", the Contracting Officer responded, "Yes. Since the
job was already printed, we could have simply gotten a copy from
the [DOJ] and there is numerous ways we could have gotten it
overnight on general usage contracts or a small purchase." Tr.:
82-83. The follow up question was "Do you have a sense for what
that might have cost the Government if you had done [that]?", and
he answered "The approximate cost I worked up on the 814 [A814-M]
program, taking approximately the fifth contractor, was
approximately $1,500[.00]." Tr.: 83.
51 A "cardinal change" occurs if the ordered deviations alter the
nature of the thing to be constructed, or amount to a "drastic
modification beyond the scope of the contract work." See
GraphicData, Inc., supra, slip op. at 113-14, fn. 68 (citing
Airprep Technology, Inc. v. United States, 30 Fed. Cl. 488, 505
(1994); Air-A-Plane Corp. v. United States, 187 Ct. Cl. 269,
275, 408 F.2d 1030 (1969)). See generally Cibinic & Nash, at
384-86.
52 The voluntary nature of additional work must be proved by
"clear and convincing" evidence. See Driftwood of Alabama,
GSBCA No. 5429, 81-2 BCA ¶ 15,169. See also Quiller Construction
Co., ASBCA No. 14964, 72-1 BCA ¶ 9322 ("preponderance" of the
evidence test applied to find voluntary performance).
53 As indicated in the regulation, the simple difference between
a "supplemental agreement" and a "change order" is that the
former is bilateral and requires the signature of both the
Contracting Officer and the contractor, while the latter is the
unilateral issuance of the Contracting Officer. See PPR, Chap.
XII, Sec. 2, ¶¶ 1(c)(1)-(2) (Contract Modifications).
54 See note 19 supra.
55 The PPR describes a properly filed claim as possessing certain
essential characteristics, namely: (1) it must be made in good
faith; (2) it must honestly and accurately reflect of the
contractor's belief of the contract liability of the Government;
(3) it must be prepared from the contractor's books of account in
accordance with Government recognized cost principles and
accounting practices; (4) it must be accurate, complete, and
current as of the date of submission; and (5) it must be prepared
for the purpose of furnishing a basis for settlement. PPR, Chap.
X, Sec. 1, ¶ 3. These requirements are somewhat mirrored in the
Board Rules regarding Complaints. Board Rules, Rule 6(a). See
Universal Printing Co., supra, slip op. at 35.
56 As the Board observed, a contractor is required to show its
actual costs in order to avoid a windfall for either party. See
New South Press & Associates, supra, slip op. at 52. See also
Universal Printing Co., supra, slip op. at 41 (citing Dawco
Construction, Inc. v. United States, supra; Cen-Vi-Ro of Texas
v. United States, supra; Buck Brown Contracting Co, supra;
Engineered Systems, Inc., supra; Bregman Construction Corp.,
supra).
57 See also R4 File II, Tab U, at 3 ("As your pricing for
composition, printing and binding, on this contract is lumped
together, and as the requirement to go back to press only calls
for printing and binding, it is necessary to separate the
composition costs from the printing and binding costs. This was
done by using the $15.00 per page composition charge mutually
negotiated in previous settlements, and used again by you in your
pending settlement proposal of [P]rint [O]rder 86148. After
deduction of the $15.00 per page composition charge from your
overall makeready price of $22.50 per page, we are left with
$7.500 per page for printing and binding. Multiplying the $7.50
figure against the 312 pages called for in the publication, and
then adding your makeready cost of $200.00 for the cover, bring
the total cost for the 100 additional copies to $2,540.00.").
58 The Board might have reached a different conclusion if the
Contracting Officer had used Program A814-M as the basis for his
equitable adjustment offer. See New South Press & Associates,
supra, slip op. at 52-54. However, although the Contracting
Officer used Program A814-M for his initial "work up," which
resulted in an equitable adjustment of approximately $1,500.00,
see note 50 supra, he clearly rejected that figure as being too
low under the circumstances. In any event, the Board itself
would have disallowed the use of Program A814-M in the context of
this case because the Appellant could not have been bound by the
range of prices in Program A814-M, see New South Press &
Associates, supra, slip op. at 53; Universal Printing Co., supra,
slip op. at 26, fn. 27 (citing Atlantic Electric Co., GSBCA No.
6016, 83-1 BCA ¶ 16,484); RD Printing Associates, Inc., supra,
slip op. at 13, fn. 15. In so many words, the employment of
Program A814-M as the equitable adjustment baseline for the
additional 100 copies of the Appendix in this case would have
been neither fair or reasonable. See e.g., New South Press &
Associates, supra, slip op. at 54.