U. S. Government Printing Office Office of the General Counsel Contract Appeals Board Appeal of Majestic Industries, Inc. March 14, 1977 Vincent T. McCarthy, Chairman Jay E. Eisen, Member Barbara J. Faulkner, Member Panel 76-10 This is an appeal filed on August 31, 1976, by Majestic Industries, Inc., hereinafter referred to as "Contractor" or "appellant", pursuant to the disputes clause of the contract, GPO Form 198, United States Government Printing Office Contract Terms No.l, Article 18. The General Counsel has been designated by the Public Printer to determine appeals under the disputes clause. Findings of Fact (a) This case arises out of a contract entered into by the appellant and the U.S. Government Printing Office, hereinafter referred to as GPO, for the production of 175,000 3-ring 3/4" plastic "camouflage" binders. On June 26, 1976, an additional 500 binders were ordered (F.E. 4); and on July 19, 1976, an additional 1646 were requested by the ordering agency, HQ TRADOC, Fort Monroe, Virginia, for a total of 177,146 binders. (F.E.8) (b) The contract, designated as GPO Jacket Number 638-344, Purchase Order No. E0571 (F.E. 11A) is a fixed price agreement for the procurement of 3-ring polyethylene binders, awarded on April 23, 1976, at a cost of $46.90 per 100, or a total of $82,846.97 for the 177,146 binders ultimately supplied. (c) The specifications required the contractor to furnish camouflage binders "to fit sheet 8" x 10 1/2" punched with 3 round holes, diameter C to C on the left 10 1/2" edge. Binder size to approximate 11 1/2" x 9" (F. E. 11A). A sample from a previous printing was furnished by GPO and mentioned under the headings of composition and printing to serve as a model for color and composition. (F. E. 11(A) p. 2.) (d) The shipment schedule required the model to be furnished by April 30, 1976, and shipment to be completed by June 29, 1976. However, as the model was not received by the Contractor until May 8, 1976, an extension of the shipping date was granted until July 8, 1976. Partial shipments were accepted by the ordering agency, HQ. TRADOC, Fort Monroe, Virginia, as follows: June 29 114,796 binders July 4 19,168 July 6 41,536 July 20 1,646 177,146 On July 13, 1976, the GPO Hampton Regional Printing Procurement Office received notification from TRADOC that the binders did not conform to specifications in that "the front and back covers were 11 1/2'' x 9 7/8" instead of the specified 11 1/2" x 9". (F.E. 6) Although the binders were considered usable despite the discrepancy, HQ. TRADOC recommended that the contractor be "penalized", because the binder "was for the capstone 'How to Fight' field manual in the Army and [was] much larger than desired or order." [sic] Other reasons for the Army's recommendation were that the manual "was cumbersome to use because the edge of the cover overhangs the text by over an inch . . . the cover tends to curve around the text edge giving a shoddy appearance . . . and the delivered binders do not fit properly on book shelves with the other 40 'How to Fight' manuals." (F.E. 6) (e) On July 15, 1976, the contractor was notified by mail that the binders did not conform to specifications and that a deduction of 4% of the contract price would be made from the Contractor's account. (F.E. ll(c)). The Contractor thereupon filed its formal notice of appeal by letter dated August 31, 1976, submitting such evidence on its behalf as is contained in F. E. ll(A), (C), (D) and (E). Exhibit (B), in the contractor's possession, is the sample sent to it by the ordering agency after the bid was awarded. Its overall dimensions, according to the contractor, are 11 1/2" x 9 7/8". (F.E. 11) Questions Presented The questions presented are: (1) whether the binders manufactured under this contract conformed to the specifications; and, if not, (2) whether the 4% deduction from the contract price was a proper measure of damages. Opinion The contractor argues that the 11 1/2" x 9 7/8" binders produced under the contract were in conformance with the specifications because the industry standard binder measures 11 1/2" x 9 7/8", the sample furnished by the government to the contractor also measured 11 1/2" x 9 7/8", and because the specifications required the binders dimensions to approximate 11 1/2" x 9" (F.E. ll(D)). Since the ambiguous specifications were created by the GPO, the Contractor contends, the government should bear the responsibility for any deficiency in the end product. A detailed examination of the specifications, however, clearly reveals that the binders produced by the Contractor did not conform to the dimensions ordered by HQ. TRADOC. Although the ordering agency required a product to approximate 11 1/2'' x 9", it received instead a product measuring closer to 11 1/2" x 10." The Contractor claims that the specifications were confusing and ambiguous, in that the sample provided by the GPO measured 11 1/2" x 9 7/8". However, a thorough reading of the specifications is sufficient to show that the sample was to serve as a model for composition and color only, rather than overall construction: "Composition: None. Camera copy and a complete set of offset positives furnished. Contractor also to receive a sample from a previous printing. . . . "Printing: Clear, sharp silk screening in green (2 shades) and black. Covers 1 and 4 bleed top, bottom and outside. Match furnished sample for colors." (F.E. ll(A), page 1 and 2) The Contractor appears to base its claim that the specifications were ambiguous upon the use of the word "approximate". Without a doubt, the employment of such a word introduces a certain amount of indistinctness in regard to the exact dimensions of the product required. However, the effect of its use is not to permit the contractor to ignore the specifications and manufacture a product almost a full inch larger than the 11 1/2" x 9" desired. As to just how much leeway the term "approximate" allows, the United States Court of Appeals, Ninth Circuit defines it as meaning "approaching or nearly." Tonkoff v. Barr, 245 F.2d 742, at 749 (1957). Webster's new collegiate dictionary defines the word "approximately" to mean "nearly correct or exact". (G & C Merriam Co., 1974) Furthermore, a government survey of a number of sources in the ring binder industry shows that the term "approximate" is interpreted by the industry to permit a leeway of 1/8" to 1/4", not 7/8'' of an inch. Since Majestic has produced a product "approaching or nearly" 11 1/2" x 10" rather than 11 1/2" x 9" it cannot be said to have conformed to specifications. The Government is entitled to a product which has been manufactured in conformance with the specifications. Inasmuch as the evidence clearly shows that the Contractor has failed to meet the specifications, that portion of the appeal is denied. The second question is whether the 4% deduction from the contract price was a proper measure of damages. The general rule of law in regard to one who commits a breach of contract is that the offending party must make compensation therefor to the injured party. "In determining the amount of this compensation . . . the aim in view is to put the injured party in as good a position as he would have had if the performance had been rendered as promised." (5 Corbin on Contracts 992, page 5). The 4% assessment against the contractor in this case, although improperly characterized as a "penalty", is a proper measure of damages, being a fair and just amount to put the government in "as good a position as it would have had" if the performance of the contract had been rendered according to specifications. Therefore the contractor's appeal of the deduction of 4% of the contract price is denied. For the foregoing reasons, the entire appeal is denied.