U. S. Government Printing Office
Contract Appeals Board

Vincent T. McCarthy, Chairman
Lawrence W. Kennelly, Member
Drew Spalding, Member
Panel 76-18

Appeal of Dynamite Graphics
Purchase Order Number 50826
August 31, 1979

Summary

This appeal is taken by Dynamite Graphics (hereinafter appellant), 2705 Ross Road, Chevy Chase,
Maryland 20015, pursuant to the Disputes clause, Article 29, U.S. Government Printing Office
Contract Terms No. 1 (revised July 25, 1970), to a decision of the contracting officer assessing
liquidated damages for late delivery.

The contract at issue required the screen process printing of 8,000 posters to be used outdoors by
the Department of Agriculture.  It also required the printing to be done with inks which resisted
fading under adverse weather conditions.  To comply with this standard, after award, the appellant
found it was required to use an ink that took a considerably longer drying period than the ink it
had originally intended to use.  Appellant maintains this delayed the delivery of the posters for
nearly nine months after the original delivery date.  The contracting officer thereafter assessed
the maximum in liquidated damages (50% of the bid price), as permitted by the contract.

Appellant appealed this decision in a timely letter to the Public Printer.  Thereafter, it
submitted a number of supporting documents and appeared at a formal hearing before this Contract
Appeals Board.  In addition, through counsel, Robert N. Stokes, Jr., Esq., appellant has argued
variously that (1) the contract specifications were defective and impossible of performance, (2)
the Government possessed superior knowledge regarding the contract specifications which it failed
to disclose, thereby preventing the contractor from performing the work properly, and (3) the
liquidated damages provision is unenforceable because it amounted to a penalty.

The Government responded by asserting that the contract term prescribing the use of fade resistant
inks was widely used in the printing industry, and that the appellant knew that it was not certain
of what the term meant and bid on the contract nevertheless.  Therefore it must be held to the
original delivery date required by the specifications.  The Government also argued that the
assessment of liquidated damages is perfectly proper in this instance, in view of the delayed
delivery date.

Based on the evidence contained in the appeal file, the testimony adduced at a hearing held before
the Board on September 25-26, 1978, and the pre-hearing and post-hearing filings of counsel for the
Government and appellant, our decision is that the appeal of Dynamite Graphics should be denied in
its entirety.

Findings of Fact

In January 1975, the Government Printing Office (GPO) placed the appellant on its bid list for silk
screen printing requirements after the appellant had filled out and submitted a questionnaire for
the Printing Procurement Department of the GPO.  In the questionnaire, appellant listed the
equipment it possessed and indicated the type of work it wanted to perform.  Silk screen posters
were among the manufacturing specialties appellant indicated it could produce.

Invitations for bids for the silk screen printing of 8,000 posters entitled "No Fireworks" were
mailed to 20 contractors on June 19, 1975.  Five bids were opened on July 3, 1975, and the
appellant supplied the low bid of $3,689.50.  The four higher bids were between $5,440 and $6,600.
Because of the wide variance between the appellant's bid and the next low bidder, the contracting
officer, through his representative, requested appellant to review the specifications and confirm
its bid (TR II, p. 80-81).  Appellant responded to this request by letter dated July 8, 1975,
signed by Mr. William T. Whipple and Nevet Sydell, co-owners of the appellant company,which
confirmed their bid price (AF, Item C, Exh. B).  The contract was awarded to appellant on that same
date, via Purchase Order No. 50826 and required final delivery on or before August 11, 1975.

The contract specifications required screen process printing in two colors (black and red) of
posters on weatherproofed blanks.  The stock to be used was prescribed as "white 5- to 10-ply
(.021" to .036" thick) weatherproofed blanks, similar to All Weather Paper Company's H2OPruf
Outdoor Board, or at contractor's option white 5- 10-ply (.021" to .036" thick) C-l-S blanks and
weatherproofed after printing" (Appeal File (AF) C-l, p. 1).

The other contract terms in issue are as follows:

"Subject matter:  All line work including a 40% tone area, printing in two colors.  Approx. ink
coverage 10% red, 5% black.

Use FADE and WEATHER RESISTANT INKS.  Iron oxide (for the red) pigments are suitable for this
purpose.  The inks must not show any deliterous [sic] effect that will render the posters illegible
when exposed to strong sunlight, heat, or humid conditions, and will not show any appreciable
change in color after exposure in an Atlas Fadeometer for 160 standard fading hours or its
equivalent.

WEATHERPROOFING:  Poster (unless weatherproofed blanks are used) must be weatherproofed on the
face, back, and edges.  These posters will be displayed in outside wooded areas for a minimum
period of 60 days.  The paper must be as white as possible to allow for discoloration because of
the weatherproofing process.  The weatherproofing material must not deteriorate the printing inks."
(AF, C-1, p. 1) (Emphasis added)

Mr. Whipple testified that prior to bidding he did not understand the requirement regarding the use
of fade and weather resistant inks.  Particularly, he was unclear of what was required by an ink
that will not show any appreciable change in color after exposure in an Atlas Fadeometer for 160
standard fading hours or its equivalent" (TR. I, p. 25-26).  As a consequence of this uncertainty,
Mr. Whipple contended that he made inquiry of GPO personnel in order to get more information
regarding the requirement (TR. I, p. 36-38).  Although he did not receive a satisfactory answer to
his inquiries at that time, he bid for the job on or about July 3, 1975.  He explained that
although he was not certain as to to the meaning of the specification regarding the fade resistance
of the inks to be used, he did understand the requirement in the "Weatherproofing" paragraph
(quoted above) which required the poster to be able to be displayed in an outside area for a
minimum period of 60 days.  At the time he submitted his bid, he simply assumed that the durability
of the ink would be sufficient if it lasted the same amount of time as the paper was required to
last, i.e., 60 days (TR.I, p. 128-9).

Shortly after award, the appellant again became concerned about the ink durability requirement and
sought information from other private ink suppliers with expertise on the subject.  As a result of
these inquiries, appellant decided to use a gloss poster ink with a hardening agent and binding
varnish (TR. I, p. 76).  This amounted to a change from the ink that the appellant had anticipated
using, namely a flat poster screen ink with hardener, which had a much shorter drying time.  While
at this time the appellant still did not know precisely what 160 standard fading hours meant, it
decided it would be sufficient if the ink used could last 160 days (TR. I, p. 134; AF, Item C. Exh.
10).

Shipment of the posters was not made on August 11, 1975.  On August 26, 1975, the GPO contacted
appellant regarding the delay, and appellant informed the GPO that equipment breakdown had caused a
delay in delivery (AF, Item C, Exh. 8).  Contact was later made with appellant during the week of
September 4, 1975, concerning a date when delivery could be anticipated, however, no projected
delivery date was obtained from appellant.  Final shipment of the posters was made on April 30,
1976, or approximately 8 1/2 months after the originally scheduled delivery date.  At no time prior
to this had the appellant discussed an extension of the delivery date with the contracting officer.

Liquidated damages were assessed by the contracting officer in accordance with Article 19, of U.S.
Contract Terms No. 1, Revised July 15, 1970, which was incorporated as part of the contract
specifications.  This provision permitted (with minor variations not relevant here) a 1% deduction
in the contract price, up to maximum of 50%, for each day beyond the contract delivery date that
delivery was actually completed.  In this case, the maximum deduction was assessed in the amount of
$1,844.75 (AF, Item C, Exh. 9).

By letter dated October 10, 1976, the appellant wrote to the contracting officer protesting the
assessment of liquidated damages.  Appellant maintained that the delay in delivery was caused by
its extraordinary efforts to meet the contract specifications in that it used an ink which took far
longer to dry than the ink that it had anticipated using at the time of its bid.  In this letter,
appellant also maintained that the GPO was in part responsible for this delay because it should
have known that the job could not have been accomplished without automatic dryers.  It asserted
that the GPO was given notice in the answers it provided in the equipment questionnaire, that it
did not have the necessary equipment to perform the job by the date specified in the contract (AF,
Item C, Exh. 10, 12).

By letter dated November 22, 1976, the contracting officer, Mr. R. E. Goltz, informed the appellant
that he had reviewed the assessment of liquidated damages and had decided that it was appropriate.
The contracting officer's position was that any contractor has the responsibility of knowing all
the elements of the specifications before submitting a bid.  He also maintained that no record
existed of any inquiry made by the appellant of the GPO regarding the ink durability requirement of
the specifications.  Appellant appealed this Final Decision in a letter dated December 20, 1976.

During the oral hearing before the Board, the Government produced several witnesses who would have
been in a position to receive an inquiry from the appellant regarding a particular contract
specification.  Each of these individuals, namely, William G. Brawner, Specifications Writer in the
Printing Procurement Department and author of the specifications at issue; George K. Spicer, a
specifications reviewer, who reviewed of the subject specifications; Mr. Joseph Wagner, a printing
specialist in the Certifications and Awards Section of the Printing Procurement Department, who was
in contact with the appellant company; and Mr. Roman Goltz, contracting officer, testified that
they had not been contacted by the appellant company on this matter either prior to bidding or
subsequent to award.

Appellant disputes the implication of this testimony claiming instead that it called the
contracting officer and he and the other persons to whom they spoke at the GPO failed to help them
in understanding the Atlas Fadeometer requirement (AF, Item C, Exh. 10; TR. I - p. 26, 40, 182).

The only expert testimony received during the hearing regarding the Atlas Fadeometer requirement
was produced by the Government through Dr. Albert R. Materazzi, Manager of the Quality Control and
Technical Department of the GPO. 1  Dr. Materazzi explained that the Atlas Fadeometer is an
instrument used to test accelerated aging of materials.  More particularly, it can be used to test
the resistance to fading of certain inks, paints, varnishes, etc. (TR. II - p. 43-44).  He further
testified that it was commonly used within the printing industry and that if a printer wanted to
buy an ink that met this specification he would simply go to a knowledgeable printing ink company
and that ink company would supply the appropriate ink (TR. II, p. 46, 61).  Further evidence was
made part of the Appeal File in Items F and G which support the conclusion that the Atlas
Fadeometer standard is one that is both meaningful and ascertainable to someone in the printing
industry.

The appellant specifically disputes this conclusion through extensive testimony in which Mr.
Whipple claimed that he contacted numerous ink manufacturers only to be given a variety of
definitions and no specific recommendations as to which ink to use (AF, Item E; TR I, p. 41, 58-60,
127).

As to this particular issue, the Board finds that there is greater reason to believe the testimony
of Dr. Materazzi.  He evidenced in his testimony an in-depth knowledge of the meaning of this
specification and he was able to demonstrate specifically how a screen printer could ensure itself
of using the correct ink to meet the specification.  In any event, the appellant apparently used an
ink which fully met the specifications as there is no indication on the record that any question
was ever raised by the contracting officer regarding the quality of appellant's work.

During the hearing, appellant suggested that the specifications for weatherproofing, as compared to
the specifications regarding the fade resistance of the inks, are inherently contradictory.  It
suggests that it is illogical for the contract to require the ink to last longer than the substrate
upon which it is placed, i.e., the weatherproofed poster board.

That these requirements are different was acknowledged by the testimony of Dr. Materazzi (TR. II,
p. 78-79).  This difference was explained by testimony provided by other Government witnesses.  Mr.
Spicer indicated that the Department of Agriculture used the posters for as long as practicable,
possibly as long as two or three years (TR. II, p. 23).  Mr. Watson, Chief of the Color
Specifications Section, testified that the 160 standard fading hour requirement was used because it
was much more susceptible of testing than the requirement regarding the ability of the poster to
stand in an outside wooded area for a minimum period of 60 days (TR. II, p. 26).

However, it was not the weatherproofing requirement which caused the appellant's problems, rather
it was the requirement that the inks resist fading.  It was the appellant's choice of inks, not the
substrate, that caused the delay in delivery. 2  As a result, we focus our attention on this
requirement in our discussion below.

Discussion

In our view, the critical fact in this case is that the appellant knew before it bid that there was
a term in the contract which it did not understand.  Nevertheless, it proceeded to bid on the
contract and thereafter even reviewed and confirmed its bid price.  In doing so, it relied on its
own interpretation of a totally different clause in the contract and assumed that the
specifications as to inks and substrate were synonymous.  Only after award, did the appellant
discover what it felt to be a more accurate interpretation, which in turn, caused it to change the
inks, resulting in the delay in delivery.  Apparently, if the appellant had known precisely what
the Atlas Fadeometer standard required prior to the bid date, it would have declined to bid on the
contract.

In its post-hearing submissions, appellant argues that.the contract specifications were defective
and impossible of performance.  Among other cases, it cites the Board to Foster Wheeler Corp. v.
United States, 513 F.2d 588 (Ct. Cl. 1975); Hol-Gar Mfg. Corp. v. United States, 360 F.2d 634 (Ct.
Cl. 1966); Kinn Electronic Corp., ASBCA 13526, 69-2 BCA ¶ 8061; and Landsverk Electrometer Co.,
ASBCA 11092, 67-2 BCA ¶ 6649.  Each of these cases concerns a situation where the product or end
item to be produced was either unique or beyond the then existing state of the art.  In the instant
case, quite the contrary is true.  There is no evidence in the record that it was objectively
impossible to meet the specifications . Indeed, there is no allegation that this contractor did not
meet the specifications.  The ink which was required was obtainable by any screen process printer,
including this contractor.

Appellant also asserts that the contract violated an implied warranty that, if followed, the
specifications will result in a satisfactory product.  It contends the specifications were "not
merely inaccurate, but required performance to a standard for which there exists no commonly
accepted measure of performance." (Appellant's Brief p. 3) In support of this proposition it quotes
a passage from Consolidated Diesel Corporation, ASBCA 10486, 67-2 BCA ¶ 6669, which indicates the
extent of the Government's responsibility for its own specifications.  We set forth a portion of
this quotation:

"When one of the parties to a contract undertakes to prepare the specifications, that party is
responsible for the correctness, adequacy and feasibility of the specifications, and the other
party is under no obligation to check and verify the work product of the party who assumed
responsibility for the preparation of the specifications, even though he may be as much or more of
an expert than the party who prepared the specifications." (p.30, 951-2)

The appellant, however, has failed to quote another portion of that same decision which we find
pertinent here.  We quote as follows:

"A bidder who knows or should have known that the specifications are impossible of performance, but
bids anyway without raising any objection to the specifications, cannot thereafter be relieved from
the consequences of impossibility, as in bidding with actual or construction [sic] knowledge of the
impossibility, he assumes the risk . . . . A bidder who is on notice of an 'incipient problem', but
neglects to bring it to the attention of the contracting officer and get it solved before the bid
opening, cannot expect to have the problem resolved in his favor." (Citations omitted.) (p. 30,952)

We find that this appellant did precisely what this decision proscribes.  It assumed the risk when
it proceeded to bid without regard to its previously acknowledged lack of information on the
meaning of the ink fade resistance specification.

The appellant argues alternatively that the Government had superior knowledge of the nature of the
performance specification which it failed to disclose to the appellant.  Specifically, it contends
that the Government knew or should have known that automatic drying equipment was needed to
complete the contract within the time frame specified.  It claims that because of the answers it
provided on the equipment questionnaire prior to bidding, the Government had actual knowledge of
what equipment it possessed and of its manufacturing capabilities.  It contends, therefore, that
the government should have advised it that the delivery date was impossible of performance with its
equipment.  In support of this proposition, appellant refers us to J. A. Jones Construction Co. v.
United States, 390 F.2d 886, 182 Ct. Cl. 615 (1968) and Helene Curtis Industries, Inc. v. United
States, 160 Ct. Cl. 437, 312 F.2d. 774 (1963)

The rule of the Helene Curtis  case is that the Government must share its superior knowledge which
is vital to the successful completion of the contract.  However, the corollary to this postulate is
that the Government is under no duty to volunteer such information, if the contractor can
reasonably be expected to obtain the facts from other sources.  H. N. Bailey & Associates v. United
States, 196 Ct. Cl. 166 at pgs. 177-178; 449 F.2d 376 at p. 382 (1971) and cases cited therein.  As
we noted above, the appellant here obtained the necessary information from other sources in the
private sector.

As noted above, the appellant contends that the Government should not have awarded it the contract
because of the equipment limitations which the Government knew existed at the contractor's plant.
In the few times that Boards have spoken to this rather remarkable argument, they have concluded,
as we do, that the contractor, and not the Government, is the best judge of the contractor's
ability.  See Valveaire, Aircraft Division Abbotwares, ASBCA 8322, 1964 BCA ¶ 4177; Washington
Scientific Instruments, Inc., ASBCA 9348, 63-1 BCA ¶ 4743 (1965).

Appellant's final claim, presented in its post-hearing brief dated November 9, 1978, is that the
liquidated damages provided for in this contract amount to a penalty and ought not be enforced.  In
support of this position, it contends that because the posters were to be produced with a legend
"No Fireworks", the logical inference is they were intended for use in the time period surrounding
the Independence Day celebrations of 1976, and since they were delivered in late April, 1976, the
Government suffered no actual damages.  Appellant does not cite to any other evidence to support
this inference, and our review of the record has not revealed any other evidence which would lead
to this conclusion.

In Bayou Culvert Manufacturing, Inc., AGBCA No. 400, 76-1 BCA ¶ 11796, a case cited by appellant,
the Agriculture Board held that  "mere allegations alone, without proof, are insufficient bases for
allowing a claim against the Government or for setting aside the decision of a contracting officer.
There must be probative evidence to support such self-serving allegations."  (Citations omitted.)
(at p. 56304)  They also held that statements contained in briefs do not rise to the level of
evidence and therefore are not given.any probative value.  (Ibid.) Using the same thinking, we find
no persuasive reason to adopt the inference urged upon us by the appellant, due to a lack of any
specific evidence on this point.

Additional support for our conclusion is contained in a recent case in the Court of Claims which
held, contrary to the assertions of the appellant, that liquidated damages are no longer looked
upon with judicial disfavor and are generally accepted as a legitimate technique to allocate the
consequences of a breach before it occurs.  Jennie-O Foods, Inc. v. United States, 217 Ct. Cl. 314,
580 F.2d 400, 412 (1978).  The Court also reaffirmed the standards for enforcement of liquidated
damages clauses enunciated in Priebe & Sons, Inc. v. United States, 332 U.S. 407 (1947).  As that
case indicates, if the actual damages suffered are less than the damages contracted for, this is
not fatal to a liquidated damages provision. (At p. 411-12)  Moreover, Southwest Engineering Co. v.
United States, 341 F.2d 998 (8th Cir.), cert. denied, 382 U.S. 891 (1965) holds that in considering
whether liquidated damages are appropriate, one examines the situation which existed at the time of
the execution of the contract, rather than at some later point in time.  In this case the parties
freely entered into the contract and were fully aware of the provision for liquidated damages (TR.
I, 138).

We have reviewed the liquidated damages clause for this particular contract and are unable to find
it invalid on its face as a penalty.  The clause does not assess damages for delay in contemplation
of an intermediate and dependent part of an integrated contract.  Schouten Construction Co.,
FAACAP 1965, 65-1 BCA ¶ 4803.  The clause also does not assess a flat rate without any
consideration for partial deliveries.  Graybar Electric Co., Inc., IBCA 1970, 70-1 BCA ¶ 8121 .

  In summary, the liquidated damages clause here appears to us to meet the requirements imposed by
  the cases cited above.  We therefore conclude that the liquidated damages clause in the instant
  contract was and is valid and enforceable.

Conclusion

For the reasons stated above, and after due consideration of all of the evidence and arguments on
the various issues raised, we hereby deny the appeal in its entirety.

_______________

1  The Board received Dr. Materazzi's resume into evidence (Government Exhibit D) and he was
examined by appellant's counsel on voir dire  regarding his qualifications to testify in this area.
(TR II, p. 35-43).  The evidence showed he has completed a doctorate in chemistry with a
dissertation on bacterial pigments.  Since 1937, when he began work as a chemist in private
industry doing three-dimensional photographic research, he has held a series of high level
positions involved with the technical aspects of printing.  Since 1974, he has been the Manager of
Quality Control and Technical Department at the GPO, and he recently supervised the production of a
technical report by the department regarding light-fast materials (TR II, p. 37; AF, Item F).
Based upon these credentials, the Board accepted Dr. Materazzi as an expert witness (TR II, p. 42).

2  Although not raised by either party during the hearing, there is some suggestion in the
submissions of the appellant (prior to its representation by counsel) that there were other factors
which caused the delay.  Specifically, Ms. Sydell and Mr. Whipple, in a letter dated October 10,
1976, to the contracting officer, wrote:

"In actual operation, the impact of this change [in inks] required intermittent printing because of
the limitation of available drying equipment (air drying).  Whereas we formerly planned to execute
this job within the time limits prescribed, we found ourselves in the position of having to
interrupt even the longer intermittent process to fit in other contracts which included use of the
same manual equipment.  Additionally, it did take longer than planned to obtain shipment of
production materials, including the newly needed glass poster inks.  It took longer than the
required time allowance just to get 8,000 pieces of weather resistant board from the mills."  (AF,
Item C, Exh. 10) (Emphasis added).

As a general proposition, a contractor is required to have made adequate provisions to obtain the
supplies to meet the obligations of a contract.  Federal Roofing and Painting, Inc.,  Eng. BCA
1968, 68-1 BCA ¶ 6912.  It appears from the above-quoted passage the appellant failed to some
extent to meet this standard.