U. S. Government Printing Office Contract Appeals Board Vincent T. McCarthy, Chairman Jay E. Eisen, Member Drew Spalding, Member Panel 77-12 Appeal of National Graphics, Inc. January 4, 1979 This is a timely appeal to a default termination filed by National Graphics, Incorporated, 725 DeKalb Industrial Way, Decatur, Georgia 30033, herein also referred to as the contractor, on November 21, 1977, under the disputes clause of the contract, Jacket 227-805, Purchase Order 82692, Article 29, U.S. Government Printing Office Contract Terms No. 1. I. Findings of Fact (A) This case arose out of a contract entered into by the appellant, National Graphics, Inc., and the U.S. Government Printing Office (GPO) for the production of 14,933 copies of a 60 page, separate paper covered, saddle-wire stitched pamphlet, printing cover in brown, titled "AH 500 Stored Grain Insects (new)". (B) The contract, designated as GPO Jacket 227-805, Purchase Order 82692 was a fixed price agreement for the procurement of the pamphlets for the Department of Agriculture, awarded to the contractor on March 9, 1977, at a cost of $14,180; however, the quantity was increased by 4,000 pamphlets at an additional cost of $3,080, (Purchase Order 53560). The contract price, therefore, was increased to $17,260. The complete shipment was scheduled for delivery on or before April 5, 1977. (C) The contract specifications set forth the type and quality of printing required as follows: "OFFSET PRINTING: Head to head. Cover prints brown and text print to 4 color process (exact register) throughout. MUST BE PRINTED ON A 4-UNIT-COLOR PRESS. Contractor to select colors to faithfully match the full color art / transparencies to be furnished and Pantone 476-brown." . . . "All printing and binding must be of the highest quality, exact register, a faithful match of the full color art / transparencies to be furnished and Pantone 476, and full and uniform ink coverage throughout the entire press run are required. See also Form GPO 2459D, 'Workmanship' ". (D) GPO 2459D, Special Terms and Conditions (Supplemental to the Basic Specifications) incorporated by reference in the contract, provides in pertinent part as to workmanship the following: "Workmanship: All workmanship in connection with the article or product manufactured under these specifications must be first class in every respect. . . . The Public Printer reserves the right to be the sole judge as to the quality of workmanship in any article or product delivered under these specifications." (E) The contract required as to submission of proofs to GPO by the contractors, the following: "PROOF: Submit 4 full color proofs (top sheets) and 2 progressive proof books of the text pages showing all elements in proper position and proofed on the paper in the inks to be used for this printing (PROOFS / PROGS MUST SHOW TEXT PAGES IMPOSED AS THEY WILL BE PRINTED), plus 2 sets of color key (3M or similar) proofs of cover. One set of color proofs (top sheets) must be ruled to show trim out and margins. . . ." . . . "The progressive proofs must contain one color bar for each color, either a gradient tint scale or half and half solid and half 70% screen density placed parallel to the proofer's ink rollers. They must show each color separately. . . ." (F) GPO furnished black and white camera copy amongst other material and illustration copy consisting of 49 (35mm) full color film transparencies with accompanying cropping/sizing guides, one full color art and cropped black and white photoprints. (G) 1. The contract required submission of the proofs as soon as possible to allow for the possibility of necessary corrections, and were scheduled to be sent back to contractor's plant within 10 working days after receipt at the GPO. In the event that the contractor's errors are serious enough in the opinion of the GPO to require revised proofs, the revised proofs are to be provided by contractor at no expense to the Government. Each revised proof will be back at the contractor's plant within 6 working days after its receipt at the GPO. No extra time can be allowed for the reproofing, but must be accomplished within the original production schedule. 2. The contractor was contacted on April 6, 1977 and April 27, 1977, and was requested to submit the proofs. Proofs were received at GPO on May 2, 1977, and returned on May 24, 1977, marked revised proofs, because of contractor's errors. Revised proofs were received on July 21, 1977. The ordering agency and GPO rejected the proofs because they did not meet the required standards of quality. The GPO and ordering agency consented to receive an additional set of revised proofs. The second set of revised proofs was delivered to GPO by the contractor in person on October 11, 1977. They were rejected by (Typography and Design) GPO because of substandard printing quality and lack of color match of the transparencies and art furnished by the Department of Agriculture. The cause for delays in delivery of the proofs were attributed in part to the contractor and GPO; however lack of timeliness was not in issue nor relevant as the basis for terminating the Contract for default. (H) On October 26, 1977, the Contracting Officer submitted to appellant a termination notice notifying the contractor that the contract was terminated for default by reason of its inability to furnish acceptable proofs. On November 21, 1977, contractor filed its appeal to the Public Printer and asserted that, in its opinion, the third and final set of press proofs were acceptable. (I) The contractor on March 3, 1978, requested a meeting with the Contract Appeals Board, and the following GPO personnel: Mr. Walter Burroughs, Mr. Roman Goltz and the GPO printing specialist who had examined the progressive proofs of the subsequent contractor which were sent to their plant. It appears that the reprocurement contract was awarded to Collier Graphics and its progressive proofs, marked "OK to print" (as corrected by GPO) were inadvertently forwarded to appellant, instead of Collier Graphics. The appellant requested that its press proofs and said approved press proofs of Collier be available at the meeting for comparison purposes. (J) Pursuant to the contractor's request an informal conference convened at the GPO on July 13, 1978. In addition to the three members of the Contract Appeals Board, the following individuals attended the meeting: 1) John Stanley Pres. National Graphics 2) Bruce Crouch Sales Rep. National Graphics 3) Paul Barlow COPPD, GPO 4) Roman E. Goltz Contracting Officer, GPO 5) Emanuel J. Fontana Pr. Spec. Typo and Design, GPO 6) Ray Johnson Pr. Spec. Typo and Design, GPO 7) Walter B. Burroughs Pr. Spec. Typo and Design, GPO 8) James C. Lane, Jr. Counsel for Contracting Officer, GPO The procedure for the meeting, in lieu of a formal hearing, was announced by the Chairman, who stated that the conference is not to provide a forum for the introduction of new matter, but to permit explanations and/or argument regarding matter already in the record. No sworn testimony was taken and no verbatim transcript prepared. The parties also were permitted, in addition to the verbal statements and argument, to submit written comments, affidavits, or documentary materials to the Board within fifteen days of the date on which the conference was held. The first set of proofs (Exhibit 9), the first set of revised proofs (Exhibit 11) and the second set of revised proofs (Exhibit 15) all submitted by the contractor as indicated in the appeal file were available for inspection by the conferees, including the Contract Appeals Board. In addition, the progressive proofs submitted by Collier Graphics (the successive contractor), which were accepted and approved by GPO, were available for scrutiny and identified as Exhibit 20. The original art work, of 49 (35mm) full color film transparencies were also available at the meeting. All of the physical evidence described herein was retained by the Board. II. Opinion The issue in this case is whether the contractor is required to perform in accordance with the specifications made a part of the contract. Two types of compliance are recognized: complete compliance and substantial compliance. Under the specifications set forth in the contract all printing is to be of the ''highest quality, exact register, a faithful matter of the full color art / transparencies to be furnished and Pantone 476, and full and uniform ink coverage throughout the entire press run are required.'' It is apparent, under the cited specifications the Government had the right to insist upon strict compliance with the specification. Ideal Restaurant Supply Co., Inc. , VACAB (1967), 67-1 BCA ¶ 6237; Steel Erectors Inc. et al., ASBCA No. 8068 1963 BCA ¶ 3973. (Emphasis supplied.) The next question to be decided is whether appellant met the requirements of the specifications as related to submitting proofs, for if it did, the appeal must be allowed. We believe that the language of the contract specifications and the referenced GPO 2459D (Rev. 11-1-73), Special Terms and Conditions, makes it clear that what appellant was to furnish is high quality, exact register product, containing a faithful match of the full color art transparencies with full and uniform ink coverage. The contract provides that the Public Printer reserves the right to be the sole judge as to the quality of workmanship produced by the contractor. The initial proofs were received at GPO on May 2, 1977, and returned to appellant for revision because of errors. A set of revised proofs was submitted by appellant to GPO on July 21, 1977. The revised proofs were rejected by GPO because of inferior reproduction of the color pictures and the heavy and inconsistent inking on the text pages. Likewise GPO agreed to view one additional set of revised proofs on October 11, 1977. These were examined by Mr. Walter Burroughs of the Typography and Design Division, and were rejected because of substandard printing quality and lack of color match to the furnished transparencies. The appellant failed to present any independent evidence to support his conclusion that the "third press proof was a good and reasonable match of the art furnished" and that, therefore, it was acceptable. In addition, the appellant, who had an opportunity to examine the GPO approved progressive proofs submitted by Collier Graphics, contended that it's third set of proofs "are made better than the other printer's set sent to us to review." The Superintendent of Typography and Design, GPO, commented in a prepared statement for the file that he compared the sets of proofs of both appellant and Collier Graphics, Inc. for register, color bar ink densities, for the number of illustrations which reasonably matched the original transparencies or could be approved with minor ink adjustment on press, and for those which required film correcting and provided his opinion as follows: "Collier Graphics maintains reasonably uniform ink densities and close registration on all sheets. The color reproductions should closely represent the negative screen percentages. Approximately 10 (depending on the individual checking the sheets) illustrations require film correcting. There are 50 illustrations in all. "National Graphics ink densities and registration were much more inconsistent. The color bars range to +/-35 from an acceptable trade density standard. The yellow readings were in the 50 to 60 range instead of 90 to 100 as is more acceptable. The press sheets, I feel, do not represent the screen percentages in the negatives based on these density readings. It would be impossible to satisfactorily reprint this pamphlet with these existing variations. Approximately 25 of the illustrations require film correcting with the present ink readings on the sheets. With the correct ink settings this number would be much larger. There is no basis to National Graphics' claim that their proofs are of equal quality. In order to judge the equality of the sheets National Graphics must first provide sheets with correct ink density readings." (Exhibit 19) We conclude, that a fair inference to be drawn from the foregoing evidence is that the appellant did not meet the requirements of the specifications as to submitting acceptable proofs. The specifications in part require a faithful match of the full color art transparencies. Interpreting "a faithful match" as a likeness to the original, yellow readings in the 50 to 60 range were far off the 90 to 100 acceptable range. We do not believe that the Contracting Officer's decision to terminate the contract for default by reason of the contractor's inability to furnish acceptable proofs was arbitrary or capricious. It [contractor] failed to meet the high standards set forth in the specifications. In addition, we note the appellant was afforded three opportunities to do so and over a considerable period of time which extended long past the original delivery date. Accordingly, the appeal is denied.