U. S. Government Printing Office Office of the General Counsel Contract Appeals Board Appeal of Loose Leaf Devices Company June 27, 1977 Vincent T. McCarthy, Chairman Samuel Soopper, Member Drew Spalding, Member Panel 77-2 Findings of Fact 1. The Government Printing Office contracted with Loose Leaf Devices Company, by its President, Mr. George F. Fowler, Jr., hereinafter referred to as appellant or contractor, of St. Louis, Missouri, for the manufacturer of 5,000 binders for the U.S. Attorneys' Manual, Government Purchase Order No. 81730, Jacket No. 223-232. 2. The specifications were issued November 19, 1976, and included the following provisions: "In accepting this contract the contractor specifically agrees to all the provisions of GPO Form 198, U.S. Government Printing Office Contract Terms No. 1, approved July 1, 1943 (Rev. 7-15-70) and GPO Form 2459D, Special Terms and Conditions (Rev. 11-1-73) which are hereby made an integral part of this contract except where in conflict with these specifications. A copy of GPO Form 2459D will be furnished to the successful bidder. "GPO TO FURNISH: A sample binder for materials and general constructions, plus one piece of camera copy, 8 x 9-1/4'', to be reproduced same size. "MATERIALS SPECIFICATIONS: Supported vinyl Black, leatherette grain, supported virgin vinyl - 15.2-oz. vinyl, 4.1-oz. cotton backing; surface coating 11-oz. virgin vinyl (basis one lineal yard - 54" wide). "SCHEDULE: Copy will be furnished by December 13, 1976. Ship complete on or before January 11, 1977." 3. The contractor submitted a bid dated November 29, 1976, in the net amount of $10,750. The contracting officer approved the bid on December 7, 1976. The purchase order is dated December 9, 1976. The contractor received notice of the award on December 15, 1976. 4. On December 16, 1976, the contractor, by its President, George F. Fowler, Jr., placed an order with Gane Brothers and Lane, Incorporated, a material supplier located in St. Louis, Missouri, for the necessary amount of virgin vinyl required by the contract. 5. On January 10, 1977, Mr. Fowler spoke with Mr. Paul Barlow, Printing Specialist, Printing Procurement Department, Government Printing Office and informed him of the impossibility of completing the contract by the scheduled date, due to the fact that the vinyl had not been received from the supplier. Mr. Barlow, having found insufficient excuse for the delay, mentioned the liquidated damages provision of the contract. 6. The contractor sent a letter to Mr. Barlow dated January 18, 1977, the body of the letter being as follows: "I am enclosing a letter from our material supplier for our contract for 5,000 binders for the U.S. Attorneys' Manual, Purchase Order No. 81730. "Mr. Gann from Gane Brothers & Lane has explained the severe weather conditions which have caused a delay in the production of the material for production of these binders. General Tire in Toledo, Ohio, has had to close its plant on several occasions and lose valuable production time due to power loss and weather conditions which prevented employees from reporting for work. This is certainly not our fault. We would, therefore, like to ask for an extension on this purchase order to February 11, 1977. We feel certain we can complete in time with this new date. "We will begin production as soon as the material is received in our plant. We have the other items necessary to produce these binders, such as the metals and board. "We will advise you as soon as the material is received in our plant and will start production immediately. Please let me hear from you as soon as possible about a request for an extension on this job. Thank you very much." 7. The letter from the material supplier referred to in Mr. Fowler's letter above, was from Ed Gann of Gane Brothers & Lane, Incorporated. The body of the letter, dated January 17, 1977, stated: "Your order for 1,000 yards of special Tolex Supported Vinyl was scheduled to be shipped from General Tire & Rubber Co. in Toledo, Ohio on January 14. It has now been rescheduled for shipment on January 21. The main reason for the rescheduling is the severe weather conditions in that area causing loss of production time. "We will try to do whatever possible to make sure shipment does leave on the 21st of January." 8. The weather in the midwestern part of the United States during January 1977 was severe and resulted in substantial commercial disruption. 9. On January 25, 1977, the contracting officer sent a termination notice stating that, in accordance with Article 18 of U.S. GPO Contract Terms No. 1, the contract was ''terminated for default by reason of your failure to make delivery within the time specified." 10. The contract was subsequently rebid and awarded to DVC Industries, Bayshore, New York, on February 4, 1977, for $11,200. Shipment was scheduled for March. The contractor was notified of the reprocurement in a letter dated February 4, 1977, from R. E. Lee, Jr., Assistant Superintendent, Central Office Printing Procurement Department of the Government Printing Office. Opinion The contractor appealed to this Board under the "disputes" clause of the contract seeking relief from the contracting officer's finding that it was in default due to failure to make delivery within the specified time. After careful consideration of the contractor's arguments and the record as submitted by both parties, we deny the appeal. 1. Excusable Delay The appellant concedes that the contract was not performed in a timely manner, but contends that all of the delay resulted from factors not within his control and was thus excusable under the contract terms. If the delay was excusable, it would, of course, be improper to default the contractor because of it. The applicable contract provisions are found in United States Government Printing Office Contract Terms No. 1, which was an integral part of the contract. Article 18 provides that termination for default is proper: "If the contractor fails to make delivery of the supplies or to perform the services within the time specified herein or any extension thereof." Article 18(c), which deals with excusable delay, provides in pertinent part: "(c) Except with respect to defaults of subcontractors the contractor shall not be liable for any excess costs if the failure to perform the contract arises out of causes beyond the control and without the fault or negligence of the contractor. Such causes may include, but are not restricted to . . . acts of the Government in either its sovereign or contractual capacity . . . and unusually severe weather; but in every case the failure to perform must be beyond the control and without the fault or negligence of the contractor. If the failure to perform is caused by the default of a subcontractor, and if such default arises out of causes beyond the control of both the contractor and subcontractor, and without the fault or negligence of either of them, the contractor shall not be liable for any excess costs for failure to perform, unless the supplies or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit the contractor to meet the required delivery schedule." The appellant seeks to bring himself under the aegis of this section by the claim that the delay in shipping was unforeseeable and not contributed to by its negligence. Rather, it contends, it was caused by the delay of the Government in its late award of the contract, by unusually severe weather conditions in the Midwest during the time for performance, and due to delays of supplier brought about by the same causes. This Board accepts the standard promulgated by the Armed Services Board of Contract Appeals for this type of case: "It is well established that appellant must establish by a preponderance of the evidence that it was excusably delayed by causes beyond its control and without its fault or negligence. Appellant must do more than make a bare assertion concerning the causes for its delay. A contractor must establish that its performance was in fact delayed by the causes alleged, must show that it took every reasonable precaution to avoid foreseeable causes for delay and to minimize their effect, and must establish a precise period of time that such causes actually delay performance. Ace Electronics Associates, Inc., ASBCA 13899, 69-2 BCA ¶ 7922 (1969) at 36845 (Citations omitted) The record in this case clearly does not establish that appellant has met this standard. The delay here seems primarily to be due to the fact that appellant was unable in a timely fashion to procure material that was necessary to fulfill its obligations under the contract. It is widely held in the field of Federal procurement law that the contractor has an obligation to reasonably assure himself of the availability of necessary supplies prior to making a contract commitment with the Government. Aargus Poly Bag, GSBCA 4314, 4315, 1976 BCA ¶ 11927 (1976) at 57182; Highway Products, Inc., ASBCA 14212, 69-2 BCA ¶ 8064 (1969). There is no showing by the appellant here that any effort was made to ascertain the situation vis-a-vis the necessary vinyl until the order was actually placed with his supplier on December 16. This was true despite the admission by George Fowler, appellant's President, contained in his affidavit dated March 8, 1977 (Appellant's Exhibit B): "[t]hat the special requirement for a surface coating of 11-oz. virgin vinyl is a requirement that, to the best of his knowledge and belief concerning the bookbinding industry, would require a special order to be placed with a factory which manufactures vinyl coating products. He knows of no company such as Loose Leaf Devices which would have such a special coating material in stock." Certainly, considering the appellant's knowledge of potential problems with the procurement of this particular material, it cannot be heard to say that merely placing an order the day after notification of the award of the contract shows "that it took every reasonable precaution to avoid foreseeable causes for delay and to minimize their effect." Ace Electronics Associates, Inc., supra. The contention that acts of the Government and severe weather conditions were the causes for the delay are likewise invalid since these factors are not established as the proximate cause of the delay. The primary piece of evidence concerning delay caused by severe weather, aside from bare assertions in the appellant's pleadings and affidavits (Exhibits A and B), is the letter from Gane Brothers to appellant dated January 17, 1977, reproduced above. The letter states that the order was originally slated for shipment on January 14, but has been rescheduled as a result of the weather conditions to January 21. Even if the original shipment schedule referred to in the letter had been adhered to, the shipment of the material would have occurred after January 11, 1977, the date the finished product was due to be shipped to Washington. Nor can the Government's alleged delay in awarding the contract be considered determinative in causing the delay of performance. Since no time for acceptance of the contract by the Government is specified in the written instrument, the award must be made within a reasonable time. National Movers Company, Inc., v. United States, 181 Ct. Cl. 419, 386 F.2d 999 (1967). (We do not understand the appellant to be contending that no contract was formed.) We are not convinced that a period of approximately 28 days for completion of this contract was "unreasonable". Again, we have no more than the bare assertion that time of award unavoidably delayed the shipment beyond the scheduled date, rather than the contractor's own negligence in failing to have suppliers lined up in advance. Moreover, we note the procedure required by the contract in this situation: "[T]he contractor shall, within 10 calendar days from the beginning of such delay, notify the contracting officer in writing of the cause of the delay." (Emphasis added.) U.S. Government Printing Office Contract Terms No.. 1, Article 17. It is undisputed that the contractor did not complain in writing to the contracting officer of unavoidable delays until January 18, .1977, well after the 10-day period which would have been triggered by the delayed award. We are also unimpressed by the suggestion that the lack of a specified time in.which the award should be made was somehow a "mistake" to be equitably corrected. Even if this Board had the power to grant such relief, see Astronetic Research, Inc., NASA 40, 1963 BCA ¶ 3794 (1963), failure to specify a time for acceptance cannot be considered a mistake requiring contract reformation, since the law will supply the contract term, see National Movers Company, Inc. v. United States, supra. We therefore hold that the appellant has failed to meet its burden of providing substantial evidence that the delay in the contract performance was due to unforeseeable causes beyond its control and without any contributory negligence on its part. Aargus Poly Bag, supra; Acme Paving Company, Inc., AGBCA 253, 73-2 BCA ¶ 10092 (1973), 47401-02. By failing to assure itself in adequate time of the availability of necessary supplies, the contractor "assumes the risk of future non-availability . . . ." Aargus Poly Bag, supra, at 57182. Therefore, its delay in performance was not excusable. 2. Supplier Delay Appellant additionally claims that the delay was the fault of his subcontractor and therefore should be excused as being beyond his control. Assuming arguendo that Gane Brothers & Lane qualify as a subcontractor under the contract terms, See U.S. Government Printing Office Contract Terms No. 1, Article 3, there is no showing that the failure to meet the shipment date in the specifications was due to excusable delay of the suppliers as opposed to the contractor's own negligence as discussed above. If, on the other hand, it is claimed that the subcontractor's negligence actually caused the delay, it will not benefit the appellant. Article 18(c) only excuses subcontractor's delay which is caused by such factors as severe weather and acts of the Government if there has been no negligence on the part of either the contractor or subcontractor. The Court of Claims has construed the effect of a similar contract clause: "Therefore, if the contractor defaults because of a supplier default, it is required to show that the supplier was not negligent in order to come within the termination for convenience provision. . . . Although this requirement can put a well-nigh impossible burden on a contractor, the burden was not met in this case." Williamsburg Drapery Co., v. United States, 177 Ct. Cl. 776, 799, 369 F. 2d 729 (1966); George Mason Construction Co., Inc., GSBCA 3863, 73-2 BCA ¶ 10257 (1973). Thus, a claim of subcontractor negligence is not a defense to the termination for default. 3. The Contracting Officer's Alleged Capriciousness The appellant takes exception to the contracting officer's determination that the contract should have been terminated for default as an arbitrary and capricious decision without the support of substantial evidence. Appellant's basis for this is partially due to a misreading of the contract provisions. He perceives a duty on the part of the contracting officer to make a finding that supplies were obtainable from other sources in sufficient time to meet the required delivery schedule "pursuant to Article 17." What Article 17 in fact says is that "penalties and/or damages shall not be applied against the contractor for delays in delivery occasioned by unforeseeable causes beyond the control and without.the fault or negligence of the contractor . . . and delays of a subcontractor due to such causes unless the contracting officer shall determine that the services, materials, or supplies to be furnished under the subcontract were obtainable from other sources in sufficient time to permit the contractor to meet the required delivery schedule." (Emphasis added.) Thus, such a determination is only necessary when the contracting officer has found the delay to have resulted from excusable causes. Here, however, the delay was found to be unexcused. Nor are we willing to say, on the record we have before us, that the contracting officer abused his discretion in defaulting the appellant for the delay in the circumstances we have described. (We note that the relevant provisions of Articles 17 and 18 are substantially the same.) 4. Time of the Essence and Waiver Appellant's last major point is that the Government was tardy in issuing termination notice and that "[t]his delay on the part of the contracting officer indicates a waiver of the delivery date of January 11, 1977, since time was not of the essence as indicated by the contracting officer's own delay." Appellant's Statement of Points on Appeal at 3. Appellant also contends that alleged delay in the awarding of the contract to another bidder supports this theory. The short answer to this contention is that "[t]ime is of the essence in any contract containing fixed dates for performance.'' DeVito v. United States, 188 Ct. Cl. 979, 991, 413 F. 2d 1147 (1969). In order for a waiver to occur, the Government must indicate that a late delivery is acceptable, and the contractor must reasonably rely on this in continuing performance. Artisan Electronics Corp. v. United States, 205 Ct. Cl. 126, 132-33, 499 F.2d 606 (1974); DeVito v. United States, supra. The record before us shows that this was clearly not the case. On January 10, when Mr. Barlow was informed of the delay by phone, he responded that liquidated damages would be assessed. This could not be construed as an indication that the Government was no longer concerned with maintaining the schedule of delivery. The contractor's letter confirming the delay was not sent until January 18. It requests an extension until February 11, 1977, asserting that production will begin as soon as the necessary materials are received from the supplier. However, the letter also states: "We will advise you as soon as the material is received in our plant and will start production immediately. Please let me hear from you as soon as possible about our request for an extension on this job." This does not indicate that appellant understood at that time that late delivery would be acceptable. The next communication between the parties was apparently the notice of termination sent out by the GPO on January 25, 1977. There is no showing that anything occurred which might have created such an understanding between January 18 and January 25. Thus, we feel that appellant has not met his burden of showing the Government waived the time of delivery specified by the contract. (The appellant raises no issue of delegation of authority, and we are satisfied that Mr. Barlow's actions were duly authorized by the contracting officer, Mr. Goltz. See Government's Exhibit 10.) We have examined the other points made by the appellant and have found them to be without merit. Decision In view of the foregoing, we hold that the termination for default was proper under the circumstances. The appeal is denied.