U.S. Government Printing Office
Contract Appeals Board
Jay E. Eisen, Chairman
Paul L. Hollenbach, Member
Melvin E. Jacob, Member
Appeal of Longmont Printing Company
Panel 79-15
April 18, 1980
1. Preliminary statement
This decision concerns an appeal filed on July 6, 1979, by
Longmont Printing Company, 100 Bowen Circle, Longmont, Colorado
80501, hereafter referred to as the contractor, under the
"Disputes" clause of the contract, Article 29, United States
Government Printing Office, Contract Terms No. 1, dated July 1,
1943, revised July 15, 1970. On August 23, 1979, Mr. Thomas L.
Mehlhorn, President of Longmont Printing Company, requested an
informal hearing to be convened at the Government Printing
Office. The Board of Contract Appeals convened on February 20,
1980, at GPO, Washington, D.C. and followed the procedure
provided in paragraph 13, GPO Instruction 110.10, June 6, 1979.
Mr. Thomas L. Mehlhorn, who was offered an opportunity to be
heard, represented himself before the Board. Mr. James Lane,
Office of General Counsel, GPO, represented the procurement
officer, Mr. John D. Chapman, who was present during the
proceedings.
II. Issue Presented
The issue presented is whether the U.S. Government Printing
Office, hereafter referred to as the GPO, Properly assessed
liquidated damages in a total amount of $13,689.15 for failure to
comply with the contracts. The total amount arises from the
assessment of liquidated damages listed as follows:
Program 1802M 77 print orders $ 13,029.29
Program 1800M 3 print orders 119.15
Program 1803M 52.27
Jacket 778-740 245.00
Jacket 779-074 233.44
$ 13,679.15
III. Findings of Fact
1. The Longmont Printing Company was awarded a multiple-award
term contract, on July 6, 1978, by the U.S. Government Printing
Office, (Regional) Denver, Colorado during the period beginning
August 1, 1978 and ending July 31, 1979, for the printing and
binding of books and pamphlets for Federal agencies in Federal
Printing Region No. 8 comprising the following States: Colorado,
New Mexico, Utah and Wyoming. Programs 1800M, 1801M, and 1802M
were combined into this program. The multiple award was made to
13 bidders in Category I and to 11 bidders in Category II. The
contractor, was listed in the abstract of bidders in both
categories. The estimated value for the term of the contract for
one year was $1,600,000.00.
2. The contract was awarded in accordance with GPO Contract
Terms No. 1 and GPO Form 2459D (Revised Jan. 1978). They are
incorporated by reference as part of the contract.
3. The contract provided that a GPO jacket number will be
assigned and a purchase order issued to the contractor to cover
work performed. The purchase order to be supplemented by an
individual print order for each job placed with the contractor.
The contract further provided that:
"The Government will be obligated to offer each order to the low
contractor determined in this manner in the corresponding
Category first, the next low contractor second, and so on until
the order has been accepted or the cut-off point has been
reached. The low contractor and each successive next low
contractor shall be obligated to accept each order offered them
except when they are unable to meet the shipping schedule. When
the contractor accepts, a formal print order will be issued. The
only valid reason for declining an offer shall be the inability
to meet the shipping schedule. (Emphasis supplied.)
. . .
"Reply to Offers: All offers will be made by telephone and
contractor must reply within 1/2 hour whether or not he can
accept the offer. If the contractor does not reply within 1/2
hour the job will be offered to the contractor next in sequence."
4. The contractor, in a letter dated October 10, 1978, to the
GPO stated that due to paper shortages and a rail strike, the ten
print orders listed therein will be delayed in shipment (Exhibit
1). The contracting officer responded that [there could be] no
contract adjustment or waiver of liquidated damages without
evidence supporting the appellant's claim that the delay was
beyond his control, including what efforts were made to get paper
from other than the Dixon Paper Company (Exhibit 2). The
contractor in a letter dated November 3, 1978, informed GPO that
it would not be able to complete all print orders listed on the
schedule since paper was no longer available, and that a four-day
rail strike took place which delayed shipments. The contractor
stated that prior to September 18, 1978, they were able to obtain
all the necessary paper stock on a three-day delivery schedule or
ten days on mill shipments. A letter from the Butler Paper
Company dated November 2, 1978, directed to the contractor,
recited in general that delays in mill shipments of paper
resulted from labor difficulties with eastern railroads and that
the situation was further compounded due to the labor situation
at paper mills in the northwestern section of the United States.
A letter to the contractor dated October 11, 1978, from the Dixon
Paper Company, cited in general similar reasons, plus inflation
causing a high demand for paper which resulted in a shortage
(Exhibit 3).
5. The contractor in a letter dated November 20, 1978, to GPO
requested that the 13 print orders listed therein be rescheduled
for delivery because of the shortage of paper. The contracting
officer in a letter November 30, 1978, informed the contractor in
regard to his request for an extension of time for deliveries
that a sufficient basis did not exist to justify the granting of
the waiver. The contractor was requested to produce evidence to
show he had on hand or had reason to know that the paper stock
was available to him at the time the print orders were accepted
and that the source of the delay stemmed from the paper supplier
and that a serious effort was made to locate alternate sources of
supply. The contracting officer also informed the contractor
that despite his efforts to locate paper on September 22, 1978,
he accepted the 13 print orders referred to in his letter of
November 20, 1978, which indicated that the contractor had no
commitment of a paper supply at the time he accepted the orders
by telephone (Exhibits 5 and 6).
6. The contractor in a letter dated January 9, 1979, notified
the contracting officer that rescheduling of the jacket and print
orders listed therein was due to the late arrival of paper. It
recited that all paper was ordered on the day that the print
orders were accepted from normally reliable sources (Exhibit 7).
7. The contractor, in a letter dated February 27, 1979, objected
to the imposition of a substantial penalty on the attached list
of print orders under Programs 1802 and 1803 and requested a
review of the orders. The contractor contended that liquidated
damages should not be imposed in instances occasioned by
unforeseeable causes beyond the control and without the fault or
negligence of the contractor, which includes acts of the
Government and strikes. The contractor contended that the
primary reason that orders were delayed arose as a result of a
four-day railroad strike, 40 paper mills were on strike, and the
failure of the President of the United States to enforce the
labor laws which could have prevented the rail and paper mill
strikes (Exhibit 8).
8. The contracting officer, in a letter dated March 7, 1979,
responded in part that many, if not most of the jobs were
accepted by the contractor subsequent to the time that the
contractor was on notice that the strikes were taking place. The
contractor was advised that Article 17, GPO Contract Terms No. 1,
provides in part:
". . .That the contractor shall, within 10 calendar days from the
beginning of any such delay, notify the contracting officer in
writing of the cause of the delay: Provided further, That such
notice to the contracting officer shall contain the justification
for such delay. . . ."
9. The contracting officer requested that the contractor, in
order to justify being excused for the delays in shipment of the
orders, submit documentation as to each job the following: the
date of the onset of the delay, when he became aware of it, how
it was beyond his control and what action was taken as a result
thereof (Exhibit 9). The contractor did not respond to the
contracting officer's letter dated May 7, 1979, in that he failed
to submit specific documentation that would relieve him of his
responsibilities under the contract, nor submit evidence that
supplies were unavailable from other sources in sufficient time
to meet the schedule established by the contract. (Exhibit 10).
10. The contracting officer, by letter dated May 21, 1979 to the
contractor, issued his final decision relevant to the assessing
of liquidated damages on 90 jobs for a total of $13,689.15 and
that the GPO was correct in its assessment of liquidated damages.
This gave rise to the appeal filed by the contractor under the
"Disputes" clause dated July 6, 1979. Since the contracting
officer's decision became final on June 8, 1979, the contractor's
appeal was timely (Exhibit 12).
IV. Findings and Conclusions
The matter at hand concerns multiple award requirement type
contracts entered into between the Longmont Printing Company and
the United States Government Printing Office. The contractor
agreed upon being awarded the contract to perform certain acts in
a specified manner and at specified scheduling dates. In
consideration for this promise, GPO agreed to pay Longmont the
cost as related to each print order. All offers to the
contractors listed on the abstract of contractors for placement
of work were made to the low contractor, then to the next
contractor in sequence. The contractors including the appellant,
tendered print orders were obligated to accept each print order,
except when unable to meet the shipping schedule. The Longmont
Printing Company upon receipt of the telephonic print orders
listed in this appeal had the option of declining the offers if
unable to meet the shipping schedules. The evidence as adduced
fails to reflect that the contractor ever refused to accept a
print order.
The terms of the contract, however, provided in part GPO 2459D,
Special Terms and Conditions (Supplemental to the Basic
Specifications) [which] reads a follows:
"LIQUIDATED DAMAGES: Should the contractor default on shipping
schedules stated in the specifications, the contractor will be
assessed liquidated damages against that part or parts of an
order which have not been shipped to the specified destination on
the specified date. Damages will not be assessed against that
part or parts of an order which have been shipped on schedule. .
. ."
Article 17 GPO Terms No. 1 provided in part the following:
"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, including, but not restricted to, acts of God, or
the public enemy, acts of the Government, fires, floods,
epidemics, quarantine restrictions, strikes, freight embargoes,
unusually severe weather, 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:
Provided, That the contractor shall, within 10 calendar days from
the beginning of such delay, notify the contracting officer in
writing of the cause of the delay: Provided further, That such
notice to the contracting officer shall contain the justification
for such delay. . . ."
The facts presented to this Board clearly and irrefutably show
that the contractor did not perform in accordance with the terms
of the contract. The course of conduct which the contractor
agreed to as far as timely deliveries was not fulfilled.
Mr. Tom Mehlhorn, President of Longmont Printing Company, was
offered a full opportunity at the informal hearing to supply
evidence supporting his contention as relating to each separate
print order that he could not perform as agreed because of
unforeseeable causes beyond his control including a four-day rail
strike and labor strikes at paper mill suppliers. He was unable
to state the date of the railroad strike. The Board provided Mr.
Mehlhorn with a graphic listing of all purchase and print orders
with jacket numbers of all the requirement term contracts to
include:
Program 1802M August 1, 1977-July 31, 1978 $ 20,000.00
Program 1800M August 1, 1977-July 31, 1978 25,000.00
Jacket 778-740 August 1, 1978 10,706.00
Program 1802M August 1, 1978-July 31, 1979 150,000.00
Program 1803M August 1, 1978-July 31, 1979 30,000.00
Jacket 779-074 Sept. 15, 1978 1,459.00
Mr. Mehlhorn amended his appeal to withdraw the print orders of
Programs 1800M, August 1, 1977 - July 31, 1978; 1802M, August 1,
1977 -July 31, 1978, apparently since the paper shortage did not
occur until about September 18, 1978. 1 Mr. Mehlhorn did not
offer any additional facts to support his defense that a national
rail strike over a period of four days and strikes at paper mills
affected his supply of paper stock. He was unable to show that
he had the paper on hand or a commitment from a paper supplier at
the time that he accepted any of the print orders. The facts and
law, however militate against the argument advanced by the
appellant that the delays in delivery were occasioned by
unforeseeable causes without the fault or negligence of the
contractor; to wit, railroad and paper mill strikes. His
contention that the U.S. Government must share the responsibility
for the delay in shipments because the demands of the employees
labor organizations exceed the guidelines on wages is irrelevant
and immaterial and not worthy of further comment.
It has been held that a contractor impliedly represents when he
makes his bid that he can accomplish what he sets out to do
within the time upon which there is an agreement. Woodhull
Construction Company, ASBCA, 57-1 BCA ¶ 1260. It is a well
settled principle of contract law that a contractor who claims
that its late performance and delivery is excusable has the
burden of proving the same under the terms of the contract. It
must prove affirmatively that the failure to achieve timely
performance was caused by or caused out of a situation beyond its
control and without its fault or negligence. Lee K. Geiger
Construction Company, GSBCA, 67-1 BCA ¶ 6189. In the case of
Federal Roofing and Painting, Inc., Eng. BCA, 68-1 BCA ¶ 6912,
the Board held that the appellant had an obligation to determine
the availability and delivery dates of materials needed for the
contract.
In the matter at hand, the contractor was on notice before some
of the print orders were awarded, that strikes had affected the
availability of paper, yet continued to accept print orders.
Thus the fact remains that the problem in paper supply was not
unforeseeable. In the correspondence between the contractor and
the contracting officer as provided in the file, the contracting
officer repeatedly informed the contractor that it could not
change the established delivery schedule unless the contractor
provided documentation within 10 calendar days from the beginning
of such delay of the cause and justification of the delay as
required by Article 17 of GPO Contract Terms No. 1. Perusal of
the evidence presented to this Board indicated that the only
documentation provided by the contractor were general self-
serving statements concerning the nonavailability of paper, a
newspaper article, and general statements of his paper suppliers.
This type of evidence does not constitute the documentation
mandated by the contract as a basis for relief of liquidated
damages. The contractor had the burden of proving that the delay
was due to causes beyond his control. Alpha Roofing and Sheet
Metal Corp., GSBCA, 1964 BCA ¶ 4461. The unavailability of
supplies does not excuse default of a contractor under contracts
accepted subsequent to its discovery that there was a shortage of
material for its pending contracts. Beco, Inc., ASBCA, 1964 BCA
¶ 4493.
In this regard, it has been held that if the contractor could
prove that his delay was justified, his delay in performance
might be excused. Transatlantic Financing Corp. v. United
States, 363 F.2d 312, 315. Further in the matter of Empire State
Tree Service, VACAB, 71-1 BCA ¶ 8716, the Board held:
". . . mere statements in claim letters, unsupported by
corroborative evidence of probative value, are not sufficient
proof of essential facts which are in dispute."
In its review and examination of the evidence. the Board finds
that the contractors failure to deliver the supplies on schedule
was not caused by conditions beyond his control.
Accordingly, in view of the facts and evidence presented by the
parties, it is the decision of this Board to deny the appeal of
the Longmont Printing Corporation.
_______________
1 Board Exhibit "A" consisting of 5 pages on graph paper.