U.S. GOVERNMENT PRINTING OFFICE CONTRACT APPEALS BOARD Thomas M. Leahy, Jr., Chairman Richard A. Morrison, Member J. K. Mehan, Member Appeal of Henry B. Katz Associates Panel 79-9 September 25, 1979 This timely appeal of Henry B. Katz Associates (Appellant), 33 Westview Road, Short Hills, New Jersey 07078, comes before the Board following a decision of the Contracting Officer on 4/19/79 that "The ship dates on the change order (change order 88746-P of 4/6/79 to purchase order 71739 of 12/29/78) will be applied for contractual purposes." This decision responded to a letter of 4/12/79 from the Appellant in which he stated that "The extensions that you (Contracting Officer) granted in your letter of April 6th are not acceptable. The amendment of Order #71739 that you sent on March 8th is not acceptable." The decision of the Board is based upon information contained in the appeal file. Summary Purchase Order 71739 was issued to Appellant as the successful bidder to print, manufacture, package and deliver several million pressure-sensitive (cohesive) bands, ten types.in all, of various sizes, colors and quantities. The specifications provided with the invitation to bid included a requirement to: "Ship 25% of each item on or before January 31, 1979. Ship complete on or before March 1, 1979" (A.F. 2). Purchase Order 71739 prescribed "Date of shipment (of) March 1, 1979," (A.F. 5) and was delivered to Appellant with some changes to specifications as to color coding. The changes were directed by the customer after the promulgation of invitations to bid (A.F. 28). The document by which the changes were directed to Appellant was a hand-ruled and hand-printed matrix that arrayed item identification against revised specifications of colors and patterns (A.F. 7, 10). On 2/16/79 Appellant was afforded the opportunity to show cause why the contract should not be terminated by the Government for reason of non-performance by Appellant (A.F. 8). In reply, Appellant denied negligence and argued "causes beyond my (Appellant's) control," and requested a thirty-five day adjustment of schedule (A.F. 10). The Contracting Officer, on 4/6/79, issued a change order granting a lesser adjustment of schedule (A.F. 17). Appellant's reply (A.F. 22) that the extension was unacceptable prompted the final decision of the Contracting Officer (A.F. 24) from which Appellant makes this appeal, by letter dated 5/16/79 (A.F. 29). Appellant maintains that no delivery prior to 3/1/79 is called for by the contract. Moreover, Appellant maintains that the order as received was not the order that he was invited to bid on. Moreover, Appellant maintains that severe weather and strikes caused delays in delivery to him of paper stock for this contract, and that efforts to obtain stock from alternate sources were unsuccessful. Appellant, for these reasons, requests reversal of the Contracting Officer's final decision of 4/19/79 that "ship dates on the change order (of 4/6/79) will be applied for contractual purposes." We conclude that the final decision of the Contracting Officer is consistent with the facts as reported in the Appeal File, and we therefore deny the appeal. Findings of Fact In addition to those findings of fact which are referenced to the Appeal File in the foregoing summary, the following findings were considered in the course of reaching the conclusion that the appeal should be denied. Appellant submitted his successful bid on ten separately priced jackets "as per specifications" (telegram of 12/22/78) and "in exact accordance with specifications unless exceptions are specifically noted above" (GPO Form 183, Bid and Acceptance, dated 12/23/78) (A.F. 3). The customer agency changed the specifications on 12/20/78, after invitations to bid had been promulgated, and the Government Printing Office decided to make the changes at the time of award to protect the invitation-bid-award schedule (A.F. 26). Purchase Order 71739 states a "Shipping Date (of) March 1, 1979" (2 places), as well as "Date of Shipment March 1, 1979" (2 places). It also states: "Ship: Per Specifications" (2 places), and includes under "Description" the provision "In strict accordance with your Quotation No. 38454 and our specifications" (A.F. 5). After the customer requested change of specifications on 12/20 and prior to the request to Appellant to "Show Cause" (A.F. 8), Mr. Blake, the Government Printing Office printing specialist, talked with Appellant on 12/21, 12/28, 1/3 (in person), 1/5, 2/6, 2/7 and ''between 12/28 and 1/3" (A.F. 12, 16, 28). Appellant states ". . . copy and instructions for the order were furnished by December 29th, 1978, but the purchase order was not received until January 2, 1979" (A.F. 10). Mr. Blake states "materials" were mailed 12/29/78, and that they were in Appellant's possession when he visited the Government Printing Office on 1/3/79 (A.F. 28). Appellant's order to Georgia-Pacific Corporation (A.F. 10) is dated 1/10/79 (A.F. 16). On 1/18/79, Georgia-Pacific Corp. returned this and other of Appellant's orders because ". . . Mr. Russell suggested that we take one step at a time . . ." (A.F. 11). Georgia-Pacific Corp. (Mr. Russell) states: "(Appellant) on or about January 2, 1979. . . requested price and availability of . . . Kraft . . .(I)t appeared reasonable that we could fill his requirements . . ." (A.F. 18); and ''(Appellant) contacted me prior to his involvement with the Government Bids. . . (H)e received some favorable commitment that we would do our level best to meet his requirements . . ." (A.F. 29). Appellant provides evidence that he was attempting to obtain paper from sources other than Georgia-Pacific Corp. in January 1979 (A.F. 16, 29). Change Order 88969-P to Purchase Order 71739 was issued 3/6/79 changing the shipping date to: "25% of each Item to be shipped by January 31, 1979. Complete shipment of the balance to be completed by March 1, 1979'' (A.F. 14). Discussion and Conclusions As outlined in the summary above, Appellant bases his appeal on three separate contentions as to the existence of causes for adjustment in schedule not recognized by the Contracting Officer in his final decision: 1) That no delivery prior to 3/1/79 is required by the original contract; 2) that the Government substantially changed the character of the order after Appellant's bid; that the changes were described defectively in that they were printed by hand; that ten items were required under the change rather than three as in the original specifications; and that these factors caused production delays; and 3) that severe weather and strikes caused Appellant's paper source to fail to honor a firm commitment to provide paper, and the same conditions precluded his obtaining the paper from alternate sources. * * * We cannot support Appellant's contention that no delivery prior to 3/1/79 is required by the original contract. The Government was responsible for a clerical error in failing to spell out in the purchase order the requirement for partial shipment by 1/31/79 that was specified in the invitation to bid and referenced in the purchase order. We would make the Government "make good'' any type of harm to Appellant resulting from that error, but we perceive no such harm. Until receipt of the discrepant purchase order on 1/2/79, Appellant's planning must be viewed as contemplating the partial shipment specified. It is possible that Appellant did not notice the discrepancy. It is not reported to have been mentioned in any of the conversations with Mr. Blake from 1/3/79 to 2/7/79, and on 2/23/79 Appellant acknowledges "My failure to complete 25% of Purchase Order 71739, Jackets 277-329 thru 277-338 by January 31st, 1979, was due to the following causes. . . .'' The language of the purchase order is not raised, even at this date, nor, in fact at any time prior to receipt of Change Order 88969- P. Alternatively, it is possible Appellant did notice the discrepancy, recognized it as such, and elected to ignore it. This alternative is also consistent with the letter of 2/23/79 and with Appellant's silence on on the matter in conversations with Mr. Blake. Under either of these circumstances, Appellant has not been harmed by the clerical error of the Government. There remains the possibility that Appellant noticed the discrepancy and considered the possibility that the delivery requirements for the work had changed. This alternative is inconsistent with the Appellant's letter of 2/23/79 and his silence on the matter in conversations with Mr. Blake. * * * Appellant maintains that his production operations were delayed on account of the manner in which the change to specifications required by the customer agency was provided to him. The change was not promulgated in accordance with the Government's rules under Article 2 of U.S. GPO Contract Terms No. 1 (Rev. July 15, 1970) (hereinafter referred to as "Contract Terms"). Any departure from specifications as bid should have been directed by change order in writing to the contractor. Apart from procedure, however, we do not consider the change that was directed, or its manner of transmittal to be defective. In the context of the original specifications, the changes directed seem clear to us as laymen. If Appellant's perception was less clear numerous occasions for clarification arose. In fact, Appellant and Mr. Blake indicate separately that the operational problem of solid ink coverage was resolved perfunctorily through two phone calls. Appellant's contention that ". . .the original bid mentioned nothing about 7 of the 10 items. . ." is not understood. The original specifications repeatedly array the ten items for various purposes including for bidding each item separately, as Appellant did. We conclude that the changes to specifications provided at the time of award were allowable under the terms of the contract, that they should not have caused delays in performance of the work, and that the record does not indicate any contention by Appellant that he required more time on this account until after the Government raised the possibility of default. * * * Appellant maintains that he had a firm commitment for paper for the contract from Georgia-Pacific Corp.. The Contracting Officer maintains (A.F. 17) that there was not a firm commitment, as evidenced by correspondence from Georgia-Pacific (A.F. 16). Appellant cites further correspondence from Georgia-Pacific Corp. (A.F. 29) as supportive of his contention. We have considered also a third Georgia-Pacific Corp. communication (A.F. 11) in reaching a conclusion on this issue. The following positions support our conclusion: 1) We find no requirements in the contract that the contractor must have obtained a "firm commitment" for raw materials prior to or after bid or award, as a condition of routine satisfactory performance. However, when answerability for non-performance becomes a consideration, the manner in which the contractor provided for contingencies becomes a factor in evaluating what constitute ". . .unforeseeable causes beyond the control and without the fault or negligence of the contractor. . .and delays of a subcontractor due to such causes. . ." (Article 17, Contract Terms). Also, while a commitment obtained prior to bid or award would clearly defend against any charge of untimeliness, we would accept a less rigorous standard. We believe that a contractor who obtains a valid commitment for raw materials only after award, but timely relative to required delivery date, should not be tested on the fact that he bid at a risk from which he subsequently removed himself if, for reasons beyond his control, the commitment later is not honored. 2) In our view a supplier's commitment is not "firm" if it is given subject to unstated conditions that may later be imposed by the supplier. Nor is it "firm" unless it specifies or limits quantities, qualities and times with respect to the supplies that are the subject of the commitment. It is not firm unless it imposes some reasonably definite obligations on the supplier. 3) We read Article 17 of Contract Terms as authorizing the Contracting Officer to forego penalties and/or damages against the contractor when delay by a subcontractor results from causes unforeseeable to the latter. The consequences of foreseeable causes of delay by a subcontractor should not concern the Government. 4) Finally, we consider that the requirement of Article 17 of Contract Terms for the contractor to inform the Contracting Officer of impending delays, serves purposes beyond maintenance of performance records. It enables the Contracting Officer to act to protect the Government from the consequences of delay, and it permits the Contracting Officer, as charged in the Article, to determine whether other sources of supply are available. We conclude that, whatever the other characteristics of Georgia- Pacific Corp.'s "commitment" to Appellant, it was quite possibly timely. We conclude that it was not "firm" by any reasonable standard that can be tested against the statements of Mrs. Novosad and Mr. Russell. Irrespective of the timeliness and firmness of the commitment, we do not agree that failure of a lengthy strike to end abruptly is the kind of "unforeseeable" cause of delay to subcontractor that is addressed by Article 17 of Contract Terms. We find no evidence that Appellant informed the Contracting Officer that delays in deliveries were impending in accordance with the requirement established by Contract Terms as the basis of foregoing of otherwise applicable penalties. With respect to timeliness, we assume that Appellant had in mind some source of paper when he bid, and Mr. Russell states that Appellant requested price and availability "(o)n, or about January 2, 1979" (A.F. 18). Appellant states he placed an order by January 10, 1979 (A.F. 10), and by January 18, 1979, at Mr. Russell's instruction, this order and others were returned (A.F. 11). If Appellant's order 1612 had been filled promptly, it would have been timely. We will not address the apparent contradiction in Mr. Russell's statement that Appellant "contacted me prior to his involvement with the Government Bids" (A.F. 29). With respect to firmness, we find no statement from Georgia- Pacific Corp. that suggests an obligation on its part. "(I)t appeared reasonable that we could fill his requirement. . ." (A.F. 18) is not a commitment to do so. ". . .(H)e received some favorable commitment that we would do our level best to meet his requirements" (A.F. 29) is noncommittal even when taken out of context, but it dissolves, as far as obligation is concerned, when viewed in the light of Mr. Russell's instructions, for whatever reason, to fill Appellant.s orders one at a time on the basis of special clearance of each order (A.F. 11). With respect to delay to a subcontractor due to unforeseeable causes, we do not consider that the Georgia-Pacific Corp. letters to the Contracting Officer support this appeal convincingly. Mr. Russell (A.F. 18, 29) recounts various operational and weather conditions in various locations during the period following Appellant's request for "price and availability'', but provides no indication of why the Government should absorb the consequences of "mill related'' occurrences nor of how and where and when the weather impacted Appellant's order. As noted elsewhere, we reject the otherwise unelaborated contention that non-termination of a lengthy strike is an unforeseeable cause of delay. With respect to the requirement to inform the Contracting Officer of impending delay, we find nothing in the record to show that the matter of Appellant's delayed receipt of stock was broached until he replied (A.F. 10) to the "Show Cause" notice (A.F. 8). The Government was given no opportunity to defend itself from delay, and for this reason we conclude appellant would be subject to "penalties and/or damages" (Article 17, Contract Terms) even if, for instance, a timely, firm commitment for paper by the Appellant were not honored by his supplier for unforeseeable causes.