Custom Printing Company GPO BCA 10-87 May 10, 1988 Michael F. DiMario Administrative Law Judge Opinion This appeal timely filed by Custom Printing Company, 1005 Commercial Drive, Owensville, MO 65066 (hereinafter "Appellant") is from the March 31, 1987 "final decision" letter of William E. Flood, Contracting Officer (hereinafter "CO"), U.S. Government Printing Office (hereinafter "GPO/Respondent") holding that Appellant must reprint certain United States Postal Service "Zip + 4 State Directories" at no additional cost to the Government, because the Appellant was solely responsible for errors in the original printing. The decision of the CO is affirmed for the reasons set forth hereinbelow. Background Respondent by Purchase Order 64164 dated October 16, 1986, competitively awarded Appellant a contract in the amount of $135,834 to produce 5 different U.S. Postal Service "Zip + 4 State Directories" (Pennsylvania (PA) Volume I, Pennsylvania (PA) Volume II, Wisconsin (WI), Missouri (MO), and Washington (WA)). Two of the directories, PA I and PA II, were assigned a single GPO Jacket No. (156-372). The other three directories, WI, MO, and WA, were assigned GPO Jacket Nos. 156-386, 156-390, and 156-401, respectively. The basic dimensions and materials for all the directories were the same. However, the cover, the text material, and number of pages and quantity ordered were different directory to directory. In addition, each directory was to be produced in two separate versions identified as Pub. 66 and Pub. 66A, respectively, the only difference in versions being the cover used. The Government was to furnish camera copy for the text from which Appellant was to make all required reproducibles. Proofs of the reproducibles were not required to be submitted for Respondent's approval but were to be retained by the contractor for 30 days after delivery of the finished product. The contract also specified that the completed products had to meet certain quality assurance levels and standards for printing and finishing. Toward this end, the contract provided for press sheet inspections by Respondent at Appellant's plant; inspection of quality assurance samples by Respondent; and the furnishing of randomly selected departmental "quality" copies. Completed products were to be shipped by the Appellant to designated Postal Service facilities throughout the country. (Rule 4 File, hereinafter "R4 File," Tab B). Upon receipt of completed PA Volume I, the Postal Service advised the CO that the publication erroneously contained WA state zip code pages 59-63 rather than the respective PA Volume I pages as ordered. An inquiry initiated by the CO on January 28, 1987, established that the problem existed only in the PA Volume I directory but failed to pinpoint its cause. The Appellant denied responsibility for the mistake alleging that it was virtually impossible for it to be at fault since its procedure developed over time in producing some 50 previous "Zip + 4" state directories was to handle only one set of furnished camera copy at a time. On the other hand, the CO could not establish with certainty that the Government's employees had furnished the correct camera copy for all pages. Moreover, the Appellant contended that the Government ought to bear the burden for the error since its press sheet inspector, John Becker, of its St. Louis Regional Printing & Procurement Office had negligently signed off on the signature which contained both correct and incorrect pages. In a further attempt to resolve the matter, a meeting was held at the GPO Washington, DC offices. Appellant was represented by William Jackson. Respondent was represented by the CO, Quality Assurance Section Chief Darwin Hughes, and Quality Inspection Technician Reggie Peebles. At the conclusion of the meeting the parties reached a tentative agreement for the directory to be reprinted at Respondent's expense because of the press sheet "O.K." by Becker. Subsequently, in another discussion, this was modified to a tentative agreement for 50% cost sharing with Appellant being requested to furnish its estimate of such cost together with its proposed production schedule for the reprint. Thereafter, by internal memorandum of March 13, 1987, the CO sought the concurrence of Respondent's Contract Review Board for issuance of a contract modification reflecting the tentative agreement. The memorandum stated that the Government "must take part of the responsibility for the error" because Inspector Becker had signed only his name and date with no further description of what he was signing for, i.e., "OK for color, OK for quality." The memorandum also stated that Contract Compliance personnel had advised the CO that because Becker had signed his name in that fashion, the Government should be held to the same standards of accountability normally expected for similar approvals in the commercial printing industry, i.e., "batters, folios, and running heads." The Contract Review Board unanimously disagreed with the CO's position. Instead, they believed that if there was any uncertainty as to the correctness of the camera copy supplied by the Government, the burden was upon the Appellant to prove that the camera copy it received was incorrect. Moreover, they believed that since the contractually stated purpose of the press sheet inspection was to assure the quality of the printing itself, the scope of such inspection did not encompass review of text for correctness, and therefore, the Respondent should not be liable for failing to note the instant error. One board member suggested that an additional check be made with the requesting agency to see if the camera copy had been returned by the Appellant in the proper sequence. Such a check determined that the copy was paginated correctly, and consisted only of "PA pages with data base date and time frame on the top of each page." (R4 File, Tab I.) Based upon this further result and the Contract Review Board's nonconcurrence, both the Contract Compliance Section and the CO reversed their positions. Thus, the CO, by letter of March 18, 1987, advised Appellant that the product was rejectable and that reprinting would have to be accomplished at no additional cost to the Government by April 17, 1987. (R4 File, Tab J.) In turn, the Appellant, by letter of March 25, 1987, advised that it was in disagreement with the CO's findings, "would appreciate a final decision on this matter," but was nevertheless proceeding with the reprint pursuant to U.S. Government Printing Office Contract Terms No. 1 Article 2-3 entitled "Disputes." (R4 File, Tab K.) In response, the CO issued his final decision letter dated March 31, 1987, wherein he advised Appellant that: The determination of this office is that your firm is solely responsible for four incorrect pages being printed in the above referenced jacket. The correct camera copy was furnished to your firm and the same correct camera copy was returned to the government. Therefore, it is my opinion that the incorrect four pages were printed in the book due to an error within your organization and that the reprinting should be done by your firm at no additional cost to the government. R4 File, Tab L. Thereafter, by letter of April 21, 1987, to this Board, Appellant noted its appeal. The appeal was subsequently perfected by letter of May 29, 1987. The letter in pertinent part stated: It is our contention that the copy was furnished to us with the four incorrect pages included in the package. Our internal procedure in our Prep Department is that only one package containing the copy would be opened at a time. We followed this procedure throughout the production of these books virtually eliminating the possibility of mixing the copy. The specified standard for this order was the furnished camera copy. A duly authorized representative of the Contracting Officer okayed the press signature on October 31, 1986. (see enclosure) The fact that the incorrect pages were in the signature verified that the copy was this way during the inspection, or that this was missed by representative. The book was printed exactly as the OK press sheet. Official File, Tab 5. On August 4, 1987, an entry of "general denial" was noted in the case docket on behalf of the Respondent pursuant to Rule 6.(b) of the Board's Rules of Procedure, (GPO Instruction 110.12 dated September 17, 1984). A prehearing conference followed on October 22, 1987. At the conference Government counsel requested that the R4 File be supplemented to include a copy of the PA I zip code containing the WA state pages, as first printed (Exhibit N); pages 58 through 63 of PA Vol. I, EPD generated camera copy, pages 58 and 63 being the original returned pages and 59 through 62 being photocopies as described in declaration of Reginald L. Peebles, infra, (Exhibit O); a signed declaration from Charlie F. Jernigan, Senior Printing Contract Specialist, U.S. Postal Service (Exhibit Q); and a signed declaration from Reginald L. Peebles, Quality Assurance Department, GPO (Exhibit P). Jernigan, under penalty of perjury, declared: 1. I am employed as a Senior Printing Contract Specialist for the United States Postal Service. 2. Pursuant to the specifications for Jacket 156-372, Custom Printing Company, Owensville, Missouri, returned the furnished camera copy to the United States Postal Service. After receiving the box containing the camera copy, I opened it. 3. Realizing that there was an error in the Pennsylvania Zip + 4 Directory, Volume I, I scanned through the materials to verify whether there were any Washington pages. I did not see any Washington pages. Furthermore, I did not remove any materials from this box. 4. After resealing this box, I sent the box to the United States Government Printing Office to the attention of Reginald L. Peebles, Inspector for Quality Assuance [sic]. R4 File, Tab Q. Peebles, under penalty of perjury, declared: 1. I am employed as an Inspector in the Quality Assurance Department of the United States Government Printing Office. 2. On behalf of the Quality Assurance Department, I requested the original camera copy furnished to Custom Printing Company for jacket 156-372. 3. During the week of February 16th, 1987, I received a box from the United States Postal Service. This box contained the camera copy for Jacket 156-372. It appeared the box had been opened and retaped. 4. After opening the box, I checked pages 59-62 of the Pennsylvania Zip +4 State Directory, Volume I. These four pages contained Pennsylvania zip codes, not Washington zip codes. I reported my findings to my supervisor, Darwin Hughes. 5. In order to correctly reprint the directory, the contractor requested pages 59-62. Consequently, I made photocopies of these pages and sent the original pages to the contractor. R4 File, Tab P. Thereafter, Government counsel, noting that the camera copy (Exhibit O) was created by the GPO Electronic Photocomposition Division (EPD), called attention to the data line at the top of the copy. The line reads: "S-155203 0065(20)(03-JUN-86-09:18:46) F3944 3/19/86." Counsel explained that the "S" number represented the internal GPO jacket number for the typesetting job. The number following the "S" number 00065 represented the particular frame containing the typeset page and the specific day and time the frame was completed. The "F3944 3/19/86" entry represented the specific format programs for all the Zip + 4 directories and the date the format program was created. Counsel next pointed out that if one examines the pages in Exhibit O, page by page, it is apparent that the "S" number, frame date, format number and format date remain constant while the frame time and number change. Counsel asserted that the conclusion to be drawn from this is that pages 58-63 were typeset sequentially on 6/3/86 between "9:18:46 a.m." and "9:20:86 a.m." Counsel then asserted as a truism that since the Washington state zip code directory was produced without errors, Appellant must have received the correct Washington state camera copy from Respondent. Counsel opined that from these facts it is clear that Appellant was furnished the correct copy for both directories and that this being the case, Appellant must necessarily have caused the mix-up during its processing. Counsel followed this by arguing that the inspector, in adhering to the portion of the contract which reads: "Press Sheet Inspection: Press sheets will be inspected at the contractor's plant for quality conformance," was merely looking for "readability" of the type and thus was not required to make editorial comments. Counsel concluded from this that the inspector's signature on the camera copy did not relieve the contractor from meeting the full requirements of the contract. In response, Appellant's representative, referencing Respondent's data line argument, pointed out that there is always some manual intervention after the copy is created. Thus, in his opinion, Respondent's offer of the data line as proof that correct copy was furnished is inconclusive. He then claimed that when the book went to prepress, no other boxes of camera copy were opened by Appellant's employees until the PA I job had been cleared from the press. The job was done as a 32-page sig on the Harris web press with 4 plates, 8 pages on a plate, and folded into a 32-page sig. The four incorrect pages in question are pages 59-62, with the first page of the sig being page 55. Once the job cleared prepress, the camera copy was stored until ready to be returned to the agency. He stated that Appellant had no problems running the job as indicated by their production records and offered to make their production records a part of the appeal record but did not have the records with him. Next, referring back to GPO's contention that the inspector was not looking for content, he called the Board's attention to the "Press Sheet Inspection" portion of the specifications, page 3 of 9, supra, and to page 5 of 9 of the specifications which mentions P-7, a printing attribute for type quality and uniformity, found in the publication entitled "Quality Assurance Through Attributes Program" (QATAP) which is incorporated in the contract by reference in the specifications. He stated that in order to verify compliance with the P-7 attribute, the inspector must make sure he has the correct camera copy in front of him to check against the press sheet. He argued that while the inspector is not looking for content, he is looking for deviations in type dimensions, broken type, etc., and therefore should be certain he is looking at the correct page. Therefore, in his judgment the mention of "quality conformance" in the press sheet inspection clause includes the P-7 attribute. He concluded by stating that it is Appellant's contention that the four Washington state zip code camera copy pages were in front of Mr. Becker when he inspected the press sheet and that is why he did not pick up the error in the PA I book. At the close of the prehearing conference, the parties were advised that the record would be settled on November 7, 1987, and that any further documentation should be furnished to the Board by that date.Subsequently, Appellant by letter of November 2, 1987, received November 9, 1987, requested that the record be supplemented by the inclusion of the original press sheet bearing Mr. Becker's signature. Although the document was not timely filed, it was not objected to by Government counsel. This being the case and since the document was relevant to the other evidence in the record, the Board waived the November 7th date and accepted the document. The record was thus settled on November 9, 1987. The matter is now before the Board in this form for decision. Issue The issue presented is whether Appellant is liable in any way for reprint costs. Discussion Article 2-12 of GPO Contract Terms No. 1 requires a contractor to correct defective supplies if so directed by GPO. Article 2-3 permits the contractor to appeal such decision if it is based upon disputed facts. In such case the contractor is to proceed with performance in accordance with the Contracting Officer's directions pending the outcome of the appeal. It is in accordance with such provisions that the dispute is before the Board. The single disputed fact in the case is whether or not Appellant was furnished the correct camera copy for the original printing. Appellant argues that it must have received defective copy from Appellant, because its own procedures for handling copy were so exacting it could not have caused the error. We are not persuaded by this argument. First, Appellant has offered virtually no evidence in support of this bald assertion. Second, Appellant had an affirmative duty to inspect the furnished copy for patent defects under the provisions of Article 4-1 of "Part IV Supplemental Terms and Conditions for Composition, Camera Copy and/or Reproduction Proofs," GPO Contract Terms No. 1, entitled "Government Furnished Material," which in pertinent part provides: The contractor will be required to examine the furnished material immediately upon receipt. If at that time there is disagreement with the description or the requirements as presented in the specification (or print order), and prior to the performance of any work, the contractor shall contact the U.S. Government Printing Office, Central Office Printing Procurement Division, Washington, D.C. 20401, or the originating Regional Printing Procurement Office, and protest the description. Third, Respondent has presented substantial documentary evidence supported by declarations signed under penalty of perjury that the PA Vol. I camera copy returned by Appellant was in fact correct in all its particulars, including sequential data line numbering, while concomitantly, no concurrent errors were evident in the Washington state directory. The only logical conclusion to be drawn from these facts is that correct camera copy was furnished Appellant for both the PA Vol. I directory and the Washington state directory. The Board, therefore, holds that the Appellant is liable for the errors, unless it can prevail on its assertion that the Government bears some liability because its inspector acted negligently in his failure to detect the error during his press sheet inspection. In order for Respondent to be liable for the inspector's negligence, the Board must find that the inspection was conducted for Appellant's benefit and that Respondent thereby owed Appellant a duty to detect errors of the sort encountered here; that through the purported negligence there was a breach of the duty; and that foreseeable injury to Appellant resulted therefrom. In order to determine if such a duty is created, we must examine the contract itself. In doing so, we find that the provision for press sheet inspection is set out on page 3 of 9 as a subcaptioned matter under the block letter caption "PRINTING." The other subcaptions under the block caption are "Format" and "Coating." Reading all of the text under the block and subcaptions together make it abundantly clear that they relate solely to the technical aspects of printing and not to the substantive content of textual matter. Based upon this reading, it is the Board's opinion that as a matter of contract law, the press sheet inspection at the contractor's plant was solely for the purpose of determining technical quality conformance. In holding this, we find no substantial disagreement by Respondent with Appellant's claim that the QATAP P-7 attributes are important measures of that conformance. Accepting this argument, we can nevertheless find nothing in the QATAP or contract provisions which create a duty to be carried out by Respondent for the benefit of the Appellant. Indeed, it seems clear to the Board that these provisions are for the exclusive benefit of the Government. See Red Circle Corp. v. United States, 185 Ct.Cl. 1, 398 F.2d 836 (1968), where the court at 8-9 stated: "The clauses pertaining to verification inspection in the instant contract must be considered for the benefit of the government, and the plaintiff's responsibility was not affected by the failure of the government to fully exercise its contract rights." Buttressing this finding are numerous cases which hold that in general, the Government's right to reject faulty products after delivery is not impaired by the conduct of its own on- site inspection even where its inspector failed to object to faulty work. Penn Construction Co., ASBCA 10780, 66-2 BCA ¶ 5800 (1966), or conditionally approved defective work, Wilkins Co., FAACAP 66-13, 65-2 BCA ¶ 5242 (1965). Thus, it is the conclusion of the Board that no contractual duty was owed to Appellant irrespective of whether or not the defect was patent as it is here. Since there was no duty owed to Appellant by virtue of the inspection respecting discovery of the defect, there is no liability on the part of the Respondent. Therefore, the Appellant is fully liable for all costs of reprinting the defective publication. Accordingly, the appeal is denied and the decision of the Contracting Officer is affirmed.