French/Bray, Inc. GPO BCA 18-85 October 23, 1986 Michael F. DiMario, Administrative Law Judge Opinion This appeal was timely filed by French/Bray, Inc. (hereinafter "Appellant"), 6731 Baymeadow Drive, P.O. Box 698, Glen Burnie, MD 21061, by notice of appeal letter dated November 26, 1985. The appeal is from the final decision of Jack G. Marken, Contracting Officer, U.S. Government Printing Office (hereinafter "GPO" or "Respondent"), dated September 19, 1985, denying Appellant's request for an increase in contract price to cover expenses incurred for the reprinting and redelivery of the product ordered by Respondent. Based upon the written record and evidence deduced at a prehearing conference held February 6, 1986, the appeal is denied and the decision of the Contracting Officer is affirmed for the reasons hereinafter set forth. Background On February 4, 1985, Respondent was competitively awarded contract Jacket No. 459-723 by GPO Purchase Order No. 52476, in the amount of $5,268 to produce some 3,500 record album jackets for the Library of Congress; the award being made "in strict accordance with . . . specifications" issued by Respondent on January 11, 1985, and amended January 14, 1985. (R4 File, Tab B) The specifications, among other things, required Appellant to "[c]oat (after printing) the entire surface of all printed areas with varnish or lacquer to prevent scratching and smearing" (R4 File, Tab B, Original Specifications, page 2 of 4) and to "pack suitable per shipping container" (R4 File, Tab B, page 3 of 4). The specifications also incorporated by reference "all terms and conditions of U.S. Government Printing Office Contract Terms No. 1, Rev. Oct. 1980 (GPO Pub. 310.2) and Quality Assurance Through Attributes Program (hereinafter "QATAP"), Rev. June 1981 (GPO Pub. 310.1)" with the proviso that "[i]n case of conflict between these specifications and Contract Terms No. 1 and/or Quality Assurance Through Attributes Program, these specifications will govern." GPO "Contract Terms No. 1," Article 3-1, specifies that "[u]nless otherwise indicated in the contract each shipping container must not exceed 45 pounds when fully packed." The completed product was shipped by Appellant to Smith Lithographic Company, Rockville, MD., in accordance with Respondent's directions. Upon receipt Smith's Government Sales Manager, Tom Gruber, telephonically notified Respondent that the cartons on the bottom layer of three skids had been crushed, and that the "records do not seem to be damaged but jackets are bent" with some covers scratched. He also reported that all cartons were 200 pound test, weight 86 pounds, and are size 25 x 15 inch. (R4 File, Tab K) As a result of this telephone call, Respondent, that same day, dispatched Richard Brzozowski, Printing Specialist, Quality Assurance Section, to conduct an inspection of the damaged product. (R4 File, Tab O) Brzozowski claims to have found pallets stacked 3 or 4 cartons high. Some cartons had been shrink-wrapped but he could not recall whether or not the cartons were also protected by bands. He randomly checked 13 cartons and found only 1 to be damaged. However, 9 of the 13 cartons contained scratched album covers. (Prehearing Conference report, page 7.) Thereafter at Brzozowski's request, Respondent's Quality Control and Technical Department (hereinafter "QCTD") tested the product and in a report dated April 18, 1985, found that the record jackets were "coated with a coating but it is not scratch resistant." The product was deemed by QCTD "not equal to the specifications" which according to the report required the product "to be coated with scratch resistant coating (varnish)." (R4 File, Tab K) This information, together with a requirement to reprint, was apparently telephonically conveyed to Appellant at this time. (R4 File, Tab I) Respondent's work notes also reflect that Appellant would be "sending in letter 4-22-85." (R4 File, Tab K) The file then contains a letter from Appellant's Mr. Joseph P. Rupert dated April 17, 1985, which reflects that Appellant "believes that the coating used on the jacket meets all specifications as outlined in Quality Assurance Through Attributes" citing an attached "letter from Braden Sutphin Ink Company" giving the results of their performance of "the same tests as outlined in the Quality Assurance Through Attributes" with the assertion that "Braden Sutphin has found that the coating used passed the Sutherland Rub Test. They also feel that any testing requirements beyond those specified would require a coating of a significantly different type." Rupert further advised that Appellant would reprint the job using Klassic-Kote rather than varnish opining that "varnishing should never have been" specified because "[w]hen looking at the amount of handling in manufacturing . . . and . . . by the end user, varnish as a protective coating would never hold up." Rupert thereafter asserts that it was Respondent's "error in failing to realize this . . . [and that] [t]he cost of reprinting . . . and coating . . . should . . . be borne by the G.P.O. and not the contractor." The Braden Sutphin letter accompanying Appellant's letter is dated May 9, 1985, a date which is difficult to reconcile with either the month or day of Appellant's letter which bears no date of receipt. (R4 File, Tab M) Be this as it may, the file contains an additional letter from Appellant which is dated April 22, 1985, which may in fact be the earlier of Appellant's two letters which states: "French/Bray has found that all specifications were followed except for the packing requirements" which was characterized as "an oversight on French/Bray's part." (R4 File, Tab N) There follows a revised report by Respondent's QCTD dated May 3, 1985, which adds to the previous report the specification "[r]ub resistance test according to QATAP Contract Terms P-ll" with test results shown as "average density = 0.063 for 4 samples" with the "DIFFERENCE" notation of "0 demerits". This report was signed by "Robert W. Praskievicz for Division Chief". (R4 File, Tab L) The file further contains an inspection report by Brzozowski dated June 12, 1985, reflecting that 8 product samples were tested from a lot size of 3,500 and that each of the 8 had "[c]onspicuous [s]ingle [p]age [d]efect, extraneous marks" or a total of 8 "major defects." (R4 File, Tab 0) There next follows at R4 File, Tab P, a letter from Darwin Hughes, Contracting Officer, of June 12, 1985, stating: An examination of samples of the product your firm produced for the Library of Congress has revealed defects under the following attributes: 1. Contract Terms No. 1, 2-10. Quality 2. Conspicuous Single Page Defect; extraneous marks 3. Contract Terms No. 1, 3-1. Packing; (j) shipping containers Product was packed in 200 lbs. test cartons, should have been 275 lbs. test containers and the cartons were overpacked; 86 lbs., should have been 45 lbs. Based on the results of this inspection, the order has been determined rejectable, and will require reprinting. The reprinting will be accomplished at no additional cost to the Government in strict accordance with the specifications. As agreed, the rejected copies will be picked up from Smith Litho. As mutually agreed upon in our telephone conversation of May 28, 1985, the reprinting and delivery of this product will be accomplished by June 17, 1985. In reference to your letter dated April 17, 1985, the specifications were adequate in assuring us that the product would be scratch and smear resistant. The following reasons we feel attributed to the failure of this product: 1. Improper application of varnish. 2. Improper handling during the manufacture of the product. 3. Packed improperly. Appellant's response of June 17, 1985, advises that "[t]he reprinting is complete" and again asserts that: A product of this nature with the amount of handling involved in manufacturing, (die cutting, folding and gluing by hand, inserting of records by hand, and packing of cartons), varnish as specified has proved to be unacceptable. In referring back to Contract Terms No. 1, 2-10 "The requirements indicated in the specifications represent minimum acceptable . . ." the G.P.O.'s test and the varnish manufacturers test of the varnish as outlined in Quality Assurance Through Attributes has shown that the varnish used on the record jacket passed the Sutherland Rub Test. These test's [sic] seem to be outlined to aid the contractor in making sure that the product will meet the minimum acceptable quality level as outlined by the G.P.O.. The Sutherland Rub Test performed to Government standards proves that the varnish on this product meets minimum acceptable quality. We find that even though the product meets the requirement as outlined in Quality Assurance Through Attributes, the coating as specified (varnish) does not hold up to all the wear and tear a product of this nature receives. Varnish should never have been offered as an option. This error on the G.P.O.'s part was the result of the product being unacceptable. The reprinting of this product using Klassic Kote should withstand the handling a product of this nature will receive. The cost of reprinting should not be borne by French/Bray, but by the Government Printing Office. French/Bray will be billing Jacket 459-723 for both the first and second printing, which we feel should be paid in full by the G.P.O.. R4 File, Tab Q By letter of August 26, 1985, Rupert summarized the above events and asserted that: As of this date no additional correspondence has been received by French/Bray from the G.P.O. regarding the subject. Having received nothing in writing, it leads French/Bray to believe that the Government is in agreement with the statements concerning the cause for reprinting and who should bear the cost of the reprinting. Please cut a Contract Modification to reflect the following: Unpacking Records From Rejected Product $ 749.00 Reprinting 3500 Copies "Wonderful Inventions" $ 5,000.00 Klassic Kote Instead of Varnish $ 722.00 Ship Completed Products to Rockville, Md $ 58.00 Total Cost to Government $ 6,529.00 R4 File, Tab S In response, Marken, the Contracting Officer, issued his final decision letter dated September 19, 1985, denying Appellant's request for a contract price increase and asserting that: It has been determined that the order as originally delivered contained defects as outlined in GPO letter dated June 12, 1985. These deficiencies were attributed to improper procedures used by the contractor, i.e., application of varnish, handling of product during manufacturing, and packing. The original specifications were reviewed for ambiguities and were found to be explicit in its statement of objectives in regard to quality and packing. Your letter of August 26, 1985 offers no new evidence to dispute these points. R4 File, Tab T Thereafter, by letter of November 26, 1985, Appellant filed its notice of appeal based upon its contention "that varnish as specified was and is an unacceptable coating for a product of this nature." (R4 File, Tab U) By letter of January 20, 1986, Appellant advised that it had no other documents which it desired to file with the Board and that a hearing was desired under the small claims procedure. In turn, the prehearing conference was scheduled and held on February 6, 1986. At the conference, Appellant's representative asserted that its representative had raised the issue of the suitability of the specified coating with one of Respondent's representatives after award of the contract but before performance. Testimony, including direct- and cross-examination of witnesses failed to corroborate this allegation. Moreover, Respondent asserted that if the Appellant had such concern, it had an inherent duty to question the specification before bidding on the contract so that any modification of the solicitation, if necessary, could be made and fairly presented to all prospective bidders. Moreover, Respondent claimed that in writing a performance related specification, the Respondent anticipated that Appellant would use production, packaging, and shipping methods which would protect the product from casual damage during manufacture and shipment. Appellant admitted that it had not followed the shipping instructions but asserted that the scratching was not the result of improper handling but rather of the specification of an inappropriate coating. In rebuttal to this Respondent, through uncontroverted, cross-examined testimony by Mr. Darwin Hughes, Chief, Quality Assurance Section, GPO, asserted that while Appellant had applied varnish to the product, it was not a scratch resistant coating as specified because it had been improperly applied. He asserted that proper scratch resistant application requires that the varnish be put on "dry". He further testified that at the time of discovery of the defect he had had a conversation with one of Appellant's representatives wherein it was admitted that Appellant had used an in-line "wet" method of varnish application rather than a dry method. Appellant did not deny this assertion but rather argued that in its experience Respondent generally specifies the method of varnish application in its specifications, whereupon the Chief, Quality Assurance Section, testified that Respondent, while not expressly stating dry or wet application, had inherently specified the method of application by requiring that it be scratch resistant with the inference being that it be applied after the ink has set up; i.e., after it is "dry". Testimony, as indicated supra, was also telephonically solicited from Robert Brzozowski with appropriate opportunity for cross-examination. Mr. Brzozowski, among other things, testified that some of the products sampled from undamaged cartons also bore scratch marks. Testimony by Robert Praskievicz, Environmental Chemist, QCTD, GPO, indicated that he conducted the second test of the sampled product, that the test included the rub resistant test required by the QATAP, that the density of the coating was 0.063, and that this required the allocation of demerits to the product. Additionally, in the testing process, scratches were visually noted, but no demerits were recorded on the report form nor was there any indication of whether or not the product was equal to the specifications, because the entire job had not been evaluated. Mr. Praskievicz indicated that in his judgment the product was not scratch resistant, since scratch resistance implies a resistance of the product to the loss of color or image; that he had used the standard rub test and in his judgment the tested products did not meet the required test. On cross-examination concerning his expertise, after reference to the opposite conclusion of the Braden-Sutphin report, Praskievicz testified that his expertise was in chemistry; that the test used was not a chemical test; that he had not previously rub tested any heavy black record covers but had on numerous occasions, as part of his procedure, rub tested book covers and posters. At the conclusion of the testimony, the parties agreed that no further hearing would be necessary, that the record could be settled, and the case decided upon the evidence as presented. The case is before the Board for decision in this form. Discussion The question presented by this appeal is whether or not the Appellant ought to bear the costs of reprinting and redelivery of a printed product produced by it after rejection of the original product for failure to meet specifications in that the products bore scratch marks. There are no factual disputes between the parties. The original products were printed; coated with "varnish"; packaged; and shipped by Appellant to another contractor, as directed, whereupon inspection they were shown to bear scratch marks. Appellant admits that it improperly packaged the products. The inspection by Respondent, however, shows that certain products were not damaged in shipment but nevertheless still bore some scratch marks, thus suggesting that the incorrect packing was not the principle cause of the scratch defect for which the entire production lot was rejected. Thus, Appellant's argument that it followed Respondent's specifications with respect to varnishing the product and should not be held responsible for damages unassociated with the faulty packaging cannot be dismissed out of hand. Accepting the fact that Appellant followed the functional requirement of applying varnish to the product after printing, the question that must be determined is upon which party does the burden reside for the damaged product. Appellant asserts that it lies with Respondent for specifying "varnish" which Appellant alleges is not adequate for the purpose of preventing scratches. Respondent, on the other hand, asserts that the burden lies with Appellant whom it alleges used a technically ineffective application procedure. To ascertain the answer we must turn to the language of the contract itself, including the referenced "QATAP" (GPO Publication 310.1, May 1979 as Revised June 1, 1981) and "GPO Contract Terms No. 1" (GPO Publication 310.2 Revised October 1, 1980). The contract specifications required Appellant to "[c]oat (after printing) the entire surface of all printed areas with varnish or lacquer to prevent scratching and smearing." (R4 File, Tab B, page 2 of 4) This language itself gave Appellant the choice of selecting the coating; i.e., "varnish or lacquer"; moreover inherent in that choice was the choice of method of application necessary to attain the requirement "to prevent scratching and smearing." (Emphasis added) "To prevent" is a much higher standard than "to resist" or "to avoid" or "to retard" or other similar standard. It is the opinion of the Board that this language places the burden of attaining the standard upon the Appellant. However, the standard itself is not so absolute as to make the product rejectable if scratching of any sort whatsoever occurs. Rather, the standard is modified by the specification of Quality Assurance Through Attributes Product Quality Level II for both Printing and Finishing Attributes and Inspection Levels (from Mil-STD-105) of (a) Non-destructive tests - General Inspection Level I and (b) Destructive Tests - Special Inspection Level S-2, and provision thereafter requiring "INSPECTION SAMPLES" and/or "QUALITY ASSURANCE SAMPLES." Respecting these requirements the QATAP in pertinent part states: 1. DEFINITIONS 1-1. . . . . . . . . 1-4. Major Defect - A major defect is a deviation from specifications which is less serious than a critical defect. Major defects are designated in the tolerance tables for printing attributes, finishing attributes, and the paper attribute. 1-5. Total Defects - Total defects are the sum of all critical and all major defects (e.g., 3 critical defects + 2 major defects = 5 total defects). 1-6. Acceptable Quality Levels (AQL's) - The AQL's are the maximum number of defects per 100 copies that the Government will accept at the contract price. Unless otherwise specified, the AQL's are 1.0 for critical defects and 6.5 for total defects. . . . . 1-10. Average Demerit Levels (ADL's) - ADL's are one of the means used to classify defects for printing attributes. . . . . 2. DETERMINATION OF PRODUCT QUALITY a. QATAP establishes attributes for quality and it defines tolerances for those attributes for five quality levels of printing. When attributes deviate from the allowable tolerances, the deviations will be classified as either major or critical defects pursuant to the applicable tolerance table. b. Attributes which are not identified as quality attributes under QATAP (e.g., stitching position) will be evaluated in accordance with the article entitled "Quality" in U.S. Government Printing Office Contract Terms No. 1. 3. DETERMINING ACCEPTABILITY - Because inspection of all copies of a publication is usually impractical, the Government will utilize statistical sampling to determine quality. When the Government determines that both the number of critical defects and the number of total defects in the lot or batch do not exceed their respective AQL's, the lot or batch will be accepted at the contract price. MIL-STD-105D will be used to make this determination. If the defects exceed either or both AQL's, the Government will have the option of having the lot or batch replaced, having the defects corrected, or accepting the lot or batch with an equitable reduction in the contract price. The discount tables contained in Appendices A & B will be used as a guide by the Contracting Officer to determine reductions. Failure to agree to such reduction of price shall be a dispute concerning a question of fact within the meaning of the article entitled "Disputes" of Contract Terms No. 1. In all cases it is the intent of the Government that the products meet the quality required in the specifications. 4. CATEGORIES OF ATTRIBUTES - Quality attributes are divided into three categories which consist of printing attributes, finishing attributes, and the paper attribute. 4-1. Printing Attributes - For each copy that is inspected, the Government will evaluate each applicable printing attribute by separately inspecting: a. outside covers (i.e., the spine and covers 1 & 4) . . . . ADL's will be determined as follows: (i) Outside covers will be inspected and evaluated as one unit. The unit will be assessed demerits (i.e., 4, 20, 100) pursuant to the demerit table for each printing attribute that deviates from specifications. The demerits which are assessed constitute the ADL for outside covers for that printing attribute for that copy. . . . . (iii) In each copy the ADL's for each printing attribute will be classified as follows: Tolerance Table for Printing Attributes ADL's Classification of Defect 4 or less for both outside None covers and text More than 4 for either or Major both outside covers and text Conspicuous Single Page Defects - When one or more pages have been assessed demerits for a printing attribute but the ADL does not exceed 4, a single major defect will be assessed for that printing attribute if one or more pages is so conspicuously defective that it significantly impairs the quality of the entire copy. Examples include a large hickey at the focal point of an illustration, a single page with extremely light (but legible) type, large ink spots, large oil spots, and large off-color spots in illustrations. 4-2. Finishing Attributes - The Government will evaluate finishing attributes by inspecting individual copies of publications. When each copy is inspected, each applicable finishing attribute that deviates from specifications will be classified as either a critical or major defect in accordance with the tolerance table for that attribute. . . . . P-ll. Rub-Resistance of Printed Image Definition: Rub-resistance is the resistance of the printed image to smearing onto similar stock when rubbed with that stock. There are two categories of rub-resistance: 1. Rub-Resistance of Unvarnished Image 2. Rub-Resistance of Varnished Image Instruments: 1. Visual Evaluation 2. Reflection Densitometer 3. Rub Tester (Sutherland or equivalent) Procedure: 1. Unvarnished Image a. Calibrate the densitometer to the blank strip of stock. b. Test a representative sample of the printed product on the Rub Tester. Give a 3" x 6" (76.2 mm x 152.4 mm) printed sample 25 rubs at a pressure of 1.0 P.S.O. against a 2" x 5-1/4" (50.8 mm x 133.4 mm) blank strip of stock similar to that on which the sample is printed. c. Make three density readings in the area of highest density on the blank 2" x 5-1/4" (50.8 mm x 133.4 mm) test strip. Use the densitometer filter which indicates the maximum density for the color of ink used in the printed sample. d. Calculate an average density for the rub-off smear based on the three independent density readings. Perform all tests at least 72 hours after the printing operation. 2. Varnished Image Follow the same procedure as above with the exception that each sample will be given 50 rubs at a pressure of 1.0 P.S.I. (.70308 gm/mm2). . . . . 2. DEMERIT TABLE FOR RUB-RESISTANCE OF VARNISHED IMAGE Product Demerits Quality Levels 4 20 100 . . . . F-ll. Damaged Covers Definition: Damaged covers consist of the following categories: . . . . 4. Scratches - Scratches are blemishes which are visible under standard viewing conditions and which do not expose any paper or cloth fibers. Instruments: 1. Visual Evaluation . . . . TOLERANCE TABLE FOR DAMAGED COVERS* Product Classification of Defect Quality Levels Major . . . . . . . . Moreover, the above-referenced article entitled "Quality" in "GPO Contract Terms No. 1," paragraph 2-10 states: Where printing is involved, careful imposition; competent makeready; careful press running; clear, sharp printing; careful binding; and good quality in every respect are required. These requirements are an essential part of the contract. The requirements indicated in the specifications represent the minimum acceptable for all printing, binding, and related services specified under the contract. Given these various contract provisions it is the opinion of the Board that as a matter of contract interpretation, and thus of law, the burden of meeting the contract specification rests solely with Appellant while the determination of whether or not such burden has been met lies solely with the Respondent, provided that the Respondent does not render its determination arbitrarily or capriciously but rather does so objectively by adhering to the testing and sampling standards of the QATAP. There is no provision in the contract for a determination by a so-called "independent" testing laboratory selected by the Appellant itself. Thus, if the Respondent shows that it has adhered to the contractual standards for testing, inspection, and determination of product quality, its determination must be upheld. This Board finds that the Respondent has indisputably met all these requisite requirements and thus, as a matter of contract law, affirms the decision of the Contracting Officer and denies the appeal. Decision Appeal denied.