BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
QUALITYPE, INC. ) Docket No. GPOBCA 21-95
Program 1020-S )
Purchase Order R-0143 )
Print Order 80000 )
For the Appellant: Qualitype, Inc., Macedon, New York, by
Frederic G. Antoun, Jr., Attorney at Law, Chambersburg,
Pennsylvania.
For the Government: Kerry L. Miller, Esq., Associate General
Counsel, U.S. Government Printing Office.
Before BERGER, Ad Hoc Chairman.
DECISION ON MOTION FOR RECONSIDERATION AND ORDER
Qualitype, Inc. (Appellant) has filed a timely Motion for
Reconsideration (Motion) of the Board's Decision and Order of
April 21, 1998, in the above-captioned appeal, in which the Board
upheld a final decision of the Contracting Officer determining
that the Appellant had been billing incorrectly for author's
alterations and directing recovery of the excess amounts paid to
the Appellant. For the reasons which follow, the Motion is
DENIED.
Under the Appellant's contract, the Appellant was to be paid its
price "per 1,000 characters" for author's alterations. The
Appellant billed for this item on the basis of the total number
of characters in a document to which author's alterations were
made; the Contracting Officer, upon learning of this, determined
that the Appellant was entitled to be paid only for the number of
actual author's alterations. The Board held that the Contracting
Officer's interpretation of the contract was the only reasonable
interpretation. In its Motion the Appellant argues that the
Board erred in reaching that conclusion because: (1) the
Appellant reasonably interpreted what was latently ambiguous
language; (2) the Contracting Officer's interpretation produced
an unconscionable result; and (3) there was a course of conduct
between the parties indicating that both parties had previously
adhered to the Appellant's interpretation. The Appellant also
argues that the Board could have relied on its precedent to find
that there was no meeting of the minds with respect to the
contract pricing language and to fashion an appropriate quantum
meruit recovery. Finally, the Appellant asserts that the Board
erred in affirming the Contracting Officer's decision to pay the
Appellant nothing for Print Orders 20000 and 20001.
Rule 29 of the Board's Rules of Practice and Procedure allows
either party to an appeal to file a motion for reconsideration
within 30 days of the party's receipt of the Board's decision.
The traditional grounds for reconsideration are newly discovered
or newly available evidence, or error in the Board's findings of
fact or conclusions of law; reconsideration, however, is
discretionary with the Board and will not be granted in the
absence of specific and compelling reasons. Univex
International, GPOBCA 23-90 (February 7, 1996), slip op. at 4-5,
1996 WL 112554; Sterling Printing, Inc., GPOBCA 20-89 (July 5,
1994), slip op. at 3-4, 1994 WL 377592; Graphic Litho, Inc.,
GPOBCA 17-85 (September 30, 1988), slip op. at 2-3, 1988 WL
363516. Arguments already made, reinterpretation of old
evidence, and mere disagreement with the Board's decision do not
provide a basis for reconsideration. Univex International, Inc.,
supra.
The Appellant's first three points set out above essentially
reflect disagreement with the Board's findings and conclusions;
there is no showing, however, of any factual or legal errors.
The first point is predicated on the Appellant's having
previously billed, and GPO's having paid, for author's
alterations on the basis of total characters in the publication;
this, says the Appellant, "is sufficient to prove that the
contractor's interpretation of the way in which it should bill is
reasonable." Motion at 1. This argument ignores the primary
bases set forth in the decision for the Board's conclusion that
the only reasonable interpretation of the disputed language was
GPO's. It also ignores the fact that even though the Appellant
had been billing on the basis of total characters per
publication, GPO, because of the Appellant's prior nominal
pricing and the resultant nominal invoice amounts involved, was
unaware of that fact and of the Appellant's interpretation.
Thus, while it is not disputed that the Appellant previously
billed on the basis of total characters in a publication, that
establishes no more than that the Appellant did so; under the
circumstances here it simply does not support the Appellant's
assertion that its interpretation was reasonable.1
The second point, that the Board's agreement with the Contracting
Officer's decision is erroneous because it leads to an
unconscionable result, is without merit. The unconscionability
claim is based on the Appellant's being paid only one-third of
what it previously received as an average per page price. This
argument, which the Appellant did not make previously, overlooks
the fact that payment to the Appellant was based on the
Appellant's pricing. For the 1993-1994 contract, which preceded
the contract which was the subject of this appeal, the Appellant
bid a unit price of $ .001 (per thousand) for author's
alterations and a unit price per page of $9 for photocomposition.
For the 1994-1995 contract, the Appellant changed its pricing
approach-it bid $12.50 for author's alterations and only $2 for
photocomposition. Had it retained its $9 photocomposition price,
it would have been paid $7 per page more, which would have
brought its average per page price to the prior year's level. As
the Board noted, while the Appellant was essentially free to
structure its bid as it chose, most of the tasks involved in
performing the contract involved photocomposition and
reimbursement for that work should have been realized through the
per page photocomposition charge rather than through author's
alterations charges; the Appellant could not "expect
reimbursement for author's alterations when the work performed is
not encompassed by the author's alterations line item of the
contract." Qualitype, Inc., supra, at 10.
The third point again is based on the Appellant's prior billing
and GPO's payment of the Appellant's invoices. In response to
the Appellant's argument that this established a prior course of
conduct which reflected the parties' interpretation of the "per
1,000 characters" phrase, the Board pointed out that the prior
course of dealing concept "requires that both parties have actual
knowledge of the prior course of dealing and of its significance
to the contract, Qualitype, Inc., supra, at 12, and held that the
evidence fell short of establishing that the GPO Contracting
Officer had actual or imputed knowledge of the Appellant's basis
for billing. The Appellant describes the Board's treatment of
this issue as follows:
The Board found no course of conduct because neither the
contracting officer nor the division empowered to pay invoices
reviewed the invoices. Thus, the Board concluded there was no
"knowing" acceptance of the interpretation or payment policy-
since no one at GPO checks invoices.
Accepting this conclusion would prevent any course of conduct
from establishing a contract pricing language interpretation.
The Board did not say that no one at GPO checks invoices. In
fact, the Board described GPO's voucher/invoice review process
and noted the various scenarios under which this review occurs.
See Qualitype, Inc., supra, at 12-13. The Board said only that
in this case it was clear from the hearing testimony that the
Contracting Officer had no actual knowledge of how the Appellant
was billing, and that the Appellant had failed to establish that
the Contracting Officer had such knowledge imputed from GPO's
Financial Management Service (FMS) (which initially reviews and
pays vouchers) because FMS, in light of the Appellant's prior
nominal pricing for author's alterations, itself did not know and
had no reason to know how the Appellant was billing for author's
alterations or to question the amounts billed. Since, as
previously recognized by the Board, knowledge of a prior course
of dealing is an essential element of the presumption that a
prior course of dealing reflects what the parties intend contract
language to mean, see MPE Business Forms, Inc., GPOBCA 10-95
(August 16, 1996), slip op., 1996 WL 812877, and Publishers
Choice Book Mfg. Co., GPOBCA 4-84 (August 18, 1986), slip op.,
1986 WL 181457, the Board could only conclude in this case that
the Appellant's position was not supported by its prior course of
dealing theory.
The Appellant's "no meeting of the minds" approach stems from the
Board's decisions in MPE Business Forms, Inc., supra, and
Publishers Choice Book Mfg. Co., supra, in which the Board, after
holding that disputed contract language was not ambiguous,
nevertheless concluded that there was no meeting of the minds
between the parties and that therefore there was no binding
contract in place. The Board then concluded that the contractor
in each case was entitled to be paid the reasonable value of what
it provided to the Government in accordance with quantum meruit
principles under an implied-in-fact contract theory.
These two cases do not reflect the usual contract interpretation
situation. As the Board stated in the more recent of those two
cases, "[i]f this appeal was a typical contract interpretation
case, the matter would end with the Board's decision that the
Respondent's ... reading of the disputed contract language was
correct, and the Appellant's contrary ... version was without
merit." MPE Business
Forms, Inc., supra, at 67. In determining that MPE Business
Forms, Inc. and its predecessor case were not typical, the Board
relied on the "well-stated" rule set forth by Professor Corbin as
follows:
If the meaning that either [party to the contract] gave to the
words was the only reasonable one under the existing
circumstances, as the other party had reason to know, the latter
is bound by that meaning and there is a contract
accordingly....But if the parties had materially different
meanings, and neither one knew or had reason to know the meaning
of the other, there is no contract.
1 CORBIN ON CONTRACTS ยง 4.10 (1993) at 617-18. Notwithstanding
that in both cases the Board found that there was only one
reasonable meaning-that proffered by the Respondent-of the
disputed contract language, the Board also found that the
contractors had in good faith based their offers on a different,
erroneous interpretation, which led to the conclusion that the
parties failed to reach a meeting of the minds.
Crucial to that conclusion was the Board's belief that the
contractors did not know or have reason to know that GPO had
another interpretation. See MPE Business Forms, Inc., supra, at
70, 71. The Board cannot say the same thing in this case, as it
believes the Appellant did have reason to know that the
Respondent did not interpret the "per 1,000 characters" phrase
the way it did. As the Board pointed out in its earlier decision
in this matter, "the gross disparity between the estimate [for
the author's alterations line item] and the expectations of the
Appellant under its interpretation ... should have alerted the
Appellant to at least the possibility that its interpretation was
incorrect," and "the Appellant's appreciation of this ...
possibility should have been reinforced by the change made from
the previous year's estimate." Qualitype, Inc., supra, at 8. In
other words, while the Board does not question that Appellant
believed "per 1,000 characters" meant total characters per
publication, the facts of this case lead the Board to believe
that the Appellant had reason to know that its interpretation of
that phrase might well not be GPO's interpretation. Accordingly,
the Board sees no reason to follow MPE Business Forms, Inc. and
Publishers Choice Book Mfg. Co. here.
Finally, the Appellant asserts that the Board erred in affirming
the Contracting Officer's decision to pay nothing under Print
Orders 20000 and 20001. The Contracting Officer's final decision
in fact stated that the Appellant was to be paid "that which is
due" on those print orders in accordance with the Contracting
Officer's interpretation of the disputed contract language. The
Contracting Officer did not decide that the Appellant was to be
paid nothing and the Board did not affirm any such decision.2
For the foregoing reasons, the Motion is DENIED.
It is so Ordered.
June 24, 1998 Ronald Berger
Ad Hoc Chairman
GPO Board of Contract Appeals
_______________
1 They also do not support the assertion that there was a
latent ambiguity. As the Board noted after thoroughly
analyzing the contract, "[t]he best that can be said for the
Appellant's position is that there was a patent ambiguity" in
the contract about which the Appellant made no inquiry. See
Qualitype, Inc., GPOBCA 21-95 (April 21, 1998), slip op. at 8
n.4, 1998 WL ______.
2 The Respondent indicates that the Appellant was paid under
those print orders but the payments were subject to setoff so
that GPO could recover an earlier overpayment; it further
indicates that if the Appellant has not been paid for
author's alterations it need only submit a revised voucher
with appropriate supporting documentation. Respondent's
Opposition to Appellant's Motion for Reconsideration at 3.