BOARD OF CONTRACT APPEALS U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC 20401 In the Matter of ) ) the Appeal of ) ) BLUEBIRD FORMS, INC. ) Docket No. GPOBCA 27-95 Program 1303-M ) Purchase Order 71223 ) For the Appellant: Bluebird Forms, Inc., Sikeston, Missouri, by Frederic G. Antoun, Jr., Attorney at Law, Chambersburg, Pennsylvania. For the Government: Thomas Kelly, Esq., Assistant General Counsel, U.S. Government Printing Office. Before BERGER, Ad Hoc Chairman. DECISION AND ORDER This is a decision on a motion to dismiss the appeal of Bluebird Forms, Inc. (Appellant), 501 Davis Boulevard, Sikeston, Missouri, arising out of Bluebird's claim that it is entitled to additional compensation for its work under U.S. Government Printing Office (GPO or Respondent) Program 1303-M contracts for the 1990-1991, 1991-1992, and 1992-1993 contract periods. For the reasons that follow, the motion is GRANTED. I. BACKGROUND 1. Bluebird was awarded a contract under the 1303-M Program, calling for the production of forms, for three consecutive contract terms beginning with May 1, 1990, and ending on April 30, 1993. 2. For orders received in 1990, 1991, and 1992, Bluebird submitted vouchers to GPO and received payment. 3. In May 1993, Bluebird prepared a voucher for work performed in response to Print Order 71223. That Print Order required parallel and right angle folds. Bluebird's president determined that it was appropriate to bill for both types of folds at the contract price for "continuous folds." The voucher amount of $194,909.52 included $14,800 for right angle folds. GPO paid this voucher. 4. While reviewing the voucher for Print Order 71223, Bluebird's president was advised by his staff that the company had not previously billed for right angle folds because the contracting officer had advised that billing for right angle folds was not authorized under the contract. Believing that to be incorrect, the president prepared supplemental vouchers for all prior work under the 1303-M contracts that had involved right angle folds. These vouchers, totaling $137,202, were submitted to GPO on June 1 and 3, 1993, and received in GPO's Office of Financial Management on June 7 and 9. 5. On September 24, 1993, GPO debited Bluebird's account for an overpayment of $20,748 on Print Order 71223 in connection with "films and folding charges not authorized." This amount was recouped between September and November through offset against other contract payments owed to Bluebird. 6. On April 18, 1995, counsel for Bluebird wrote to the Contracting Officer, stating that Bluebird had "registered a complaint" about the $20,748 deduction, had "resubmitted billings," and had submitted supplement vouchers, but had never received a final decision on the matter. In response, Bluebird's counsel received a letter from GPO counsel advising that the claim was barred because Bluebird had not taken written exception to the payments within 60 days thereof as required by the terms of the contract. 7. On August 15, 1995, Bluebird appealed the Contracting Officer's refusal to issue a final decision, and subsequently requested the Board to treat the Contracting Officer's refusal as an appealable denial of Bluebird's claims for $20,748 and $137,202. Complaint at 3, 4. II. DISCUSSION The Respondent's motion to dismiss is predicated on the contract clause captioned "Payments on Purchase Order," GPO Contract Terms, Solicitation Provisions, Supplemental Specifications, and Contract Clauses, GPO Pub. 310.2 (Rev. 9-88) (hereafter GPO Contract Terms), Contract Clauses, ¶ 24. That clause states: (b) Checks tendered by GPO in payment of any invoice submitted by the contractor, whether equal to or less than the amount invoiced, are tendered as final payment. Acceptance of payment of any check so tendered shall operate as a bar to the assertion of any exceptions by the contractor to the amount paid by GPO unless the contractor notifies the Contracting Officer in writing within 60 calendar days of the date of such check. Such notice shall specify the exceptions taken to the sum tendered, and the reasons therefor. The Respondent states that the Appellant did not take written exception within 60 days to any of the payments it received in 1990-1993, including the payments that were subject to offset in the fall of 1993, and that therefore its claims are now barred by the quoted clause. The Appellant argues that its claims are not so barred. First, with respect to the payments that were subject to setoff, it asserts that the Respondent's right of setoff "is separate and distinct from GPO Contract Clause 24(b)," and that the Appellant "was not charged with the responsibility of raising any exceptions to a check which did not represent full payment for all services or claims." Appellant's Brief (hereafter App.Brf.) at 9. The Appellant states that instead it promptly contacted the Contracting Officer regarding the setoff to "register a dispute" and to request return of its money, and that it was entitled to a final decision on the matter, which the Contracting Officer has yet to provide. With respect to the other contract payments, the Appellant asserts that the quoted clause is irrelevant to two of its supplemental vouchers because they were submitted within 60 days of the final payment received on Program 1303-M. As for its other supplemental vouchers, the Appellant contends that they are not barred because in 1991 it discussed with the Contracting Officer its belief that it should be able to bill separately for right angle folds, that this "claim or dispute" was never resolved, that the Contracting Officer knew of this pending "claim" when the contracts for 1990-1991 and 1991-1992 were closed out, and that therefore no final payment could have taken place with respect to those contracts. The Appellant further contends that its claim should not be barred because it detrimentally relied on inaccurate information from the Contracting Officer which kept it from billing for right angle folds. The "final payment doctrine" embodied in the "Payments on Purchase Order" clause was discussed at length in Media Press, Inc., GPOBCA 03-93 (April 30, 1997), slip op., 1997 WL 742507, and need not be repeated here. Suffice it to say that the purpose of the "final payment doctrine" is "to protect the government against stale claims by establishing a cut-off date to ensure that timely claims are asserted within the life of a contract." Media Press, Inc., supra, at 32. While the term "final payment" generally refers to the last payment made under a contract, Midwest Bank Note Company, GPOBCA 13-95 (June 22, 1998), slip op. at 6-7, 1998 WL ______ (holding that this is what was meant by the term in GPO's "Warranty" clause, GPO Contract Terms, Contract Clauses, ¶ 15), in the "Payments on Purchase Order" clause, which refers to "any" check tendered by GPO in payment of "any invoice submitted by the contractor," the term "final payment" means each payment made under the contract, not just the last payment. Id. at 7. Thus, with respect to the "final payment doctrine," GPO's "Payments on Purchase Order" clause does two things: 1) it permits contractors to take exception, and in effect file a claim, up to 60 days after the date of the last contract payment, Media Press, Inc., supra, at 41, but 2) with respect to earlier payments, requires contractors to file any exceptions with respect to those payments within 60 days of the payment dates. Midwest Bank Note Company, supra, at 7. It is not disputed that the Appellant received and accepted payments from GPO in 1991, 1992, and 1993 and in no case took written exception to any of those payments within 60 days thereof. Thus, by virtue of the language in paragraph (b) of the "Payments on Purchase Order" clause, the Appellant's acceptance of those payments bars the Appellant from taking exception to the amounts paid. The various arguments raised by the Appellant to avoid this obvious conclusion simply are not convincing. First, the Appellant argues that this clause has nothing to do with set-offs and therefore, in effect, that it does not impose a final payment limitation upon its right to object to the set- offs. This argument ignores the very precise language of the clause: "Acceptance of payment of any check so tendered shall operate as a bar to the assertion of any exceptions by the contractor to the amount paid 1/4." (Emphasis added.) The final payment rule established by the clause is predicated on contract payments, and when a setoff is involved, the amount paid to the contractor obviously is the amount to which the contractor is entitled pursuant to its voucher less the amount that is set off. Thus, the "Payments on Purchase Order" clause literally encompasses setoff actions. The Board recognizes that the Government's right of setoff is very broad and can be used to satisfy all kinds of debts owed by the contractor to the Government. See Comp. Gen. Dec. B- 176791, Sept. 8, 1972. For example, while the amounts set off may arise from a perceived contract overpayment, either on the same contract or, as here, on a different GPO contract, in other circumstances the debt giving rise to the setoff action may be related to contracts of other federal agencies or to non- contract matters such as unpaid taxes. See, e.g., UNIDEV, Inc., B-184067, June 19, 1975, 75-1 CPD ¶ 375. Despite the encompassing literal language in the "Payments on Purchase Order" clause, the Board would be hesitant to view the clause as applicable to these non-GPO and non-contract matters as the underlying debts would be subject to different contract clauses (there is no clause comparable to the "Payments on Purchase Order" clause in Executive Branch contracts. Media Press, Inc., supra, at 39-41) and/or different rules, and it not apparent how the purpose of the clause-bringing finality to GPO contracts within 60 days of each payment unless an exception is filed-would be served by applying it to matters unrelated to GPO contracts. Here, however, application of the clause, where the debt giving rise to the setoffs arose out of a GPO contract, is entirely consistent with the purpose and intent of the clause. The Board sees no difference, for purposes of the "Payments on Purchase Order" clause, between an initial contract payment that reflects a GPO deduction for a perceived overcharge and a later payment on another GPO contract that reflects a deduction, or setoff, for an earlier overpayment on a different GPO contract. In both cases, the contractor is placed in the same position-it receives less money than the amount to which it believes it is entitled under the relevant contract. The only difference is that in the case of an initial overpayment the contractor receives, and has the benefit of, a larger sum than the Government otherwise would have paid it. Accepting the Appellant's argument-that the clause applies to contract payments but not to setoffs reflected in a contract payment, would lead to an incongruous result-GPO, where it recognizes an overcharge on a contractor's voucher and makes payment after adjusting the voucher to eliminate the overcharge, would be free from contractor claims with respect to the work encompassed by that voucher if a claim is not made within 60 days, but would not be so insulated if it initially fails to recognize the overcharge and remedies that failure by exercising its right of setoff against other payments due the contractor under another contract. The Appellant offers no rationale for such a result. Accordingly, the Board concludes that under the circumstances here the "Payments on Purchase Order" clause and its final payment rule apply to contract payments reflecting a setoff for overpayments on other GPO contracts. Therefore, the Appellant's claimed contact with the Contracting Officer (who denies that such contact occurred. Declaration of Chris J. Brown, accompanying Respondent's Reply Brief) to "register a complaint," which the Appellant does not allege to have been in writing, cannot preserve its right to challenge the setoff as it does not comply with the requirements of the clause. Second, the Appellant argues that two of its supplemental vouchers are not barred from consideration because they were filed within 60 days of the last payment made on the contract. According to the Appellant, it is entitled to payment on its supplemental invoices for Print Orders 60161 and 60369 because they were received by GPO on June 9, 1993, within 60 days of the final contract payment made in May. The Appellant ignores, however, the requirement of the "Payments on Purchase Order" clause that exceptions to contract payments received be filed within 60 days of those payments, not within 60 days of the last contract payment. See Midwest Bank Note Company, supra, at 7. GPO has furnished a statement from the chief of its Examination and Billing Branch, Procurement Accounting Division, with supporting documentation, establishing that the original vouchers for these two print orders were paid on September 17, 1992 and January 5, 1993, respectively. Declaration of Philip L. Jones, accompanying Respondent's Motion to Dismiss. Accordingly, the Appellant's argument is baseless. Third, the Appellant asserts that as a result of a discussion with the Contracting Officer in 1991 the Contracting Officer knew that the Appellant believed it was entitled to bill separately for right angle folds, that this discussion gave rise to a claim or dispute, that under such circumstances the matter is not foreclosed by the final payment rule, and that therefore the supplemental vouchers it submitted are not time-barred. It is true that a final payment will not foreclose a contractor's right to pursue a claim if prior to that payment the contractor "reasonably manifested to the Government a present intention to seek recovery of money based on a claim of legal right under the contract" or if at the time of payment the contracting officer knew that "the contractor is asserting a right to additional compensation, even though no formal claim has been filed." Media Press, Inc., supra, at 36; Gulf & Western Industries, Inc. v. United States, 6 Cl. Ct. 742 (1984). Moreover, in determining whether a claim had been asserted prior to final payment "the oral and written communications between the parties are construed liberally." Media Press, Inc., supra, at 37. Those communications, however, must bear some attributes of a claim, id. at 38; the key attribute of a claim, of course, is a demand for money or other adjustment. Id. at 47. The Appellant states that its officials would testify that in 1991 during the term of the first contract the company contacted the Contracting Officer "and had discussions about the fact that Bluebird believed it should be able to bill separately for right angle folds." App.Brf. at 13. Such testimony would fall far short of establishing the existence of a claim. At best it would establish that somebody (not the company President, who, according to the Complaint, learned much later of GPO's position regarding right angle folds) from Bluebird had discussions with the Contracting Officer about whether the Appellant could separately charge for right angle folds. It would not establish that the discussions ended in disagreement, or that Bluebird did anything to place the Contracting Officer on notice that it was disputing the Contracting Officer's view or expecting a final decision on the matter. See Media Press, Inc., supra, at 47-48 (contractor's letter expressing "strong disagreement" with GPO's position and setting forth contractor's belief was not a claim because it lacked a key attribute of a claim, a demand for money). Indeed, the fact that Bluebird was awarded two follow- on contracts for the 1303-M program, apparently without any further discussion of this matter or expression of continuing disagreement with the Contracting Officer's position, strongly suggests that Bluebird itself did not consider the matter to be an on-going, unresolved dispute. Moreover, it is well established that when one party to a contract knows the other party's interpretation of the contract and does not object to it, the first party will be bound to that interpretation. E.I. Du Pont De Nemours & Co. v. United States, 24 Cl. Ct. 635 (1991), aff'd, 980 F.2d 1440 (Fed. Cir. 1992); Keno & Sons Constr. Co., ENGBCA 5837, 95-2 BCA ¶ 27,687; MJW Enters., Inc., ENGBCA 5813, 93-1 BCA ¶ 25,405. Thus, even if the 1991 "discussion" could be said to have given rise to a claim, the Appellant's acceptance of the subsequent contracts without objecting to the Contracting Officer's interpretation would preclude the Appellant from now arguing for a different interpretation with respect to those contracts. Finally, the Appellant seeks to avoid the consequences of the final payment rule by arguing that it relied to its detriment on "inaccurate information"-that it could not separately bill for right angle folds-provided by the Contracting Officer in 1991. The concept of detrimental reliance has various applications in contract law. For example, it is an indispensable element of 1) equitable estoppel, see, e.g., Advanced Materials, Inc., ASBCA 47014, 96-1 BCA ¶ 28,002, and B & B Reproductions, GPOBCA 09-89 (June 30, 1995), slip op., 1995 WL 488447; 2) defective pricing claims by the Government, see, e.g., Motorola, Inc., ASBCA 48841, 96-2 BCA ¶ 28465; and 3) claims of delivery date waiver precluding terminations for default. See, e.g., Nimbus Mfg., Inc., GPOBCA 21-96 (July 9, 1998), slip. op., 1998 WL ______ and Precision Standard, Inc., ASBCA 41375, 96-2 BCA ¶ 28,461. It also can preserve appeal rights in circumstances where a contractor is given incorrect appeal information by the Government and the contractor relies on that information. See Decker & Co. v. West, 76 F.3d 1573 (Fed. Cir. 1996). The Board is at a loss to understand its application in this case, however, since at this point there is only the Appellant's allegation that the information allegedly provided by the Contracting Officer in 1991 was inaccurate; there is nothing in the record establishing that to be so. Moreover, the facts presented by the Appellant do not make out a case of reliance since, notwithstanding what the Contracting Officer supposedly said in 1991, the Appellant's president included a charge for right angle folds when billing for Print Order 71223 and had supplemental vouchers prepared when he learned from his staff that the company had not previously billed for them. In other words, it appears that the failure to bill previously simply was due to a lack of communication between the president and his staff. Furthermore, even if the company did rely on contracting officer advice as the basis for not initially billing for right angle folds, nothing the Contracting Officer did precluded the Appellant from challenging the Contracting Officer's position if it desired to do so. There is no detrimental reliance here. III. ORDER In light of the above, the Board finds and concludes that the Appellant's claim is barred by the final payment rule embodied in the "Payments on Purchase Order" clause in its contracts and that the Board therefore is without jurisdiction to consider it. Accordingly, the Respondent's motion to dismiss is GRANTED and the appeal is DISMISSED. It is so Ordered. August 20, 1998 Ronald Berger Ad Hoc Chairman Board of Contract Appeals