UNITED STATES CLAIMS COURT


                     INTERNATIONAL GRAPHICS,
        Division of Moore Business Forms, Inc., Plaintiff

                               v.

                  THE UNITED STATES, Defendant

                           No. 586-83C

5 Cl. Ct. 100

Robert D. Wallick, Washington, D.C., attorney of record for
plaintiff. Steptoe & Johnson, of counsel.

Stephen Bergenholtz, Washington, D.C., with whom was Acting
Assistant Attorney General Richard K. Willard, for defendant.


            OPINION ON PLAINTIFF'S MOTIONS IN LIMINE

GIBSON, Judge:

This matter comes before the court on plaintiff's first and
second "Motion In Limine," filed February 29 and March 2, 1984.
Said motions, and defendant's response thereto, come as the
latest skirmish in a long series of procedural battles,
pertaining to the cancellation of a solicitation (Program 174-S)
by the Government Printing Office (GPO) for the printing and
distribution of the Commerce Business Daily (CBD).1  Plaintiff's
first motion seeks the exclusion from evidence in the forthcoming
trial on the merits of a series of proposed exhibits filed by
defendant and related testimony, which purport to estimate the
in-house costs of performing the requirements of Program 114-S
under the standards of Office of Management and Budget (OMB)
Circular A-76 (A-76).2 In its first motion, plaintiff contends
that defendant's estimates and re-estimates in the exhibits it
challenges constitute an ex post facto attempt to justify
cancellation of its solicitation which contradict both A-76 and
the general principles of fairness in government procurement.
Plaintiff's second motion seeks the exclusion of all evidence
(documentary and otherwise) directed at justifying the
cancellation of the solicitation by utilizing the cost comparison
standards of the August 4, 1983 amended version of A-76.  It
contends instead that only the 1979 version of A-76 (as amended
by Transmittal Memoranda between 1980 and 1982) provides valid
standards for comparison between in-house costs and commercial
bids.

The facts pertinent to plaintiff's present motions are set forth
below.  For the reasons stated hereinafter, this court must deny
both of plaintiff's motions.

FACTS

On February 24, 1982, the GPO issued a solicitation styled
Program 114-S, which advised in its letter of transmittal to
prospective bidders as follows:

...  The Government Printing Office is doing a feasibility/cost
analysis for the requirements of the "Commerce Business Daily."
This will be accomplished as outlined in OMB Circular No. A-76.

This solicitation in in part for information and planning
purposes and consequently, it may be that the Government will not
award a contract on the basis of this solicitation....  (Emphasis
added.)

Subsequently, a pre-bid conference was held on Program 114-S on
March 9, 1982, which was attended by prospective bidders,
including plaintiff.  The following bidder questions and GPO
responses, pertinent to the issues herein, occurred:

Q.  Can you provide a copy of OMB Circular No. A-76 referred to
in your letter of February 24, 1982?

A.  Yes.

Q.  Will provisions of A-76 be used as criteria for proposals?

A.  GPO is not bound by OMB A-76 but adopts its theory in
principal [sic]. (Emphasis added.)

In the February 24, 1982 solicitation, the GPO stated that it
intended to issue a Single Award Term Contract for the
publication and distribution of the CBD for the Department of
Commerce by the method known as Two-Step Formal Advertising.
Under this method, bidders were first invited to submit technical
proposals, without pricing.  Those bidders that submitted
acceptable technical proposals were then to be issued formal
Invitations for Bids (IFBs), under which they were to submit
final price bids.

The GPO did not complete its evaluation of technical proposals
and issue its formal IFB under Step Two of the solicitation until
August 15, 1983.  The resulting IFB disclosed, inter alia, that
bids must be submitted for all lots and for all items therein;
however, defendant reserved the right to award "by lots or any
combination thereof."

The lots upon which bids were required were delineated into four
categories as follows:

Lot   Description of       Services Currently
      Services Sought         Performed by

1     Editorial             DOC
2     Typesetting           Commercial Contractor
      ADP Capability        DOC
3     Printing/Binding      GPO
4     Subscription          SOD3
      Management

Bids under the IFB were received from five commercial bidders, as
well as the GPO itself, by September 16, 1983.Plaintiff submitted
two bids, dated September 15, 1983.  Its first bid was on all
lots separately, and its alternate bid was for a total package
price, pursuant to an option offered to bidders in a september
1983 amendment to the IFB.  The GPO submitted in-house costs only
on Lots 3 and 4, however, and utilized the low contractor price
on Lots 1 and 2 for evaluation purposes.  Bids were opened by the
GPO's contracting officer on September 16, 1983.  At this time,
the bids of all bidders except plaintiff, defendant, and Jeffries
Banknote Company were rejected as nonresponsive.4

Stemming from information and belief, plaintiff reasoned that the
GPO imminently contemplated awarding Lots 1 and 2 of the contract
to Jeffries Banknote Company and Lots 3 and 4 to itself.
(Jeffries and the GPO were the apparent low bidders on the
respective lots.) Accordingly, in a letter dated September 20,
1983, plaintiff protested, anticipatorily, the award of a
contract to anyone other than itself, and requested the
administrative review/appeal mandated by OMB Circular A-76.5
Whereas defendant did not honor plaintiff's request, plaintiff
immediately applied for a temporary restraining order in this
court on September 22, 1983, against the awarding of a contract
to anyone other than itself.  Because defendant stipulated that
no award of a contract would be made until after a hearing on
October 5, 1983, this application was denied as moot.Before the
hearing could be held, however, defendant abruptly cancelled the
solicitation on October 3, 1983.  This was done because retention
of the CBD production and distribution in-house, rather than
outsourcing same, would allegedly effect a $1.2 million cost
savings to the government over the five-year life of the
contract.

Thereafter, plaintiff's motion for a preliminary injunction
restraining the cancellation of the solicitation under Program
114-S was heard, and was granted after a hearing on October 7,
1983.  About that time and thereafter, defendant moved to dismiss
and for summary judgment on October 3 and 20, 1983.  These
motions were subsequently denied by this court in an opinion
filed on December 23, 1983, which held, inter alia, that a
genuine issue of fact existed with respect to whether a $1.2
million cost savings existed.  See International Graphics, 4 Cl.
Ct. at 196.

On January 12, 1984, defendant moved to suspend the proceedings
to February 24, 1984, in order to complete an evaluation of the
costs of Program 114-S in accordance with A-76.  In said motion,
defendant acknowledged that "there were some respects in which
the GPO did not follow OMB Circular A-76 in its conduct of the
Program 114-S solicitation," because it did not originally intend
itself to be bound by A-76.It further admitted that "GPO's
existing figures and evaluations are not amenable to study or
comparison in terms of OMB Circular A-76," and that "if [its new
A-76] evaluation concludes it would be more cost effective to
contract out publication of the CBD, GPO will take all
appropriate steps to restore the solicitation and award the
contract to the lowest responsive responsible bidder." This
motion was denied in a memorandum order filed January 20, 1984,
on the grounds that (a) a suspension of proceedings could extend
the resolution of this case for an intolerable period, and (b)
defendant would, notwithstanding the denial, have more than the
43 days it requested, in order to do the necessary A-76 study,
between the date of its motion and the initial trial date.

After one short continuance of the trial date (from February 27
to March 1, 1984) and a concomitant extension of time for the
submission of proposed exhibits and contentions of law and fact,
the parties submitted their proposed exhibits by February 27,
1984.  Included in defendant's proposed exhibits, as the apparent
mainstay of its case, was a recently completed cost comparison by
the GPO for Program 114-S, ostensibly prepared pursuant to the
August 1983 updated version of A-76.  Plaintiff then filed
subject motions in limine on February 29, 1984 (the day prior to
the scheduled trial) and on March 1, 1984 (after a continuance of
the trial date had been ordered by the court), praying that the
designated documentary evidence and related testimony be excluded
from evidence, at the trial, under Rules 402 and 403 of the
Federal Rules of Evidence (FRE).6  The grounds postulated for
said position were that such evidence is irrelevant and would (a)
unfairly prejudice the plaintiff, (b) confuse the issues, and (c)
waste time.

DISCUSSION

We observe, as our starting point, that a recent Claims Court
decision has characterized the purpose of a motion in limine in
the following manner:

A motion in limine is a useful tool to prevent a party before
trial from encumbering the record with irrelevant, immaterial or
cumulative matters. Such a motion enables a court to rule in
advance on the admissibility of documentary or testimonial
evidence and thus expedite and render efficient a subsequent
trial. (Emphasis added.)

Baskett v. United States, 2 Cl. Ct. 356, 367-68 (1983). The
courts and commentators favor the use of motions in limine in
complex litigation as a means of "increasing trial efficiency and
promoting improved accuracy of evidentiary determinations by
virtue of the more thorough briefing and argument of the issues
that are possible prior to the crush of trial." Zenith Radio
Corp. v. Matsushita Electric Industrial Co., Ltd., 505 F.Supp.
1125, 1140 (E.D. Pa. 1980); see authorities cited therein at
1141.

In the instant case, the parties appear to hold diametrically
opposite points of view with respect to what the proper issue(s)
shall be at the forthcoming trial.  Plaintiff essentially takes
the position that since defendant did not did Lots 1 and 2 (but
merely adopted the lowest bid of the lowest bidders for same) for
purposes of determining whether it was justified in cancelling
the solicitation, based on the alleged compelling need, defendant
should be permitted simply to "correct" (not re-estimate ab
initio) its bid on Lots 3 and 4 consistent with OMB Circular
A-76, prevailing as of March 1982.  With respect to Lots 1 and 2,
plaintiff contends that fairness dictates that defendant not be
permitted to bid lots ab initio, after all bids have been opened.
So as not to offend the procurement process, it suggests that
defendant should adopt its (plaintiff's) lowest bid on Lots 1 and
2, aggregate same with defendant's "corrected" bids on Lots 3 and
4, and determine who is the lowest bidder by comparing the
foregoing with plaintiff's lowest package bid.

Premised on the foregoing, plaintiff, in essence, takes the
position that the only question before the court in the
forthcoming trial on the merits is whether defendant's bid of
September 15, 1983, modified and corrected in the foregoing
manner respecting the fourt lots, is, in the aggregate, lower
than plaintiff's package bid.  Conversely, defendant admits that
the study it made of the comparative costs of producing the CBD,
prior to cancellation, was not done substantially pursuant to OMB
Circular A-76, and therefore it has conducted an entirely new
study pursuant to the 1983 version (most recent) of the OMB
Circular.  Defendant thus intends to introduce its new study into
evidence as the methodology utilized in establishing the
compelling reason for cancelling the solicitation based on a $1.2
million savings.  Plaintiff's motions in limine therefore come to
the court for the appropriate purpose of seeking an order
excluding all evidence at trial that reflects a post-bid opening
estimate of the cost of in-house production of the CBD, as well
as all evidence of a cost comparison pursuant to the August 1983
version of A-76.  It is this evidence that plaintiff avers is
prejudicial, will confuse the issues, and waste time.

I.

In its first motion in limine, plaintiff contends that the
defendant is bound, by the "Government procurement norm" and the
then existing cost comparison principles of A-76, to conduct its
cost comparison study prior to bid opening, and that any initial
estimate (Lots 1 and 2) or "re-estimate" (Lots 3 and 4) of the
government's costs subsequent to bid opening are therefore
contrary to law and the implied contract.  This contention
receives threshould support from the fundamental principle in
federal procurement law governing competitive bidding, that bids
should not be submitted when a bidder or bidders have had the
opportunity to see the bids of others.  See 41 C.F.R. 1-2.401
(1983); R. Nash and J. Cibinic, Federal Procurement Law 223 (3d
Ed. 1977).  It is also supported by the Cost Comparison Handbook
(both the 1979 and 1983 versions) which contemplates that the in-
house cost estimate will be prepared by the concerned government
agency prior to bid opening.  See OMB Circular No. A-76,
Supplement I (1979), at 7,  D(2) and appendix 3; id. (revised
1983), at IV-3, 2(g) and appendix A.

Defendant opposes plaintiff's position by contending that "all
applicable authorities sanction the re-estimate of A-76 costs
after bid opening." Underlying defendant's position is another
pervading principle of federal procurement law, namely that "the
policy of Congress [is] to promote economy, efficiency, and
effectiveness in the procurement of goods, services and
facilities by and for the executive branch of the Federal
Government...." Pub. L. 91-129, 83 Stat. 269 (1969); see also R.
Nash and J. Cibinic, supra, at 487. Therefore, defendant posits
that a re-estimate of government costs of performing a contract
should be permitted, even after bid opening, if the government
reasonably believes that the most economical option has not yet
been properly determined.

At first blush, the present dispute reflects an apparent conflict
between the foregoing two fundamental premises of government
procurement law.  However, the language of the 1979 and 1983
versions of the A-76 Cost Comparison Handbook clearly
demonstrates that although it is intended that the government
should compile its own costs prior to bid opening, the government
must be given the opportunity to correct errors discovered in its
cost comparison after bids have been opened.  See OMB Circular
No. A-76, Supplement No. 1 (1979), p. 8, 6; id. (1983), p. I-12,
 E(4).  This result is mandated by the overriding purpose of
A-76 -- to assure the most "economical performance of Federal
activities," through "a comprehensive and valid comparison of the
estimated cost to the Government of acquiring a product or
service by contract and of providing it with in-house, Government
resources." Id. (1979), p. 1; see id. (1983), p. IV-1. Moreover,
this result is in accord with the general Congressional policy
that agencies are not obliged in all circumstances to utilize a
competitive bidding system, but only must do so "to the maximum
extent practicable." Pub. L. 91-129, supra.

In accord with this directive, decisions of the General
Accounting Office (GAO), which have found A-76 cost comparisons
erroneous, have consistently held that the agency that made the
study should adjust its in-house cost estimate to reflect the
effect of the correction of the error.  See, e.g., Trend Western
Technical Corporation, B-212410.2 84-1 CPD  29 (1983); Contract
Services Co., B-208180.2, 83-2 CPD  331 (1983); Satellite
Services, Inc., B-207180, 82-2 CPD  474 (1982). The reasoning
underlying the GAO decisions, with which this court agrees and
adopts,7 was stated as follows in the Trend Western case, supra:

Implicit in our decision [to permit the government to correct its
in-house cost estimate after bid opening] is the recognition that
a government estimate provides a standard against which bids and
proposals are evaluated.  The government estimate thus is not
subject to the same rules as are bids and proposals, such as the
requirement that a bid be responsive....  Therefore, we cannot
question the Army's position on its authority to correct the
government estimate.  (Emphasis added.)

We note that plaintiff does not challenge the authority of the
government to make "adjustments" or corrections of a previously
completed A-76 study after bid opening.  Instead, it attempts to
draw a sharp distinction between the "correction" of errors in a
pre-bid A-76 cost comparison study, which it concedes to be
legitimate, and the initial estimation and/or "re-estimation" of
in-house costs in a new A-76 study, which it strenuously contends
to be contrary to law.8 Plaintiff, therefore, takes strong
exception to defendant's preparing an in-house estimate for Lots
1 and 2, as well as the completion of the portion below Line 9 of
the 1979 A-76 cost comparison form,9 because, prior to bid
opening, the GPO did not submit bids on the first two lots and
did not make the adjustments to its in-house cost estimate
required by the portion below Line 9 of the 1979 cost comparison
form.  Plaintiff cites no authority for the foregoing distinction
it makes, aside from the fact that the pertinent GAO decisions
have expressly permitted adjustments or corrections to A-76 cost
comparisons but have made no mention of "re-estimations".

Plaintiff thus apparently seeks an order from this court to the
effect that defendant's so-called "ex post facto" A-76 study is
so unfair and prejudicial, as to be abusive of the procurement
process, that defendant should be precluded from introducing it
into evidence.  We hasten to point out that the short answer to
the foregoing is that the pleadings, affidavits, and evidence
brought thus far to the court's attention belie such a hospitable
conclusion.  To the contrary, even though defendant now concedes
that it did not conform substantially to the procedures of an
A-76 study prior to its cancellation of October 3, 1983, the
record indicates that such omission has consistently been
premised on the good faith belief that it was not "bound" by
A-76.  This belief was expressed by GPO representatives, at the
pre-proposal conference of March 9, 1982, ante litem motam, and
was reiterated in statements on the record by various GPO
officials in September and October, 1983.  For examaple,
according to the testimony of the contracting officer for Program
114-S, the GPO only believed that it was obligated to compare the
overall cost of performing the contract in-house with that of the
lowest private bidder(s), without having to follow in toto the
technical cost comparison methodology of A-76.

This perception of the responsible GPO official was also
apparently based on the fact that A-76 does not apply to
legislative agencies such as the GPO, as well as the specific
language in A-76 excepting printing and binding activities under
Title 44 from its coverage.  See OMB Circular A-76, 6(d)(6)
(1979); id., 7(b)(1983).  In light of the foregoing facts and
circumstances, as well as the presumption of regularity that
attaches to actions of government officials, at this posture, no
persuasive facts have been adduced to compel this court to find
that defendant has so abused the procurement process as to
preclude it from introducing evidence of its most recent A-76
study.  In the circumstances of this case, a heavy burden is on
the movant to so show and we find such a showing to be wanting.
See Kalvar Corp. v. United States, 211 Ct. Cl. 192, 197-98, 543
F.2d 1298 (1976).

The ultimate question in subject litigation is whether defendant
had a "compelling reason" to cancel the solicitation under
Program 114-S, pursuant to the GPO's Printing Procurement
Regulations.10 See International Graphics 4 Cl. Ct. at 196. The
subsidiary question thereto is how and by what method may
defendant prove said fact.  Defendant initially claimed that its
decision to cancel the solicitation was justified by a cost
savings of $1.2 million that would be effected thereby, and that
it was not bound to follow A-76 in making its determination of
cost savings.  Following the issuance of this court's opinion on
December 23, 1983, holding that defendant was bound to comply
with the fundamental cost comparison principles of A-76 before it
could cancel the solicitation because of cost savings achieved
thereby, defendant conceded that its initial cancellation
decision was not made pursuant to a defensible A-76 study.
Hence, it subsequently undertook to perform such a study,
committing itself, concomitantly, to award the contract to the
lowest responsible/responsive private bidder if it found that
outsourcing the contract was justified under the cost comparison
principles of A-76.11 This court has found nothing contained in
the general body of applicable procurement law (or in the cost
comparison principles of A-76), nor has plaintiff so shown, which
would prohibit defendant from exercising this statutory
prerogative.

II.

Plaintiff's second motion in limine requests that the court
exclude all of defendant's evidence (documentary and testimonial)
pertaining to a cost comparison under Program 114-S which uses or
relies upon the 1983 revised version of A-76.  Instead, plaintiff
contends that the proper methodology for determining the in-house
cost and the standard for all cost comparisons of producing the
CBO by defendant should be the 1979 version of the Circular, as
amended until 1982.

Plaintiff's position, seemingly, is premised primarily on this
court's holding of December 23, 1983, that while A-76 does not
apply per se to the GPO, the "cost comparison principles" of A-76
were incorporated into the implied contract of fairness running
between the government and plaintiff. Consequently, it argues, in
effect, that A-76 is only significant in subject solicitation to
the extent that its cost comparison principles were incorporated
into the foregoing implied contract, and that the events which
gave rise to said implied contract occurred either in February
1982, when the solicitation under Program 114-S was disseminated,
or in March 1982, when plaintiff's representative was allegedly
given a copy of the then-prevailing version of A-76 (i.e., 1979)
by the GPO's contracting officer.  Hence, plaintiff argues that
the subsequent revision of A-76, which became effective on August
4, 1983, had no legal effect on the implied contract between the
parties, and therefore is not relevant to any present issue
before this court.

While it is true that the sole legal significance of A-76 in
subject litigation is that its "fundamental cost comparison
principles" were incorporated by reference into the implied
contract of fairness under Program 114-S, plaintiff has no
sustainable basis for contending that said implied contract arose
in 1982.The implied contract on which plaintiff must rely is, of
course, implied in fact, since this court has no jurisdiction
over a contract implied in law.  Merritt v. United States, 267
U.S. 338, 341 (1925); Algonac Mfg. Co. v. United States, 192 Ct.
Cl. 649, 674, 428 F.2d 1241 (1970). The requirements for such an
implied-in-fact contract were summarized, in pertinent part, as
follows in Prevado Village Partnership v. United States, 3 Cl.
Ct. 219, 223-24 (1983):

To carry its burden in proving [the existence of an] implied-in-
fact [contract], plaintiff must show the same mutual intent to
contract, as well as the absence of any ambiguity in the offer
and acceptance, as is required for an express contract.
Plaintiff must show an agreement based upon a meeting of the
minds that can be inferred, as a fact, from the conduct of the
parties under existing circumstances which manifests their tacit
understanding.  A definite offer by one party and an
unconditional acceptance by the other must be established to show
an implied-in-fact contract. (Citations omitted.)

(Emphasis added.) See also Baltimore & Ohio R.R. v. United
States, 261 U.S. 592, 597 (1923); Algonac Mfg. Co., 194 Ct. Cl.
at 673-74.

In the context of the implied contract of fairness, the
solicitation of February 24, 1982 can only be considered to be an
"offer." The "acceptance" does not take place until the bids are
submitted, because it is only then that there is a mutuality of
intent to contract between the government and bidders. Moreover,
"[i]t is the plaintiff's compliance with the solicitation that
forms the consideration for the implied contract of fair
dealing." Ingersoll-Rand Co. v. United States, 2 Cl. Ct. 373, 376
(1983). Hence, the implied contract of fairness between the
government and bidders only arises upon the submission of bids.
Id.; see also Alabama Metal Products, No. 610-83C, slip op. at 6
(Cl. Ct. Feb. 14, 1984).

Although the solicitation in the instant case was issued on
February 24, 1982, bids were not submitted until September 15,
1983.  Thus, the implied contract of fairness with plaintiff in
subject litigation arose on September 15, 1983, 42 days after the
effective date (August 4, 1983) of the 1983 revision of A-76.
Consequently, even if the theory were accepted that defendant's
cost comparison must be made under the prevailing version of A-76
at the time the implied contract of fairness arose, defendant
would not be restricted from utilizing the recent updated 1983
revision of A-76 in its cost comparison, since the implied-in-
fact contract arose after the promulgation of the latest revised
A-76.

Moreover, plaintiff has no justifiable basis for contending that
because some of the events that "gave rise to" subject implied
contract occurred in February and March 1982, defendant should be
restricted from applying all revisions of A-76 issued subsequent
to that time.  The solicitation that formed the basis for said
implied-in-fact contract clearly indicated that the GPO's
"cost/feasibility analysis" would be conducted "as outlined in
OMB Circular No. A-76," but was void of any indication as to
which version of A-76 would be applicable.  In interpreting such
ambiguous provisions, it is axiomatic that:

The primary objective of contractual interpretation is to
ascertain and give effect to the mutual intention of the
contracting parties, and to this end a contract should be
appraised as a whole--giving just consideration to the
fundamental purposes of the parties and the surrounding factual
circumstances at the time of execution. (Emphasis added.)

Micrecord Corp. v. United States, 176 Ct. Cl. 46, 53, 361 F.2d
1000 (1966). On the other hand, this court has usually adopted
the contractor's interpretation of an ambiguous contract drawn by
the government, contra proferentum, if, and only if, the
contractor actually and reasonably relied upon that construction
at the time the contract was entered into.  See Randolph
Engineering Co. v. United States, 176 Ct. Cl. 872, 876, 367 F.2d
425 (1966). Assuming arguendo a claim of reliance, the question
then is whether plaintiff, on the facts of this case, was
reasonable in believing (at the time its bid was submitted on
September 15, 1983) that defendant intended to utilize the cost
comparison provisions of the 1979 version of A-76, rather than
the 1983 version, in determining its in-house costs.

The record, with respect to subject solicitation, shows that the
fundamental objective of the government was clearly to determine,
in the most efficacious manner, whether contracting out the
production and distribution of the CBD or retaining same in-house
was more cost-effective for the government. In view of the
complexity entailed in such a determination, it is most
reasonable to construe subject solicitation to mean than the
government intended to utilize the most accurate state-of-the-art
techniques available in making its cost comparison under A-76
(and no creditable evidence surfaced indicating that prospective
bidders failed to so understand).  The GPO's use of the recent
1983 revision of A-76, which was clearly meant to facilitate
greater accuracy and simplicity in cost comparisons, would be
most consistent with the foregoing interpretation. See 48 Fed.
Reg. 1376 (1983). In this connection, it is especially
significant to note that the Federal Register placed bidders on
notice as early as January 12, 1983, of proposed changes in the
1979 version of A-76.

This court is of the view that plaintiff must be held accountable
for all knowledge affecting Program 114-S that would flow to a
reasonably cognizant person at the time it submitted its bid on
September 15, 1983.  Against the foregoing background, it strains
credulity that plaintiff could reasonably believe, at the time of
submission of its bid, that defendant in applying the principles
of A-76 would not follow the then-existing updated 1983 version
of A-76.  Moreover, it is apparent from all of plaintiff's
submissions after bid opening, prior to this court's opinion of
December 23, 1983, that plaintiff did not specifically rely on
either the 1979 or 1983 versions of A-76 to the exclusion of then
other, but instead referred to both versions while expressing no
preference for either one.12 On these facts, this court must hold
that plaintiff did not actually and reasonably rely, at the time
of the submission of its bid, on the 1979 version of A-76 as
being applicable to defendant's cost comparison.

Consequently, plaintiff's attempts to make much of the alleged
fact that defendant's contracting officer furnished its
representative with the 1979 version of the A-76 Circular upon
his request in March 1982, even if assumed to be true, in no
respect limit the government's ability to utilize the more recent
version of A-76 in its ultimate cost comparison analysis.

Plaintiff also makes two other arguments that the 1979 version of
A-76, rather than the 1983 version, should apply.  First, it
states that the government's initial A-76 study was in progress
prior to the August 4, 1983 effective date of the 1983 version.
Consequently, it argues that the following language from 12 of
the 1983 Circular mandates that the earlier 1979 version be
applied:

This Circular and its supplements are effective immediately but
need not be applied where a cost comparison was begun, using the
March 1979 Circular, prior to the effective date [(August 4,
1983)].  (Emphasis added.)

This argument is totally without merit.  This court interprets
the phrase "need not" to mean "may," that is to say, it is
discretionary with the agency. Therefore, the only effect of the
literal language of the Circular cited above is to permit the
government to continue an A-76 study under the 1979 Circular if
such was in progress as of August 4, 1983.  Nothing contained in
12 or any other part of A-76 precludes the government from
applying the 1983 version of the Circular.

Secondly, plaintiff lists a number of instances in the
defendant's preliminary motions, as well as the preliminary
hearings, in which defendant referred to the 1979 version of the
Circular.  Consequently, plaintiff contends that these uses of
the 1979 Circular constitute a "contemporaneous interpretation"
by the GPO of the implied contract, which "conclusively confirms"
that the 1979 Circular here pertains.  This contention is equally
devoid of substance.  Throughout the period before the
disposition of its motion for summary judgment, defendant
unswervingly took the position that the GPO was not bound to
conform to any version of A-76, and all references it made to the
1979 Circular were in support of this contention.

Moreover, the references made to the 1979 version of A-76 by
defendant were only made in response to plaintiff's assertions,
using the 1979 version of the Circular, that the GPO was bound by
the principles of A-76.  It is clear that plaintiff's assertions,
at this time, were made using the 1979 version "[f]or brevity's
sake." See note 12, supra. Given the foregoing circumstances,
this court will not deem defendant's references to the 1979
version of A-76 as a "contemporaneous interpretation" of same,
but only as references similarly made for brevity's sake.13
Consequently, defendant's current use of the updated 1983 A-76
Circular in its pretrial submissions cannot be deemed to
constitute a "blatant and arbitrary change of position... [which]
demonstrates bad faith," as claimed by plaintiff.

CONCLUSION

For the foregoing reasons, plaintiff's first and second motions
in limine are denied.  Accordingly, at the forthcoming trial on
the merits, defendant shall be permitted to introduce evidence,
documentary and otherwise, of its more recent A-76 cost
comparison, and will also be permitted to utilize the provisions
of the 1983 revision of A-76 as a standard for determining
whether the cost savings it projects would result in fact from
the cancellation of subject solicitation.

IT IS SO ORDERED.

April 18, 1984


_______________

1  For a previous history of this case, see International
Graphics v. United States, 4 Cl. Ct. 186 (1983).

2  OMB Circular A-76 was originally issued in 1966, for the
purpose of "establish[ing] the policies and procedures used to
determine whether needed commercial or industrial type work
should be done by contract with private sources or in-house using
Government personnel." See OMB Circular No. A-76, 44 Feb. Reg.
20,556, 20,557 (1979).  The Circular was revised by seven
Transmittal Memoranda (TM) between January 1967 and October 1982,
most notably TM #4 (1979), which incorporated a completely
revised version of the main body of the Circular as well as a new
detailed Cost Comparison Handbook.  On January 12, 1983, OMB
published another proposed revision of the Circular in the
Federal Register. See 48 Fed. Reg. 1376 (1983). The proposed
changes were then adopted and implemented as OMB Circular No.
A-76 (Revised) on August 4, 1983.

3  DOC is the Department of Commerce.  SOD is the Superintendent
of Documents.

4  Jeffries Banknote Company intervened in this action on
September 29, 1983 (allowed on October 4, 1983), and subsequently
withdrew by motion on February 29, 1984.

5  Plaintiff's letter made no mention of whether it thought that
the 1979 (revised) or the 1983 updated versions of A-76 should
apply in determining the base of GPO's estimate against which all
bids would be measured.

6  Rule 402, FRE, provides, inter alia, that "[e]vidence which is
not relevant is not admissible." Rule 403, FRE, provides, inter
alia that "[a]lthough relevant, evidence may be excluded if its
probative value is substantially outweighed by the danger of
unfair prejudice, confusion of the issues,... or by consideration
of undue... waste of time...." (Emphasis added.)

7  It is well settled that while this court is not bound by the
decisions of the Comptroller General, it can adopt the views
contained therein.  See, e.g., Burroughs Corp. v. United States,
223 Ct. Cl. 53, 63, 617 F.2d 590 (1980).

8  Plaintiff specifically objects to a "re-estimation" of the in-
house costs on Lot 3 and 4 (the only lots of Program 114-S on
which the GPO made pre-bid estimates of its in-house costs) and
an estimation, ab initio, on Lots 1 and 2 after bids have been
opened.

9  The portion of the 1979 cost comparison form below Line 9,
captioned "Performance by Contracting-Out (Chapter IV)",
encompasses adjustments in the low bidder's contract price so as
to include additional government costs that would be incurred
from contracting out, such as contract administration and
conversion costs, and deduct items such as federal income taxes
that would be collected from the low bidder.  This portion of the
1979 cost comparison form is comparable to the portion of the
1983 cost comparison form below Line 6.

10  Specifically, the GPO is required to have a "compelling
reason" for cancellation by GPO Printing Procurement Regulation,
 IV.2.

11  In essence, defendant has thus acted to correct an error,
albeit a major error, in the initial cost comparison it made
prior to cancellation, which, on these facts, is within the ambit
of permissible agency actions under the Trend Western line of GAO
cases, supra.

12  For example, in its motion for a preliminary injunction, in
which plaintiff asserted that the GPO did not comply with A-76,
it cited the 1979 version "[f]or brevity's sake,... except where
there appear to be differences [with the 1983 revision] which
might be significant in this action." Elsewhere in its motion,
where the 1983 revision differed from the 1979 version, plaintiff
cited the two versions, without expressing a view of which
version should be applicable.

13  In this connection, it is noteworthy that those portions of
the 1979 Circular cited by defendant in its preliminary motion of
October 3, 1983 and the hearing of October 7, 1983 were retained
in virtually identical form in the 1983 Circular.