U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS

THE APPEAL OF INTERNATIONAL LITHOGRAPHING
DOCKET NO. GPO BCA 1-88
December 29, 1989

MICHAEL F. DI MARIO
ADMINISTRATIVE LAW JUDGE

OPINION

This appeal, timely filed by International Lithographing, 11631
Caroline Road, Philadelphia, PA 19154 (Appellant), is from the
January 15, 1988, "final decision" of Richard W. Wildbrett,
Contracting Officer (CO), Dallas Regional Printing Procurement
Office (DRPPO), United States Government Printing Office (GPO or
Respondent), terminating Print Orders 60000, 60001, and 60002,
Purchase Order K-2868, Jacket No. 761-146, Program 2721-S, for
default on the basis of Appellant's alleged "inability to perform
within the schedule of the contract." (Rule 4 File, hereinafter
"R4 File," Tab A) The decision of the CO is affirmed and the
appeal denied for the reasons set forth hereinbelow.

BACKGROUND

The DRPPO, upon requisition of the United States Air Force
Recruiting Service (Air Training Command), advertised and
competitively awarded Appellant, as low bidder, a single award,
"requirements" type contract to produce certain 4-color process,
multi-panel, recruitment "Fact Folders" as might be required from
time-to-time during the term commencing with the date of award of
the contract and ending June 30, 1988.

The contract adopted by reference "all terms and conditions of
U.S. Government Printing Office Contract Terms No. 1, Rev.
October 1980 (GPO Pub. 310.2); Quality Assurance Through
Attributes Program, Rev. June 1981 (GPO Pub. 310.1) . . . ." (R4
Tab G page 1 of 17)

Each requirement was to be initiated by issuance of a print order
specifying thework to be performed. Camera Copy in the form of
pasted-up "mechanicals," art work and a folding dummy were to be
furnished by the Government. All other materials and operations
"necessary to produce the products in accordance with the
specifications" were to be furnished by the Appellant. (R4 Tab G
page 6 of 17)

Quality Assurance Through Attributes "Product Quality Levels" to
be attained were specified as Level II for both printing and
finishing attributes with the exception of registration
attributes which were specified as Level I. (R4 Tab G page 2 of
17)

In order to assure compliance with these quality standards, the
specifications further provided that "the printed products
produced in accordance with these specifications will be
statistically sampled and inspected for quality using quality
attributes contained in GPO Pub. 310.1 (Rev. 6-1-81) and an
applicable sampling plan from MIL-STD-105D, Sampling Procedures
and Tables for Inspection by Attributes. Accordingly, the
contractor must furnish the Dallas Regional Printing Procurement
Office with a sampling of 50 copies selected in accordance with
the specified sampling plan stated on page 10 for DEPARTMENTAL
QUALITY SAMPLES." 1/ (R4 Tab G page 10 of 17)

The sampling plan for "DEPARTMENTAL QUALITY SAMPLES" provided
that:

All orders must be divided into equal sublots in accordance with
the chart shown below. A random sample must be selected from each
sublot. Do not choose copies from the same general area in each
sublot.

Quantity Ordered   Number of Sublots
500 - 3,200   13
3,201 - 10,000   20
10,001 - 35,000   32
35,001 and over   50

These randomly selected samples must be packed separately and
must be identified by a special Government-furnished blue label,
which is to be affixed to each affected container. These random
sample copies must be recorded separately on all shipping
documents and sent in accordance with the distribution list to
USAFRS/RSAMP, Randolph AFB, TX 78150-5421, as part of the advance
copies. The random inspection samples constitute a part of the
total quantity ordered, and no additional charge will be allowed.

In addition, a copy of the PRINT ORDER/SPECIFICATION along with
the signed selection certificate, which will be furnished, must
be included with the samples. (R4 Tab G page 10 of 17)

"Inspection Levels (from MIL-STD-105)" were specified as "General
Inspection Level I" for "Non-destructive Tests" and "Special
Inspection Level S-2" for "Destructive Tests." (R4 Tab G page 2
of 17)

On July 9, 1987, Respondent issued the first three print orders
to Appellant numbered 60000, 60001, and 60002 for pamphlets
respectively titled "GS-87-032 Education and Training Direct Mail
Folder," "GS-87-033 Benefits Direct Mail Folder," and "GS-87-034
Senior Direct Mail Folder." Each order required the Appellant to
produce 1,500,587, 11 x 8-1/2" folders, at an estimated price of
$66,355.92. The specified shipping date for each order was
September 11, 1987. (R4 Tab F)

Appellant picked up the furnished materials, produced, and then
distributed the copies, including inspection samples and
certifications, as directed by the specifications. One million
five hundred thousand (1,500,000) copies were shipped to PSA, an
Air Force mailing contractor in Baltimore, Maryland.

The job was shipped sometime in September 1987, and thereafter
Appellant's Rich Rodriguez received a letter from the CO dated
September 15, 1987, (Hearing Transcript, hereinafter TR, page
22).

The letter in pertinent part stated:

We have a complaint from Randolph AFB, TX, concerning the direct
mail folders procured from your firm on Program 2721-S, Print
Orders 60000, 60001, and 60002. The art boards specified a
horizontal perforation of 3-9/16" and a vertical perforation of
5-7/8". The returned proofs also advised your firm of the
perforation requirements. The direct mail folders received by our
customer were perforated along the entire 8-1/2" vertical
dimension.

This order is being accepted reluctantly. Future orders may be
refused if they contain similar defects. If this problem
continues, a non-responsibility determination may be made against
your firm. Your prompt attention to this matter will be
appreciated. (TR - Appellant's Exhibit I)

The letter was the firm's initial contact by Respondent
concerning any problems with the orders. (TR page 23)

On November 2, 1987, Mr. Carl R. Seta, Chief, Production Control
Branch, Directorate of Advertising and Promotion, RSAMP, Randolph
AFB, Texas, wrote a letter of complaint to the DRPPO forwarding
some of the advance copies received by his office. Mr. Seta's
letter in pertinent part stated that:

1. The following are discrepancies noted on each job.

a. GS87-032. Severe cracking of the coated stock along the fold.
Folds were not IAW mech. Panel 1 is folded 1/16" off, causing a
white border to appear on the left side of the art. This art was
to bleed on 3 sides and fold on the edge. Vertical perforations
between panels 4 & 5 are 8-1/2" instead of 5-7/8", Register is
out.

b. GS87-033. Severe cracking of the coated stock along the fold.
Art 1 on panel 1 wraps around fold onto panel 6. Vertical
perforation between panels 4 & 5 is 8-1/2" instead of 5-7/8".
Register is out.

c. GS87-034. Severe cracking of the coated stock along the fold.
Vertical perforation is only partial. Register is out.

2. These 3 jobs are unacceptable. The workmanship from the
bindery is the worst I've ever seen.

3. We have put 1,000,000 copies of each format on hold at the
Publication Distribution Center in Baltimore, pending a survey of
Washington GPO personnel. The 500,000 of each format delivered to
PSA in Baltimore have already been distributed. A new delivery
date for all 3 jobs is November 26. (R4 Tab E)

On December 10, 1987, the DRPPO's Duane Kemmet, a Printing
Specialist, telephonically advised Appellant's Production
Manager, Marvin Cohen, that the orders were being rejected.
Kemmet's contemporaneous notes of the conversation reflect the
following:

Serious problem with these orders.

1. Cracked on fold - look (sic) like they may not have been
scored before folding. AF told me you had used an outside bindery
(sic) on some orders - maybe they did not score.

2. Ragged edges, damaged edges and/or skewed trim.

3. Margins are off-faced to follow mechanical.

4. Perforation off (P.O. 60001), should be 2-5/8" varies from 2
to 2-3/4" from sample to sample.

5. Hickies on P.O. 60002, face and back.

6. Misregistration of color.

7. Ink scum.

Mr. Cohen - Why so long to complain? Will need to see samples and
art.

Mr. Kemmet - Dept. starting to use material. and discovered
defect. Warranty is for 120 days.

Mr. Cohen - Have to go to meeting will call back after meeting.
(R4 Tab D) 2/

This conversation was followed by a "final decision" letter from
the CO to Cohen dated December 18, 1987, advising that the DRPPO
had inspected random samples from each order which:

" . . . revealed that the folders were not folded according to
the mechanical provided. Specifically, they were not scored prior
to folding, causing the ink to crack on the fold. They have
ragged edges, skewed trim size and the position of the
perforation is inconsistent. Other printing defects consist of
misregistration, incorrect margins, ink scumming and hickies."

As a result the DRPPO was rejecting the order and Appellant was
thereby being

"directed to reprint these three orders at no additional expense
to the Government and complete delivery within 10 workdays after
receipt of this letter."

Appellant was also told that it must advise the DRPPO of the
disposition it desired for the rejected orders, and that such
disposition would be at the Appellant's expense. The contractor
was also advised that it could appeal to this Board within.90
days of receipt of the CO's letter. The letter furnished
Appellant
"samples, negatives, and art boards." (R4 Tab C)

On January 6, 1988, Kemmet received a telephone call from a Sgt.
Michael of Randolph AFB, TX, asking when the Air Force would get
the reprinted orders and what disposition to make of the rejected
folders. Kemmet then called Cohen who advised that his firm
intended "to appeal the reprinting of these three (3) orders."
Cohen alleged that he had "talked to someone in Washington" who
told him Appellant did not have to reprint until the outcome of
the appeal. Kemmet, in-turn, advised Cohen that the Dispute
process allowed him to appeal but that he still was required to
reprint. Kemmet asked Cohen if he had the name of the person in
Washington. Cohen responded that he did not. 3/

Kemmet then called an unidentified person at Randolph AFB who
requested that the orders be reprinted because the folders were
"still unusable." (R4 Tab B)

On January 15, 1988, the CO wrote two (2) separate letters to
Cohen. One, was captioned "Termination Notice." The other
referenced such notice in its text. The "Termination Notice"
advised Appellant that the three print orders where "Terminated
for Default because of your firm's inability to perform within
the schedule of the contract." It also advised that "the "same or
similar items, may be reprocured against your firm's account, on
such terms and in such manner as the Contracting Officer deems
appropriate. In that event, your firm shall be held liable to the
Government for excess costs. The Government reserves all rights
and remedies provided by law and under the contract in addition
to charging excess costs." The letter stated that this was as a
"final decision," again with advice to Appellant of its right to
appeal such decision to this Board under the "Disputes" clause of
the contract.

Thereafter, on January 12, 1988, the Board received and docketed
an appeal letter from Cohen dated January 7, 1988, which had
attached to it, and in pertinent part addressed, the CO's first
"final decision" letter respecting rejection of the three print
orders but not the second final decision letter respecting
Appellant's alleged "inability to perform within the schedule of
the contract." The letter in pertinent part stated:

We take exception to the decision of the contracting officer for
the following reasons:

A - An inspection of 50 random samples was used as the basis for
rejection of each of the three print orders. We do not believe
that this is a realistic sampling in view of the fact that each
order was for 1,500,000 pieces.

Further, the entire order was not shipped to one location but to
two making a fifty piece sampling less that indicative of
the overall job.

B - I have been informed by the Dallas Office that approximately
100,000 to 200,000 pieces have been mailed and/or otherwise
utilized.

If in fact the order is rejectable, why was this not determined
prior to utilization and mailing?

C - Other deficiencies cited in the letter of rejection were
that:
1) The folders were not scored prior to folding causing cracking
2) Ragged edges and skewed trim size
3) Misregistration
4) Incorrect margin and position of perforation
5) Ink scumming and hickies

D - In answer to those complaints let the following be known:

1) Cracking and scoring: this job was scored prior to folding. No
specific method of scoring was required by the specifications,
therefore the job was scored on the folder in the bindery.
Further, absence of cracking was not cited in the specifications
as being a pre-
requisite of the job. Cracking is a normal result of ink coverage
going over a fold, especially on heavyweight papers and should
have been considered at the time of design, along with a request
for letterpress scoring and/or other precautions against
cracking.

2) Ragged edges and skewed trim size are not indicative of the
entire job and should not be used as a basis for rejection. These
defects do not appear throughout the samples furnished to us.

3) Misregistration is another criteria which cannot be applied to
the entire job as the entire job is not out of register. Some
registration variation will be found on a job of this magnitude
due to the nature of high-speed printing. In no way can the
slight variation cause this job to be considered rejectable.

4) We will concede that there are variations in the margin and
perforation positions but these in no way would prevent the piece
from being used for its intended purpose.

5) Ink scumming and hickies are again minor defects that will
randomly appear in any printing job of this magnitude.
The samples furnished to us by the Dallas Office show random
hickies and scumming but these defects are not prevalent, nor do
they appear on each sample. In light of this, these criteria
cannot be used as a means of rejection since it is obvious that
the defect did not persist throughout the job.

There are certain circumstances that should be brought to the
attention of the Board concerning this matter.

Firstly, my conversations with Mr. Kemmet of the Dallas Office at
the inception of the problem brought to light the fact that the
quality control samples submitted by our staff were far superior
to those chosen at random and in no way rejectable, again making
the random samples suspect.

Secondly, I was informed that either Dallas GPO or some other
source had advised the Air Force that a portion of this job was
produced at a bindery that we had sub-contracted rather than
completed in our in-plant bindery. This information.had been
volunteered to the Dallas Office at some earlier date during
another discussion on this contract. I was informed that the Air
Force requested an inspection based on this fact.

To the best of my knowledge, it is certainly permissible for our
firm to use an outside independent bindery. However, I am
concerned that unfounded fears and prejudices based on this point
have affected the objectivity of the sampling.

Thirdly, it was made known to me that the Air Force fears that
these printed pieces will fall apart when mailed and the intended
recipients will not receive the mailing thereby blunting the Air
Forces recruiting campaign.

This unproven and unsubstantiated supposition weighed heavily on
the decision to reject and for all intent and purposes is totally
without merit.

In summation, our firm requests to file an appeal on the decision
of the Contracting Officer for the following reasons:

A - The random sampling taken does not truly reflect the nature
of our work and the true appearance and character of the final
printed order. We believe that there is sufficient doubt that it
was a true sampling.

B - Those deficiencies cited in the sampling are not ones which
prevent the printed pieces to be used for their intended purpose.

C - The fact that a large quantity of the pieces were mailed '
would tend to substantiate my comments in paragraph "B" above.

D - The decision to reject was prejudiced by unfounded fears and
assumptions.

E - We will agree that this job is less than perfect but again
the deficiencies are not ones which affect the intended purpose.

F - We believe a viable and reasonable solution can be found to
this problem in lieu of rejection.

In light of all the above, we hereby file an appeal.

By letter dated January 14, 1988, this Board advised the parties
of the docketing of the appeal as being one "from the final
decision of the Contracting Officer dated December 18, 1987."
Appellant was furnished a copy of the Board's Rules of Practice
and Procedure with advice that Rule 6.(a) of such rules required
the filing of a complaint within 30 days of Appellant's receipt
of the docketing letter. Appellant did not respond to such
requirement. Accordingly, the Board reviewed the original
submission, deemed it to meet the requirements of a complaint
under the rules and so notified Respondent's counsel by letter
dated March 23, 1988.

Respondent did not "answer" the complaint within the time
specified in the rules; therefore, the Board issued a letter to
Appellant stating that a "general denial" had been entered into
the record by the Board on behalf of the Government pursuant to
the provisions of Rule 6.(b) of the Board's Rules of Practice and
Procedure and that such entry by operation of the Rules "denies,"
and thus puts in issue, each and every substantive allegation of
(its) complaint without need for further answer by Respondent.

Subsequently by letter dated May 5, 1988, the Board received a
representation letter from Frederic G. Antoun, Jr., Esq.,
Appellant's counsel, stating in pertinent part that:

"I am writing to confirm my client's (sic) understanding (and
mine) that because an appeal from the final decision of the
Contracting Officer dated December 18, 1987, rejecting the orders
and ordering a reprint was filed, no appeal of a subsequent
Termination Notice dated January 15, 1988, on the same print
orders is required, as the validity of the grounds for the
termination will be resolved in the above appeal."

By a later communication Antoun requested that a hearing be
scheduled. As a consequence, a telephonic prehearing conference
was scheduled and held on December 20, 1988. At that time Antoun
alleged that his client had not been given the specifics of the
inspection upon which rejection was based; that a sample size of
50 pamphlets, given the size of each order, was statistically
inadequate; that the Government had offered no proof that the
samples were selected in accordance with the contract terms; that
there was no proof the inspection was carried out in accordance
with the contract terms; that the use of more than 50 percent of
such pamphlets by the Government was proof of their suitability
for the use intended, and that independent testimony would show
that the defects alleged were either erroneous or insufficient to
support rejection under the Quality Assurance Through Attributes
Program.

Government counsel, on the other hand, argued that termination of
the contract was for the reason of Appellant's refusal to reprint
during the pendency of its appeal as required by GPO Contract
Terms No. 1, supra. 4/ Government counsel agreed to send Mr.
Antoun copies of the selection certificates whereby Appellant
attests to the fact that the samples were selected in accordance
with the sampling plan specified in the contract, a copy of the
work papers of the GPO employee who inspected the sample copies,
and an update from the Air Force on the number of copies
remaining in the warehouse.

By letter dated January 17, 1989, Respondent's counsel forwarded
the copies of the signed selection certificates, inspection work
papers, and an Air Force memorandum from Carl Seta dated January
5, 1989, showing that the Air Force had on hand at its
Publications Distribution Center 664,800 copies from print order
60000; 1,350,200 copies from print order 60001; and 354,400
copies from print order 60002. (The three (3) documents were made
a part of the Rule 4 file and appear at Tabs H-J, respectively.)

A formal hearing was convened by the Board on February 16, 1989,
at its offices in Washington, DC. At that time, Government
counsel, at the request of the Board, stated its opinion that the
threshold issue in dispute was "whether or not the Contracting
Officer's decision that the materials produced by International
Lithograph were not of Level II quality, and are therefore not in
compliance with the requirements of the contract, was arbitrary
and capricious." (TR page 7). Counsel for Appellant agreed with
this characterization but nevertheless stated it somewhat
differently; i.e., "whether the initial decision of the
Contracting Officer rejecting the three (3) print orders was
appropriate." (TR page 9). The parties, although not stating it
as such, were in substantial agreement that the second issue is
whether or not Appellant, under the facts and circumstances of
the case, was justified in refusing to reprint the three (3)
print orders notwithstanding the provisions of the Disputes
clause ' requiring the contractor to "proceed diligently with the
performance of the contract and in accordance with the
Contracting Officer's decision." (Footnote 4, supra)

Testimony on behalf of Appellant was given by Marvin Cohen,
supra, and C. Clint Bolte of American Business Consultants,
Chambersburg, PA, called as an expert witness respecting the
quality of the disputed printing. Testimony on behalf of the
Government was given by Seta, Kemmet, and Wildbrett, supra. The
testimony has been independently reported in a verbatim
transcript of the proceedings.

The matter comes now before the Board in this fashion for
decision.

DISCUSSION

Under the law of Government contracts the Government is entitled
to strictly enforce its contracts, S.S. Silberblatt. Inc. v.
United States, 433 F.2d 1314 (Ct. Cl. 1970), even where a
variance from specifications is very minor. Arrow Lacquer Corp.,
ASBCA No. 4667, 58-2 BCA  2003 (1958); Ram Constr..Inc., ASBCA
No. 22370, 79-1 BCA  13646 (1979); Coronado Paint Co., GSBCA No.
4784, 4836, 80-1 BCA  14,415 (1980). However, in doing so, it
bears the initial "burden of persuasion" to show that the work it
rejects does, in fact, deviate from the specifications. Fillip
Metal Cabinet Company, GSBCA No. 7695, 87-2 BCA  19,822 (1987);
Hardeman-Monier-Hutcherson, ASBCA 11785, 67-1 BCA  6,210 (1967);
Ramar Co., ASBCA 16060, 72-2 BCA  9,644 (1972);
Pams Products, Inc., ASBCA 15847, 72-1 BCA  9,401 (1972). The
Government usually meets this burden by advising the contractor
of the results of tests it has conducted. The burden then shifts
to the contractor to prove that the Government's findings are
invalid for one reason or another. Universal Steel Stripping Co.,
ASBCA No. 13686, 69-2, BCA  7,799 (1969); C.W.ROEN Construction
Co., DOTCAB 75-43, 76-2 BCA  12,215 (1976); Continental Chemical
Corp., GSBCA 4483, 76-2 BCA  11,948 (1976).

In the instant case, it is apparent from the facts that the
Government met its "burden of persuasion" when the CO issued his
first "final decision" letter, supra, wherein he specified the
inspection findings upon which rejection was based. The burden at
that point shifted to Appellant to prove that the findings were
wrong, which Appellant, by its efforts on appeal, has attempted
to do. Thus, the threshold issue for this Board to decide is not
whether the CO's decision was "appropriate", as stated by
Appellant, or "arbitrary and capricious", as stated by
Respondent, but rather whether, as a question of fact, the
Appellant has proven the results of Respondent's inspection to be
erroneous.

Appellant attempts to meet this demand in several ways. One, by
alleging, that the sample size used for the inspection was a
statistically invalid basis for rejection given the quantity of
folders produced. Two, by proffering the testimony of Cohen that
no irregularities were experienced during
production of the print orders and that the first communication
to Appellant mentioned only problems with the perforations. (TR
pages 22, 23). Three, by proffering the opinion testimony of
Bolte, a paid expert witness, whom it periodically engages as a
consultant in its regularly conducted business activities, that
three product samples from the instant print orders (TR Exhibits
7, 8 & 9), previously introduced into evidence as business
records through Cohen, were of a "commercially acceptable"
quality and "at least as good" as a number of other product
samples (TR Exhibits 10-14), also introduced into evidence
through Cohen, which Appellant had retained from print orders
reportedly accepted by Respondent. (TR pages 90-120). Four, by
asserting that it is self-evident from the documented use of an
extraordinarily large quantity of rejected folders by the Air
Force Recruiting Service, that the product was fit for its
intended use. (Pleadings, supra and TR pages 141 and 142). Fifth,
by the testimony of Seta upon cross-examination that the "blue
label" samples which he examined in making his initial judgment
that the product was rejectable, and which he furnished to Kemmet
for further examination, were, in fact, obtained by him from the
Publications Distribution Center (PDC) in Baltimore, Maryland,
Appellant having failed to furnish the advance "blue label"
copies required by the contract (TR page 136) and to correctly
conclude from this that there is no evidence that such copies
were selected in a statistically valid manner. (TR page 137).
Six, by cross-examining Kemmet to prove that he made his decision
to reject the products based upon Seta's findings and his own
examination of the PDC "blue label" samples before he had
examined the "yellow label" samples. (TR pages 165 - 169). And,
seven, by the additional testimony of Cohen (who was present
during Kemmet's testimony - no witnesses having been sequestered
by the Board) that Kemmet, during a telephone conversation to
which Cohen refers in his January 7, 1987, letter of appeal,
supra, but has no contemporaneous notes to support, had
purportedly stated that the "yellow label" copies were "in no way
rejectable" (TR page 193); a charge which Kemmet denies (TR page
204).

The Board, having carefully heard this matter and having
thoroughly reviewed the transcript and evidential record, is
unpersuaded by Appellant's arguments or efforts at proof:

First, the statistical sample size was a matter of contract
agreed to by Appellant. The Board's own examination of the
specified sampling plan and sample size has shown them to be
precisely those specified in MIL-STD-105D, the most widely
accepted, statistically based sampling scheme for product
inspection used by the United States Government. 5/ Conversely,
Appellant has proffered no probative evidence whatsoever to
support its contention.

Second, the contractual basis upon which the quality of the
delivered products is to be judged is not some undocumented,
vaguely identified, so-called "commercially acceptable" standard
(TR page 101), but rather the standard prescribed in the "Quality
Assurance Through Attributes Program", supra. Given this, the
Board finds no probative value whatsoever in the expert testimony
proffered by Appellant even in its nuance allegation that the
Government's enforcement of such contractually agreed to product
quality standards may be uneven.

Third, with respect to Appellant's more artfully crafted
allegation that Kemmet based his decision to reject the product
upon Seta's findings and his own examination of the PDC "blue
label" samples, suffice it to say that this Board, as finder of
fact, being most persuaded by the sense of veracity conveyed in
Mr. Kemmet's testimony and demeanor under questioning by the
Board, itself, finds that he did not. Rather, using the
contractually agreed to QATAP standard, Kemmet examined the
yellow label "Quality Assurance Samples" certified by Appellant
as having been randomly selected in accordance with the terms of
the contract, noted differences in his findings from those he had
made in examining the samples furnished by Seta, and concluded
from his examination that the "yellow label" samples, while
better than the "blue label" samples, were nevertheless
rejectable under the terms of the contract. The Board finds
nothing of conviction in Cohen's additional testimony which
impeaches the validity of this finding.

Turning to the issue of whether Appellant, under the factual
circumstances presented, was entitled to refuse to reprint the
entire quantity of publications as directed by the CO, the Board
finds that as a matter of contract law that it was not. The
question is governed solely by the terms of Article 2-3. Disputes
of U.S. Government Printing Office Contract Terms No.l, (GPO Pub.
310.2, Rev. October 1, 1980), supra. Such Article makes it clear
that the Appellant was obligated to follow the CO's directive
notwithstanding the fact that the total quantity of publications
which the Government received and used would exceed the original
quantity ordered. Had this been done, the Appellant would have
been entitled to the full contract price for the reprint,
assuming its acceptance, and an equitably adjusted discounted
price for the quantity of publications used by the Government
from the first printing.

In consequence of these findings the Board hereby Affirms both
"final decisions" of the CO and denies the appeal. The CO is
directed to proceed diligently with the equitable adjustment of
Appellant's accounts respecting any defective publications which
were of necessity used by the Air Force.

It is so Ordered
_______________

1/ These copies were subsequently identified in the hearing of
this matter as "yellow label" copies.

2/ Mr. Cohen testified to the substantial correctness of the
notes. (TR page 25)

3/ Mr. Cohen testified to the substantial correctness of the
notes. (TR page 36)

4/ Article "2-3 Disputes" of GPO Contract Terms No. 1, revised
October 1, 1980, in pertinent part provides that:
. . . any dispute concerning a question of fact related to the
contract which is not disposed of by agreement shall be decided
by the Contracting Officer, who shall make his/her decision in
writing and mail or otherwise furnish a copy thereof to the
contractor. The decision of the Contracting Officer shall be
final and conclusive unless, within 90 days from the date of
receipt of such copy, the contractor mails or otherwise furnishes
to the [U.S.GPO Board of Contract Appeals] a written appeal . . .
. Pending final decision of a dispute hereunder, the contractor
shall proceed diligently with the performance of the contract and
in accordance with the ' Contracting Officer's decision.

5/ R. Nash, Jr. and J.Cibinic, Jr., FEDERAL PROCUREMENT LAW,
1980, p.1566, n.5.