U.S. GOVERNMENT PRINTING OFFICE BOARD OF CONTRACT APPEALS The Appeal of VALLEY PRINTING SERVICE GPO BCA 3-84 June 6, 1985 Michael F. DiMario, Administrative Law Judge OPINION This appeal timely filed by Valley Printing Service ("VPS") pursuant to the "Disputes" clause of the contract is from the final decision of Michael T. Atkins, Contracting Officer, Seattle Regional Printing Procurement Office, ("SRPPO"), U.S. Government Printing Office ("GPO"), dated June 29, 1984, terminating the contract known as Purchase Order R-1376, Program 1046-S, Print Order 4000, Jacket 794-789, for default for "failure to reprint the 20,000 folders due to unacceptable printing." (Exhibit 3, page 2.) BACKGROUND On March 15, 1984, Appellant, VPS, by Print Order No. 4000, was given an award by the SRPPO, GPO, Respondent, to produce some 20,000 copies of a certain brochure requisitioned from the SRPPO by the Fish and Wildlife Service, ("FWS"), U.S. Department of the Interior, Portland, Oregon (Exhibit 3, page 4). The award was in the estimated amount of $1,900 with shipping date of final product to two FWS locations by March 30, 1984. The print order was placed with appellant under the terms and conditions of a certain requirements type contract between the appellant and the GPO identified as Program 1046-S which had been previously completed. The print order required the finished product to be produced in black ink with certain background areas in "process blue" ink on "70# White Litho Coated Book" stock from camera copy and negatives furnished by FWS; the original copy and negatives to be returned to FWS upon completion. Program 1046-S incorporates by reference all the terms and conditions of "GPO Contract Terms No. 1," (GPO Pub. 310.2) and "Quality Assurance Through Attributes - Contract Terms," (GPO Pub. 310.1). Among those terms and conditions are requirements for the contractor to furnish two samples of completed products for inspection. Pursuant to such requirement, appellant furnished samples which upon examination by the FWS were rejected. The reasons for the rejection are set forth in a letter of April 10, 1984, wherein reprinting at contractor expense is requested, as follows: On Panel 4 of the inside of the leaflet all of the recreational symbols are overdeveloped rendering this useless for proper identification. The map on the back of the leaflet is also overexposed, the type frightfully overdeveloped and not legible. The recreational symbols cannot be discerned as to what they mean. The boat ramp symbol in the large map should have a white background instead of blue. The blue ink coverage is poorly done on Panels 1, 2, and 3. (Exhibit 3, page 7.) The SRPPO then requested additional random samples for further examination. These were apparently mailed to the SRPPO on or about May 2, 1984. At about the same period of time the SRPPO apparently returned the rejected negatives to the appellant for its consideration. The record is unclear on the point. However, the appellant by letter of Wes Rogers to Kirk Clapper, SRPPO, dated May 10, 1984, states: "Using the negs you sent back, we made a dylux proof. Using our normal exposure times this is the result. If we had overexposed the plate or the dylux, the definition of the other characters would have been distorted." (Exhibit 3, page 8.) Despite this explanation, the SRPPO upon its examination of some 32 additional randomly selected samples of the final product it received, concurred with the FWS rejection, finding the same defects previously noted. Accordingly, the appellant, by letter of the SRPPO Contracting Officer dated May 17, 1984, was advised of the results of the examination of samples, the rejection of the product, and the requirement that the product be reprinted. The Contracting Officer noted the defects as "artwork printed indiscernable [sic]. Type plugged." (Exhibit 3, page 6.) The letter stated that the contractor was to "deliver the corrected copies to the original address by May 31, 1984, at no additional cost to the government," and to inform the SRPPO of "the disposition of the rejected copies." On June 12, 1984, the Contracting Officer, in consequence of the reprinted product not having been received, wrote to the appellant notifying it that "since you have failed to perform Purchase Order R-1376, Program 1046-S, Print Order 4000, Jacket 794-789, within the time required by the terms thereof, the Government Printing Office is considering terminating said contract pursuant to the article entitled, 'Default,' United States Government Printing Office Contract Terms No. 1." (Exhibit 3, page 5.) The appellant was given 6 days from receipt of the notice "to present, in writing, any extenuating facts bearing on the question." The notice also advised appellant that "your failure to respond within this time may be considered as an admission of fault or negligence." On June 22, 1984, the Contracting Officer wrote to the GPO Contract Review Board (CRB), outlining the facts of the case known to it through that date, including the fact of the appellant's failure to respond to the notice and of unsuccessful attempts to contact appellant by telephone. The Contracting Officer requested CRB concurrence to terminate Jacket 794-789 for default (Exhibit 3, page 3). Following the CRB concurrence, the Contracting Officer by letter dated June 29, 1984, notified the appellant that the contract "is hereby terminated for default because of your failure to reprint the 20,000 folders due to unacceptable printing." (Exhibit 3, page 2.) The notice "also advised that the same or similar items terminated 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."1/ The notice advised the appellant of his right to "appeal within 90 days from receipt of this decision." By letter dated July 10, 1984, appellant filed Notice of Appeal and requested copies of the Contracting Officer's "written decision of default [and] any information you have which outlines the appeal process." (Exhibit 1.) On July 18, 1984, the Contracting Officer telephonically informed appellant of the appeal procedure. By letter of September 12, 1984, the appellant perfected its appeal stating its reasons therefore substantially as follows: Until March 31, 1984, we were the holders of contract #1046- S . . .. During the time the contract was in effect we printed a number of brochures . . . . Occasionally they submitted maps produced on a 'fogged' or 'frosted' mylar base that we were to shoot and strip into position on their forms. Because the maps were on this 'fogged' or 'frosted' finish mylar, the type had a tendency to flair and become diffused. The degree of diffusion seemed to coincide with the boldness of the original type and how much the original was enlarged or reduced. In response to this problem I several times suggested to the order person at Fish & Wildlife that he request a dylux proof of those jobs and then decide for himself what was or was not acceptable. The order person did not seem to understand what a dylux proof was, despite the fact that he ordered all the printing and that there was a provision for dylux proofs in the contract. Because of his position, I notified GPO-Seattle on several occasions of the potential problem. Dave Goldberg of GPO understood the obvious need for proofs on some of the jobs and said that he would strongly recommend dylux proofs to the Fish & Wildlife order person on any orders of this nature. . . . [T]he job in question . . . we proceeded to produce . . . according to their specifications. . . . [T]hey did not request a dylux and did not request extra camera work . . . . . . . GPO . . . said . . . we shot a poor negative . . . and had to reprint . . . . Our position was since the map was on the frosted finish mylar . . . taped to a semi[-] transparent base sheet it was obvious why they had a problem with plugged and ['halowed'] type. . . . [T]wo independent litho prep houses . . . [we] asked . . . to try and shoot a negative that correctly reproduced the map without distorting the other portions . . . . Their negatives show that it was not possible to shoot a better negative than we did. . . . . . . . [W]e . . . acted properly . . . . 1. We notified GPO and Fish and Wildlife in advance of the potential problem. 2. We suggested dylux proofs to allow the ordering agency to inspect prior to printing. GPO confirmed that this would be advisable. 3. . . . [W]e should not be held responsible for poor camera ready copy. 4. . . . [W]e strictly followed their production specifications. (Exhibit 2.) The letter did not contain a request for a hearing and no such election was made within the time prescribed by Board Rule. Accordingly, the appeal is for decision on the written record pursuant to Rule 8. The camera ready copy, photographs, artwork, and copies of the rejected final product were furnished to the Board by the SRPPO together with copies of the reprocured final product (Exhibit 6). The appeal comes to the Board in this form. DISCUSSION The only question presented by this appeal is whether or not the Government bears any responsibility with respect to the appellant's failure to produce a product which meets the requirements of the specifications inasmuch as the appellant claims that: (1) The respondent had been put on notice with respect to certain prior print orders from the FWS under this program that the copy furnished the appellant was of poor quality and therefore susceptible to poor reproduction; and (2) the respondent under provisions of the program contract could have required the appellant to furnish dylux proofs of the job before giving an "O.K. to print," which such procedural production step the appellant itself had recommended to both the FWS and the respondent on several occasions. At the outset of its review, the Board visually examined the final product produced by the appellant and the final product produced under the reprocurement against the "copy" furnished. From this visual examination it was clear that the reprocured product duplicated the detail in graphics, artwork, and photography of the original "copy", whereas the final product furnished by appellant was deficient in much of the necessary detail, especially with respect to the inking of explanatory symbols. (The product is meant to be a visitors' guide pamphlet to certain recreational facilities available to the public, such as horseback riding and boating, as well as handicap features of the park.) Because of the overwhelmingly clear visual disparity between the quality of the products, the Board believed it necessary to obtain statements from Mr. Daniel Hayes from the FWS, and Mr. David S. Goldberg, of the SRPPO, as to the contentions made by appellant with respect to the quality of the copy furnished both appellant and the reprocurement contractor and the purported prior notice of the need for dylux proofs. Their comments in pertinent part follow: Letter dated February 13, 1985, from Daniel Hayes, Regional Publication Coordinator, United States Department of the Interior, Fish and Wildlife Service, Portland, Oregon: Valley Printing was most unacceptable as a vendor to this program. The quality of our leaflets and brochures reduced greatly under this printing contract. We were unable to acquire satisfactory printing and unresponsiveness from Mr. Wes Rodgers [sic] as to why it was printed improperly. Mr. Wes Rodgers [sic], the proprietor of Valley Printing, discussed with me on several occasions the need for dylux on printed matter before the job was completed. We used this method on many of our projects because of the imperfection on their screens and half tones. On several occasions I had a press inspection to be assured of getting what we wanted. Our mapping section discussed new techniques and modified their process to arrive at a working solution for quality printing from this establishment but to no avail. There were times when we had rush jobs and did not have time to get a dylux produced before the final product. These projects put us in a bind because they had to be done over (see enclosed memo as example). (Exhibit 10, page 3.) Memorandum (Affidavit) dated February 19, 1985, from Mr. David S. Goldberg, Assistant Manager, Seattle RPPO: In regard to the dispute by Valley Printing Service on Jacket 794-789, I have no records of conversations, nor documentation of time and dates of such conversations due to the fact that such queries were not in reference to any one particular order. Prior to the award of Jacket 794-789, I have had two or three conversations with Wes Rogers of Valley Printing who called me to complain of poor quality originals that were submitted with orders on Program 1046-S. I remember telling him that GPO can not expect any reproduction that will enhance a poor quality, only an exact reproduction. We discussed supplying proofs to the customer. However, Mr. Rogers stated that Fish and Wildlife Service did not want proofs as they could not extend their schedules. I then called Dan Hayes at the Fish and Wildlife Service. We talked about the quality of the copy and proofs. Dan Hayes stated to me that the quality of the copy was good and he did not need nor desire proofs. He stated that he did not approve of the quality of printing from Valley Printing Service and he wanted to submit printing orders for 1046-S directly to GPO. These orders would be intended for procurement off the contract. I remember one order in particular that Mr. Hayes hand carried to Seattle for procurement. As we opened the package to inspect the copy, I pulled the base art out and noticed tape placed over type and overlays falling off of the base art. I mentioned to him that this may be part of his quality problems but received no comment in return. Mr. Hayes repaired the art before we left. I do not remember which order it was as he has hand carried numerous orders to this office, but I was informed by Michael Atkins of this office that the camera copy, artwork and photographs that were furnished for the rejected product and the re[-] procurement are one and the same. (Exhibit 10, page 2.) Mr. Atkins,.by Affidavit of April 4, 1985, corroborated the fact that "The camera ready copy that Valley Printing returned to the Government is the same material that was furnished to the contractor who produced the reprocurement." (Exhibit 12.) While it is clear that much of what appellant contends has been corroborated by Mr. Goldberg with respect to copy for prior print orders, there is no showing that the copy was defective with respect to the print order being scrutinized by this appeal. Each print order in and of itself is a contract having its own terms and conditions, in addition to the contractual terms of the Program. Additionally, the copy for each print order must necessarily be examined by the contractor for each print order it receives, since as a general rule, the copy will differ by content from print order to print order depending on the subject matter of the brochure or pamphlet being produced. Accordingly, this Board believes that notice of defective copy on prior print orders did not serve to put respondent on notice of any copy defect with respect to the print order being considered by this appeal. Moreover, based upon the fact that the same copy was furnished both contractors and the second contractor produced a product which clearly met specifications without the necessity of having dylux proofs, it is the ruling of this Board that the termination of appellant's contract for default was fully justified and that the reprocurement costs have been properly charged back to the appellant under terms of the contract and pursuant to Federal procurement law. _______________ 1/ GPO Contract Terms No. 1 (GPO Pub. 310.2) establishes four alternatives available to the GPO upon product rejection: (1) Reprint at the contractor's expense; (2) Accept product at a discounted price pursuant to discount formula set forth in Quality Assurance Through Attributes - Contract Terms (GPO Pub. 310.1); (3) Reprocure product from another vendor with assessment of excess reprocurement costs to the defaulting vendor; and (4) Rejection without reprint, discounted price acceptance, or reprocurement.