PUBLISHERS CHOICE BOOK MFG. CO.

GPO BCA 4-84
August 18, 1986

Michael F. DiMario
ADMINISTRATIVE LAW JUDGE

OPINION

   This appeal, timely filed by Publishers Choice Book
   Manufacturing Company, Mars Industrial Park, P.O. Box 709,
   Mars, PA 16046 (hereinafter Appellant or "PCBMC"), arises
   under the standard "Disputes" clause of Government Printing
   Office Contract Terms No. 1, which by reference was
   incorporated into and made a part of two identical,
   sequential, multiple award, definite term, requirements
   contracts between Appellant and the United States Government
   Printing Office (hereinafter Respondent or GPO), identified as
   Program B365-M.  One contract was for the period beginning
   August 1, 1983, and ending July 31, 1984, while the other
   contract was for the period beginning August 1, 1984, and
   ending July 31, 1985.  The appeal is from the Final Decision
   dated October 16, 1984, of Respondent's Contracting Officer,
   Alice S. Jennings, wherein Appellant was advised that it had
   been erroneously paid for certain invoiced work, that such
   invoices would be adjusted, and that future invoices if found
   to be incorrect would likewise be adjusted.  The case is
   remanded back to the Contracting Officer for negotiation of
   quantum in accordance with the decision rendered hereinbelow
   holding "no contract" but recognizing quantum meruit
   entitlement.

BACKGROUND

   Respondent, pursuant to a requisition of the Department of
   Agriculture, issued an Invitation for Bids (hereinafter "IFB")
   for procurement of the printing of such Soil Survey Maps as
   might be required from time to time during the term August 1,
   1983, through July 31, 1984.  The contract was to be awarded
   on a multiple basis; i.e., to more than one qualified bidder,
   in lowest bid rank order; such ranking to be used to place
   work during the contract term.  The IFBs were sent to some 35
   potential bidders.  Eleven bids and 2 "no bids" were
   thereafter received by Respondent.  The bids were abstracted
   for comparison purposes.  Appellant was the second lowest
   bidder (Rule 4 File, hereinafter "R4 File", Tab 4), its bid
   having been made on June 23, 1983, in the amount of
   $487,357.00.  This bid was in contrast to the lowest bid at
   $485,190.20 and the next higher bid of $563,277.97, which was
   followed by 4 bids ranging from $633,120.80 to $691,961.00,
   another bid at $777,793.52, and the remaining 3 bids from just
   below 2 million dollars upward to 2.7 million dollars.  The
   contract in being for Program B365-M at that time was for
   $508,373.84.  (R4 File, Tab 4).

   Thereafter, by letter of July 12, 1983 (R4 File, Tab 3), David
   A. Charnock, Appellant's Comptroller, assured Respondent's
   Printing Specialist, Stuart B. Friedman, of Appellant's
   capability to perform the work required under Program B365-M.
   There is no indication of what prompted the letter.  However,
   on July 14, 1983, Alice Jennings, Contracting Officer, ordered
   a preaward survey to determine Appellant's capability to
   produce the required product.  The survey  was satisfactory
   except for Appellant's record of meeting delivery schedules
   under other GPO contracts.  On July 19, 1983, Stuart Friedman
   telephoned Appellant and spoke to Michael D. Cheteyan,
   President, PCBMC, concerning its bid and "why some prices for
   one color are higher than 2 color."  Cheteyan purportedly told
   him that "the prices are correct as bid" and that Appellant
   had "analyzed and bid the job as a complete package . . . this
   is a printing only job" and "they need work."  Friedman
   purportedly also "cautioned" Cheteyan "that bids which are
   inconsistent or unrealistic in regard to others in the same
   offer could be rejected by the contracting officer."  He also
   asked Cheteyan "about late orders on Program 198 and voluntary
   defaults on other orders."  Friedman's notes show no response
   by Cheteyan but instead reflect a return telephone call from
   one Mike Biggerstaff explaining that Appellant "had problems
   with new equipment and personnel leaving without notice but
   they are working hard to get all the work out . . . ."

   Thereafter, Friedman and Jennings summarized the bids on a
   lowest bidder sequential basis as outlined above in a
   memorandum to the GPO Contract Review Board (CRB).  The
   memorandum stated that "prices are fair and reasonable based
   on competitive bids.  Propose award in the above sequence with
   no award beyond the number three contractor without prior
   approval of the CRB."  The CRB concurred in this proposal and
   award was subsequently made to the 3 lowest bidders; the award
   to Appellant being by Purchase Order No. 30364, dated July 22,
   1983. No work was placed with Appellant, however, until
   January 23, 1984, when Print Orders 3030, 3031, and 3032 were
   issued to it.  Two days later on January 25, 1984, Respondent,
   "via a letter from Alice Jennings invoked the 'Exception
   Clause' on this program, stating her reason being that P.C.
   had had difficulty with compliance with schedules on other GPO
   programs." (R4 File, Tab 17)  The Exception Clause of Section
   3, page 11 of 15 (R4 File, Tab 2) states that:

Noncompliance with the shipping and/or delivery schedule, or any
other term, condition or specification of this contract will be
cause, and the GPO reserves the right, to withhold further offers
until the contractor is judged by the Government to have
established adequate procedures to fulfill the requirements.

Thereafter, Appellant completed its work and vouchered Print
Orders 3030 and 3032 to Respondent on March 29, 1984, in the
respective amounts of $8,078.84 and $6,824.00.  Print Order 3031
was not vouchered by Appellant until April 30, 1984, due to a
departmental error requiring a print order modification.  (R4
File, Tab 7) At that time it was vouchered in the amount of
$7,097.55.  These vouchers, after application of the 5% prompt
payment discount, were paid on May 22, May 4, and September 6,
1984, in the amounts of $7,681.19, $6,824.00, and $7,027.95,
respectively.  (R4 File, Tab 17)

   In mid-April, Appellant was reinstated on the contract.  (R4
   File, Tab 16).  Thereafter, Appellant received 16 additional
   print orders from May 14, 1984, through July 30, 1984.  (R4
   File, Tab 7) Appellant submitted vouchers to Respondent for
   this additional work at various times between July 27, 1984
   and August 14, 1984, except for Print Orders 3072 and 3073
   which were not vouchered until October 18, 1984, and September
   30, 1984, respectively.  Thereafter, Appellant received
   payments for some of its vouchered work with other vouchers
   pending.  (R4 File, Tab 8).

   Subsequently, by IFB of June 5, 1984 (R4 File, Tab 9),
   Appellant was invited to bid on the same Program B365-M to
   produce Soil Maps for the term beginning August 1, 1984, and
   ending July 31, 1985.  This time 36 contractors were invited
   to bid.  Nine "no bids" were received.  In addition, Gateway
   Press, Inc., and Qualigraphics, Inc., the third and fourth low
   bidders on the previous Program B365-M contract, were declared
   to have nonresponsive bids "for failure to acknowledge
   amendment No. 1."  Two other bidders, Graphic Litho Corp. and
   Studio Printing, were declared to be "nonresponsible bidders".
   The remaining 2 bidders were the Appellant with the lowest bid
   at $540,117.00 - 5% - $513.111.15 and Techna-Graphics (the low
   bidder under the previous contract) with a bid of $797,574.80
   - 2% - $781,623.30.

   Jennings, by memo of July 26, 1984, recommended award to
   Publishers Choice and Techna-Graphics, declaring the prices to
   be "fair and reasonable based on bids received and comparison
   with current contract prices" noting also that Appellant "has
   the capacity to perform the majority and possibly all of this
   contract." (R4 File, Tab 11)  A notation on this memo states,
   "[w]hile Techna-Graphics prices are high in comparison to
   Publishers Choice, a better comparison would be with Gateway's
   prices, who for a number of years produced this contract as
   the low bidder.  Publishers Choice has reviewed and confirmed
   their prices - Biggerstaff to ASJ, 7/27/84."  The memorandum
   was reviewed by one Barbara Chapman and concurred in by the
   Contract Review Board.  (R4 File, Tab 11) Award was thereafter
   made to Appellant by Purchase Order No. 33385 dated August 3,
   1984.  Commencing on August 28, 1984, Appellant was issued 6
   Print Orders numbered 10001 through 10006 under the contract;
   the last one being dated September 6, 1984.  Later "during the
   month of September, payment was received in full on Print
   Orders . . ., 3054, 3057, and 3064."

   About this time.GPO's Financial Management Service, in
   examining another batch of Appellant's vouchers which it had
   previously submitted, discovered what they believed to be a
   billing error.  They notified Friedman that Appellant had
   apparently billed double the amount they believed Appellant to
   be entitled to bill for map sheets printed two sides to a
   sheet under the Schedule of Prices provisions of the contract.
   In turn Friedman, on September 26, 1984, telephoned Appellant
   and spoke to Charnock, to ascertain the reason for such
   billing.  Charnock told Friedman that in bidding and billing
   it had interpreted the words "map sheet" on the Schedule of
   Prices language to be virtually synonymous with the word "map"
   and therefore based its bid on a per map basis, and thus was
   entitled to bill map sheets printed on two sides on a per map
   basis.  Friedman told Charnock that he would speak to Jennings
   about the matter and then get back to him.

   Two days later Friedman called Charnock and specifically
   informed him that Appellant's interpretation of the contract
   provision was incorrect.  Charnock then asked for a conference
   with Jennings.  Such conference was held on October 4, 1984,
   without reconciliation of the differences between the parties.
   Appellant then wrote to Paul Barlow, GPO Contract Specialist,
   restating its position regarding the contract.  Barlow
   forwarded the letter to Jennings who by Final Decision letter
   of October 16, 1984, responded as follows:

     You have interpreted the descriptive words, "single map
     sheet", to mean that you must be reimbursed [sic] double the
     prices quoted for sheets printed two sides, [sic] This
     interpretation is not correct.

     The language on which you base your assertion simply
     describes the trim size which allows the variation in the
     product price for differing sizes of single sheets.

     Further, this interpretation disregards the language "Sheets
     Printed Two Sides".  Your argument that this phrase
     describes the method of printing and not the method of
     billing is without merit.  Methods of production are
     described under "Section 2 - Specifications", while the
     language under the "Schedule of Prices [sic] pertains to
     completed products.

     Therefore, adjustments must be made to incorrectly paid
     invoices and future invoices if found incorrect.

Rule 4 File, Tab 18

   Appellant then appealed to this Board.  Subsequent thereto a
   prehearing conference was held on September 24, 1985, followed
   by a hearing on October 28, 1985, and submission of briefs
   thereafter.  At the prehearing conference Respondent made a
   Motion for Summary Judgment in its favor based upon its
   contention from the pleadings of the parties that there is no
   genuine dispute as to the facts; and that Respondent is
   entitled to judgment in its favor as a matter of law.  Such
   motion was renewed by Respondent at the time of the hearing.
   Appellant in turn has argued that the contract language was
   drafted by Respondent, was reasonably interpreted by Appellant
   based upon its experience with a companion program, the 198
   Program, wherein it was required to take maps manufactured
   under Program B365-M, fold the maps, and bind the same with
   text material into book format; that such maps had printed on
   each side of each sheet the word "sheet" followed by
   sequential page numbering so that, for example, the words
   "SHEET NUMBER 1" appeared on one side of a sheet while on the
   reverse side of the same sheet appeared the words "SHEET
   NUMBER 2"; and that such familiarity and wording gave rise to
   Appellant reasonably interpreting the words "map sheet" in the
   caption "Single Map Sheet Trim Size" on page 13, 14, and 15 of
   the "Schedule of Prices" of the first contract IFB and pages
   15, 16, and 17 of 18 on the second contract IFB, to be
   synonymous with the word "map" in light of the fact that
   neither contract defines the words "map" or "map sheets".
   Appellant further argues that it applied this reasonable
   interpretation consistently; and that such interpretation must
   be construed against the Respondent's drafters' construction.
   In the alternative Appellant argues that should the Board find
   that there was "no contract" on the basis that there was no
   requisite "meeting of the minds" to contract formation,
   Appellant should be entitled to be compensated for its costs
   and a reasonably expected profit on the basis of quantum
   meruit.  Moreover, Appellant asserts that the doctrine of
   equitable estoppel should also be applied against the
   Government's set-off action because the Government had notice
   of Appellant's interpretation of the contract upon Appellant's
   submission of its first vouchers and thus had ample
   opportunity after such notice to have raised the issue before
   Appellant acted at its financial jeopardy with respect to
   performing under subsequent print orders.

   The case is before the Board for decision in this form.

ISSUE

   The issue is whether or not there was a contract between the
   parties.  If there was a contract, what were its terms with
   respect to defining production units for bidding and billing
   purposes when "maps" were to be printed on both the face and
   reverse sides of a press sheet?  If such units were as
   contended by the Respondent, should it nevertheless be
   equitably estopped from recovery of overpayments?  If no
   contract, does Appellant have a right to compensation on the
   basis of quantum meruit?  If so, in what amount?

DISCUSSION

   At the outset of this discussion, suffice it to say that the
   Board finds that there are no factual disagreements between
   the parties.  Accordingly, the Board finds that the record and
   testimony in this case supports Appellant's uncontroverted
   claim that at the time it first bid for the B365-M Program and
   at all pertinent times thereafter, Appellant did indeed
   construe the term "map sheet" to be synonymous with the term
   "map" based upon its familiarity with the 198 Program.  The
   Board's conclusion in this regard is further influenced by the
   fact that at the time of this initial bid, Respondent's
   employee, Mr. Friedman, sensed a possible mistake in bid,
   appropriately pointed to what he believed were
   inconsistencies, and asked Appellant to review and confirm in
   that light.  Appellant, given its interpretation of the
   disputed language, believed its bid to be correct, and thus
   confirmed it.

   We conclude from this that Appellant clearly intended the bid
   that it made and thus did not assert a post-award mistake in
   its bid as Respondent anticipated it would, but rather
   asserted that based upon the prior course of dealing in
   Program 198 it reasonably interpreted the Program B365-M IFB
   language and bid accordingly..

   Respondent, while accepting without argument the truthfulness
   of Appellant's assertion, denies that it was reasonable
   claiming instead that Appellant, in reading the language as it
   has, made a mistake in judgment for which it should not be
   compensated.  Thus, Respondent has consistently objected to
   the relevancy of admitting Program 198 materials into
   evidence.  (Respondent's Exhibit 29.) This Board admitted such
   material for whatever probative value it might have.

   On the question of the weight to be given a course of prior
   dealings, Professors Nash and Cibinic in examining the
   principal case of L. W. Foster Sportswear, Co. v. United
   States, 186 Ct.Cl. 499, 405 F.2d 1,285 (1969), tell us that in
   Government contract law "[w]here the parties to an
   interpretation dispute have interpreted, either expressly or
   by their actions, the provisions of a similar, previously
   performed contract in a certain manner, they will be presumed
   to have intended the same meaning for those provisions in the
   disputed contract.  This presumption is rebuttable by clear
   evidence that the parties have changed their intent or are in
   disagreement at the time they enter into the disputed
   contract.  See, e.g., Lockeed Aircraft Corp. v. United States,
   192 Ct.Cl. 36, 426 F.2d (1970)." Ralph C. Nash, Jr. and John
   Cibinic, Jr., Federal Procurement Law, Third Edition, The
   George Washington University, 1980, at 969 n.l (emphasis
   added).

   They further tell us in footnote 2 that "[w]hen the contract
   language is clear and precise, the court or board will
   normally give lesser weight to a prior course of dealing.  [T]
   he governing factor in such cases is the degree of clarity or
   exactness with which the disputed term or clause is written,
   Robert McMullan & Sons, Inc., ASBCA 21455, 77-1 BCA  12, 456
   (1977) . . . however, superficially exact language may not
   correctly express the parties agreement.  Generally more
   convincing evidence of a course of prior dealing will be
   required to controvert contract language which is stated
   precisely.  Cf.  Doyle Shirt Manufacturing Corp. v. United
   States, 199 Ct. Cl. 150, 462 F.2d 1150 (1972)." Id. at 970,
   n.3.

   In addition, they tell us that "[t]he parties may be bound by
   their interpretation of prior contracts even though the
   language of the disputed contract has been altered." Id. at
   971, n.3.

   Lastly, they tell us that "[t]he reasoning underlying the
   prior course of dealing rule requires that both parties have
   had actual knowledge of the prior course of dealing and of its
   significance to the contract.  Clearly, it would be
   unreasonable to find that a party had agreed to a term which
   he was not aware." Id. at 972, n.5 (emphasis added).

   In addition, the United States Claims Court in Opalack v.
   United States, 5 Cl.Ct. 349 (1984), at 359, tells us that:

[6-8] Ordinarily, when interpreting a contract, the plain meaning
of the contract is binding upon the court unless the contract by
its very terms is inherently ambiguous.19 A contract is ambiguous
if it is subject to more than one reasonable interpretation.20
But it is not appropriate to strain the language of the contract
to create an ambiguity.21 (citations omitted) (emphasis added)

   This Board believes that the meaning of language is best
   derived by applying Professor Williston's "standard of
   reasonable expectation" which we recently applied in the case
   of Fry Communications, Inc.-InfoConversion Joint Venture,
   Jacket No. 421-710 (878-85-067).  As stated therein at page 9
   and 10, that standard holds that contract language should be
   given "the meaning that the party making the manifestation
   should reasonably expect the other party to give it."  John D.
   Calamari and Joseph M. Perillo, The Law of Contracts, West
   Publishing Co., St. Paul, MI (1977),  310, at 118.

   As we further cited in Fry, supra, Professors Calamari and
   Perillo in footnote 18, at 118, tell us:

This test is somewhat similar to, but not exactly the same as,
the test of the reasonable man in the position of the party other
than the one making the manifestation, a standard of reasonable
understanding.  See Sect. 2-2 supra.  The standard of reasonable
understanding takes into account what the other party knows or
should know, whereas the standard chosen by Williston would take
this into account only where the party making the manifestation
knew or should know of the knowledge of the other party.  A
compromise between the two tests is employed by Corbin.  See test
at note 35 infra.  Sometimes the test is stated in terms of what
a reasonable person in the position of the parties would have
concluded.  James v. Goldberg, 256 Md. 520, 261 A.2d 753 (1970).

   Turning to the IFBs, respecting their clarity and precision,
   the Board, taking into account the course of prior dealings in
   light of the legal principles enunciated herein, finds that
   there is no ambiguity in the language given its plain ordinary
   meaning derived from the context in which it appears.  The
   term "sheets" clearly represents the concept of a piece of
   paper or a "sheet" having both a "face" and a "back", either
   or both of which may be printed upon.  The vertical references
   to "sheets" clearly and precisely convey the same thought.
   Moreover, this concept of "sheet" is conveyed throughout the
   contract document.  The fact that the word "sheet" is coupled
   with the word "map" in the horizontal captions does not
   transform the concept of a "2-sided" piece of paper into a
   "map", a concept generally conveying the thought of a one-
   sided, flat representation of a geographic area.  As such, the
   Board rules that the language is susceptible to being given
   only one reasonable meaning; that being the interpretation
   given the language by Respondent.

   We turn next to whether or not there was in fact a contract.
   Having accepted the truthfulness of Appellant's claim as to
   its construction of the Schedule of Prices language and having
   found the meaning of such language to be unambiguous and as
   contended by Respondent, the Board necessarily finds that
   there was no contract since there was no mutuality of assent
   to the quantum of consideration.  This being the case, the
   Board further rules that the Appellant is entitled to be
   compensated for its work on the basis of quantum meruit, since
   to do otherwise would result in unjust enrichment to the
   Government.  In furtherance of settlement of this issue, the
   Board directs the parties to enter into negotiations,
   respecting the proper quantum to be paid to Appellant subject
   to the following guidelines.  Appellant is to be paid on a
   reasonable cost basis, which shall include a reasonable profit
   for work actually performed; all such reasonable costs and
   profit to be subject to audit by Respondent's Office of
   Inspector General; provided, however, that the payments to
   Appellant on each of its two respective claims shall not be
   less than the next lower bid price or contract then in being,
   nor more than the next higher bid price, as applicable.

   Having ruled that there was no contract and that entitlement
   to compensation is upon the equitable principle of quantum
   meruit, this Board further rules that there is no basis for
   Appellant's assertion of equitable estoppel.

   The case is remanded back to the Contracting Officer for
   processing in accordance with this decision.