ALLEN WAYNE, LTD.

GPO BCA 6-87
November 20, 1987
Michael F. DiMario
Administrative Law Judge

Opinion

   This appeal, timely filed by Allen Wayne, Ltd., 5404A Port
   Royal Road, Springfield, VA 22151 (hereinafter "Appellant"),
   is from the final decision of Jack Scott, Contracting Officer,
   United States Government Printing Office, Washington, DC 20401
   (hereinafter "Respondent" or "GPO"), dated November 20, 1986,
   denying Appellant's request for payment for certain
   typesetting work it performed but which was not expressly
   ordered by any print order issued pursuant to GPO contract
   Purchase Order 82942, Jacket No. 181-217, Program C504-S,
   dated March 18, 1986. (Rule 4 File, hereinafter "R4 File," Tab
   D.) The appeal is granted for the reasons set forth
   hereinbelow.

Background

   Appellant, by GPO Purchase Order 82942 dated March 18, 1986,
   was competitively awarded a requirements type, single award
   contract by Respondent for the production of certain Federal
   Energy Regulatory Commission (hereinafter "FERC") Management
   Reports as might be directly ordered printed from time to time
   by FERC during the period April 1, 1986 through March 31,
   1987. The award was made in strict accordance with Appellant's
   bid of February 25, 1986, and Respondent's specifications of
   February 4, 1986. (Id. at Tab D, sheet 2; and Tab B,
   respectively.)

   The specifications, among other things, stated that the
   Government was to furnish "[c]amera copy consisting of line
   art, with marked up printed copy showing typographical changes
   to be corrected and reproduced at various focuses. . . . [and]
   Typewritten and handwritten manuscript copy." The contractor
   was to furnish all other materials and operations necessary
   for "[t]he production of perfect bound publications . . ."
   including such operations as composition, making
   reproducibles, printing, binding, packing, and distribution.
   Occasional orders might be placed for composition only. The
   specifications anticipated that one management report known as
   the "Red Book" would be ordered monthly and might include as
   many as 5 publications at any one time. Another report known
   as the "Executive Summary Report" was to be ordered quarterly.
   Typical examples of products to be produced were attached as
   exhibits to the specifications with the caveat that no
   guarantee was given that future orders would correspond
   exactly to the exhibits. (Id. at Tab B, page 4 of 12.)

The specifications also stated that:

During the term of this contract publication pages may require
resetting, however, the majority of composition will consist of
setting various "spots" and incorporating them into the artwork
which will be held by the contractor throughout the term of this
contract. Updating of artboards will be accomplished by using
actual copy used to make reproducibles. Pages from a previously
printed publication will not be an acceptable means of updating.
Exhibits G and H represent up to 50% of the pages on some orders.
Graphic changes will be required on these pages on most orders
and resetting entirely may be required. If it is not possible to
match either the size or weight of the existing type, the
contractor shall select the size and weight which best suits the
area being revised and shall set the entire block of contiguous
reading matter to achieve a consistent appearance within the
revised area.

Id. at Tab B, page 5 of 12.

   The general terms and conditions of the contract (Id. at Tab
   B, page 2 of 12) specified that:

POSTAWARD CONFERENCE: In order to insure that the contractor
fully understands the total requirements of the job as indicated
in these specifications, Government representatives will conduct
a conference with the contractor's representatives at the GPO,
Washington, D.C., immediately after award.

Id. at Tab B, page 2 of 12.

   Additionally, the general terms and conditions provided:

ORDERING: Items to be furnished under this contract shall be
ordered by the issuance of print orders by the Government. . . .

REQUIREMENTS: This is a requirements contract for the items and
for the period specified herein.

Shipment/delivery of items or performance of work shall be made
only as authorized by orders issued in accordance with the clause
entitled "Ordering."

Id. at Tab B, page 3 of 12.

   The post-award conference was held at GPO on April 9, 1986,
   and was attended by GPO, FERC, and contractor personnel. At
   such time discussion of the parties centered on the fact that
   FERC was not pleased with the work of the previous contractor
   during the preceding term of the program, and that there was a
   desire in FERC to have all of the textual material (left-hand
   pages) as well as artwork (right-hand pages) reset, although
   it was of primary importance to do the artwork. Certain work
   done by the previous contractor was shown to Appellant to
   illustrate the problem. Moreover, Appellant had been the
   program contractor for the term immediately preceding the
   unfavorably perceived contract. At that time, because of
   problems with the quality of materials, it had undertaken the
   recomposition of all program materials.

   Subsequent to the meeting, Appellant began receiving print
   orders from FERC commencing with Print Order No. 40000 dated
   April 11, 1986. Almost from the beginning, Appellant undertook
   the resetting of text material whether or not such work was
   specified in the orders. Appellant claims to have periodically
   made inquiries of Ms. Jewel Poore, the FERC representative
   with whom it most often dealt, respecting when it would
   receive print orders covering this work. None were
   forthcoming, however, as a result, Appellant's Production
   Manager, Kathleen E. Kevlin, by letter of June 4, 1986, wrote
   to FERC (Attn: Ms. Jewel Poore) stating:

The following print orders are still to be issued:

Volume I:   text - due June 24
   art - due June 24

Volume II:   text - due June 4 (?) (or whatever date you wish
   as this is complete)

Volume III:   text - due June 30

Volume IV:   text - due June 4 (?) (also complete)
   art - due June 12

. . . .

Official File, Tab 13, page 2.

   The print orders requested by Appellant were never issued,
   although it performed all the text resetting work.
   Accordingly, by letter of November 6, 1986, to which was
   attached its own Invoice No. 17968 and Government Voucher No.
   17963 both dated November 7, 1986, Appellant requested payment
   as follows: "Allen Wayne, Ltd. is herewith submitting an
   invoice for services rendered, namely the retyping of all text
   pages (left-hand pages) for the four volumes of the FERC Red
   Book series." (Id. at Tab A, page 2 of November 6, 1986.) By
   that time Appellant had received some 33 print orders from
   FERC. Four additional print orders were issued to Appellant on
   November 14, 1986.

   On November 17, 1986, the GPO Contracting Officer, Jack Scott,
   requested that a meeting be set up between FERC, GPO Customer
   Service, GPO Procurement, and Appellant's personnel to try to
   resolve the problem. The following day, however, the Customer
   Service representative advised the Contracting Officer that
   Mr. Hargrove, the FERC authorized representative, would not
   meet with Appellant "because [FERC] never authorized the
   contractor to set the left-hand pages, and would not authorize
   any payment for this service."

   This information was telephonically conveyed to Appellant's
   Kevlin by the GPO Contracting Officer. Kevlin said her firm
   would appeal and asked the Contracting Officer for a final
   decision letter which such letter was issued on November 20,
   1986. The letter addressed to Appellant's Mr. Dan W. Kilcup in
   pertinent part states:

   Your exception arose as a result of being unable to get
   authorization in the form of a print order or contract
   modification for typesetting your firm did on program C504-S
   to improve the quality of the text pages (left hand pages) in
   the publications. Due to the fact that a print order or
   modification has never been issued to cover this performance,
   and the Department's statement that they never authorized you
   to do this typesetting, your request for payment is denied.

Id. at Tab A, page 2.

This letter was followed by another letter from the Contracting
Officer dated December 19, 1986, which advised Appellant the
Government was terminating the entire contract effective that
date for the convenience of the Government. (Id. at Tab G.)

   In response to such termination letter, Kilcup, by letter of
   January 15, 1987, stated the following pending claims:

a. Excess cover stock (ordered specifically for this contract)
1,500 sheets, 23 x 55 cover stock (prorated per attached invoice)
$ 345.63

b. Resetting text matter to meet standards required by FERC -
prior claim [see attached copy of invoices]   $ 5,922.68

  c. Delivery charges (return of materials)    $ 15.00

  d. Re-scheduling/training of personnel assigned specifically to
  contract C-504-S due to interruption of requirements [average
  320 hours/per month x 4 months remaining = 1,280 hours of
  anticipated labor x 15 percent factor for
  terminations/retraining/rescheduling = 192 hours]

  192 hours x 12.00/hour (no overhead)   $ 2,304.00

Official File, Tab 4, page 5.

   In addition, in reply to Scott's final decision letter of
   November 20, 1986, Kilcup, by letter of February 18, 1987,
   gave this Board notice of its appeal stating in pertinent part
   that: "Our specific objection is to the denial by the
   Department that the typesetting authorization would be
   forthcoming." (Official File, Tab 1.)

   Subsequently, by letter of March 9, 1987, Appellant perfected
   its complaint, asking that its appeal be expedited as a small
   claim pursuant to GPO's Board of Contract Appeals Rule
   12.1(a).

   On July 28, 1987, a prehearing conference was held at which
   time testimony was taken to clarify the parties' positions
   respecting the effect of the post-award conference on the
   their rights and liabilities. The essence of the testimony is
   set forth in a Prehearing Conference Report dated August 17,
   1987, a copy of which is attached hereto. The sum and
   substance of the matter is that the parties have differing
   stated views respecting the central issue of whether or not
   the Appellant was led to believe that it would need to reset
   the entire product, including text pages.

   The Appellant believes that the intent expressed in the
   contract and at the post-award conference was that the left-
   as well as right-hand pages needed to be reset, although the
   right-hand pages were of greater importance and that without
   so doing, it would have been impossible to give the requesting
   agency the quality it demanded. To reinforce this position,
   Appellant pointed to the fact that the Government by its
   figures on page 9 of 12 of the specifications; namely, items
   "I. (b) 1,499" and "I. (d) 4,801," indicated that it
   anticipated the resetting of substantially all the text. Items
   I. (b) and (d) correspond with item I. (b) and (d) of Section
   4 Schedule of Prices of the specifications (page 11 of 12).
   The numbers 1,499 and 4,801 are the Government's estimated one
   year production requirements for tabular matter per 1,000 ems
   and page make-up per page, respectively. Appellant pointed to
   the fact that the specifications on page 4 of 12 estimate 24
   to 470 pages per publication per order, and that the tabular
   matter included the setting of vertical rules. Page 5 of 12 of
   the specifications specifies after the caption "Vertical
   Rules" that: "Each vertical rule appearing in tabular matter
   will be measured as if.it were one horizontal type line within
   the table. For purposes of this contract a vertical rule is
   defined as any rule which could be drawn along a guide edge,
   without moving the guide edge, regardless of how often the
   ruling pen must be lifted."

   The Respondent, on the other hand, took the position that (1)
   the specifications required a print order be issued before any
   work was to be performed; (2) that only one FERC employee, Mr.
   Hargrove, was authorized to issue such orders; (3) that Mr.
   Hargrove did not issue any print orders for the work in
   dispute; (4) that the FERC representatives at the prehearing
   conference were not empowered to change the terms of the
   specifications; and (5) that the FERC employees, while
   discussing the future importance of redoing text pages, were
   not empowered to nor did they in fact, expressly or impliedly
   authorize such work to be done without the issuance of
   definite print orders for the same.

Discussion

   The issue presented by this appeal is whether or not the
   Appellant is entitled to be paid for work it undisputedly
   performed for the benefit of the Government.

   In addressing the issue we note that the contract provisions,
   supra, provide in pertinent part that (1) "performance of work
   shall be made only as authorized by orders issued in
   accordance with the clause entitled "Ordering." (page 4,
   supra); (2) such clause provides that "[i]tems to be furnished
   . . . shall be ordered by the issuance of print orders by the
   Government." (page 3, supra); (3) "the majority of composition
   will consist of setting various 'spots' . . . incorporating
   them into the artwork . . . ." (page 3, supra); (4) although
   occasionally "[d]uring the term of this contract pages may
   require resetting." (Page 3, supra) (Emphasis added.)

   The clear, unambiguous, plain meaning of such language is that
   only certain portions of the publications would be reset; that
   the work to be done would be expressly ordered by issuance of
   a print order; that the majority of such work would be "spots"
   to be "incorporat[ed] . . . into the artwork," but
   occasionally entire "publication pages" might require
   resetting; and lastly, that no work should be done unless
   expressly authorized by a duly issued print order. No other
   reading of the contract is reasonable notwithstanding
   Appellant's assertion that Respondent's estimate of work
   reflects the contemplation of resetting all the text as well
   as artwork pages.

   The next question to be addressed is whether these contract
   terms were modified by the parties during the post-award
   conference in some legally enforceable way.

   Turning first to the contract itself, we note that the stated
   purpose of the conference was "to insure that the contractor
   fully understands the total requirements of the job as
   indicated in these specifications." The clear sense of the
   provision is that the conference not change the specifications
   but rather that discussion be held to assure that the
   contractor fully understood how the specifications were to be
   followed. Needless to say, this goal was not achieved.

   From the factual testimony of the various witnesses, we find
   that FERC's Ms. Poore, with whom Appellant dealt on its
   previous contract, denies that she in any way authorized
   Appellant to reset the text material not authorized by print
   order. Moreover, Ms. Poore was not the FERC printing officer's
   principal representative. Additionally, no express statements
   directly or indirectly contradictory of the specifications
   were made by other FERC or GPO personnel. Indeed, viewing the
   evidence in a light most favorable to Appellant, the most that
   the testimony established is that Appellant perceived that
   Poore was the principal spokesperson for the Government and
   that she desired that all the text pages, as well as art
   pages, be reset during the term of the contract. We conclude
   from these facts that no legally binding modification was in
   any way proffered by the Government, nor do we believe that it
   was reasonable for the Appellant to have concluded that any
   legally enforceable right sprang from this meeting.

   We nevertheless are confronted with the fact that Appellant
   did produce the work for which it seeks payment, and FERC
   received such work from time to time without rejection,
   although it was in noncompliance with the work orders issued.
   Adding to this dilemma is the fact that the evidence supports
   a conclusion that FERC failed to give any effective notice to
   Appellant to cease and desist from producing such
   nonconforming work once FERC. knew of such deviation. The
   Appellant instead was left to produce some 33 print orders
   before such effective notification was given by way of
   Respondent's rejection of its invoiced claims. Such egregious
   nonfeasance by public officials cannot be allowed to work a
   financial hardship upon a contractor, no matter how
   unreasonable the contractor's own conduct, especially when, as
   here, the result of such nonfeasance is the enrichment of the
   Government.

   Accordingly, the Board expressly holds, as a finding of fact,
   that FERC's Hargrove, the Government official holding
   delegated Contracting Officer's authority to deal directly
   with Appellant, acquiesced in Appellant's unauthorized action
   by failing to give Appellant adequate notice that it was in
   noncompliance once such information was brought to his
   attention by Poore; and that such action, when coupled with
   the acceptance of the product by FERC without rejection,
   created a legally binding obligation upon the Government to
   pay Appellant for typesetting the left-hand as well as right-
   hand pages of the publications. 1/ We thus grant the appeal
   and remand the case back to the Contracting Officer for
   appropriate settlement of Appellant's claims for work actually
   performed; such settlement to be made an integral part of the
   Government's termination for its own convenience. Appellant's
   claim for compensation for "rescheduling/training of personnel
   due to interruption of requirements" is disallowed and should
   not be included within the settlement.

The appeal is granted.
_______________

1/ In general, where compensation is sought for unauthorized
work, such as here, Boards of Contract Appeals have held that the
burden is upon the contractor to show that an authorized
Government official acquiesced in the unauthorized action. See
Globe Construction Co., GSBCA 2197, 67-2, BCA  6,478 (1967).
Acquiescence, however, may be implied from the actions or
inactions of authorized officials, even though they do not, or
even refuse to, expressly ratify the unauthorized acts. See   1
Nash & Cibinic, Federal Procurement Law, note 3, at 70.