U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS

The Appeal of BUSE PRINTING & ADVERTISING, INC.
Docket No. GPO BCA 6-89
April 5, 1990

MICHAEL F. DiMARIO
Administrative Law Judge

OPINION

   This appeal, timely filed by Buse Printing & Advertising,
   Inc., 1616 East Harvard, Phoenix, Arizona  85006 (hereinafter
   Appellant), is from the final decision of David G. Sever,
   Contracting Officer, Columbus Regional Printing Procurement
   Office (RPPO), U.S. Government Printing Office (GPO)
   (hereinafter Respondent), dated March 2, 1989, completely
   terminating a certain contract identified as Purchase Order
   H3808, Jacket 649-103(R), for default for failure to produce
   in accordance with the schedule.  The decision of the
   Contracting Officer is affirmed for the reasons set forth
   hereinbelow.

BACKGROUND

   Appellant, by the above-cited Purchase Order, dated December
   2, 1988, was awarded a contract in the amount of $1,292.00 to
   produce 1200, plus or minus 5 percent, copies of a certain
 pocket folder requisitioned from Respondent by the Department of
 Health and Human Services, Requisition Number 9-00008-NIOSH.  A
 logo was to be printed upon the face of each folder.  The
 completed product was to be delivered to NIOSH, Cincinnati,
 Ohio, by December 23, 1988.

   Instructions for producing the logo stated in pertinent part
   ". . . Contractor to make color separations for logo (3
   colors).  Register is critical.  Folder is to be printed by
   thermographic printing process.  Colors must not overprint ea.
   other on logo."  The folder was to be constructed of white
   litho coated cover stock.  Inks for the three colors, red,
   blue, and gold, were specified by Pantone numbers subject to
   the condition that they must match such Pantones.  (Tab A,
   Rule 4 File)

   Appellant was furnished three pieces of camera copy for the
   logo.  The first piece of camera copy was for the blue color
   and consisted of an approximately 4" x 4" rectangular border
   1/4" in width with the acronym NIOSH printed beneath it in
   block letter outline form.  The second piece of camera copy
   was for the red color and consisted of a solid image
   reminiscent of a gear wheel approximately 2 1/4" in diameter.
   The third piece of camera copy was for the gold color and
   consisted of a stylized caduceus with the acronym NIOSH
   printed beneath it in solid image block letter form.  The
   traditional staff and serpentine of the caduceus was
   represented in the camera copy by a series of outlined circles
   of narrow width and diminishing size, top to bottom, with an
   elongated, narrow, perpendicular, solid image, inverted
   triangle running through the center of the circles.  The space
   between the inner edge of each outlined circle and the
   triangular segment was left blank on the camera copy.  (Tab B,
   Rule 4 File)

   Thus, when printed, the completed logo was to be of a gold
   caduceus with part of its staff and serpentine superimposed
   over a red "gear wheel," all within a blue border, over the
   word NIOSH in gold block letters outlined in blue.  In
   producing the product, however, Appellant omitted the red
   color from the space between the circular portions of the
   serpentine outline and the center triangular shaft, which, as
   pointed out above, were left blank on the "gold" camera copy,
   thus allowing the unprinted white paper stock to show through.

   By "suspect letter," dated January 6, 1989, Appellant was
   advised that the product which it delivered was "suspect of
   not being acceptable. . . . Preliminary examination of the
   product indicates, but may not be limited to, the following
   discrepancies:  hickies or spots and the color gold does not
   match.  If further examination reveals that this deviation or
   any additional deviations would affect the acceptance of this
   product, corrective action may be necessary. . . . Such action
   may be: (1) have the defective products replaced by your firm,
   (2) have the defect(s) corrected, or (3) accept the products
   with an appropriate reduction in cost. . . ."  (Tab D, Rule 4
   File)

   Thereafter, the defect was confirmed by Respondent's Quality
   Assurance and Compliance personnel with a determination that
   the Appellant caused the error since "the neg[ative] for the
   red has tape applied around the knockout for the gold." 1 (Tab
   E, Rule 4 File)  Appellant was telephonically advised of this
   fact by Respondent's Quality Control and Compliance Officer,
   Gerald J. Finnegan, on January 26, 1989.  Finnegan's
   contemporaneous notes of the conversation show that
   Appellant's President, "Ray Buse . . . stated that they cannot
   get the color within the gold area" and requested a default
   termination of the contract.  (Tab E, Rule 4 File)  But in a
   subsequent telephone conversation with Finnegan that same day,
   Buse ". . . stated that there may be a 10% chance that they
   may be able to drop in the color but will not know until after
   he gets the folders back. . . ."  (Tab E, Rule 4 File)
   Finnegan advised Buse that he "could send 3 for testing,
   further agency needs folders NLT [no later than] COB [close of
   business] 2-22-89.  Ray [Buse] stated that he would know
   within 24 hrs after receipt if it would work."  (Tab E, Rule 4
   File)

   As a matter of required procedure, Appellant, at that time,
   was telefaxed a "cure notice reprint" letter, dated January
   26, 1989, advising in pertinent part that ". . . the
   Government . . . considers your failure to produce an
   acceptable product . . . a condition that is endangering
   performance of the contract in accordance with its terms."
   Appellant was directed to pick up the defective folders ". . .
   at the Cincinnati, Ohio, address as listed in the
   specifications . . ." and ". . .As mutually agreed . . . to
   correct the defect by reprinting the entire quantity in strict
   accordance with the specifications as published."
   [Underlining added for emphasis.]  The "cure notice reprint"
   letter further advised that ". . . All of the above is to be
   accomplished at no expense to the Government not later than
   the date listed below. . . ." [February 22, 1989].  (Tab G,
   Rule 4 File)

   Discussions held on February 8, February 16, and February 28,
   1989, established that although the above "cure notice
   reprint" letter directed that the product be reprinted, the
   Contracting Officer acquiesced to Appellant's attempt to
   correct the defective product "if possible" so long as the
   delivery was by the February 22nd date.  (Tab E, Rule 4 File)
   Appellant did not comply with this requirement.  In
   consequence of this, on March 2, 1989, its President was
   telephonically advised by Finnegan that the contract was being
   terminated for default and to return all Government furnished
   material to Respondent.  (Tab G, Rule 4 File)  By letter,
   telefaxed to Appellant that same day, the contract was
   terminated completely for default for failure to produce in
   accordance with  the schedule with advice that Appellant could
   appeal this decision to this Board.  (Tab H, Rule 4 File)

   Appellant thereafter appealed to this Board, its principal
   contentions being that: (1) the art was not clear; (2) it did
   not have sufficient time to correct the product because it was
   not advised of the problem with the red color until a
   contracting officer called "later in January" [than its
   receipt of the "suspect letter," supra]; and (3) the
   Government caused delay which resulted in Appellant's not
   being able to recover the folders which it needed to correct
   until the week of February 24th via UPS and that at that time
   one box was still missing.  (Appellant's Appeal of
   Termination)

   Respondent, by Answer, asserts that none of Appellant's
   contentions are supported by the record for the reasons that:
   (1) the Contracting Officer's January 6, 1989, "suspect
   letter" advised Appellant that an

     "intensive evaluation will be made by the Government
     Printing Office.  If our evaluation confirms the agency's
     complaint or reveals any additional defect(s), corrective
     action on your part may be necessary."  Tab C, Rule 4 File.
     The Contracting Officer's "Cure Notice Reprint" letter of
     January 26, 1989, listed only one defect, the failure of the
     contractor to properly print the color red through the gold
     illustration as shown in the furnished camera copy, as the
     defect upon which the rejection was based.  Exhibit F.

and (2)

     . . . Appellant was solely responsible for arranging for the
     pick up of the rejected materials.  The Contracting Officer,
     in his "Cure Notice Reprint" letter of January 26, 1989, had
     clearly directed Appellant to pick up the defective products
     and to reprint and deliver no later than February 22, 1989.
     Appellant failed to follow the Contracting Officer's
     directions.

(Respondent's Answer)

   The Appeal comes before the Board in this form for decision.

DISCUSSION

   Having examined the record in its entirety, the Board finds
   that Appellant's assertions are without merit for the
   following reasons.

   First, the Purchase Order instructions to the contractor, when
   read together with an examination of the furnished camera
   copy, make it abundantly clear that the red color was to be
   applied to the entire "gear wheel" except in those locations
   where the gold color was to be applied for the serpentine and
   staff of the caduceus.  The taped negatives examined by
   Respondent's quality control personnel clearly established
   that the contractor did not follow this directive.  As a
   result, the product was improperly printed in nonconformance
   with the specification and thus fully rejectable by the
   Contracting Officer.  In this regard, U.S. GPO Contract Terms
   (see footnote #2, below) provides in Article 14.(f), Contract
   Clauses, that:

     The Government has the right either to reject or to require
     correction of nonconforming supplies.  Supplies are
     nonconforming when they are defective in material or
     workmanship or are otherwise not in conformity with
     requirements.  The Government may reject nonconforming
     supplies with or without disposition instructions.

   Second, Appellant was not directed to correct the defective
   products, but rather to reprint the entire order anew.  Then,
   without rescinding this directive, the Contracting Officer, as
   a matter of purely gratuitous accommodation agreed to accept
   corrected products provided they were in full compliance with
   the specifications and delivered to NIOSH Cincinnati by
   February 22, 1989.  The contract gave Appellant 18 days
   (December 5, 1988, to December 23, 1988) to complete and
   deliver the entire order.  The January 26, 1989, directive
   gave Appellant 27 days to reprint the entire order.  Moreover,
   the default termination did not come until March 2, 1989,
   affording Appellant an additional 6 days more to complete its
   work.  Surely, such largess on the part of the Contracting
   Officer is beyond what a reasonable sense of fairness would
   demand.

   Third, as pointed out by Respondent's Answer, the January 26,
   1989, "cure notice reprint" letter clearly directed Appellant
   to pick up the defective products.  Again, there is no
   evidence to show that the Contracting Officer ever rescinded
   or modified this directive.  In this regard, Article 14.(g),
   Contract Clauses, of the said Terms, in pertinent part,
   provides:

     The contractor shall, promptly after notice, remove supplies
     rejected or required to be corrected. . . .

and Article 14.(h) provides that:

     If the contractor fails to promptly remove, replace, or
     correct rejected supplies that are required to be removed or
     to be replaced or corrected, the Government may . . .
     terminate for default as provided in article 20 "Default". .
     . .

   From these provisions we conclude that the burden for picking
   up the rejected material was solely that of the Appellant and
   cannot now be shifted to the Respondent as means of avoiding
   responsibility for the consequences of default.

   Accordingly, the appeal is denied and the decision of the
   Contracting Officer affirmed.

It is so Ordered.

_______________

1 The contractor returned the negatives at the time of delivery
of the job per instructions in the Purchase Order.

2 Article 7, Government Furnished Property, Contract Clauses, of
U.S. GPO Contract Terms, GPO Publication 310.2, effective
December 1, 1987, (Rev. 9-88), adopted by reference in the
contract, requires the contractor to examine government furnished
property immediately upon receipt and prior to performance and to
advise the Government Printing Office of any discrepancies.