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.