GPO BCA 7-85
November 25, 1986

MICHAEL F. DiMARIO, Administrative Law Judge


   This appeal, timely filed on February 19, 1985, by Product of Information Systems (hereinafter
   Appellant), 1850 Whittier Avenue, Costa Mesa, CA 92627, is from the final decision of Jules B.
   Selvin, Contracting Officer, Los Angeles Regional Printing and Procurement Office, U.S.
   Government Printing Office, Washington, D.C.  20401 (hereinafter Government or Respondent),
   dated December 18, 1984, terminating Print Order 10200, Purchase Order N2518, Jacket No.
   783-002, Program 1902-M, for default for "failure to produce an acceptable check copy and your
   failure to perform as specified."

   The decision of the Contracting Officer is affirmed and the appeal is denied for the reasons set
   forth hereinbelow.


   Appellant, by Purchase Order N2518 dated September 1, 1984, was among the multiple awardees of a
   term contract, Program 1902-M, to produce such quantities of various books and pamphlets as
   might be ordered by certain elements of the Department of the Navy from September 1, 1984
   through August 31, 1985.  (Appeal File, hereinafter "R4 File", Tab A) Pursuant to the contract,
   Appellant was issued Print Order 10200 on September 20, 1984, to produce a certain publication
   entitled "Navy UHF Satellite Communications System Description" for the Naval Ocean System
   Center, San Diego, CA (hereinafter "NOSC").  The Purchase Order contained instructions as
   follows:  "Check copy required.  Send Check Copy to NAVAL OCEAN SYSTEM CENTER, CODE 231 (Label
   enclosed).  DO NOT SHIP until check copy is approved.  Make negs.  34 pages contain halftones.
   All copies ship to: NCSC, address shown above."  (R4 File, Tab B)

   Thereafter, Appellant produced the check copy and shipped it as instructed.  The check copy was
   then rejected because of the following defects:

Page 85--Halftones for Figures 55 and 57 are transposed; Pages 13, 20, 38, 50, 51, 53, 54, 64, 69,
70, and 100--Loss of information; Front cover and text (approx.  57 pp.)--Uneven ink densities;
some copy with insufficient ink, some copy plugging up.

R4 File, Tab C

   The Appellant was notified by letter of the Contracting Officer dated November 2, 1984, (R4
   File, Tab C) which advised Appellant that he must correct all of the defects noted and deliver a
   revised check copy via overnight services to NOSC by November 13, 1984, at no additional cost to
   the Government.  Appellant was further instructed that it was not to ship the completed order
   until the revised check copy had been approved.  Appellant was advised that its "written
   explanation of the noted defects and the quality control measures implemented to guard against a
   recurrence must be received in our office by November 15." (R4 File, Tab C)

   By letter dated November 15, 1984, Appellant responded stating:

     On Page 85, both prints were furnished labeled Figure 57 (please note that some numbers had
     been changed two and three times).  Perhaps the job should have been stopped at the camera at
     this point and questioned but the truth is that we quite often get this kind of apparent
     inconsistency and if we stopped for them all we would soon be out of business!  We must assume
     the "camera ready copy" is truly ready.

     Pages 13, 20, 38, 50, 51, 53, 54, 64, 69, 70 and 100 appear to have loss of information.  If
     you will note that on pages 13 and 38, this information appears exactly as on the originals.
     In the balance of the pages noted above, please note the variations in quality of the
     originals submitted; i.e.  yellowing copy, stains on veloxes, tape marks, unmortised
     pasteovers, etc.

     On all level IV contracts, in order to effect the economies our contract pricing reflects, the
     pages are gauged into large flats when shot.  A common reading for camera exposure is used and
     with obvious variations in copy it is impossible to hold all the detail when the copy is poor.
     For example, if we pinch back exposure to compensate for yellowing copy - some copy may be
     lost in the process.

     It seems that these are decisions (What to try or not try to hold?) that should not be
     required of the printer when copy submitted is "Camera ready" under a contract such as 1902.
     Neither, we feel, should the vendor on the 1902 contract (level IV) be required to read each
     page with a densitometer and shoot it individually.  We do this on all halftones with the
     price considerably higher per unit (because individual attention is given to each).

     "Uneven densities" or "inking", as the client referred to various pages, is also a result of
     uneven originals as submitted.  Please note the variation in velox densities throughout the
     pages; they range from grey to white, to yellow, to acetate film positives, etc.  It is truly
     impossible to shoot these with any consistency without using a densitometer on every page!

     As for the cover - dupes were made of a supplied negative.  Perhaps more care might have been
     given in making the dupes.

. . . .

     Now we are asked to reprint the whole job - which when done - still will result in an
     unacceptable job according to the customer standards.  It is not possible to make a "silk
     purse out of sow's ear" without our having magical qualities, which we sadly do not possess.

R4 File, Tab D

   Upon receipt of Appellant's letter, a telephone discussion was held between the Appellant and
   Respondent's representative wherein it was agreed that Appellant would furnish Respondent the
   original camera copy that same date (November 16, 1984) for review against the rejected check
   copy.  After the review was completed, the record shows that the Appellant "agreed to reshoot
   all illustrations to hold fine lines and furnish revised check copy (unbound) on 11-21." (R4
   File, Tab E)  The record also shows that Appellant on November 21, 1984, notified Respondent
   that "webpress broke down.  Will deliver check copy on 11-26." (R4 File, Tab E)

   The Contracting Officer by letter of November 21, 1984, notified Appellant that since it had
   "[f]ailed to deliver revised check copy as agreed.  Original ship date has passed.", the
   Respondent was considering terminating the contract for default and that pending a final
   decision, Appellant would be "afforded the opportunity to present, in writing, any facts bearing
   on the question to the Contracting Officer . . . within 5 days after receipt of this notice" in
   order to determine whether its failure to perform arose out of causes beyond its control and
   without fault or negligence on its part.  (R4 File, Tab F)

   Apparently, this show cause notice was followed by a subsequent show cause notice (although such
   document is not contained in the appeal file) since Appellant, by letter dated November 28, 1984
   (R4 File, Tab G), makes reference to "two show cause notices dated 21 and 26 November" and a
   "recent meeting". The November 28 letter transmitted the revised check copy to the Contracting

   On December 10, 1984, a Navy Printing Procurement Service Office representative met with the
   Contracting Officer and informed him that "[s]ince the contractor has failed to produce an
   acceptable check copy and since there is no evidence that additional revised check copies will
   prove otherwise, we propose to terminate subject print order due to default on the part of
   Products of Information Systems." (R4 File, Tab I) As a consequence, the Contracting Officer
   requested Respondent's Contract Review Board's concurrence to terminate the Print Order for
   default since Appellant had "failed to produce an acceptable check copy and . . . there is no
   evidence that additional revised check copy will prove otherwise".  (R4 File, Tab I) The
   concurrence was given with the Contracting Officer being so notified on December 18, 1984.  (R4
   File, Tab I) That same day the Contracting Officer notified Appellant in writing of the
   termination.  (R4 File, Tab J) Included in the notice was advice to Appellant that the product
   might be "reproduced against your firm's account" and that in such event the "firm is being held
   liable to the Government for any excess costs."  Appellant responded to the termination letter
   by sending a letter addressed to the Public Printer c/o the Contracting Officer referencing its
   position as stated in its letter dated November 15, 1984, supra.  (Official File, Tab 1) The
   letter goes on to restate their "feeling regarding the lack of quality in the originals" and
   that Appellant would like to have the original copies entered as Exhibit C as well as their
   previously submitted revised check copy.

   The Appellant then asserted in the letter that "[t]here was no indication of what was
   unacceptable concerning the check copy, and us [sic], no longer in possession of the originals
   have nothing against which to compare.  What we do have are six skids of books, representing a
   second printing which, we feel your using agent has capriciously determined are 'unacceptable',
   which in truth, we would like to submit, may be due in large part to the condition of
   'unacceptable' originals." (Official File, Tab 1)

   By letter dated March 18, 1985, Appellant's President wrote to the Contracting Officer as

     The purpose of this letter is to provide information to you regarding significant changes made
     in our company organization.

     As a result of a serious flu epidemic among our employees involving three separate flu viruses
     in December, January and into the beginning of February, our work performance and schedules
     suffered badly.  Since our illness absentee rate was as high as 63% it was virtually
     impossible to properly maintain schedules/re-schedules.  Consequently we were unable to
     deliver a number of jobs on a timely basis, and thus "spoiled" a long and continuing
     reputation for qualitative and timely work performance.  Even worse than poor performance,
     however, was our apparent operating management unwillingness or inability to properly keep our
     clients adequately informed of the problem(s), which lapse we recognize as inexcusable.

     To our chagrin, we have learned that we failed to respond to telephone calls and letters and
     on occasion even misrepresented job conditions, which malfeasance was hidden from company
     senior management for a relatively long period of time.  Illness in senior management ranks
     probably contributed to the seriousness of the problem, but the real issue is that we were
     totally unprepared for breaches of integrity at any management level.  We have now "covered"
     this deficiency by instituting double checks on numerous areas where control was previously
     exercised by only one manager.

     Furthermore, we wish to inform you that those responsible for the serious breaches in
     communication and integrity are no longer employed here, and that daily operations management
     has been taken over by myself and our Executive Vice President, Richard Deutsch.  We believe
     that we have now returned in performance and quality control to our traditional position of
     excellence, and will hopefully now continue as superior performers for all time.

     Please allow us to express our apology for any inconvenience(s) caused your office by our
     management failures.  We hope that we shall again be given opportunity to service your needs
     whenever our bids are successful, and look forward to the opportunity of again proving our

R4 File, Tab P

   No formal complaint or other additional correspondence from Appellant was received by this
   Board.  Accordingly, Respondent was requested to file its answer to the issues listed in
   Appellant's February 19, 1985, letter.  Respondent did so therein asserting that:

Appellant has presented no argument or evidence which would warrant further consideration.
Appellant chose to utilize a production method which resulted in poor quality negatives.
Appellant, however, could have used an alternative method which would have resulted in higher
quality negatives but at a higher cost to appellant.  The choice was appellant's and appellant
bears ultimate responsibility for the consequences of that choice.

Official File, Tab 6

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


   The case file in this appeal contains no information concerning whether or not Appellant
   abandoned its appeal.  Absent such information, the Board hereinafter renders its opinion as
   required by GPO Instruction 110.12 dated September 17, 1984.

   Appellant has provided no substantial or compelling evidence or arguments to support is bald
   allegation that the original camera ready copy was of such a poor quality that the required
   product could not be obtained without extraordinary measures, or that with respect to the second
   revision, that the Contracting Officer in reviewing the product acted capriciously.  Indeed, the
   reprocured product which was submitted to this Board stands out in marked contrast to both the
   first and second products submitted by the contractor and is letter perfect respecting its
   compliance with the very same camera copy.  Moreover, Appellant's November 15, 1984, letter
   contains elements admitting of some fault although offering unsubstantiated claims of
   contributory fault on the part of Respondent.  Appellant's letter of March 18, 1985, while
   nonspecific as to this case, alludes to an admission of generally poor performance.  This Board
   believes that given the record before it, no further discussion of this issue is necessary to
   support the conclusion that the appeal is without merit.  This Board, absent a showing that the
   Contracting Officer's decision was arbitrary and capricious in such judgmental matters as this,
   wherein the contract and the Print Order itself gave the sole right of review to the Respondent,
   has no authority to substitute its judgment for that of the Contracting Officer.

   Accordingly, this Board affirms his decision.