BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
CHARGER PRESS, INC. ) Docket No. GPOBCA 08-98
Program 5566-S )
For the Appellant: Charger Press, Inc., Cincinnati, Ohio, by
Christopher P. Finney, Esq., Cincinnati, Ohio.
For the Government: Thomas Kelly, Esq., Assistant General
Counsel, U.S. Government Printing Office.
Before BERGER, Ad Hoc Chairman.
DECISION AND ORDER
Charger Press, Inc. (Appellant), 1645 Blue Rock Street,
Cincinnati, Ohio, appeals a final decision of U.S. Government
Printing Office (GPO or Respondent) Contracting Officer
Aurelio E. Morales denying the Appellant's claim for
$18,116.97. That amount represents the total of what GPO
either refused to pay to recouped by setoff after GPO
determined that the Appellant was not properly billing for
work it had performed. For the reasons which follow, the
Contracting Officer's decision is AFFIRMED and the appeal is
DENIED.
I. BACKGROUND
1. On December 30, 1994, the Appellant, operating under the
name "Pony Express Printing," was awarded the 1995 contract
for Program 5566-S, calling for fast turnaround copying
services for forms and looseleaf books/pamphlets. Rule 4
File, Tabs 1, 2.1 The price schedule contained a line item for
tab dividers, for which the Appellant bid a unit price of $8.
Rule 4 File, Tabs 1, 4.
2. In August 1995 the Appellant submitted vouchers for work
performed in response to print orders 23156, 23158, and 23159,
billing $8 for each tab divider. The Respondent, viewing the
contract price as $8 per hundred tabs, adjusted the voucher
amounts downward by a total of $9,779.87. Rule 4 File, Tab
13.
3. Subsequently, the Appellant, for print order 23194, again
billed based on a charge of $8 per tab divider, and GPO paid
the invoiced amount. GPO later discovered what it believed to
be its error in paying $8 per divider on that print order and
recovered the extra amount involved, $8,337, by setoff against
the amount due the Appellant under another purchase order (No.
H6402). Rule 4 File, Tab 24.
4. The Appellant then requested reimbursement for these
amounts, Rule 4 File, Tab 20, which the Contracting Officer
denied by final decision of December 3, 1997. Rule 4 File,
Tab 26. This appeal followed.
II. DISCUSSION
The crux of this appeal is the meaning of the contract line
item for tab dividers contained in the contract's Schedule of
Prices. The Appellant reads it as pertaining to a single tab
divider, thus entitling it to be paid its unit price of $8 for
each tab divider it furnished. The Respondent, on the other
hand, reads it as an item "per 100 copies," which of course
would entitle the Appellant to $8 only for every 100 tab
dividers.
The Schedule of Prices was divided into four parts for bidding
purposes. Part I, with which we are concerned here, read as
follows:
I. ELECTROSTATIC COPYING, MAKEREADY, COLLATING, STITCHING,
INSERTING TAB DIVIDERS (IF APPLICABLE), WHITE OFFSET/WHITE
WRITING/WHITE XEROGRAPHIC PAPER, PACKING, SHIPPING AND
DELIVERY: The prices offered must be all-inclusive...and
shall include the cost of all required materials and
operations EXCEPT [what was covered by the other three
parts of the Schedule].
Running per 100 Copies
Format Format Format
2
A B C
UP TO 1,000 IMPRESSIONS
(1) (2) (3)
(a) Leaves copied one
side...............................................$
$ $
(b) Leaves copied two
sides.............................................$
$ $
1,001 to 5,000 IMPRESSIONS:
(c) Leaves copied one
side................................................$
$ $
(d) Leaves copied two
sides..............................................$
$ $
5,001 to 10,000 IMPRESSIONS
(e) Leaves copied one
side................................................$
$ $
(f) Leaves copied two
sides...............................................$
$ $
10,001 to 50,000 IMPRESSIONS:
(g) Leaves copied one
side................................................$
$ $
(h) Leaves copied two
sides..............................................$
$ $
NOTE: THE PRICE FOR ALL WHITE/OFFSET/WHITE WRITING/WHITE
XEROGRAPHIC STOCK/PAPER MUST BE INCLUDED IN PRICES SUBMITTED
FOR (a) thru (h) ABOVE.
UP TO AND INCLUDING 50,000 IMPRESSIONS:
(i) Tab Divider....per side, per
divider.............................$ xxxxx $
$ xxxxx
(j) Covers Sets....each
set.................................................$ xxxxx
$ $ xxxxx
The Appellant argues that the term "per side, per divider"
means exactly what it says and is not modified by any language
requiring a price per 100 copies. In this regard, the
Appellant points out that line items (i) and (j) are separated
and isolated from the other line items by two lines of
underscored text. The Appellant essentially concludes that
since the language for line item (i) is different from the
language used in the other line items ("per side, per divider"
rather than "leaves copied one side" or "leaves copied two
sides") and is visually separated from those other line items
subject to the "per 100 copies" legend, it can be read only as
the Appellant read it. At the very least, the Appellant
believes, its interpretation is a reasonable one which is all
that is required for it to prevail.
The Respondent, of course, reads the contract differently. It
states that the entire line item series (a) through (j) was
subject to the "per 100 copies" legend, and that if the tabs
and covers were intended to be priced individually "they would
not have been included in [the] series ... but instead would
have been denominated differently and under a separate
heading." Respondent's Brief at 6. The Respondent further
states that the two lines of underscored type simply refer to
the common paper stock for items (a) through (h), as opposed
to the tab and cover stock for items (i) and (j), and do not
break out items (i) and (j) from the requirement to price the
items per 100 copies. The Respondent also points to the
contract estimate of 6,200 for tab dividers and the quantity
of 62 set forth in the Determination of Award section for bid
computation purposes as indicating that bid prices were
intended to be for tab dividers per 100 copies and not per
individual tab.
Resolution of this matter is controlled by established
principles of contract interpretation which the Board
previously has discussed at length. See, e.g., Custom
Printing Co., GPOBCA 28-94 (March 12, 1997), slip op. at
30-35, 1997 WL 128720; MPE Business Forms, Inc., GPOBCA 10-95
(August 16, 1996), slip op. at 42-48, 1996 WL 812877; The
George Marr Co., GPOBCA 31-94 (April 23, 1996), slip op. at
41-44, 1996 WL 273662. In brief, when two contracting parties
have different interpretations of the same contract language,
that disagreement, while not automatically signaling the
existence of an ambiguity, International Business
Investments, Inc. v. United States, 17 Cl. Ct. 122 (1989),
aff'd without op., 895 F.2d 1421 (Fed. Cir. 1990); Qualitype,
Inc., GPOBCA 21-95 (April 21, 1998), slip op. at 4, 1998 WL
350484, recon. denied, GPOBCA 21-95 (June 24, 1998), slip op.,
1998 WL 350480; United Computer Supplies, Joint Venture,
GPOBCA 26-94 (January 23, 1998), slip op. at 14, 1998 WL
148845, does raise the possibility that the language is
ambiguous. RD Printing Assocs., Inc., GPOBCA 23-94 (February
24, 1998), slip op. at 6, 1998 WL 148997; B & B Reproductions,
GPOBCA 09-89 (June 30, 1995), slip op. at 22, 1995 WL 488477.
To be ambiguous the disputed language must be susceptible to
more than one reasonable interpretation. The George Marr Co.,
supra, at 41. Determining whether contract language is
susceptible to two or more reasonable interpretations and thus
latently ambiguous requires a careful reading not only of the
disputed language but of the contract as a whole so that all
of its provisions are given effect. Qualitype, Inc., supra,
at 5; MPE Business Forms, Inc., supra at 45-46. If the
contract is ambiguous, that is, if a reasonably prudent
contractor could interpret the contract in a manner different
from the drafter's reasonable interpretation, the language
will be construed against the drafter if the contractor can
show that it relied on its interpretation in formulating its
offer. Randolph Eng'g Co. v. United States, 367 F.2d 425 (Ct.
Cl. 1966); Midwest Bank Note Co., GPOBCA 13-95 (June 22,
1998), slip op. at 10, 1998 WL 350489; Custom Printing Co.,
supra, at 31, quoting MPE Business Forms, Inc., supra, at
43-44.
Here, the Board, mindful of its duty to interpret the contract
as a whole and not leave any portion of the contract useless
or superfluous, MPE Business Forms, Inc., supra, at 51, has no
difficulty in concluding that there is only one reasonable
interpretation of the disputed provision and that
interpretation is the Respondent's. The Board reaches this
conclusion essentially because the format of the Schedule of
Prices leaves no room for the Appellant's interpretation and
because the Appellant's interpretation is inconsistent with
the contract estimates.
The Schedule of Prices was divided into four parts. The first
part, set forth above, contained line items (a) through (j)
and columns for bid price insertions for each of three size
formats. Above these columns was the legend "Running per 100
Copies." Part II, captioned "STOCK/PAPER," contained its
own line items (a) through (e), each representing different
paper, and columns for insertion of bid prices for each size
format. Above the columns was the legend "Per 100 leaves."
Part III, captioned "ADDITIONAL OPERATIONS," contained line
items (a) through (h) representing such tasks as inserting
colored slip sheets, shrink-film wrapping, and drilling. For
this part there were no columns and no legend, simply a single
blank for each line item for bid price insertion. These line
items were individually specified as "per set," "per 100
leaves," "per 100 pads," or "per pamphlet/book." The fourth
part, captioned "PREMIUM PAYMENTS," provided for a premium
payment for orders placed on an accelerated schedule; bidders
were simply asked to insert a "Percentage increase."
In the Board's view, the structure of the Schedule of Prices
is clear--miscellaneous operations were to be priced
individually (by set, by book or pamphlet, or per 100 pads or
100 leaves, as specified for each operation) in the third
part, while certain varieties of paper stock were to be priced
per 100 leaves in the second part and the copying itself was
to be priced per 100 copies in the first part. The copying
requirement included both one-sided and two-sided copying and,
for a certain number of orders,3 tab dividers and covers.
That the line items for the tab dividers and covers were
intended to be subject to the "Running per 100 Copies" legend
is clearly indicated by the format of those line items--it is
the same as that used for the other Part I line items,
differing only in that the column spaces for Formats A and C
are filled in so that bid prices can be entered for these two
line items only for Format B. From a reading of the Schedule
of Prices as a whole, it is apparent that if GPO was seeking
pricing for individual tab dividers and covers, their
respective line items would not have been set forth in the 3-
column format of Part I, but would have been set up in the
single column pricing format used for Part III. Moreover, the
Board does not find persuasive the Appellant's assertions that
the two lines of underscored text preceding items (i) and (j)
can be reasonably read as somehow divorcing those two line
items from the requirements and provisions of the portion of
the Schedule of Prices in which they were located. The two
lines of text obviously are where they are because they
pertain only to the line items that immediately precede them
and not to the following line items (i) and (j). There is
nothing about them, however, that suggests that they were
intended to cut off those following two line items from the
per 100 copies requirement or from the three different formats
representing the different sizes. Indeed, as the Respondent
points out, the Appellant had no difficulty in understanding
that its bid prices for tab dividers and covers were for the
Format B size only and not for all possible sizes. As for the
"per side, per divider" language of line item (i), when read
in the context of the Schedule of Prices4 it clearly means
only that the contractor is to be paid for each side of each
divider requiring an impression--it does not mean that the
contractor is to be paid the bid price for each such
impression as opposed to 100 such impressions.
Any doubt about this should have been resolved in the
Appellant's mind by the contract estimates. The
specifications stated that tab dividers would be required for
approximately five orders, with an average of 31 tabs per
order and average of 40 copies per order. Rule 4 File, Tab 1
at 12. That multiplies out to an anticipated total of 6,200
tab dividers. The Determination of Award section of the
solicitation, setting forth the estimated quantities for each
line item to be used for bid evaluation purposes, did not set
forth 6,200 for the tab divider line item--it set forth a
quantity of 62. Rule 4 File, Tab 1 at 20. This made it
eminently clear that the price entered for that line item was
to be per 100 copies,5 since it is improper for the Government
to evaluate bids and award a contract on a basis other than
the quantities it expects to order. Qualitype, Inc., supra, at
7; United Computer Supplies, Joint Venture, GPOBCA 26-94
(January 23, 1998), slip op. at 11, 1998 WL 148845; Shepard
Printing, GPOBCA 37-92 (January 28, 1994), slip op. at 23,
1994 WL 275077. In short, when the Appellant's contract is
read as a whole, there is only one way to reasonably interpret
the line item for tab dividers, and that is that the pricing
is for 100 copies and not for each individual tab divider.
Accordingly, the Board concludes that there is no ambiguity
here, that the Appellant's interpretation of the contract is
unreasonable, and that the Respondent's interpretation is
correct.
III. ORDER
For the foregoing reasons, the Contracting Officer's final
decision is AFFIRMED and the appeal is DENIED.
It is so Ordered.
December 4, 1998 Ronald Berger
Ad Hoc Chairman
GPO Board of Contract Appeals
_______________
1 The Contracting Officer's appeal file, assembled pursuant to
Rule 4 of the Board's Rules of Practice and Procedure, was
delivered to the Board on April 1, 1998. It will be referred to
as the Rule 4 File, with an appropriate Tab number also
indicated. The Rule 4 File consists of 29 numbered tabs.
2 The specifications identified Format A as including any trim
size up to 6 x 9-1/2", Format B as larger than Format A and up to
a trim size of 8-1/2 x 11", and Format C as larger than Format B
up to 17 x 11".
3 The specifications stated that tab dividers would be
required for approximately five orders and cover sets required
for approximately two orders. Rule 4 File, Tab 1 at 9.
4 The Appellant urges the Board to focus only on the "per
side, per divider" language and not look at other areas of the
contract. As the Board has previously noted, however, "[t]he
most basic principle of contract construction is that the
document should be interpreted as a whole." MPE Business Forms,
Inc., supra, at 45. Thus, in determining the meaning of the
disputed language the Board must consider the entire contract and
not limit its review to a few words without regard to the context
in which they are used. See id. at 53.
5 The same is true for line item (j). The specifications
anticipated two orders requiring covers with an average of 500
copies each. The Determination of Award section set forth a
quantity not of 1,000 but of 10 for this line item.