Custom Printing Company
GPO BCA 10-87
May 10, 1988
Michael F. DiMario
Administrative Law Judge
Opinion
This appeal timely filed by Custom Printing Company, 1005
Commercial Drive, Owensville, MO 65066 (hereinafter
"Appellant") is from the March 31, 1987 "final decision"
letter of William E. Flood, Contracting Officer (hereinafter
"CO"), U.S. Government Printing Office (hereinafter
"GPO/Respondent") holding that Appellant must reprint
certain United States Postal Service "Zip + 4 State
Directories" at no additional cost to the Government,
because the Appellant was solely responsible for errors in
the original printing. The decision of the CO is affirmed
for the reasons set forth hereinbelow.
Background
Respondent by Purchase Order 64164 dated October 16, 1986,
competitively awarded Appellant a contract in the amount of
$135,834 to produce 5 different U.S. Postal Service "Zip + 4
State Directories" (Pennsylvania (PA) Volume I, Pennsylvania
(PA) Volume II, Wisconsin (WI), Missouri (MO), and
Washington (WA)). Two of the directories, PA I and PA II,
were assigned a single GPO Jacket No. (156-372). The other
three directories, WI, MO, and WA, were assigned GPO Jacket
Nos. 156-386, 156-390, and 156-401, respectively. The basic
dimensions and materials for all the directories were the
same. However, the cover, the text material, and number of
pages and quantity ordered were different directory to
directory. In addition, each directory was to be produced in
two separate versions identified as Pub. 66 and Pub. 66A,
respectively, the only difference in versions being the
cover used. The Government was to furnish camera copy for
the text from which Appellant was to make all required
reproducibles. Proofs of the reproducibles were not required
to be submitted for Respondent's approval but were to be
retained by the contractor for 30 days after delivery of the
finished product. The contract also specified that the
completed products had to meet certain quality assurance
levels and standards for printing and finishing. Toward this
end, the contract provided for press sheet inspections by
Respondent at Appellant's plant; inspection of quality
assurance samples by Respondent; and the furnishing of
randomly selected departmental "quality" copies. Completed
products were to be shipped by the Appellant to designated
Postal Service facilities throughout the country. (Rule 4
File, hereinafter "R4 File," Tab B).
Upon receipt of completed PA Volume I, the Postal Service
advised the CO that the publication erroneously contained WA
state zip code pages 59-63 rather than the respective PA
Volume I pages as ordered.
An inquiry initiated by the CO on January 28, 1987,
established that the problem existed only in the PA Volume I
directory but failed to pinpoint its cause. The Appellant
denied responsibility for the mistake alleging that it was
virtually impossible for it to be at fault since its
procedure developed over time in producing some 50 previous
"Zip + 4" state directories was to handle only one set of
furnished camera copy at a time. On the other hand, the CO
could not establish with certainty that the Government's
employees had furnished the correct camera copy for all
pages. Moreover, the Appellant contended that the Government
ought to bear the burden for the error since its press sheet
inspector, John Becker, of its St. Louis Regional Printing &
Procurement Office had negligently signed off on the
signature which contained both correct and incorrect pages.
In a further attempt to resolve the matter, a meeting was
held at the GPO Washington, DC offices. Appellant was
represented by William Jackson. Respondent was represented
by the CO, Quality Assurance Section Chief Darwin Hughes,
and Quality Inspection Technician Reggie Peebles. At the
conclusion of the meeting the parties reached a tentative
agreement for the directory to be reprinted at Respondent's
expense because of the press sheet "O.K." by Becker.
Subsequently, in another discussion, this was modified to a
tentative agreement for 50% cost sharing with Appellant
being requested to furnish its estimate of such cost
together with its proposed production schedule for the
reprint.
Thereafter, by internal memorandum of March 13, 1987, the CO
sought the concurrence of Respondent's Contract Review Board
for issuance of a contract modification reflecting the
tentative agreement. The memorandum stated that the
Government "must take part of the responsibility for the
error" because Inspector Becker had signed only his name and
date with no further description of what he was signing for,
i.e., "OK for color, OK for quality." The memorandum also
stated that Contract Compliance personnel had advised the CO
that because Becker had signed his name in that fashion, the
Government should be held to the same standards of
accountability normally expected for similar approvals in
the commercial printing industry, i.e., "batters, folios,
and running heads."
The Contract Review Board unanimously disagreed with the
CO's position. Instead, they believed that if there was any
uncertainty as to the correctness of the camera copy
supplied by the Government, the burden was upon the
Appellant to prove that the camera copy it received was
incorrect. Moreover, they believed that since the
contractually stated purpose of the press sheet inspection
was to assure the quality of the printing itself, the scope
of such inspection did not encompass review of text for
correctness, and therefore, the Respondent should not be
liable for failing to note the instant error. One board
member suggested that an additional check be made with the
requesting agency to see if the camera copy had been
returned by the Appellant in the proper sequence. Such a
check determined that the copy was paginated correctly, and
consisted only of "PA pages with data base date and time
frame on the top of each page." (R4 File, Tab I.) Based upon
this further result and the Contract Review Board's
nonconcurrence, both the Contract Compliance Section and the
CO reversed their positions. Thus, the CO, by letter of
March 18, 1987, advised Appellant that the product was
rejectable and that reprinting would have to be accomplished
at no additional cost to the Government by April 17, 1987.
(R4 File, Tab J.)
In turn, the Appellant, by letter of March 25, 1987, advised
that it was in disagreement with the CO's findings, "would
appreciate a final decision on this matter," but was
nevertheless proceeding with the reprint pursuant to U.S.
Government Printing Office Contract Terms No. 1 Article 2-3
entitled "Disputes." (R4 File, Tab K.)
In response, the CO issued his final decision letter dated
March 31, 1987, wherein he advised Appellant that:
The determination of this office is that your firm is solely
responsible for four incorrect pages being printed in the
above referenced jacket. The correct camera copy was furnished
to your firm and the same correct camera copy was returned to
the government. Therefore, it is my opinion that the incorrect
four pages were printed in the book due to an error within
your organization and that the reprinting should be done by
your firm at no additional cost to the government.
R4 File, Tab L.
Thereafter, by letter of April 21, 1987, to this Board,
Appellant noted its appeal. The appeal was subsequently
perfected by letter of May 29, 1987. The letter in pertinent
part stated:
It is our contention that the copy was furnished to us with
the four incorrect pages included in the package. Our internal
procedure in our Prep Department is that only one package
containing the copy would be opened at a time. We followed
this procedure throughout the production of these books
virtually eliminating the possibility of mixing the copy.
The specified standard for this order was the furnished camera
copy. A duly authorized representative of the Contracting
Officer okayed the press signature on October 31, 1986. (see
enclosure) The fact that the incorrect pages were in the
signature verified that the copy was this way during the
inspection, or that this was missed by representative. The
book was printed exactly as the OK press sheet.
Official File, Tab 5.
On August 4, 1987, an entry of "general denial" was noted
in the case docket on behalf of the Respondent pursuant to
Rule 6.(b) of the Board's Rules of Procedure, (GPO
Instruction 110.12 dated September 17, 1984). A prehearing
conference followed on October 22, 1987.
At the conference Government counsel requested that the R4
File be supplemented to include a copy of the PA I zip code
containing the WA state pages, as first printed (Exhibit N);
pages 58 through 63 of PA Vol. I, EPD generated camera copy,
pages 58 and 63 being the original returned pages and 59
through 62 being photocopies as described in declaration of
Reginald L. Peebles, infra, (Exhibit O); a signed
declaration from Charlie F. Jernigan, Senior Printing
Contract Specialist, U.S. Postal Service (Exhibit Q); and a
signed declaration from Reginald L. Peebles, Quality
Assurance Department, GPO (Exhibit P).
Jernigan, under penalty of perjury, declared:
1. I am employed as a Senior Printing Contract Specialist for
the United States Postal Service.
2. Pursuant to the specifications for Jacket 156-372, Custom
Printing Company, Owensville, Missouri, returned the furnished
camera copy to the United States Postal Service. After
receiving the box containing the camera copy, I opened it.
3. Realizing that there was an error in the Pennsylvania Zip +
4 Directory, Volume I, I scanned through the materials to
verify whether there were any Washington pages. I did not see
any Washington pages. Furthermore, I did not remove any
materials from this box.
4. After resealing this box, I sent the box to the United
States Government Printing Office to the attention of Reginald
L. Peebles, Inspector for Quality Assuance [sic].
R4 File, Tab Q.
Peebles, under penalty of perjury, declared:
1. I am employed as an Inspector in the Quality Assurance
Department of the United States Government Printing Office.
2. On behalf of the Quality Assurance Department, I requested
the original camera copy furnished to Custom Printing Company
for jacket 156-372.
3. During the week of February 16th, 1987, I received a box
from the United States Postal Service. This box contained the
camera copy for Jacket 156-372. It appeared the box had been
opened and retaped.
4. After opening the box, I checked pages 59-62 of the
Pennsylvania Zip +4 State Directory, Volume I. These four
pages contained Pennsylvania zip codes, not Washington zip
codes. I reported my findings to my supervisor, Darwin Hughes.
5. In order to correctly reprint the directory, the contractor
requested pages 59-62. Consequently, I made photocopies of
these pages and sent the original pages to the contractor.
R4 File, Tab P.
Thereafter, Government counsel, noting that the camera copy
(Exhibit O) was created by the GPO Electronic
Photocomposition Division (EPD), called attention to the
data line at the top of the copy. The line reads: "S-155203
0065(20)(03-JUN-86-09:18:46) F3944 3/19/86." Counsel
explained that the "S" number represented the internal GPO
jacket number for the typesetting job. The number following
the "S" number 00065 represented the particular frame
containing the typeset page and the specific day and time
the frame was completed. The "F3944 3/19/86" entry
represented the specific format programs for all the Zip + 4
directories and the date the format program was created.
Counsel next pointed out that if one examines the pages in
Exhibit O, page by page, it is apparent that the "S" number,
frame date, format number and format date remain constant
while the frame time and number change. Counsel asserted
that the conclusion to be drawn from this is that pages
58-63 were typeset sequentially on 6/3/86 between "9:18:46
a.m." and "9:20:86 a.m." Counsel then asserted as a truism
that since the Washington state zip code directory was
produced without errors, Appellant must have received the
correct Washington state camera copy from Respondent.
Counsel opined that from these facts it is clear that
Appellant was furnished the correct copy for both
directories and that this being the case, Appellant must
necessarily have caused the mix-up during its processing.
Counsel followed this by arguing that the inspector, in
adhering to the portion of the contract which reads: "Press
Sheet Inspection: Press sheets will be inspected at the
contractor's plant for quality conformance," was merely
looking for "readability" of the type and thus was not
required to make editorial comments. Counsel concluded from
this that the inspector's signature on the camera copy did
not relieve the contractor from meeting the full
requirements of the contract.
In response, Appellant's representative, referencing
Respondent's data line argument, pointed out that there is
always some manual intervention after the copy is created.
Thus, in his opinion, Respondent's offer of the data line as
proof that correct copy was furnished is inconclusive. He
then claimed that when the book went to prepress, no other
boxes of camera copy were opened by Appellant's employees
until the PA I job had been cleared from the press. The job
was done as a 32-page sig on the Harris web press with 4
plates, 8 pages on a plate, and folded into a 32-page sig.
The four incorrect pages in question are pages 59-62, with
the first page of the sig being page 55. Once the job
cleared prepress, the camera copy was stored until ready to
be returned to the agency. He stated that Appellant had no
problems running the job as indicated by their production
records and offered to make their production records a part
of the appeal record but did not have the records with him.
Next, referring back to GPO's contention that the inspector
was not looking for content, he called the Board's attention
to the "Press Sheet Inspection" portion of the
specifications, page 3 of 9, supra, and to page 5 of 9 of
the specifications which mentions P-7, a printing attribute
for type quality and uniformity, found in the publication
entitled "Quality Assurance Through Attributes Program"
(QATAP) which is incorporated in the contract by reference
in the specifications. He stated that in order to verify
compliance with the P-7 attribute, the inspector must make
sure he has the correct camera copy in front of him to check
against the press sheet. He argued that while the inspector
is not looking for content, he is looking for deviations in
type dimensions, broken type, etc., and therefore should be
certain he is looking at the correct page. Therefore, in his
judgment the mention of "quality conformance" in the press
sheet inspection clause includes the P-7 attribute. He
concluded by stating that it is Appellant's contention that
the four Washington state zip code camera copy pages were in
front of Mr. Becker when he inspected the press sheet and
that is why he did not pick up the error in the PA I book.
At the close of the prehearing conference, the parties were
advised that the record would be settled on November 7,
1987, and that any further documentation should be furnished
to the Board by that date.Subsequently, Appellant by letter
of November 2, 1987, received November 9, 1987, requested
that the record be supplemented by the inclusion of the
original press sheet bearing Mr. Becker's signature.
Although the document was not timely filed, it was not
objected to by Government counsel. This being the case and
since the document was relevant to the other evidence in the
record, the Board waived the November 7th date and accepted
the document. The record was thus settled on November 9,
1987.
The matter is now before the Board in this form for
decision.
Issue
The issue presented is whether Appellant is liable in any
way for reprint costs.
Discussion
Article 2-12 of GPO Contract Terms No. 1 requires a
contractor to correct defective supplies if so directed by
GPO. Article 2-3 permits the contractor to appeal such
decision if it is based upon disputed facts. In such case
the contractor is to proceed with performance in accordance
with the Contracting Officer's directions pending the
outcome of the appeal. It is in accordance with such
provisions that the dispute is before the Board.
The single disputed fact in the case is whether or not
Appellant was furnished the correct camera copy for the
original printing. Appellant argues that it must have
received defective copy from Appellant, because its own
procedures for handling copy were so exacting it could not
have caused the error. We are not persuaded by this
argument.
First, Appellant has offered virtually no evidence in
support of this bald assertion. Second, Appellant had an
affirmative duty to inspect the furnished copy for patent
defects under the provisions of Article 4-1 of "Part IV
Supplemental Terms and Conditions for Composition, Camera
Copy and/or Reproduction Proofs," GPO Contract Terms No. 1,
entitled "Government Furnished Material," which in pertinent
part provides:
The contractor will be required to examine the furnished
material immediately upon receipt. If at that time there is
disagreement with the description or the requirements as
presented in the specification (or print order), and prior to
the performance of any work, the contractor shall contact the
U.S. Government Printing Office, Central Office Printing
Procurement Division, Washington, D.C. 20401, or the
originating Regional Printing Procurement Office, and protest
the description.
Third, Respondent has presented substantial documentary evidence
supported by declarations signed under penalty of perjury that
the PA Vol. I camera copy returned by Appellant was in fact
correct in all its particulars, including sequential data line
numbering, while concomitantly, no concurrent errors were evident
in the Washington state directory.
The only logical conclusion to be drawn from these facts is
that correct camera copy was furnished Appellant for both
the PA Vol. I directory and the Washington state directory.
The Board, therefore, holds that the Appellant is liable for
the errors, unless it can prevail on its assertion that the
Government bears some liability because its inspector acted
negligently in his failure to detect the error during his
press sheet inspection.
In order for Respondent to be liable for the inspector's
negligence, the Board must find that the inspection was
conducted for Appellant's benefit and that Respondent
thereby owed Appellant a duty to detect errors of the sort
encountered here; that through the purported negligence
there was a breach of the duty; and that foreseeable injury
to Appellant resulted therefrom.
In order to determine if such a duty is created, we must
examine the contract itself. In doing so, we find that the
provision for press sheet inspection is set out on page 3 of
9 as a subcaptioned matter under the block letter caption
"PRINTING." The other subcaptions under the block caption
are "Format" and "Coating." Reading all of the text under
the block and subcaptions together make it abundantly clear
that they relate solely to the technical aspects of printing
and not to the substantive content of textual matter. Based
upon this reading, it is the Board's opinion that as a
matter of contract law, the press sheet inspection at the
contractor's plant was solely for the purpose of determining
technical quality conformance. In holding this, we find no
substantial disagreement by Respondent with Appellant's
claim that the QATAP P-7 attributes are important measures
of that conformance. Accepting this argument, we can
nevertheless find nothing in the QATAP or contract
provisions which create a duty to be carried out by
Respondent for the benefit of the Appellant. Indeed, it
seems clear to the Board that these provisions are for the
exclusive benefit of the Government. See Red Circle Corp. v.
United States, 185 Ct.Cl. 1, 398 F.2d 836 (1968), where the
court at 8-9 stated: "The clauses pertaining to
verification inspection in the instant contract must be
considered for the benefit of the government, and the
plaintiff's responsibility was not affected by the failure
of the government to fully exercise its contract rights."
Buttressing this finding are numerous cases which hold that
in general, the Government's right to reject faulty products
after delivery is not impaired by the conduct of its own on-
site inspection even where its inspector failed to object to
faulty work. Penn Construction Co., ASBCA 10780, 66-2 BCA ¶
5800 (1966), or conditionally approved defective work,
Wilkins Co., FAACAP 66-13, 65-2 BCA ¶ 5242 (1965).
Thus, it is the conclusion of the Board that no contractual
duty was owed to Appellant irrespective of whether or not
the defect was patent as it is here. Since there was no duty
owed to Appellant by virtue of the inspection respecting
discovery of the defect, there is no liability on the part
of the Respondent. Therefore, the Appellant is fully liable
for all costs of reprinting the defective publication.
Accordingly, the appeal is denied and the decision of the
Contracting Officer is affirmed.