BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE


In the matter of            )
                            )
the Appeal of               )
                            )
INFORMATION PROCESSING      )      Docket No. GPOBCA 10-99
SERVICES, INC.              )
                            )
Program C855-S              )
Purchase Order 94555        )

For the Appellant:  Betty L. Hearn, President, and Bettie Gray,
Operations Manager, Information Processing Services Inc.,
Alexandria, VA.

For the Respondent:  Roy E. Potter, Esq., Associate General
Counsel, U.S. Government Printing Office.

Before GARY E. GREENFIELD, Administrative Judge.1

DECISION

This appeal arises out of a contract between the U.S. Government
Printing Office (GPO) and Appellant, Information Processing
Services, Inc. (IPS) that was terminated for the convenience of
the Government.  Appellant seeks $63,816.09 in termination costs
which includes claims for lost profits and attorneys fees.  For
the reasons that follow, the Contracting Officer's final decision
denying all claimed termination costs is AFFIRMED and all claims
of Appellant are DENIED.

FINDINGS OF FACT

1.   Program C855-S was a single award requirements contract to
provide proofreading services to the Internal Revenue Service
(IRS) for the period beginning April 1, 1998, and ending March
31, 1999.  The successful bidder was to provide an average of
seven proofreaders per day.  Rule 4 File, Tab A.
2.   On March 31, 1998, the GPO awarded a term contract to IPS
for one year (April 1, 1998-March 31, 1999).  The contractor was
to provide an average of seven proofreaders per day for initial
proofreading and revisions of proofs of tax forms, instructional
material, and other textual and tabular material at the IRS.
3.   On May 5, 1998, the first of a series of contract
modifications was entered into by GPO and Appellant each reducing
temporarily the number of proofreaders to be provided.  Rule 4
File, Tabs J-O.
4.   By early June, it was obvious to both GPO and Appellant that
there was to be a permanent reduction in the number of
proofreaders to be provided.  Rather than negotiate a permanent
reduction, on or about June 8, 1998, Appellant's attorney asked
that the GPO terminate the contract for convenience so a
settlement claim could be made.  Rule 4 File, Tabs J-O and P;
Declaration of John R. Scott (GPO Contracting Officer for Program
C855-S) executed March 2, 2000.
5.   On June 12, 1998, the GPO Contracting Officer received a
memorandum from the IRS asking that the contract be terminated
for the convenience of the Government.  Rule 4 File, Tab P.
6.   The GPO Contract Review Board concurred on June 15, 1998,
with the Contracting Officer that Program C855-S should be
terminated for the convenience of the Government.  Rule 4 File,
Tab P.
7.   On July 1, 1998, after obtaining guidance from the IRS and
the required concurrence of the GPO Contract Review Board to
terminate for convenience and to readvertise with the reduced
requirement, the Contracting Officer issued a formal Notice of
Termination - Convenience of the Government, effective July 31,
1998.  Rule 4 File, Tabs P and Q.
8.   On August 1, 1998, a new contract was entered into with a
different contractor for the period beginning August 1, 1998 and
ending March 31, 1999.  Declaration of John R. Scott executed
March 2, 2000.
9.   On October 7, 1998, Appellant submitted a settlement
proposal on GPO Form 911 for $63,816.09 consisting of $12,803.79
for general and administrative expenses, $28,146.26 for profit,
$866.04 for settlement expenses, and $22,000 for additional
rental space for training.  Prior to this, the GPO had already
paid a total of $39,709.17 to Appellant (less the 2 percent, 30-
day prompt payment discount) for the work that was completed
before the contract termination.  Rule 4 File, Tabs R and U.
10.   Pursuant to agency regulations, the Contracting Officer
sought an audit of the claim by the GPO Office of Inspector
General (OIG).  See, GPO Printing Procurement Regulation (PPR),
GPO Publication 305.3 (Rev. 10-90), Chap. XIV, Sec. 2.3h(1).  On
October 13, 1998, the Contracting Officer referred the settlement
proposal to the GPO Inspector General.  Rule 4 File, Tab S.
11.   On December 2, 1998, the GPO Office of Inspector General
(OIG) requested from Appellant documentation to support the
settlement proposal.  The OIG listed several records needed to
establish the validity of the claimed amounts for each area of
Appellant's claim.  Rule 4 File, Tab T.
12.   On February 24, 1999, the GPO OIG issued its audit report
and conclusions.  The OIG concluded that all of Appellant's
claims were unproven because IPS personnel did not provide any
documentation to support or show how the entire amount was
determined.  In addition, the OIG audit found the claim for
profit unallowable because anticipatory profits are unallowable.
Finally, the OIG audit concluded that the claim for rental space
for training was not only unproven, as were all the other claims,
but was also unallowable because training was outside the scope
of the contract.  Rule 4 File, Tab U.
13.   On March 1, 1999, the Contracting Officer issued the final
decision denying all claims of Appellant on the basis that they
were not supported by adequate documentation.  Rule 4 File, Tab
V.
14.   Thereafter, Appellant filed a timely notice of appeal with
the GPO Board of Contract Appeals (GPOBCA) on May 4, 1999.  Rule
4 File, Tab Q.

DISCUSSION

   Appellant questions whether the Contracting Officer acted
   properly in terminating the contract for convenience of the
   Government.  Appellant also asserts a claim for termination
   costs.
   Respondent takes the position that the termination for
   convenience was within the discretion of the Contracting
   Officer.  Respondent also takes the position that as a matter
   of law the Appellant is not entitled to some of the expenses
   claimed, and as for the other items, the claims are not
   adequately supported by the required documentation.

The Contracting Officer's Right to Terminate for Convenience

   Appellant questions whether the Contracting Officer acted
   properly in terminating the contract.  Program C855-S
   contained a termination for convenience clause that provided
   in part:
The Government may terminate performance of work in whole or in
part if the Contracting Officer determines that a termination is
in the Government's interest.

Clause 19(a), GPO Contract Terms, GPO Publication 310.2 (Rev.
9-88).  That language is nearly identical to the standard
Government-wide contract clauses contained in the Federal
Acquisition Regulation (FAR).  See 48 C.F.R.  52.249-1(a),
52.249-2(a), 52.249-3(a), 52.249-4(a), 52-249-5(a).
   Decisions construing the Government-wide Termination for
   Convenience clauses hold that a Contracting Officer's election
   to terminate is conclusive in the absence of bad faith or a
   clear abuse of discretion.  See Melvin R. Kessler, PSBCA Nos.
   2820, 2972, 92-2 BCA  24, 857, at 123, 996 (citing John
   Reiner v. United States, 325 F.2d 438,442 (Ct. Cl. 1963),
   cert. den. 377 U.S. 931 (1964)), mot. for reconsid. denied
   92-3 BCA  25, 092; Salisbury Industries v. United States, 905
   F.2d 1518 (Fed. Cir. 1990)), mot. for reconsid. denied 92-3
   BCA  25, 092.  See also, Seaboard Lumber v. United States, 19
   Cl. Ct. 310 (1989); Robert K. Adams, ASBCA No. 34519, 92-3 BCA
    25, 165; Automated Services, Inc., DOTBCA No. 1753, 87-1 BCA
    19, 459; ITG Corp., ASBCA No. 27285, 85-1 BCA  17,935.  Any
   allegation of bad faith must be established by "well-nigh
   irrefragable" proof because there is a strong presumption that
   Government officials properly and honestly carry out their
   functions.  See, e.g., Asa L. Shipman's Sons, Ltd., GPOBCA No.
   06-95 (August 29, 1995), 1995 GPOBCA  LEXIS 17, 1995 WL
   818784, slip op. at 12, fn. 16.  Accord Brill Brothers, Inc.,
   ASBCA No. 42573, 94-1 BCA  26,352; Karpak Data and Design,
   IBCA No. 2944 et al., 93-1 BCA  25,360; Local Contractors,
   Inc., ASBCA No. 37108, 92-1 BCA  24, 491.  The key to such
   evidence is that there must be a showing of a specific intent
   on the part of the Government to injure the contractor.  See
   Stephenson, Inc., GPOBCA No. 2-88, (Dec. 20, 1991), 1991
   GPOBCA LEXIS 14, 1991 WL 439274, slip op. at 54.  Accord,
   Kalvar Corp. v. United States, 543 F.2d 1298, 1302 (Ct. Cl.
   1976), cert. denied, 434 U.S. 830 (1977).  See also, Solar
   Turbines, Inc. v. United States, 23 Cl. Ct. 142 (1991).
   Properly exercised, a contracting officer's discretion to act
   pursuant to the "Termination for Convenience" clause is very
   broad.  See Caldwell & Santmyer, Inc., supra, 94-2 BCA at
   133,625 (citing ARDCO, Inc., AGBCA Nos. 94-101-1, 94-193-1,
   1994 WL 45000 (Feb. 16, 1994); Michael J. Earl, PSBCA No.
   3332, 93-3 BCA  26, 234).  One obvious exception is when the
   Government enters into a contract with no intention of
   fulfilling its promises, it may not use a termination for
   convenience to avoid a breach of contract claim.  See
   Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756
   (1982).  However, recent decisions from the U.S. Court of
   Appeals for the Federal Circuit have reaffirmed the principle
   that in the absence of bad faith or clear abuse of discretion,
   the Contracting Officer's decision to terminate for
   convenience is conclusive.  See T & M Distributors, Inc. v.
   United States, 185 F.3d 1279 (Fed. Cir. 1999); Krygoski Const.
   Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996) cert.
   denied, 520 U.S. 1210 (1997); Caldwell & Santmyer, Inc., v.
   Glickman, 55 F.3d 1578 (Fed. Cir. 1995); Salisbury Industries
   v. United States, 905 F.2d 1518 (Fed. Cir. 1990).
   This clause gives the Contracting Officer the broad right to
   terminate without cause and limits the Appellant's recovery to
   costs incurred, reasonable profit on work completed, and costs
   of preparing the termination settlement proposals.  Recovery
   of anticipated profit is precluded.
   Under a termination for convenience clause, performance of
   work under a contract may be terminated by the Government in
   whole or in part whenever the Contracting Officer determines
   such termination to be in the best interests of the
   Government.
   On June 12, 1998, the GPO Contracting Office received a
   memorandum from the IRS asking that the contract be terminated
   for the convenience of the Government.  Rule 4 File, Tab P.
   The GPO Contract Review Board concurred on June 15, 1998,with
   the Contracting Officer that Program C855-S should be
   terminated for the convenience of the Government.  Rule 4
   File, Tab P.
   The Contracting Officer was well within his contractual rights
   to terminate this contract for convenience in the best
   interests of the Government.  The unrebutted evidence of
   record is that the contract was terminated for convenience due
   to a reduction in the IRS's proofreading requirements.
   Therefore, the Board concludes that the Contracting Officer
   had the right to terminate Program C855-S for the convenience
   of the Government and that his exercise of that right was not
   an abuse of discretion.

Entitlement to Convenience Termination Costs

   When the Government terminates contracts for the convenience
   of the Government, it owes contractors the duty to fairly
   compensate them for legitimate termination costs.  In the
   instant appeal, the Contracting Officer appropriately
   exercised his discretion to terminate Program C855-S for
   convenience. The analysis now shifts to an examination of the
   termination claims made by the Appellant. The Appellant
   submitted a settlement proposal on GPO Form 911 for
   $63,816.09, consisting of $12,803.79 for general and
   administrative expenses, $28,146.26 for profit, $866.04 for
   settlement expenses, and $22,000 for additional rental space
   for training.  GPO paid a total of $39,709.17 to Appellant
   (less the 2 percent, 30-day prompt payment discount) for the
   work that was completed before the contract termination.
   Appellant submitted a claim for $22,000 for additional rental
   space for training as part of its settlement proposal.  The
   Contracting Officer concluded that the entire $22,000 for
   rental space for training was unallowable based on the
   Qualifications/Production Standards of Contractor Personnel
   Section of the contract which required "A minimum of two years
   of professional editorial proofreading experience with a
   firm/company/agency which is/was regularly engaged in the
   printing, publishing or editorial field."
   The Board agrees that the cost for the rental space for
   training is unallowable under the contract.  Accordingly,
   Appellant's claims for $22,000 for additional rental space for
   training is DENIED.
   The actual incurrence of costs is a prerequisite to recovery
   under a termination for convenience; i.e., if the contractor
   has incurred no cost, there is no recovery.  See R.C. Swanson
   Printing & Typesetting Co., Supplemental Decision, GPOBCA No.
   15-90 (July 1, 1993), slip op. at 19, 1993 GPOBCA LEXIS 26,
   1993 WL 526638 (citing Building Maintenance Specialists, Inc.,
   ENG BCA No. 5654, 90-3 BCA  23,032).  Accord, Lisbon
   Contractors, Inc. v. United States, 828 F.2d 759, 767 (Fed.
   Cir. 1987); J.W. Cook & Sons, Inc., ASBCA No. 39691, 92-3 BCA
    25,053, at 124,863 (citing Tubergen & Associates, Inc.,
   ASBCA Nos. 34106, 34107, 90-3 BCA  23,058); Youngstrand
   Surveying, AGBCA No. 90-150-1, 92-2 BCA  25,017, at 124, 694
   (citing Roberts International Corp., ASBCA No. 15118, 71-1 BCA
    8869); R.G. Robbins & Co., Inc., ASBCA No. 27516, 83-1 BCA 
   16,420.
   The contractor has the burden of establishing the amount of
   incurred costs, and, in the absence of evidence to the
   contrary, the Contracting Officer's termination allowance will
   be accepted, Roberts Int'l Corp., ASBCA 15118, 71-1 BCA 
   8869.  See also, Delaware Tool & Die Works, Inc., ASBCA 14033,
   71-1 BCA  8860, recons. denied, 72-1 BCA  9206, where the
   contractor had no proof of the costs incurred in the
   terminated portion of the work.  It is preferable to establish
   incurred costs from accounting records.  However, if the
   accounting records are not available, due to no fault of the
   contractor, the costs may be established on the basis of
   estimates, FAR 49.206-1(c); Bailey Specialized Bldgs., Inc.,
   ASBCA 10576, 71-1 BCA  8699.  Even if estimates are used, the
   contractor still has the burden of proof.  See Clary Corp.,
   ASBCA 19274, 74-2 BCA  10,947, where the board stated that,
   although the burden need not be met through the use of
   accounting records, it cannot be carried by unsupported
   allegations.
   The Contracting Officer, who relied upon an audit
   recommendation from the GPO Office of Inspector General (OIG),
   concluded that Appellant was not entitled to any of the
   settlement proposal costs because the Appellant did not
   provide any documentation to support or show how the Appellant
   arrived at its settlement proposal.
   During the September 17, 1999, Prehearing Telephone Conference
   before GPOBCA Judge Ronald Berger, the Appellant was informed
   by Judge Berger that the information provided by the Appellant
   to support the Appellant's settlement proposal claims did not
   contain the very detailed specific documentation necessary to
   substantiate its claim.  Appellant was given the opportunity
   to submit additional substantiating documentation for
   Appellant's settlement proposal claims.  Appellant provided
   information similar to its initial submission, without any
   additional detailed specific documentation to prove its
   claims.
   The Board has reviewed the multiple submissions of documents
   by the Appellant, and the Board concludes that Appellant has
   failed to provide any specific detailed documentation in
   support of any of its claims in the settlement proposal.

Lost Profits Claim

   Appellant also seeks to recover lost profits as part of this
   appeal as a component of Appellant's termination for
   convenience claim.  A contractor terminated for convenience
   may not recover anticipated profits as part of its termination
   for convenience cost claim.  Salisbury Indus. v. United
   States, 905 F.2d 1518, 1522 (Fed. Cir. 1990); G.C. Casebolt
   Co. v. United States, 190 Ct. Cl. 783, 421 F.2d 710, 713
   (1970); Nolan Bros., Inc. v. United States, 405 F.2d 1250 (Ct.
   Cl. 1969).
   Perhaps the major impact of the termination for convenience
   procedure is that it relieves the Government from the
   obligation of paying anticipated profits for unperformed work
   if it terminates the contractor's performance of the work.
   Dairy Sales Corp. v. United States, 219 Ct. Cl. 431, 593 F.2d
   1002 (1979), aff'g Dairy Sales Corp., ASBCA No. 20193, 75-2
   BCA  11,613).  See PPR, Chap. XIV, Sec. 2.3.n.  Accord,
   D.E.W. & D.E. Wurzbach, JV, ASBCA No. 50796, 98-1 BCA  29,835
   at 146,055; Steelcare, Inc., GSBCA No. 5491, 81-1 BCA 
   15,143, at 74, 901.
   Therefore, Appellant's claim for anticipated profits is
   DENIED.

CONCLUSION

   For the foregoing reasons, the Contracting Officer's final
   decision regarding entitlement to termination for convenience
   costs is AFFIRMED and all claims of Appellant are DENIED.


July 14, 2000                  GARY E. GREENFIELD
                     Administrative Judge
_______________

1 Appointed ad hoc member of U.S. Government Printing Office
Board of Contract Appeals on April 5, 2000, pursuant to GPOBCA
Rules of Practice and Procedure,  I.C.