PEAKE PRINTERS, INC.
GPO BCA 12-85
November 12, 1986
MICHAEL F. DiMARIO, Administrative Law Judge

   This appeal, timely filed by Peake Printers, Inc. 2500
   Schuster Drive, Cheverly, MO 20781 (hereinafter Peake or
   Appellant), is from the final decision of Alice S. Jennings,
   Contracting Officer, U.S. Government Printing Office,
   Washington, DC 20401 (hereinafter GPO or Respondent), dated
   July 19, 1985 (Official File, Exhibit 1), denying Appellant's
   request of July 15, 1985 (Rule 4 File, hereinafter R4 File,
   Tab 9), to modify certain contracts between them known as
   Program 315-S, Jacket Nos. 381-611, 421-611, and 420-813.  The
   decision of the Contracting Officer is affirmed and the appeal
   is denied for the reasons set forth hereinbelow.

BACKGROUND

   Invitation for Bids (IFBs) on Program B315-S, a requirements
   type term contract, to produce various booklets, guide books,
   and handbooks as might be ordered by the Park Service, U.S.
   Department of Interior, from time to time during the period
   April 1, 1983 through March 31, 1984 (R4 File, Tab 2), were
   sent by Respondent to 33 potential printing contractors with
   10 responding thereto; seven with "no bids" and 3 with bids as
   follows:

1.  Peake Printers   $172,155.30  -1%-   $170,434.74
2.  Waverly Press   187,709.52  -1%-   185,832.42
3.  Garamond Pridemark   209,827.10  -1%-   207,728.83.

   Among its requirements, the IFB specified that bidders make
   their bids on a line-item basis for certain portions of the
   required work.  Appellant, with respect to the line-item for
   work identified on the "Schedule of Prices" as:

IV.  BINDING:
   Per 1,000 Copies
a.  . . .
b.  Smyth sewing   $  210.00,

bid $210.00 (R4 File, Tab 3, page 13 of 14) as contrasted with
Waverly Press at $363.69 and Garamond at $249.00.

   After bid opening, Appellant, the low bidder, was asked by
   Respondent to review and confirm its bid and did so as
   originally submitted.  (R4 File, Tab 4) Thereafter,
   Respondent, by Purchase Order No. 27459 dated April 4, 1983,
   notified Appellant that it had been awarded the program
   contract "[i]n strict accordance with your Quotation No.
   311207 [d]ated 3-14-83 and our specifications." (R4 File, Tab
   5)

   Appellant was then issued several print orders under the
   contract, produced the required products, and invoiced the
   Respondent for the work performed.  The invoices included
   billing for Smyth sewing work on a per 1,000 32-page signature
   basis rather than a per 1,000 copy basis.  Respondent paid
   Appellant for such work in accordance with 3 invoices.
   However, on another of the invoices, one of Respondent's
   Voucher Examiners determined that payment per 1,000 32-page
   signature was not in accordance with the terms of the
   contract.  Thereafter, Respondent notified Appellant of the
   error and Respondent's corrective action respecting the
   vouchers.  Appellant disagreed with such action and by letter
   dated July 15, 1985, requested that Respondent issue a
   contract modification making Smyth sewing billable on a "price
   per thousand 32-page signatures and parts thereof"  basis.
   (R4 File, Tab 9) Respondent's Contracting Officer
   telephonically conferred with Appellant and then in a letter
   dated July 19, 1985, advised Appellant in pertinent part that:

     This letter is sent to confirm our telephone conversation of
     July 17, 1985 regarding Program B315-S.  The contract
     pricing structure is such that we asked for a binding cost
     per 1,000 copies of the books, regardless of the number of
     pages.  For this reason, I cannot modify the contract to
     allow you to bill the binding costs on a signature basis (32
     pages or parts thereof).  Although the first two vouchers
     were billed and paid in error, this does not prohibit the
     government from recovering the overpayment.

     While your statement that the cost of Smyth sewing an 80
     page book is less than the cost of sewing a 224 page book is
     correct, it does not have any bearing on the contract (April
     1, 1984 thru March 31, 1985) at hand.  We have used this
     pricing structure for a number of years, as well as in our
     current contract which became effective on April 1, 1985 and
     have had no problems in requesting prices in this format.
     However, since you have raised this issue, we will certainly
     give it consideration when we rewrite the contract next
     time.

     If I can be of any further assistance, please contact me.

Official File, Exhibit 1.

   Appellant, by letter of July 29, 1985, appealed this decision
   to the Board noting in pertinent part that:

     By her own admission, Ms. Jennings agrees that our
     interpretation on the binding clause is correct.  Yet, she
     maintains that past practice takes precedence over
     correctness.  Conversely, we don't agree.  Over the years,
     Peake Printers has produced a large number of contracts for
     the U. S. Government Printing Office.  They almost
     universally allowed variable binding costs for variable page
     counts.  We feel very strongly that these numerous contracts
     take precedence over this single Program B315-S.  Therefore,
     our opinion is that Ms. Jennings' interpretation is contrary
     to established standards.

Official File, Tab 1.

   Subsequently, a prehearing conference was held whereat it
   became clear that there were no factual disputes between the
   parties and that the only issue was whether or not the
   contract should be modified as requested by Appellant.
   Testimony was elicited from the parties respecting whether or
   not a mistake in bid had occurred.  Respondent indicated that,
   as stated above, Appellant had been requested to review and
   confirm its bid.  This was done as a matter of routine and not
   as a result of any indication that Appellant's bid was
   disproportionately lower than other bidders.  Indeed, as to
   Smyth sewing, Respondent's Contracting Officer stated that it
   had compared Appellant's line item entry with other bids and
   with is own in-house estimate of costs for such services and
   found that Appellant's bid was not out-of-line.  Appellant, in
   turn, stated that at the time of bid it had worked up a base
   contract price and then estimated its binding costs on a per
   1,000 32-page signature basis.  Appellant's representative
   added that he believed one of the other bidders had in fact
   "padded" additional binding expenses over and above its Smyth
   sewing line-item entry into other elements of its pricing but
   offered no evidence to support this allegation.

   At the close of the prehearing conference, Respondent, through
   counsel, made a Motion for Summary Judgment stating that since
   there were no factual disputes between the parties, Respondent
   was entitled to a decision in its favor as a matter of law
   based upon the unambiguous plain language of the contract.
   Appellant did not respond to the motion by objection but did
   ask that the undersigned orally rule upon the motion at that
   time.  The undersigned then ruled in favor of the Respondent
   granting the Motion for Summary Judgment subject, however, to
   modification if upon his review of the written record, such
   modification was warranted.

DISCUSSION

   As stated above, the Board finds that the only issue in this
   case is whether or not the contract should be modified as
   requested by Appellant.

The Board holds that it should not be so modified.

   To properly understand the issue and decision in this case,
   one must understand the nature of the authority of this Board.
   The Board is not a creature of statute; thus, it has no powers
   which arise under law as do courts.  Instead, it derives all
   its powers by virtue of the so-called disputes clause of the
   contract itself.  That clause, Article 2-3 of GPO Contract
   Terms No. 1, gives a contractor the contractual right to
   appeal any dispute with the Contracting Officer which is
   "related to the contract" to the Public Printer who is in fact
   the Officer of the United States authorized by statute to
   contract on behalf of the United States (44 U.S.C. 502).  The
   disputes clause in turn gives the Public Printer the authority
   to delegate his appeal authority to his designee which he has
   done by GPO Instruction 110.12 dated September 17, 1984,
   designating this Board his agent for that purpose.  Thus, the
   Board's authority is purely derivative and contractual.  As
   such, it is constrained by the terms of the contract itself.
   Since this is the case, the Board cannot enlarge the very
   agreement between the parties from which it derives its
   authority merely because it deems such action to be equitable,
   but will be constrained to deciding disputes within the
   parameters of the contract itself.

   Examining the specifications in this light, the Board finds
   that while it cannot modify the contract by way of unilateral
   reformation of its terms, the "Disputes Article" phrase
   "related to the contract" is broad enough in its scope to give
   authority to the Board to deal with questions of post-award
   discovery of mistake in bid.  Examining the facts of the case
   respecting the question of mistake, the Board finds that this
   in fact is what Appellant alleges has occurred, i.e., that
   Appellant, contrary to the plain meaning of the "per 1,000
   copies" language mistakenly read into that phrase a meaning of
   "per 1,000 copies of 32 page signatures." Accepting that a
   claim of post-award discovery of mistake in bid has been made
   out, the Board next turns to the law respecting such matter.

   This Board recently reviewed such law in the appeal of Valley
   Forms, Inc., Docket No. GPO BCA 1-84, Jan. 15, 1986.  In
   Valley Forms, Inc., we cited Manistique Tool and Manufacturing
   Company, ASBCA No. 29164, Aug. 13, 1984, 84-3 BCA  17,599, as
   clearly summarizing such law wherein at page 87,677 it said:

     As a general rule, neither a Board of Contract Appeals or
     the Claims Court is authorized to relieve a bidder from its
     obligations under a contract unless it is subject to
     invalidation on recognized legal grounds, such as mutual
     mistake, or a mistake of which the contracting officer was
     on notice or should have been on notice.  Aydin Corporation
     v. United States [29 CCF  82,129], 229 Ct.Cl. 309, 669 F.2d
     681 (1982); Wender Presses, Inc.  v. United States [10 CCF 
     72,978], 170 Ct.Cl. 483, 343 F.2d 961 (1965); Holway Oil
     Company, ASBCA No. 27862, 83-2 BCA  16,684.  Moreover,
     before relief by reformation or rescission is available to
     relieve a contractor of the effect of its mistake, the
     mistake must be a "clear cut clerical or arithmetical error,
     or misreading of the specifications" and such relief does
     not extend to mistakes of judgment.  Aydin Corporation v.
     United States, supra; National Line Co. v. United States [26
     CCF  83,394, 221 Ct.Cl.  673, 607 F.2d 978 (1979); Ruggiero
     v.  United States [14 CCF  83,352], 190 Ct.Cl. 327, 420
     F.2d 709 (1970); Michael Chernick v. United States [12 CCF 
     80,938], 178 Ct.Cl. 498, 372 F.2d 492 (1967).

     [A]ppellant is entitled to relief in contract reformation or
     rescission for a unilateral mistake in bid claimed after
     contract award only where the contracting officer knew or
     should have known of the mistake at the time the bid was
     accepted.  Figgie International, Inc., ASBCA No. 27541, 83-1
     BCA  16,421; Paragon Energy Corp. v. United States [28 CCF
      81,290], 227 Ct.Cl.  176, 645 F.2d 966 (1981).

   In Valley Forms, Inc., we further cited Aerospace Components,
   Inc., ASBCA No. 28606, June 27, 1984, 84-3 BCA  17,536,
   respecting the question of post-award mistake in bid wherein
   at page 87,339 the ASBCA said:

[F]or a unilateral mistake in bid (discovered or alleged after
award), to be remediable, the contracting officer must have had
actual knowledge or been on constructive notice of a possible
clerical or careless error in the bid.  Wender Presses, Inc.v.
United States [10 CCF  72,978], 170 Ct.Cl.  483, 343 F.2d 961
(1965); Walter Straga, ASBCA No. 26134, 83-2 BCA  16,611.  Here,
the only potential indication would have been a substantial price
disparity between the Texas Aerospace bid and the next lowest
offers.  Given that this disparity with the next lowest offer was
only 3 percent and the next two offers were 13.4 and 18.8
percent, respectively, higher than Texas Aerospace's bid, we are
unable to conclude that the contracting officer should have been
deemed to have been on constructive notice of an error.

   As in Valley Forms, Inc., we believe that the facts at hand in
   this case do not support a finding that the Contracting
   Officer suspected or should have suspected such mistake in bid
   given the history of prior use of the language, the
   Respondent's own analysis of estimated costs, and the
   competitive range of Smyth sewing bids between the first,
   second, and third bidders.  Moreover, we believe that the kind
   of mistake made by Appellant in reading into the "per 1,000
   copies" language the 32-page signature intention is a mistake
   in judgment and not a mere misreading of the specification.
   In such cases the courts, as we cited in Great Lakes
   Lithograph Company, Docket No. GPO BCA 18-84, May 22, 1985,
   have long held that " . . . an agreement cannot be revised to
   reflect a plaintiff's subjective understanding the defendant
   does not and should not know of."  Benjamin v. United States,
   348 F.2d 502, 172 Ct. Cl. 118 (1965).

   Accordingly, this Board can find no basis for granting the
   appeal.  Thus, the appeal is denied and the decision of the
   Contracting Officer is affirmed.