BOARD OF CONTRACT APPEALS
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, DC 20401
In the Matter of )
)
the Appeal of )
)
R.C. SWANSON PRINTING AND ) Docket No. GPO BCA 15-90
TYPESETTING COMPANY )
Jacket No. 241-699 )
Purchase Order 70992 )
Program D404-M )
DECISION ON MOTION FOR RECONSIDERATION AND ORDER
On July 1, 1993, the Board issued its Supplemental Decision
and Order (Supplemental Decision), in the above-captioned
appeal of R.C. Swanson Printing and Typesetting Company
(Appellant or Contractor)) on the issue of termination costs.1
In its Supplemental Decision, the Board overruled the U.S.
Government Printing Office's (Respondent or GPO or Government)
final decision disallowing nearly all of the Appellant's
claim for settlement costs stemming from the canceling of its
contract for the convenience of the Government because the
Contracting Officer had failed to take into account that the
contract in question was a requirements contract.2 R.C.
Swanson Printing and Typesetting Company, GPO BCA 15-90 (July
1, 1993), Supplemental Decision and Order, Sl. op. at 26. In
so ruling, the Board accepted the Contractor's view that the
proper basis for calculating termination settlement costs was
the estimated contract price over the life of the contract.
Id., Sl. op. at 25 (citing, Aviation Specialists Inc., DOT BCA
No. 1967, 91-1 BCA ¶ 23,534). Accordingly, the Board reversed
the Respondent's final decision and remanded the matter to the
Contracting Officer with instructions to reconsider the
Appellant's claim in light of the Supplemental Decision.
On August 2, 1993, Counsel for GPO submitted Respondent's
Motion for Reconsideration (Motion for Reconsideration) to the
Board, asking it to review its Supplemental Decision, and find
instead that the decision of the Contracting Officer was
correct. Board Rules, Rule 29. Thereafter, on August 24,
1993, Counsel for the Appellant filed Appellant's Opposition
to Respondent's Motion for Reconsideration (Appellant's
Opposition) with the Board, requesting that the Motion for
Reconsideration be denied.3 The Board has carefully
considered the Motion for Reconsideration and the Appellant's
Opposition, and for the reasons which follow, it herein
AFFIRMS the Contracting Officer's determination, and MODIFIES
its Supplemental Decision.
DISCUSSION AND OPINION
As a rule, reconsideration is discretionary and will not be
granted in the absence of specific and compelling reasons.
See, e.g., Christie-Willamette, NASABCA No. 1182-16, 89-2
BCA ¶ 21,659; Carolina Maintenance, ASBCA No. 25891, 88-1
BCA ¶ 20,388; Ken Rogge Lumber Company, ASBCA No. 84-145-3,
84-3 BCA ¶ 17,570; Ronald C. Skillens d/b/a Skillens
Enterprises, GSBCA No. 4625, 77-2 BCA ¶ 12,634.
Reconsideration is not intended to allow the moving party to
reargue the case or reinterpret old evidence. See, e.g.,
Blake Construction Company, GSBCA No. 8376-R, 90-1 BCA ¶
22,408; Prime Roofing, Inc., ASBCA No. 30651, 89-2 BCA ¶
21,593; Ford Aerospace & Communications Corporation, ASBCA
No. 29088, 88-3 BCA ¶ 21,061; Sequal, Inc., ASBCA No. 29119,
85-3 BCA ¶ 18,366; Graphic Litho, Inc., GPO BCA No. 17-85
(September 30, 1988), Sl. op. at 3-5.
Apart from establishing precise time limits for filing, Rule
29 provides only general guidance for parties seeking to have
the Board reconsider a decision.4 Board Rules, Rule 29.
However, in Graphic Litho, Inc., the Board enumerated the
standards for reconsideration in this forum:
Generally, Boards of Appeals, such as this, will not reopen
an appeal record once it is settled. [Footnote omitted.]
Polerad Electronics Corp., ASBCA [No.] 20636, 79-1 BCA ¶
13,777[.] [See also,] Cal Constructors, ASBCA [No.] 21179,
78-1 BCA ¶ 12,992; Harold Benson, AGBCA [No.] 384, 77-1 BCA
¶ 12,490. However, on occasion they will exercise
discretion and do so in order to receive significant newly-
discovered evidence[,] Key, Inc. & Jones-Robertson, Inc.,
IBCA [No.] 690-12-67, 69-1 BCA ¶ 7,447, or non-newly
discovered evidence, G.M. Co. Manufacturing, Inc., ASBCA
[No.] 5345, 60-2 BCA ¶ 2,759, when it is clear that
injustice will be done if the evidence is not considered.
K-Square Corp., IBCA [No.] 959-3-72, 73-2 BCA ¶ 10,146;
Turner Construction Co., GSBCA [No.] 3549, 75-1 ¶ 11,106.
A Board may also exercise such discretion in granting
reconsideration where it is alleged that the Board erred in
its legal conclusions, Pansophic Systems, Inc., GSBCA [No.]
4983, 78-2 BCA ¶ 13,390; or where it is claimed that the
decision was founded in a legal theory which neither party
had espoused. Kaminer Construction Corp., ENGBCA [No.]
2833, 70-1 BCA ¶ 8,257.
Id., Sl. op. at 2-3. [Emphasis added.]
As indicated in Graphic Litho, Inc., the traditional grounds
for reconsideration are: (1) newly discovered evidence, or
evidence which was unavailable at the time of the initial
proceeding; or (2) error or oversight in a contract appeals
board's findings of fact or conclusions of law. See also, Old
Dominion Security, Inc., GSBCA No. 8563-R, 88-3 BCA ¶ 21,072;
Chrysler Corporation, NASABCA No. 1075-10, 77-2 BCA ¶ 12,829;
Winsco Instruments & Controls Company, NASABCA No. 1065-40,
67-2 BCA ¶ 6,644. It is also settled that any new evidence
must be significant and material, and it must be such as to
require a different result. See, e.g., United States v. 41
Cases, More or Less, 420 F.2d 1126, 1132 (5th Cir. 1970); Reed
& Reed, Inc., ASBCA No. 34367, 88-3 BCA ¶ 20,876; Wise
Instrumentation and Controls, NASABCA No. 1072-12, 76-1 BCA ¶
11,641; Mastic-Tar Co., Inc., ASBCA No. 7272, 1962 BCA ¶
3,429. The same requirements regarding materiality and a
difference of result also apply to alleged errors or
oversights of findings of fact and conclusions of law. See,
e.g., Camel Manufacturing Company, ASBCA No. 41231, 91-2 BCA ¶
23,908; Optimal Data Corporation, NASABCA No. 381-2, 85-2 BCA
¶ 18,165.
In seeking review here, the Respondent alleges that the Board
"mischaracterized the nature of the contract" in its
Supplemental Decision by calling it a requirements contract,
and thus the Board's conclusion is legally flawed.5 Motion
for Reconsideration, at 1. In that regard, contract
interpretation is clearly a question of law. Pacificorp
Capital, Inc. v. United States, 25 Cl.Ct. 707, 715 (1992),
aff'd 988 F.2d 130 (Fed. Cir. 1993); Fry Communications, Inc.-
Infoconversion Joint Venture v. United States, 22 Cl.Ct. 497,
503 (Cl.Ct. 1991); Fortec Contractors v. United States, 760
F.2d 1288, 1291 (Fed.Cir. 1985); P.J. Maffei Building Wrecking
Company v. United States, 732 F.2d 913, 916 (Fed. Cir. 1984);
Hol-Gar Mfg. Corp. v. United States, 169 Ct.Cl. 384, 386, 351
F.2d 972, 973 (1965). Consequently, the task confronting the
Board in this proceeding is to examine the terms of the
contract and decide what the agreement really is, regardless
of what the contract is called.6 Ralph Construction, Inc. v.
United States, supra, 4 Cl.Ct. at 731.
The crux of the Respondent's argument is that the contract at
issue was a multiple-award type of agreement, which did not
create an exclusive contractual relationship between the
Appellant and GPO-an essential ingredient for a requirements
contract. Motion for Reconsideration, at 2-3. In that
regard, the Respondent specifically directed the Board's
attention to a case decided by the United States Claims Court
(Claims Court) 16 years ago, in which it held that GPO's
multiple-award agreements were not requirements contracts, as
that concept is understood in Government contracts law.7 See,
Media Press, Inc. v. United States, 215 Ct.Cl. 985, 986
(1977).
In Media Press, Inc., GPO made multiple awards in a contract
for the procurement of certain printed forms for the
Department of Health, Education and Welfare, because it
believed that no single printing firm would be able to meet
all of the customer-agency's needs. Id., at 985. As the
Claims Court described the contractual scheme:
Plaintiff was named low bidder on the basis of its
aggregate low price, with other awards made sequentially
from lowest to highest, also on the basis of aggregate
prices. In placing work, the GPO was obligated to first
communicate with the low contractor to determine whether or
not he could accept an order. The only valid reason for
declining was inability to meet a shipping schedule. If
the low contractor was unable to accept an order, the
Government would contact the next low bidder, and so on,
until the job was accepted.
The contract provided three exceptions to this method of
placing work, only one of which is pertinent here. The
provision in question, Exceptions Clause (3), reserved the
right to establish a new low bidder and numerical sequence
of other bidders on each particular print order, taking
into account only those variables involved in that
particular order, rather than on an aggregate basis taking
into account all four variables. This process of computing
prices on each individual print order is known as
"abstracting". Abstracting showed, because of the
structure of plaintiff's bid, that on orders requiring
little or no folding, the prices of other contractors were
lower. The Government invoked this exception with the
result that all orders were not automatically offered
initially to plaintiff.
Media Press, Inc. v. United States, supra, 215 Ct.Cl. 985-86.
The aggregate low bidder sued in the Claims Court for lost
profits on the print orders it failed to receive, alleging that
the contract was a requirements contract, and thus every offer of
a print order to another contractor was a breach of contract by
GPO. The Claims Court disagreed and dismissed the low bidder's
suit. Media Press, Inc. v. United States, supra, 215 Ct.Cl. 987.
The rationale for the Claims Court's decision was:
A requirements contract has been defined as a contract in
which the purchaser agrees to buy all of its needs of a
specified material from a particular supplier, and the
supplier agrees, in turn, to fill all of the purchaser's
needs during the period of the contract. Inland Container,
Inc. v. United States, 206 Ct.Cl. 478, 482-483, 512 F.2d
1073 (1975); Ready-Mix Concrete Co., Ltd. v. United States,
141 Ct.Cl. 168, 169, 158 F.Supp. 571 (1958); Gemsco, Inc.
v. United States, 115 Ct.Cl. 109 (1950); Johnstown Coal &
Coke Co. v. United States, 66 Ct.Cl. 616 (1929). Neither
party to the instant contract is so tightly and exclusively
bound to the other so as to give rise to a requirement-type
arrangement. The government retained the right to purchase
some of its needs from other printers. Similarly,
plaintiff was empowered to refuse orders if it was unable
to meet a delivery schedule. We conclude, therefore, that
such consideration is insufficient to support plaintiff's
construction of the contract as a requirements contract.
See, Goldwasser v. United States, 163 Ct.Cl. 450, 454-455,
325 F.2d 722, 724 (1963).
Media Press, Inc. v. United States, supra, 215 Ct.Cl. 986.
[Emphasis added.]
The Board's own research on the question raised by the Motion
for Reconsideration, confirms that the earmark of a
requirements contract is the existence of an exclusive
relationship between the contractor and the Government; i.e.,
an understanding that the contractor has the exclusive right
and legal obligation to fill all of the Government's needs for
the work of the kind described in the contract and that the
Government will purchase those needs from no one other than
the contractor. Ralph Construction, Inc. v. United States,
supra, 4 Cl.Ct. at 731; Torncello v. United States, supra, 681
F.2d at 761; Automated Services, Inc., DOTBCA No. 1753, 87-1
BCA ¶ 19,459, at 98,350; Dynamic Science, Inc., supra, 85-1
BCA ¶ 17,710, at 88,383. As explained by the Claims Court in
Torncello:
Requirements contracts also lack a promise from the buyer
to order a specific amount, but consideration is furnished,
nevertheless, by the buyer's promise to turn to the seller
for all such requirements as do develop. Such contracts
clearly are enforceable on that basis. Brawley v. United
States, 96 U.S. 168, 172, 24 L.Ed. 622 (1878); Shader
Contractors, Inc. v. United States, 149 Ct.Cl. 535, 540-43,
276 F.2d 1, 4-6 (1960); Gavin at 244-48 [Gavin, Government
Requirements Contracts, 5 Pub.Cont.L.J. 234 (1972)]. The
entitlement of the seller to all of the buyer's
requirements is the key, for if the buyer were able to turn
elsewhere for some of its needs, then the contract would
not be distinguishable from an indefinite quantities
contract with no stated minimum, unenforceable as we have
stated.
Torncello v. United States, 681 F.2d at 761-62. [Emphasis
added.] Indeed, in a case not unlike Media Press, Inc., the Armed
Services Board of Contract Appeals held that a roofing
contractor, who claimed that work done by two other contractors
should have gone to him, was not entitled to any work required to
be purchased under his requirements contract other than that
specified in delivery and call orders issued under his agreement,
where the Government properly followed its delivery order/call
order system in administering the contract. Skip Kirchdorfer,
Inc., ASBCA No. 22997, 83-2 BCA ¶ 16,713.
The Board has carefully studied the relevant terms of the
Appellant's contract with GPO, and has determined that, as the
Respondent contends, it misapplied the law in this case, and
that the conclusion it reached in its Supplemental Decision
was in error. In that regard, the contract specifications
here disclose a print order placement scheme which is
identical to the one considered by the Claims Court in Media
Press, Inc. Thus, the Appellant's contract also provides, in
pertinent part, that:
DETERMINATION OF AWARD AND PLACEMENT OF WORK
The Government will make multiple awards under this
solicitation since it is anticipated that one firm may not
be able to meet all of the requirements.
In order to make multiple awards and to determine the
sequence of bidders, the Government will apply the prices
quoted by each bidder in the "Schedule of Prices" to the
following units of production which are the estimated
requirements to produce one year's under this contract.
These units do not constitute, nor are they construed as a
guarantee of the volume of work which may be ordered for a
like period of time.
In placing work, the Government will first communicate with
the low contractor to determine whether or not at that time
one or more orders for specified quantities can be accepted
for shipment within the time required by the Government.
The Government will be obligated to offer each job to the
low contractor first, the next low contractor second, and
so on until the job has been accepted. The offer shall be
made only to those contractors whose prices are determined
to be fair and reasonable. The low contractor and each
successive next low contractor shall be obligated to accept
the job except when the shipping schedule cannot be met.
Contractors refusing to accept orders offered with the
requested ship date shall be required to provide the best
date that can be met. When the contractor accepts, a
formal print order will be issued.
* * * * * * * * * *
Notwithstanding any sequence of contractors established as
a result of the Determination of Award, the Government
reserves the right, without limitation, to establish a
specific sequence of contractors for any or all print
orders to be issued under this contract by abstracting the
contract prices of each contractor against actual print
orders to be issued, and adding any applicable costs to the
Government, for transportation of the finished product to
all destinations. In the event such a specific sequence is
established, such specific sequence of contractors shall
control the order in which the print order(s) is offered.
The determination to establish a specific sequence or
sequences shall not be cause for an adjustment in the
contract price or any other term or condition of the
contract.
See, R4 File, Tab A, p. 11. [Emphasis added.]
Where, as here, one contract either refers to or incorporates
the provisions of another contract, both contracts should be
construed together to determine the meaning of the terms and
intent of the parties. Pacificorp Capital, Inc. v. United
States, supra, 25 Cl.Ct. at 716 (citing, Chicago Pneumatic
Tool Co. v. Ziegler, 151 F.2d 784, 795 (3rd Cir. 1945)).
Therefore, when the Board considers the relevant provisions of
the Appellant's contract in light of the Claims Court's
analysis in Media Press, Inc., it is compelled to conclude
that, in fact, the multiple-award agreement in question was
not a requirements contract. Furthermore, since the Board's
error of law was, indeed, significant and material, and was
such as to require a different result, it will grant the
Respondent's Motion for Reconsideration. See, e.g., United
States v. 41 Cases, More or Less, supra, 420 F.2d at 1132;
Camel Manufacturing Company, supra, 91-2 BCA ¶ 23,908; Reed &
Reed, Inc., supra, 88-3 BCA ¶ 20,876; Optimal Data
Corporation, supra, 85-2 BCA ¶ 18,165; Wise Instrumentation
and Controls, supra, 76-1 BCA ¶ 11,641; Mastic-Tar Co., Inc.,
supra, 1962 BCA ¶ 3429.
However, the Board's responsibility does not end here. As
indicated in the Supplemental Decision, the Board was faced
with two issues:
1. Did the Contracting Officer use the proper cost basis
for considering the Appellant's settlement proposal in this
case?
2. Has the Appellant provided sufficient proof to show that
it incurred the costs connected with the terminated
contract described in its claim?
Supplemental Decision, Sl. op. at 13. Granting the Motion for
Reconsideration only disposes of the first question. The Board
must still determine the quantum of relief which the Appellant is
entitled to because of the convenience termination of its
contract.
The record in this case shows that the Appellant's termination
settlement proposal was referred to GPO's Office of the
Inspector General (OIG) for an audit (R4 File, Tabs M and N).
On February 27, 1990, the OIG issued its audit report of the
Appellant's claim (R4 File, Tab Q) (hereinafter OIG Audit
Report). As indicated in the Supplemental Decision, of the
Appellant's claim of $245,796.75, the audit report questioned
$244,265.86, leaving a balance of $1,530.89 (R4 File, Tab Q,
Attachment III, p. 1). The reasoning of the OIG auditors with
respect to their disposition of the individual settlement
categories presented by the Appellant-Labor Costs, Overhead
Expenses, Capital Acquisition Debt, General and Administrative
Expenses, Lost Profit, and Settlement Expenses-has been set
forth previously, and need not be repeated here. Supplemental
Decision, Sl. op. at 9-11. Suffice it to say, that the
Contracting Officer's settlement offer of March 23, 1990,
essentially adopted the findings in the OIG Audit Report (R4
File, Tab S).
The Board has recently indicated that it would rely heavily on
OIG audits in assessing a contractor's evidence of costs.
See, Banta Company, GPO BCA 03-91 (November 15, 1993), Sl. op.
at 57 (and cases cited therein). Here, too, the Board
believes that the information contained in the OIG Audit
Report is the best available in the record to determine the
quantum of relief issue. Id. See also, S.W. Electronics &
Manufacturing Corporation v. United States, 228 Ct.Cl. 333,
655 F.2d 1078 (1981); E.W. Eldridge, Inc., ENGBCA No. 5269,
90-3 BCA ¶ 23,080,; Celesco Industries, ASBCA No. 22251, 79-1
BCA ¶ 13,604. Accordingly, when the Board considers the
record in this case as a whole, including the transcript of
the hearing held on June 2, 1992, it finds that the evidence
supports payment of the Appellant's claim to the extent
offered by the Contracting Officer on March 23, 1990.
Therefore, the Board will allow termination costs in the
amount of $1,530.89, which it finds is fair and reasonable
under the circumstances. Cf., Banta Company, supra, Sl. op.
at 61.
ORDER
For all of the foregoing reasons, the Board finds and
concludes that the Respondent has presented grounds which
would warrant reconsideration of the Supplemental Decision,
and that therefore, its Motion for Reconsideration is GRANTED.
Furthermore, the Board finds and concludes that the record
evidence supports the Appellant's termination claim to the
extent of the Contracting Officer's settlement offer of March
23, 1990. THERFORE, the Board MODIFIES its Supplemental
Decision and REMANDS the case to the Contracting Officer with
instructions to make appropriate arrangements to pay the
Contractor in accordance with this opinion. Banta Company,
supra, Sl. op. at 62; RD Printing Associates, Inc., GPO BCA
02-92 (December 16, 1992), Sl. op. at 37; General Business
Forms, Inc., GPO BCA 2-84 (December 3, 1985), Sl. op at 23.
It is so Ordered.
December 20, 1993 STUART M. FOSS
Administrative Judge
_______________
1 The Board's initial opinion in this appeal was issued on
March 6, 1992. The Board's Decision and Order dismissed the
Contractor's claim for breach of contract damages for lack of
jurisdiction, but ruled that the appeal from the Contracting
Officer's denial of its claim for termination costs was a
justiciable controversy. R.C. Swanson Printing and
Typesetting Company, GPO BCA 15-90 (March 6, 1992), Decision
and Order, Sl. op. at 2.
2 In that regard, the Contracting Officer had disallowed
nearly all of the Appellant's claim for termination costs of
$245,796.75. However, because the termination cost question
could not be decided on the record as it existed, the Board
ordered a hearing to take evidence on that issue. R.C.
Swanson Printing and Typesetting Company, supra, Decision and
Order, Sl. op. at 41-42. GPO Instruction 110.12, Subject:
Board of Contract Appeals Rules of Practice and Procedure,
dated September 17, 1984, Rules 8, 17-25 (Board Rules). The
hearing was conducted by the Board on June 2, 1992. After
reviewing the record in the case, including the evidence
introduced at the hearing and the posthearing briefs
submitted by the parties, the Board issued its Supplemental
Decision.
3 Throughout these proceedings, up to and including the
issuance of the Board's Supplemental Decision, the Appellant
was represented pro se. However, by Notice of Appearance,
dated August 9, 1993, Counsel for the Appellant entered an
appearance on behalf of the Contractor.
4 Rule 29 provides: "A motion for reconsideration, if filed
by either party, shall set forth specifically the ground or
grounds relied upon to sustain the motion, and shall be filed
within 30 days from the date of the receipt of a copy of the
decision of the Board by the party filing the motion."
5 The Respondent does not question the Board's conclusion
that the proper basis for calculating termination settlement
costs for a requirements contract is the estimated contract
price over the life of the contract. R.C. Swanson Printing
and Typesetting Company, supra, Supplemental Decision and
Order, Sl. op. at 25 (citing, Aviation Specialists Inc.,
supra, 91-1 BCA ¶ 23,534). This rule applies provided that
the Government exercises due care in preparing its estimates.
See, Crown Laundry and Dry Cleaners, Inc. v. United States,
39 CCF ¶ 76,575 (Fed.Cl. September 22, 1993); Dynamic
Science, Inc., ASBCA No. 29510, 85-1 BCA ¶ 17,710; Huff's
Janitorial Service, ASBCA No. 26860, 83-1 BCA ¶ 16,518.
6 The Board is not bound by what the parties call a
contract, Ralph Construction, Inc. v. United States, 4
Cl.Ct. 727, 731 (1984) (citing, Torncello v. United States,
681 F.2d 756, 760 (Ct.Cl. 1982); Mason v. United States, 222
Ct.Cl. 436, 444, 615 F.2d 1343, 1346-47 (1980)), and the
understanding and actions of officials administering an
agreement are not dispositive, Salem Engineering &
Construction Corporation v. United States, 2 Cl.Ct. 803, 808
(1983). Thus, in Stanley F. Horton d.b.a T & H Rental & Snow
Removal, the Department of Transportation board of contract
appeals determined, in the absence of any expression within
the agreement denoting that it was a requirements contract,
that such a contract existed between the parties nonetheless
because the facts showed that the Government, historically,
had awarded all snow removal work to the lowest bidder, and
the contract in question contained a reservation clause
allowing the Government to procure elsewhere in the event of
non-performance, which would not be necessary unless the
contract was a requirements contract. Stanley F. Horton
d.b.a T & H Rental & Snow Removal, DOTCAB No. 1231, 82-2 BCA
¶ 15,967.
7 Pursuant to Title IX of the Federal Courts Administration
Act of 1992, Pub. L. No. 102, 106 Stat. 4506 (1992), the
United States Claims Court was renamed the United States
Court of Federal Claims, effective October 29, 1992.