Bay Printing, Inc.

GPO BCA 16-85
January 30, 1987
Michael F. DiMario
Administrative Law Judge


   This appeal, timely filed by Bay Printing, Inc., 7677 Canton
   Center Drive, Baltimore, MD 21224-2084 (hereinafter
   "Appellant"), is from the termination for default of the
   contract with the U.S. Government Printing Office, Denver
   Regional Printing & Procurement Office, Denver, CO 80225
   (hereinafter "Respondent"), identified as Purchase Order
   M-9031, Jacket No. 579-184, "due to your inability to provide
   proofs of acceptable quality and fidelity in the original,
   [sic] camera copy." (Official File, Tab 2.)

   The decision of the Contracting Officer is affirmed for the
   reasons stated hereinbelow.


   By Purchase Order M-9031 dated July 1, 1985, Appellant was
   awarded a contract to produce 1,491 copies, plus one complete
   set of films, of a certain publication titled "White Sands
   Missile Range Book", requisitioned by the Department of the
   Army. The contract price was $7,960 with an added rate of $310
   for each 100 additional copies. Certain illustrations in the
   publication were to be done in 4-color process requiring the
   contractor to make color separations and provide the
   Government with proofs in advance of production. The
   specifications required compliance with "Government Printing
   Office Contract Terms No. 1 (GPO Publication 310.2 - Revised
   October 1, 1980; GPO Publication 310.1, 'Quality Assurance
   through Attributes - Contract Terms,' and MIL-STD-105,
   'Sampling Procedures and Tables for Inspection by Attributes,'
   in effect on the date of issuance of the invitation for bid."
   (Rule 4 File, hereinafter "R4 File," Tab B.) In addition, page
   2 of the specifications included a "Specified Standard" for
   halftone match (single and double impression) and for a
   process color match, the respective standards being to match
   "furnished camera copy" and "color key O.K.'d proof."

   Thereafter, the Appellant proceeded to perform under the
   contract providing Respondent with the required proofs.
   Respondent, after its review, returned the proofs to Appellant
   with corrections stating in pertinent part that: "We are
   concerned about the 4-color process illustrations and wish to
   view a press sheet in your plant prior to the full run. Such
   an on-sight inspection is authorized under article 2-12 in
   Contract Terms No. 1." (R4 File, Tab C.)

   Appellant, upon receipt of such written notice telephoned
   Respondent indicating that it would like to avoid a press
   sheet inspection because it did not schedule time and expense
   for such procedure in its bid and requested that Respondent
   accept a press proof instead of such inspection. Appellant was
   advised that such substitute procedure was acceptable
   "provided there's no cost and you correct the problems on the
   proof . . . ." (R4 File, Tab D.) Respondent's representative
   also indicated to Appellant that Respondent would "like to see
   a color bar for test, etc." (R4 File, Id.)

   Subsequently, on August 23, 1985, Appellant furnished
   corrected copies to Respondent but did not include the
   originals so that a comparative judgment could be made.
   Respondent's representative nevertheless advised Appellant
   that "[t]he 4-color illustrations, on a [sic] least some of
   them, have very serious problems. It's some of the worst 4-
   color work I've seen. Also, the halftones on some pages have
   hot spots all around them." (R4 File, Tab E.)

   That same day a conference call was held between the
   representatives of the two parties wherein they discussed "[p]
   roblems on press proof books . . . ." At that time Respondent
   advised Appellant that it needed "camera copy back ASAP. [and
   that] we'll review w/agency and let you know extent of
   disaster. Hold on to everything else until you hear from us."
   (R4 File, Id.)

   There followed a "Cure Notice" dated September 6, 1985, from
   the Contracting Officer to the Appellant advising that:

   The proofs are rejected. We find numerous problems regarding
   missing copy, type density, halftone quality, and the 4-color
   process illustrations. The extent of the problems can be seen
   by the fact that we are returning only one press proof copy.
   The color on the illustrations varied from copy to copy so
   much that we could not establish a standard. You will find
   comments on most pages regarding the various printing errors.

   The number of contractor errors combined with the extreme
   degree of quality problems convince us that performance under
   the contract is endangered. Therefore, unless you can provide
   this office with a new set of proofs free from contractor
   errors on or before September 23, 1985, the Government may
   terminate subject contract for default pursuant to the article
   entitled "Default", [sic] United States Government Printing
   Office Contract Terms No. 1.

R4 File, Tab F.

   By letter of September 19, 1985, Appellant complied with the
   request by furnishing a package containing the new color
   separations, the old color separations, the original copy, and
   a proof on the referenced jacket. Respondent, after
   examination of these materials, telephonically advised
   Appellant that he was considering terminating the contract for
   default because "Bay submitted color match (?) proofs only,
   did not provide anything on B & W pages, and the color match
   on new proofs were off (too much yellow which was original
   problem)." (R4 File Tab H.)

   In both a subsequent conversation and in a letter the same
   date, October 1, 1985, Appellant advised Respondent that it
   was "embarrassed by the problems . . ." asserting that:

   Our problem started when we engaged the services of a man to
   do the separations. We have used this source before, and he
   had done satisfactory work for Level III separations. However,
   the separations we received were not acceptable. We returned
   them and he worked on them and returned them to us again, then
   departed on his vacation.

   With no other choice, our Production Department decided to use
   these negatives, hoping that the reproduction by the press
   would be satisfactory. We then sent a blueline proof and press
   sheets for you to check for position of pages and overall

   When these were returned, there was some notation as to the
   placing of margins on the page and also the color reproduction
   was rejected, along with the halftone reproduction.

   I was not aware of the problems involved in this. After
   getting involved, I did agree that you were justified in
   rejecting that which you had received, and called your office
   stating that we would have color separations remade and sent
   these along with the original bluelines and printed page
   proofs, which were marked for margin changes.

. . . .

R4 File, Tab I.

   The Contracting Officer, by letter of October 4, 1985,
   responded to Appellant's contention that "[it] intended to
   perform fully and correctly on the order if given the chance."
   by stating that:

   We have reviewed this case and find that the problems to date,
   including those on the latest Cromalin proofs, are serious and
   all inclusive enough to justify termination for default. We
   then checked to [sic] GPO file to learn if your performance
   over time could demonstrate your ability to provide sustained
   quality work. We find that 21 orders, 4% of the work
   attempted, over the past year have been rejected due to
   quality problems. That did not provide the reassurance we

   We have decided to proceed with the termination for default.

R4 File, Tab J.

   There followed the "Notice of Termination" letter dated
   October 4, 1985, indicating that the termination for default
   was due to Appellant's "inability to provide proofs of
   acceptable quality and fidelity to the original, [sic] camera
   copy." (R4 File, Tab K.) The notice also advised Appellant of
   the potential of reprocurement from another source and the
   charge back to Appellant of excess costs, if any, resulting
   from such action.

   Appellant responded to the termination letter by letter of
   October 31, 1985, stating in pertinent part that:

   We feel that, on this particular project, while there may have
   been some reason for the contracting officer to become
   annoyed, as we pointed out in our letter of October 1, 1985,
   we should have been allowed to show another press proof to
   decide if the quality of the completed project would have been

   We explained the problem we were having in that letter and
   asked for you to reconsider your decision.

   The first proof, a dylux and a set of color keys, were sent to
   you and returned with the comment that the color reproduction
   of the full color photos was not acceptable.

   We had the color separations sent back to the separator and he
   worked on them and returned them to us. Running out of time,
   our project manager decided to go to press and print a limited
   number of books and submit them to you for your comment and
   any additional corrections.

   A copy was then returned with your letter of September 6,
   1985, and the cure notice.

   We then reshot all the photos and had new separations made by
   one of the top quality separation firms.

   Being concerned with the overall quality requirements, we
   reviewed the complete project, making every effort to assure
   that the project would be completed to your complete

   In this review, there was a question of the page margins,
   which were not a major concern in your initial communication
   when the first proof was returned. In our efforts to establish
   these margins, your office was called and we were instructed
   to return the blueline and the press proof to you to answer
   this question. We sent along the chromalins on the new set of
   separations, so that you could check them before we proceeded
   with the printing of the complete job.

   We offered to deliver some books for your immediate use, while
   the problems on this project were being resolved. They could
   have been used until the job was rerun.

   The point is, we were all set up to go to press, and delivery
   could have been made.

   There is some question as to the fidelity of the reproduction
   of the color prints on the chromalin proofs that were sent to
   you with the bluelines on September 19, 1985.

   These chromalin proofs were made by Graphics, Inc. I
   personally, did not see these proofs, but from my past
   experience, they should be very good reproductions of the
   subject matter.

. . . .

R4 File, Tab L.

   In a final letter to this Board dated December 23, 1985,
   Appellant stated that:

   What we question is the procedure that was used in this case.

   Even though the Contracting Officer worked within the
   guidelines as dictated by the GPO regulations, we feel that
   there should be some interim review of the situation before
   going to the extreme of cancelling the contract.

. . . .

   The problem in this area is the interpretation of the quality
   of the product delivered, and the steps necessary to achieve
   that level.

   The Contracting Officer must act as an intermediate between
   the Agency customer and the Contractor, assuring that the
   final product delivered is of the nature that it is able to be
   used by the Agency to accomplish the objective that it was
   supposed to accomplish.

   Also, the Contracting Officer must assure that the Agency
   Customer does not insist on increasing the quality level to
   the point where it is not feasible for the Contractor to
   achieve that level without a great overrun in cost for the

. . . .

Official File, Tab 5.

Appellant also stated that it had "elected not to request a
formal hearing [but to] . . . submit [it's] case on the record."
(R4 File, Id.)

   Pursuant to GPO Instruction 110.2 dated September 17, 1984,
   Rule 6.(b), the Board recorded a "general denial" in the
   record on behalf of the Government, since the Respondent had
   not filed a responsive pleading. Such denial procedurally puts
   the matter in formal controversy, thusly making it ripe for

   The case is before the Board for decision in this form.


   The Appellant failed to state a claim for which relief can be
   granted. Indeed Appellant's correspondence admits fault
   respecting contract performance and acknowledges Respondent's
   right to take the default action which it in fact appeals. In
   fact, the only thing it questions "is the procedure that was
   used in this case." asserting in this regard that "even though
   the Contracting Officer worked within the guidelines as
   dictated by the GPO regulations, we feel that there should be
   some interim review of the situation before going to the
   extreme of cancelling the contract." Thus, by its own words,
   Appellant seeks relief not upon the contractually agreed to
   provisions of the contract but upon some nebulous concept of
   "interim review." As noted In the matter of the appeal of
   Peake Printers, Inc., Docket No. GPO BCA 12-85, dated November
   12, 1986:

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.

   Thus, even if this Board were to find itself in agreement with
   Appellant "that there should be some interim review of the
   situation before going to the extreme of cancelling the
   contract.", it could not grant any relief to Appellant under
   the facts of this case since to do so would be to enlarge the
   terms of the contract.

   Accordingly, this Board affirms the decision of the
   Contracting Officer and denies the appeal.