U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS
WASHINGTON, DC 20401
In the Matter of )
)
The Appeal of )
)
WEB BUSINESS FORMS, INC. ) Docket No. GPO BCA 16-89
Jacket Nos. 232-106 through )
232-112 )
Purchase Order 12930 )
DECISION AND ORDER
By letter dated June 5, 1989, Web Business Forms, Inc.
(Appellant or Contractor), 6 Shirley Avenue, Franklin
Township, New Jersey 08873, filed a timely appeal from the May
4, 1989, final decision of Contracting Officer James L.
Leonard, of the U.S. Government Printing Office's (Respondent
or GPO or Government) Printing Procurement Department,
Washington, DC 20401, rejecting the Appellant's request for an
equitable adjustment in the amount of $1,800.00 for printing a
series of forms under its contract identified as Jacket Nos.
232-106 through 232-112, Purchase Order 12930. The
Appellant's claim was based on its contention that it had
discovered a post-award mistake in bid when it noticed during
contract performance that each of the forms were different,
and contradicted the hand-printed notice at the top of the
Purchase Order which stated: "Specifications Apply Equally To
All 7 Jackets Unless Otherwise Noted!" See, R4 File, Tabs A
and G. [Emphasis added.]1 For the reasons which follow, the
decision of the Contracting Officer is hereby AFFIRMED, and
the appeal is DENIED.2
FINDINGS OF FACT3
1. On March 10, 1989, the Respondent solicited telephone
bids for a single contract to print varying quantities of
seven different two-part marginally-punched continuous forms
for the (then) Veterans Administration (VA) (now Department of
Veterans Affairs) (R4 File, Tab A, p. 1). Although each form
was covered by a separate GPO Jacket Number, the Invitation
for Bids (IFB) stated that the "Specifications Apply Equally
To All 7 Jackets Unless Otherwise Noted!" (R4 File, Tab A, p.
1). Potential bidders were also told that the Government-
furnished material (GFM) would be available by March 20, 1989,
and that the contract had to be completed by April 4, 1989 (R4
File, Tab A, p. 1).4
2. The forms were part of a series entitled "National
Service Life Insurance" (R4 File, Tab A, p. 3). The second
page of the solicitation, which consisted of four pages,
informed potential bidders that the VA had ordered the
following quantities of forms: (a) 3,000 copies of Form No.
29-8172 (Rev. 2-81) (VA Requisition No. 9-00417, GPO Jacket
No. 232-106); (b) 5,000 copies of Form No. 29-8291 (Rev. 2-81)
(VA Requisition No. 9-00418, GPO Jacket No. 232-107); (c)
50,000 copies of Form No. 29-8163 (Rev. 3-73) (VA Requisition
No. 9-00419, GPO Jacket No. 232-108); (d) 50,000 copies of
Form No. 29-8161 (Rev. 4-71) (VA Requisition No. 9-00420, GPO
Jacket No. 232-109); (e) 5,000 copies of Form No. 29-8170
(Rev. 4-65) (VA Requisition No. 9-00421, GPO Jacket No.
232-110); (f) 10,000 copies of Form No. 29-8169 (Rev. 2-81)
(VA Requisition No. 9-00422, GPO Jacket No. 232-111); and (g)
10,000 copies of Form No. 29-8167 (Rev. 3-65) (VA Requisition
No. 9-00423, GPO Jacket No. 232-112) (R4 File, Tab A, p. 2).
3. The third page was the front of GPO Form 1026b, which
contained, inter alia, the following additional
specifications:
EQUIPMENT AND USAGE: Printer-IBM 1403/2; Burster-
Manual/Mechanical.
SIZE (OVERALL): Width-10-5/8"; Depth 17".
PAPER COLOR: Part 1-White; Part 2-White.
PAPER KIND: Part 1-C.W. Bond; Part 2-C.W. Bond.
SUB NO. (LATITUDE): Part 1-20; Part 2-20
TYPE OF CHANGE: Part 2-Major (Face and Back).
COLOR OF INK: Part 1-Black (Face and Back); Part 2-Black
(Face and Back).
PRINTS HEAD TO: Part 1-Head; Part 2-Head.
MARGINS-FACE: Head-1/2"; Foot-5/16"; Left-1-3/16";
Right-1-3/16"; -BACK: Head-1/2"; Foot-Various;
Left-1-3/16"; Right-1-3/16".
JOINING: Join sets in the Left margin(s) by [f]irm glue.*
* Position glue line to the right of the left marginal
perforation extending the full 17" depth of the form so
that the form will remain intact when marginal strip is
removed.
* * * * * * * * * *
PERFORATIONS-All perforations shall be cut clean and
sufficiently deep to permit easy separation but not to tear
in ordinary handling or in feeding through the machine.
MARGINAL: 13/16" from left side, 13/16" from right side.
TEARLINE: Horizontal perforations shall be provided every
17".
See, R4 File, Tab A, p. 3.5
4. The Respondent received 10 bids, including offers from
the Appellant and Valley Forms (R4 File, Tabs B and C).6
However, because the Appellant's quote for Form No. 29-8170
(Rev. 4-65) (GPO Jacket No. 232-110) was $2,087.50, Valley
Forms was determined to be the low bidder and was awarded the
contract.7 See, Draft Report, p. 2.
5. Thereafter, on March 22, 1989, the Appellant's President,
Mr. Ed Vartughian, telephoned the Contracting Officer and
informed him that the Contractor had made a mistake in its bid
(R4 File, Tab D). Specifically, Vartughian told Leonard that
his quote of $2,087.75 for Form No. 29-8170 (Rev. 4-65) (GPO
Jacket No. 232-110) was in error, and that the true price
should have been $208.75, a contention which was verified by
the "additional rate" price (R4 File, Tabs D and E). Based on
this information, Leonard determined that this change made the
Appellant the low bidder and he terminated Valley Forms'
contract for the convenience of the Government (R4 File, Tab
F).8 See, GPO Contract Terms, Contract Clauses, ¶ 19
(Termination for the Convenience of the Government).
6. On March 28, 1989, the Respondent issued Purchase Order
12930, awarding the contract to the Appellant (R4 File, Tab
G). Since the original contract delivery date was only a week
away when the contract was awarded, the Appellant wrote to the
Contracting Officer on April 3, 1989, and asked for an
extension of the delivery schedule to April 17, 1994, to
accommodate for the delay (R4 File, Tab G). See, GPO Contract
Terms, Contract Clauses, ¶ 12(c) (Extension of schedules).
The Contractor also stated, however, that the GFM differed
from the contract specifications and it requested a contract
modification to reflect the changes (R4 File, Tab G). In that
regard, the Appellant wrote, in pertinent part:
Your specification sheet shows a quantity breakdown for
seven different jacket numbers with form name and [number]
changes only. It also shows part 1 and part 2 have a major
change between them. The specification sheet then shows
"specifications apply equally on all seven jackets unless
otherwise noted". No where [sic] does the order show or
indicate that the copy other than shown on the
specification sheet are to be different for all lots front
and back.
I would request at this time you send to me a contract
modification which will show as follows:
All seven jackets do not print equally but have major copy
changes part 1 to part 2 both front and back.
We will charge for this modification which includes per
change one negative, one plate, table work to strip same,
and plate changes on the press, $75.00 per change.
Total amount of the contract modification is $1,800.00.9
See, R4 File, Tab G.
7. In a letter to the Contracting Officer on April 10, 1989,
the Appellant amplified the above views (R4 File, Tab J).
Specifically, the Contractor stated, in pertinent part:
. . . [O]n the specification sheet, page [no.] 1 of the
four pages provided it shows "SPECIFICATIONS APPLY EQUALLY
TO ALL 7 JACKETS UNLESS OTHERWISE NOTED".
No where [sic] in the four page specification sheet does it
show that there are copy changes from jacket to jacket. On
page 2 of the specification sheet composition shows face of
part 1 to face of part 2 a major change and on the backer
of part 1 to the backer of [part] 2 a major change.
Based on the specification sheet which states equal on all
jackets and since no other changes are noted we bid this
job at $5,552.75 less 5% for a net of $5,275.11.
When we received the order on 3/38/89 the artwork called
for other than was provided in the specification sheet that
being every jacket had a change to both face and back and
changes to part 2 face and back on all lots.
We are seeking an additional $1,800.00 on this order to
cover the added expenses incurred as a result of the
changes needed but not shown on the original specification
sheet requirements. . . .
See, R4 File, Tab J).
8. Also on April 10, 1989, Vartughian telephoned Leonard and
told him that the job was ready to ship, but that the
Contractor had made a mistake in pricing (R4 File, Tab H). In
response, Leonard informed Vartughian that he could make a
claim for a post-award mistake in bid (R4 File, Tab H).10
See, GPO Printing Procurement Regulation, GPO Publication
305.3 (September 1, 1988), Chap. XI, Sec. 6, ¶ 4 (PPR).
9. By letter dated April 21, 1989, the Contracting Officer
answered the Appellant's April 3, 1989, letter and denied the
requested contract modification (R4 File, Tab I). Addressing
the Contractor's allegations, Leonard explained, in pertinent
part:
When jobs having certain similarities such as common
construction, papers, dimensions, schedules, etc., are
found feasible to be produced by a single contractor
economically and expeditiously because of the similarities,
those orders are combined into a series of "strapped"
jackets and awarded to a single contractor under one
purchase order. In the specifications the following
statement will appear: "Specifications apply equally to all
jackets unless noted otherwise."
This statement is intended to avoid having to repetitively
list every detail in the specifications for each product.
For example, if the dimensions, number of parts, paper
weights, schedules, destinations, etc., are identical for
all products, then such details are entered into the
specifications once and incorporated by the referenced
statement into all the product. The statement neither
specifies nor infers that all the strapped products are
identical insofar as the images and printed matter
contained therein is concerned.
Each of the seven strapped jackets awarded under Purchase
Order 12930 are in fact unique-individual two-part form
sets, each having a distinct title and form number. For
each jacket the specifications stated that GPO would
furnish a negative for the masthead and reprint copy that
must be used as camera copy for the forms. The paper
stocks, inks, changes, and printing requirements, as well
as the construction, packing, ship date, etc., were listed
once in the specifications. As stated in the previous
paragraph, these common details were incorporated into each
of the individual jackets by the referenced statement:
"Specifications apply equally to all jackets unless
otherwise noted." . . .
[GPO Contract Terms] . . . instructs the contractor how to
proceed if there is a conflict with the [GFM]: "The
contractor is required to examine the furnished property
immediately upon receipt. If at that time there is
disagreement with the description or the requirements as
presented in the specification, and prior to the
performance of any work, the contractor shall contact the
GPO . . . and contest the decision." [Citing, GPO Contract
Terms, Contract Clauses, ¶ 7 (Government Furnished
Property).] The succeeding paragraphs describe the
resolutions to any disagreements. The contract file does
not show any record where you contacted the GPO and
protested the furnished property prior to the commencement
of production.
See, R4 File, Tab I, pp. 1-2. [Emphasis added.]
10. A follow-up letter was sent by the Contracting Officer
on April 26, 1989, specifically replying to the Appellant's
letter of April 10, 1989 (R4 File, Tab K). In this letter,
Leonard stated, in pertinent part:
. . . I have concluded that the specifications are not
misleading.
The language pertaining to the seven jackets is standard
and has been used in our specifications for a number of
years. The discussion of the term "strapped jackets" is
found in my April 21, 1989, letter to you. Each of these
jackets represents similar but not identical forms and were
strapped to avoid using repetitive language. Page 2 of the
specifications lists the different form numbers, thus
indicating their difference one from another.
Article 7 of [GPO Contract Terms], . . . does provide
protection for vendors in these circumstances by requiring
the vendor to notify the Contracting Officer of the alleged
discrepancy prior to beginning performance. The contract
file shows no record of your notification. . . .
See, R4 File, Tab K, p. 1.
11. On April 28, 1989, Vartughian wrote to the Contracting
Officer again, disputing the Respondent's position as set
forth in its letter of April 21, 1989, and asking Leonard to
reconsider his denial of a contract modification for the extra
costs incurred printing the job or, in the alternative, render
a final decision on the matter (R4 File, Tabs I and L). In
that regard, the Appellant argued, in pertinent part:
. . . The specifications for these seven jackets state,
"SPECIFICATIONS APPLY EQUALLY TO ALL 7 JACKETS UNLESS
OTHERWISE NOTED".
A.) No where [sic] in the specification sheet does it
show a notation for the 7 jackets to print different.
B.) [The Webster definition] of the word equal is, "of
the same value, evenly proportioned, to be the same with
no variation".
I think the problem we are faced with is our disagreement
as to the meaning of the word equal.
When this order was received it was noted that the seven
jackets were not equal. They were and are different. The
specification sheet said they were to be equal.
I contacted you at the time we received this order and
advised you of the problem. You advised me that I could
make an application for more money, but you doubted it
would be given.
Reference is made to page 2 of your letter to me. I did
contact GPO about the problem, but it is also my
understanding a contractor is obligated, even if there is a
dispute to continue on an order and perform and ship the
order no matter what the dispute is about.11
See, R4 File, Tab L, p. 1. [Original emphasis.]
12. On May 4, 1989, the Contracting Officer sent the
Appellant his final decision denying the claim for an
equitable adjustment in the contract price (R4 File, Tab M).
Leonard's letter essentially reiterated the points he made in
his letter of April 21, 1989, namely: (a) the statement
concerning the specifications applying equally to all of the
jackets unless otherwise noted was intended to avoid having to
repeat every specification, in detail, for each product; (b)
it was not meant to infer that all of the forms were identical
as to images and printed matter; (c) the contract was for
seven separate and distinct two-part forms each with a
different title number; (d) the GFM for each form, consisting
of a negative for the masthead and a reprint copy, was also
different; and (e) only the common elements-i.e., the paper
stocks, inks, changes, printing requirements, construction,
packing, delivery date, etc.-were covered by the statement
concerning the specifications applying equally to all jackets
(R4 File, Tab M. pp. 1-2).12 Leonard went on to say, in
pertinent part:
You claim that you notified GPO of the "problem" when you
received the purchase order. However, our records indicate
that GPO was notified on April 10, 1989, at 9:25 a.m. that
the order had been completed and was ready to ship. You
were told at that time your company could claim a post
award error in bid.
The third part of your claim is that there was a dispute.
Our records indicate that there was never a dispute but
some questions on what your rights are. The facts in this
matter have been reexamined and the original decision will
remain as previously stated.
See, R4 File, Tab M, p. 2.
13. By letter dated June 5, 1989, the Contractor timely
appealed the Contracting Officer's final decision to the
Board.
ISSUE PRESENTED
As framed by the Board during the prehearing conference on
April 19, 1989, the sole issue in this case is:
Are the specifications in the Appellant's contract
sufficiently ambiguous to support its claim for additional
compensation based on a post-award mistake in bid, and if
so, how much?
See, Draft Report, p. 12.
POSITION OF THE PARTIES13
This case is before the Board because the parties disagree
over the meaning of the statement on the face of the IFB which
says that the "Specifications Apply Equally To All 7 Jackets
Unless Otherwise Noted!" (R4 File, Tab A, p. 1). The essence
of the Appellant's case is that these words are misleading
because they imply that, except for changes in the form name
and number, all seven jackets would print precisely the same
(R4 File, Tabs G, J and L). Consequently, having relied on
this interpretation in formulating its bid price, the
Contractor says that it was surprised to find that the GFM it
received had copy changes for each jacket; i.e., the seven
jackets were not "equal", as the Appellant understands that
word, but rather they were different (R4 File, Tabs G, J and
L). See, Draft Report, p. 6. As succinctly stated in its
Complaint letter to the Board, the Contractor's position is,
in pertinent part:
The specification[s] . . . state that all 7 jackets are
equal unless otherwise noted. Our position is all the
jackets have major differences in copy from one another and
those major changes were not noted and therefore we
accepted the order based on no major changes from jacket to
jacket.
See, Letter from the Appellant to the Board, dated July 20, 1989,
p. 2. See also, Draft Report, p. 4. Since the Respondent failed
to apprise potential bidders of the scope of the changes in each
jacket in the specifications, the Appellant believes that it is
entitled to reimbursement in the amount of $1,800.00 for
performing the contract.14 Id., Draft Report, p. 6.
The Respondent's argument, on the other hand, is rooted in two
basic rules of construction which say first, that a contract
should be interpreted as a whole, and second, it should be so
construed that all of its parts have meaning, if at all
possible. R. Brf., p. 3 (citing, United Pacific Insurance
Company v. United States, 204 Ct.Cl. 686, 691, 497 F.2d 1402
(1974) (and cases cited therein); Blake Construction Company
v. United States, 202 Ct.Cl. 794 (1973); Hunkin Conkey
Construction Company v. United States, 198 Ct.Cl. 638, 461
F.1270 (1972); Rice v. United States, 192 Ct.Cl. 903, 428 F.2d
1311 (1970)). In GPO's view, the Appellant's interpretation
of the contract violates these fundamental precepts. R. Brf.,
p. 3. The Respondent contends that the contract
specifications were clear and unambiguous, and left no doubt
as to how the seven strapped jackets were to be printed. R.
Brf., p. 4. GPO principally relies on page 2 of the
specifications, which indicated all of the differences in the
seven jobs by jacket and form number, to support its argument
that potential bidders were on notice that although the seven
strapped jobs contained some common characteristics,
nonetheless there were differences which had to be considered
in printing them. Id. Indeed, the Respondent believes that
not only was it impossible for the Appellant to have
overlooked the variations between the seven strapped jackets
shown on page 2 of the specifications, but the Contractor, in
fact, acknowledged these differences in its April 3, 1989,
letter to the Contracting Officer. R. Brf., pp. 4-5, 6. See,
R4 File, Tab G. See also, Draft Report, pp. 12-13. In
addition, GPO claims that the statement "Specifications Apply
Equally To All 7 Jackets Unless Otherwise Noted!", has been
placed on GPO purchase orders covering multiple printing
jackets for many years, and the words "unless otherwise noted"
are intended to alert potential bidders to the fact that the
strapped jobs vary in some respects, and are not to be printed
alike. R.Brf., pp. 4-5. See, R4 File, Tab K. See, Draft
Report, pp. 7, 12. Finally, the Respondent contends that if
the Appellant had doubts about the specifications, then under
GPO Contract Terms it had a duty to contact the Contracting
Officer and seek a clarification prior to printing the seven
forms. R. Brf., pp. 6-7. See, GPO Contract Terms, Contract
Clauses, ¶ 7 (Government Furnished Property). See also, Draft
Report, pp. 3, 5. Accordingly, the Respondent submits that
since the evidence shows that the contract specifications were
clear and unambiguous, and moreover, that the Appellant failed
to meet its obligation under GPO Contract Terms to ask the
Contracting Officer for a clarification of the printing
instructions prior to performance if it had any questions, the
appeal should be denied. R. Brf., p. 8.
DECISION15
Reduced to its basics, the Appellant's claim for equitable
relief is predicated on two grounds, namely: (1) the statement
on the front of the IFB which says that the "Specifications
Apply Equally To All 7 Jackets Unless Otherwise Noted!" is
misleading and ambiguous, and the Respondent should be held
liable for its poor drafting; and (2) at the very least, the
imprecision of the statement induced the Contractor to make a
mistake in its bid which was discovered only after award. In
the Board's view, neither of these contentions has merit.
1. Contrary to the Appellant's belief, the contract
specifications are not ambiguous.
As the parties recognize, resolution of this dispute
essentially involves an interpretation of the contract by the
Board. Since the parties have drawn different meanings from
the disputed statement on the face of the IFB, the Board's
task is simple-it must decide which of the two conflicting
interpretations is correct, or whether both readings may be
reasonably derived from the contract terms; in other words, is
the contract ambiguous?16 See, e.g., McDonald & Eudy
Printers, Inc., GPO BCA 25-92 (April 11, 1994), Sl. op. at 13;
Shepard Printing, GPO BCA 37-92 (January 28, 1994), Sl. op. at
15-16.
The focus of inquiry in this case is confined to the contract
itself. See, Universal Printing Company, supra, Sl. op. at
26, fn. 27, RD Printing Associates, Inc., supra, Sl. op. at 9,
13, fns. 9 and 15; B. P. Printing and Office Supplies, supra,
Sl. op. at 15. Therefore, certain legal principles should be
kept in mind at the outset. When the parties confront the
Board with two different interpretations of the same contract
language they raise the possibility that the specifications
may be ambiguous. McDonald & Eudy Printers, Inc., supra, Sl.
op. at 13; R.C. Swanson Printing and Typesetting Company, GPO
BCA 31-90 (February 6, 1992), Sl. op. at 41, aff'd on other
grounds, Richard C. Swanson, T/A R.C. Swanson Printing and
Typesetting Company v. United States, Cl.Ct. No. 92-128C
(October 2, 1992). Contractual language is ambiguous if it
will sustain more than one reasonable interpretation.17 Fry
Communications, Inc./InfoConversion Joint Venture, GPO BCA
9-85, Decision on Remand (August 5, 1991), Sl. op. at 9; R.C.
Swanson Printing and Typesetting Company, supra, Sl. op. at
41, fn. 22; General Business Forms, Inc., supra, Sl. op. at
16. See also, Fry Communications, Inc./InfoConversion Joint
Venture v. United States, supra, 22 Cl.Ct. at 503 (citing,
Edward R. Marden Corporation v. United States, 803 F.2d 701,
705 (Fed. Cir. 1986); Sun Shipbuilding & Drydock Co. v. United
States, 183 Ct.Cl. 358, 372 (1968)). In analyzing disputed
contract language, the courts and contract appeals boards
place themselves in the shoes of a reasonably prudent
contractor; i.e., the language of the contract must be given
that meaning which a reasonably intelligent contractor
acquainted with the circumstances surrounding the contract
would derive. McDonald & Eudy Printers, Inc., supra, Sl. op.
at 14; General Business Forms, Inc., supra, Sl. op. at 18
(citing, Salem Engineering and Construction Corporation v.
United States, 2 Cl.Ct. 803, 806 (1983)). See also, Norcoast
Constructors, Inc. v. United States, 448 F.2d 1400, 1404, 196
Ct.Cl. 1, 9 (1971); Firestone Tire and Rubber Company v.
United States, 444 F.2d 547, 551, 195 Ct.Cl. 21, 30 (1971).
A dispute over contract language is not resolved simply by a
decision that an ambiguity exists-it is also necessary to
determine whether the ambiguity is latent or patent. Courts
will find a latent ambiguity where the disputed language,
without more, admits of two different reasonable
interpretations.18 Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl.Ct. at 503
(citing, Edward R. Marden Corporation v. United States, supra,
803 F.2d at 705); R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 41, fn. 22. On the other hand, a
patent ambiguity would exist if the contract language
contained a gross discrepancy, an obvious error in drafting,
or a glaring gap, as seen through the eyes of a "reasonable
man" on an ad hoc basis.19 Fry Communications,
Inc./InfoConversion Joint Venture v. United States, supra, 22
Cl.Ct. at 504 (citing, Max Drill, Inc. v. United States, 192
Ct. Cl. 608, 626 (1970); WPC Enterprises, Inc. v. United
States, 163 Ct.Cl. 1, 6 (1963)); General Business Forms, Inc.,
supra, Sl. op. at 17 (citing, Enrico Roman, Inc. v. United
States, supra, 2 Cl.Ct. at 106).
However, the rules concerning ambiguous contract language come
into play only if the meaning of the disputed terms are not
susceptible to interpretation through the usual rules of
contract construction. McDonald & Eudy Printers, Inc., supra,
Sl. op. at 16; Shepard Printing, supra, Sl. op. at 19; R.C.
Swanson Printing and Typesetting Company, supra, Sl. op. at
42. The most basic principle of contract construction is that
the document should be interpreted as a whole.20 Hol-Gar
Manufacturing Corporation v. United States, supra, 169 Ct.Cl.
at 388, 351 F.2d at 975; General Business Forms, Inc., supra,
Sl. op. at 16; Restatement of the Law, Contracts 2d, § 202(2)
(1981). Hence, all provisions of a contract should be given
effect and no provision is to be rendered meaningless.
Pacificorp Capital, Inc. v. United States, supra, 25 Cl.Ct. at
716; Fortec Constructors v. United States,supra, 760 F.2d at
1292; United States v. Johnson Controls, Inc., 713 F.2d 1541,
1555 (Fed. Cir. 1983); Jamsar, Inc. v. United States, 442
F.2d 930 (Ct.Cl. 1971); Grace Industries, Inc., ASBCA No.
33553, 87-3 BCA ¶ 20,171; General Business Forms, Inc., supra,
Sl. op. at 16 (citing, Raytheon Company v. United States, 2
Cl.Ct. 763 (1983)). In other words, a contract should be
interpreted in a manner which gives meaning to all of its
parts and in such a fashion that the provisions do not
conflict with each other, if this is reasonably possible.21
B. D. Click Company v. United States, 614 F.2d 748 (Ct.Cl.
1980).
When these principles are applied in this case, it is clear
that notwithstanding the painstaking efforts of the Appellant
to construe the "catch-all" statement on the front of the
contract, the Board does not see any ambiguity in its terms.
McDonald & Eudy Printers, Inc., supra, Sl. op. at 18; Shepard
Printing, supra, Sl. op. at 20; R.C. Swanson Printing and
Typesetting Company, supra, Sl. op. at 43-44. See also,
Export Packing & Crating Company, ASBCA No. 16133, 73-2 BCA ¶
10,066, at 47,215. In that regard, the key phrase in the
disputed statement are the words "unless otherwise noted".
The clear import of those words in a statement which says
"Specifications Apply Equally To All 7 Jackets Unless
Otherwise Noted!" is to alert potential bidders that while the
seven forms have specifications in common, some specifications
are different. Hence, a reasonably prudent contractor would
have anticipated those differences in its bid, and would not
have thought, as the Appellant did here, that all seven
jackets would print exactly the same (R4 File, Tabs G, J and
L). Unless such differences were present, the three key words
at the tail of the statement would have no meaning-they would
be mere surplusage. Indeed, if the Respondent wanted to
convey the idea that all seven forms printed alike, as the
Appellant believes, all the statement needed to say was
"Specifications Apply Equally To All 7 Jackets!" Thus, in the
Board's view, the Appellant's interpretation totally ignores
the last three words of the statement, as written, and is
contrary to the settled rules of contract construction which
favor a reading of a document as a whole, and in a manner
which gives meaning and effect to all of its parts. Fortec
Constructors v. United States, supra, 760 F.2d at 1292; United
States v. Johnson Controls, Inc., supra, 713 F.2d at 1555;
Pacificorp Capital, Inc. v. United States, supra, 25 Cl.Ct. at
716; Hol-Gar Manufacturing Corporation v. United States,
supra, 169 Ct.Cl. at 388, 351 F.2d at 975. See also, General
Business Forms, Inc., supra, Sl. op. at 16; Grace Industries,
Inc., supra, 87-3 BCA ¶ 20,171. Accordingly, since the
"catch-all" statement on the front of the IFB is not
misleading or ambiguous, there is no basis for holding the
Respondent liable under the doctrine of contra proferentem in
this case. McDonald & Eudy Printers, Inc., supra, Sl. op. at
16; Shepard Printing, supra, Sl. op. at 19; R.C. Swanson
Printing and Typesetting Company, supra, Sl. op. at 42.
Accord, International Business Investments, Inc. v. United
States, supra, 17 Cl.Ct. 122; G.M. Shupe, Inc. v. United
States, 5 Cl.Ct. 662, 704 (1984); Rainbow Construction Co.,
Inc., AGBCA No. 87-370-1, 92-3 BCA ¶ 25,130.
Furthermore, as the Board stated during the prehearing
conference on April 19, 1990, the Appellant's position is even
more suspect when considered in light of the sequence of
events which shows that notwithstanding the perceived conflict
between the written specifications and the GFM, which it
brought to the Respondent's attention on April 3, 1989, the
Contractor nonetheless went ahead and printed the forms by
April 10, 1989, before the Contracting Officer could resolve
the matter, and in the absence of any direction from him to do
so. See, Draft Report, pp. 9-11. See also, R4 File, Tabs G
and H. In that regard, the present situation is analogous to
a recent dispute between the same parties, in which the Board
rejected the Appellant's equitable adjustment claim because it
proceeded with performance of the contract in the face of
questions it had about the GFM it had received, without
seeking a proper clarification from the Contracting Officer.
Web Business Forms, Inc., supra, Sl. op. at 14-15. Accord,
Avedon Corp. v. United States, 15 Cl.Ct. 771 (1988);
Engineering Technology Consultants, S.A., ASBCA No. 43600,
92-3 BCA ¶ 25,133; Rainbow Construction Co., Inc., supra, 92-3
BCA ¶ 25,130. Consequently, when the forms in question had to
be reprinted after the initial shipment was rejected for
defects, the Government was not liable for the additional
cost because the Contractor had clearly acted contrary to the
"Government Furnished Property" clause of the contract.22 Web
Business Forms, Inc., supra, Sl. op. at 15. See also,
Printing Unlimited, GPO BCA 21-90 (November 30, 1993), Sl. op.
14; Custom Printing Company, supra, Sl. op. at 13. Since the
contractor bears the risk of performance costs in a firm
fixed-price contract, absent facts or a clause allowing
otherwise, see, D.K.'s Precision and Manufacturing, ASBCA No.
39616, 90-2 BCA ¶ 22,830; Chevron U.S.A., Inc., ASBCA No.
32323, 90-1 BCA ¶ 22,602; Nedlog Company, ASBCA No. 26034,
82-1 BCA ¶ 15,519, the Appellant alone was responsible for the
costs of its premature printing of the form in that case,23
see, Web Business Forms, Inc., supra, Sl. op. at 15. See
also, McDonald & Eudy Printers, Inc., supra, Sl. op. at 16;
1993), Sl. op. at 19-21 (citing, Serigraphic Arts, Inc.,
GPOCAB 22-79 (May 8, 1980), Sl. op. at 7-8).24 The Board
believes that the same result is indicated in this appeal,
because the record clearly shows that despite the existence of
a major doubt in its mind concerning the specifications and
the GFM it received from the Respondent, the Contractor, of
its own volition, performed the work before the Contracting
Officer could clarify the matter. Web Business Forms, Inc.,
supra, Sl. op. at 14-15. See also, McDonald & Eudy Printers,
Inc., supra, Sl. op. at 16; 1993), Sl. op. at 21-22. Cf.,
Editor's Press Incorporated, GPO BCA 03-90 (September 4, 1991)
(contractor not entitled to an equitable payment for lost
press time when it unilaterally shut down its presses while it
sought reapproval of its paper stock from GPO). Accordingly,
for all of these reasons the Board concludes that the first
claim made by the Appellant concerning the specifications
themselves is without merit and is rejected.
2. The Appellant has not sustained its claim that it is
entitled to relief because it made a mistake in its bid
which was only discovered after award.
The second contention advanced by the Appellant also relies on
its reading of the statement "Specifications Apply Equally To
All 7 Jackets Unless Otherwise Noted!" to mean that, except
for changes in the form name and number, all seven forms would
print exactly the same. Thus, the Contractor says that it
formulated its bid with that understanding in mind, only to
find when it received the GFM that, in fact, the copy for each
form was different. Therefore, the Appellant believes that
the impreciseness of the disputed statement induced it to make
a mistake in its bid which was discovered only after award,
and it asks the Board, as a matter of equity, to reform the
contract so that it can be paid for the work it actually
performed.25
As the Board indicated during the prehearing conference on
April 19, 1990, post-award mistake in bid claims are generally
not favored in the law because they tend to disadvantage the
unsuccessful bidders by creating a situation where a
contractor can "buy into" a contract at a low offer and then
rely on its mistake to increase its contract price to a level
where it might not have been awarded the contract in the first
instance. Draft Report, p. 10. In that regard, the Board has
remarked that:
It is the duty of the Government to treat all bidders
fairly. Indeed, the very nature of advertised competitive
procurements mandates such action in order that commercial
providers of goods and services will be encouraged to
compete for the public's business. This requirement places
a heavy burden upon contracting officials to strictly
adhere to the exact letter of contract language once award
has been made. To do otherwise would be patently unfair to
the unsuccessful bidders and would discourage future
participation in Government solicitations. The downside of
this is that an innocent bidder, as here, who might not
fully comprehend the provisions of the solicitation will
receive the award as low bidder and be economically injured
as a result. Absent Government fault contributing to the
commission of such error, there is no means of negating
such an unfortunate consequence.
Graphicdata, Inc., GPO BCA 28-88 (February 9, 1990), Sl. op. at
9. See also, Chavis and Chavis Printing, supra, Sl. op. at
18-19. Accord, Ideal Restaurant Supply Company, VACAB No. 570,
67-1 BCA ¶ 6,237). Consequently, although such claims are
recognized by the law, the contractor alleging a post-award
mistake in bid bears a heavy burden of proof.26 Draft Report, p.
10. See, W.B. & A., Inc., ASBCA No. 32524, 89-2 BCA ¶ 21,736, at
109,310 (citing, United States v. Hamilton Enterprises, Inc., 711
F.2d 1038 (Fed. Cir. 1983)).
Executive Branch boards of contract appeals draw their
authority to reform contracts from the Contract Disputes Act
of 1978 (CDA), Pub. L. 95-563 (November 1, 1978), 92 Stat.
2383, 41 U.S.C. § 607(d), and the provisions of the Federal
Acquisition Regulation (FAR), § 14.406-4 (Mistakes after
award), which is essentially a statement of the general law
pertaining to contract reformation..27 See, Construction
Administrative Services, Inc., ENG BCA No. 6033, 93-3 BCA ¶
26,091; Diamond Shamrock Refining and Marketing Company, ASBCA
No. 43729, 92-3 BCA ¶ 25,132; Para/Medical Supplies, Inc.,
VABCA No. 1464, 82-1 ¶ 15,660. As a Legislative Branch
agency, GPO is not covered by the CDA, and thus contractors
who do business with the Respondent have no access to that
statute for resolution of their disputes. See, Tatelbaum v.
United States, 749 F.2d 729, 730 (Fed. Cir. 1984); Wessel
Company, Inc., supra, Sl. op. at 17, fn. 18. However, the
phrase "related to the contract" in the GPO "Disputes" clause,
as well as the agency's printing procurement regulations,
gives the Board the authority to remedy a post-award discovery
of a mistake in bid. Peake Printing, Inc., GPO BCA 12-85
(November 12, 1986), Sl. op. at 6; Great Lakes Lithograph
Company, GPO BCA 18-84 (May 22, 1985), Sl. op. at 18. See,
GPO Contract Terms, Contract Clauses, ¶ 5(a); PPR, Chap. XI,
Sec. 6, ¶ 4.
In that regard, the PPR states, in pertinent part:
a. When a mistake in a contractor's bid is not discovered
until after the award, the mistake may be corrected by
contract modification if correcting the mistake would make
the contract more favorable to the Government without
changing the essential requirements of the contract.
b. In addition to the case in subparagraph 6.4a above,
Contracting Officers, after review by the Chairperson,
Contract Review Board, are authorized under the
circumstances set forth in subparagraph 6.4c to make
administrative determinations described as follows in
connection with mistakes in bid alleged or disclosed after
award. A determination may be made (1) to rescind a
contract or (2) reform a contract:
(i) by deleting the item or items involved in the
mistake; or
(ii) by increasing the price if the contract price, as
corrected, does not exceed that of the next lowest
acceptable bid under the original invitation for bids.
c. Determinations under subparagraph 6.4b may be made only
on the basis of clear and convincing evidence that a
mistake in bid was made, and either that the mistake was
mutual or that the unilateral mistake made by the
contractor was so apparent as to have charged the
Contracting Officer with notice of probability of mistake.
If the evidence does not warrant a determination under
subparagraph 6.4(b)(i) or (ii), a determination may be made
that no change shall be made in the contract as awarded.
See, PPR, Chap. XI, Sec. 6, ¶ 4 (PPR). [Emphasis added.] Except
for some minor variations in language and structure, the above
quoted paragraphs of the PPR are identical to the provisions of
FAR § 14.406-4 (Mistakes after award).28 Thus, like FAR §
14.406-4 (Mistakes after award), the above provisions of the PPR
basically repeat the general rule of Government contracts law
which holds that a contractor who is awarded a contract on the
basis of mistaken bid will be bound by its erroneous offer if the
mistake was neither induced nor shared by the Government, unless
the contracting officer knew or should have known of the
existence of the mistake at the time the bid was accepted. See,
Great Lakes Lithograph Company, supra, Sl. op. at 20-21 (citing,
Doke, Mistakes in Government Contracts-Error Detection Duty of
Contracting Officers, 18 S.W.L.J. 1 (1964)). Furthermore, as the
Board has indicated several times in the past, where GPO adopts
the regulatory language of other agencies as its own, in this
case the rules regarding post-award discovery of mistakes in bid,
then under settled rules of construction the Board must presume
that the uniform interpretation given to those words has also
been accepted. See, Sterling Printing, Inc., GPO BCA 20-89,
Decision Denying Second Motion for Reconsideration and Order
(August 12, 1994), Sl. op. at 3; Banta Company, GPO BCA 03-91
(November 15, 1993), Sl. op. at 34. See also, McDonald & Eudy
Printers, Inc., GPO BCA 40-92 (January 31, 1994), Sl. op. at
11-12; Shepard Printing, supra, Sl. op. at 21-22.
The leading decision of this Board on the question of post-
award discovery of a mistake in bid is Great Lakes Lithograph
Company, supra. In that case the Board, relying on the
decision of the Federal Circuit in United States v. Hamilton
Enterprises, Inc., supra, 711 F.2d at 1038, found for the
contractor on its post-award mistake claim because the record
showed: (1) the existence of a mistake; (2) that the mistake
was not one of judgment but of misreading the specifications;
(3) that the Government shared in the mistake; and (4) that
the appellant presented clear and convincing evidence what its
price would have been but for the mistake. See, Great Lakes
Lithograph Company, supra, Sl. op. at 29. In a lengthy
opinion, the Board set forth, in detail, the standards which
are applied in such cases by this adjudicatory body,
explaining, in pertinent part:
" . . . it is well established that an erroneous bid based
upon a mistake in judgment does not entitle the contractor
to reformation of its contract. [Footnote and citations
omitted.] While on the other hand a "clear cut clerical
or arithmetical error, or misreading of specifications"
may be compensated in certain circumstances. [Citation
omitted.] "The question depends not alone on whether the
bidder made a mistake but on the application of certain
legal principles to the established facts in the
particular case . . . .". [Citation omitted.]
* * * * * * * * * *
The principles of law to be applied in "mistake in bid"
cases have been judicially fashioned (Aydin Corp. v. United
States, 669 F.2d 681, 685 (Ct.Cl. 1982)), based on the view
that:
Although an award normally results in a binding contract
fixing the parties' rights and obligations [citation
omitted], so that ordinarily no relief will be granted
to a party to an executory contract in the case of a
unilateral mistake [citation omitted], nevertheless an
acceptance of a bid containing a palpable, inadvertent,
error cannot result in an enforceable contract.
Moffett, Hodgkins & Clarke Co. v. City of Rochester, 178
U.S. 373, 20 S.Ct. 957, 44 L.Ed. 1108 (1940); United States
v. Metro Novelty Manufacturing Co., 125 F.Supp. 713
(S.D.N.Y. 1954); Kemp v. United States, 38 F.Supp. 568
(D.Md. 1941).
* * * * * * * * * *
. . . The task of ascertaining what an official in
charge of accepting bids "should" have known or
suspected is, of course not always an easy one. . . .
the test here, as in so many areas, must be that of
reasonableness, i.e., whether under the facts and
circumstances of `the particular case there were any
factors which reasonably should have raised a
presumption of error in the mind of the contracting
officer', Welch, Mistakes in Bids, 18 Fed.B.J. 75, 83
(1958), [Wender Presses, Inc. v. United States, 170
Ct.Cl. 483, 343 F.2d 961, 963 (1965)]. . . where it is
obvious from the range of bids itself that a mistake
must have been made, or that there is a real possibility
of such error, and the Government has done nothing by
way of making appropriate inquiry, relief will be
afforded. [Citations omitted.]
Where, as in the case at hand, the Government surmises that
there may be a mistake in bid, "[t]here is authority that a
mere general request for verification would not suffice; it
should invite attention to the reason for surmising error."
[Citations omitted.]
* * * * * * * * * *
In Ruggiero v. United States, 190 Ct.Cl. 327, 420 F.2d 709
(1970), the Court at 715 and 716 said:
. . . As we pointed out in [Charnick] v. United States, 372
F.2d 492, 178 Ct.Cl. 498 (1967), what we are really
concerned with is the overreaching of a contractor by a
contracting officer when the latter has the knowledge,
actual or imputed as something he ought to know, that the
bid is based on or embodies a disastrous mistake and
accepts the bid in face of that knowledge. The corrections
of the mistake, perhaps in the teeth of general conditions
or specifications, by rescission or reformation, represents
an application of equitable principles in a legal action.
The mistake, to invoke such principles, must be, as in the
cases cited, a clear cut clerical or arithmetical error, or
misreading of specifications, and the authorities cited do
not extend to mistakes of judgment. . . . [A]n 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).
See, Great Lakes Lithograph Company, supra, Sl. op. at 17-18,
22-23, 25-26. See also, Atlantic Research Corporation, GPO BCA
22-87 (July 10, 1989), Sl. op. at 5-6; Federated Lithographers-
Printers, Inc., GPO BCA 1-86 (May 29, 1987); Sl. op. at 5; Peake
Printing, Inc., supra, Sl. op. at 7; Valley Forms, GPO BCA 1-84
(January 15, 1986), Sl. op. at 10-11, 13-14.
Subsequently, in Taggart Printing Corporation, the Board
amplified its views when it stated, in pertinent part:
Recently in Valley Forms, Inc., . . .and again in Peake
Printers, Inc., . . . , we cited Manistique Tool and
Manufacturing Company, ASBCA No. 29164, Aug. 13, 1984, 84-2
BCA [¶ 17,599], 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. [Citations omitted.] 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. [Citations
omitted.]
* * * * * * * * * *
[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. [Citations
omitted.]
Taggart Printing Corporation, GPO BCA 11-85 (January 20, 1987),
Sl. op. at 7. See also, Valley Forms, supra, Sl. op. at 11;
Peake Printers, Inc., supra, Sl. op. at 7-8. Furthermore, the
Board has adopted the Armed Service Board Contract Appeal's
(ASBCA) analysis in Aerospace Components, Inc., when considering
post-award mistake in bid claims, where 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 knkowledge or been on
contructive notice of a possible clerical or careless error
in bid. [Citations omitted.] 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 on
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.
See, Valley Forms, supra, Sl. op. at 12 (citing, Aerospace
Components, Inc., ASBCA No. 28606, 84-3 ¶ 17,536, at 87,339);
Peake Printers, Inc., supra, Sl. op. at 8.
As can be seen, the rules applied by the Board to post-award
mistake in bid claims are precisely the same principles
followed by its Executive Branch counterparts. See, Packard
Construction Company, ASBCA No. 45996, 94-1 BCA ¶ 26,512, at
131,971 (citing, Singleton Contracting Co., ASBCA No. 26862,
82-2 BCA ¶ 15,994, aff'd 2 FPD 20, 723 F.2d 68 (Fed. Cir. 1983
(Table)); Universal Construction Company, supra, 93-3 BCA ¶
26,173, at 130,226 (citing, Bromley Contracting Co., Inc. v.
United States, 794 F.2d 669, 672 (Fed. Cir. 1986); Outside
Plant Engineering & Construction Company, Inc., NASA BCA No.
58-1191, 93-1 BCA ¶ 25,489); Construction Administrative
Services, Inc., supra, 93-3 BCA ¶ 26,091, at 129,682-83
(citing, Chemtronics, Inc., ASBCA No. 30883, 88-2 BCA ¶
20,534; Worldwide Parts, Inc., ASBCA No. 38896, 91-2 BCA ¶
23,717; United States v. Hamilton Enterprises, Inc., supra,
711 F.2d at 1038; Aydin Corp. v. United States, supra, 669
F.2d at 681; Bromley Contracting Co., Inc. v. United States,
supra, 227 Ct.Cl. at 573; Wender Presses, Inc. v. United
States, supra, 343 F.2d 961 (1965); CESICA S.p.a., ASBCA No.
42021, 92-2 BCA ¶ 24,964; Penn-Field Industries, Inc., ASBCA
No. 31105, 86-3 BCA ¶ 19,228; Elias Brothers, Inc., ENG BCA
No. 5321, 88-3 BCA ¶ 21,091); Rainbow Construction Co., Inc.,
supra, 92-3 BCA ¶ 25,130, at 125,288 (citing, Lake Shore,
Inc., ASBCA No. 42577, 92-1 BCA ¶ 24,685); Baltazar Torres,
GSBCA No. 11472, 92-3 BCA ¶ 25,178, at 125,469 (citing,
Liebherr Crane Corp. v. United States, 810 F.2d 1153 (Fed.
Cir. 1987); United States v. Hamilton Enterprises, Inc.,
supra, 711 F.2d at 1038; Aydin Corp. v. United States, supra,
230 Ct.Cl. at 886, 669 F.2d at 681; Ruggiero v. United States,
supra, 190 Ct.Cl. at 327, 420 F.2d at 709; Wender Presses,
Inc. v. United States, supra, 170 Ct.Cl. at 483, 343 F.2d at
961; Fan Inc., GSBCA Nos. 7836, 8715, 91-1 BCA ¶ 23,364
(1990); George A. Harris Enterprises, Inc., GSBCA No. 9888,
90-1 BCA ¶ 22,405); W.B. & A., Inc., supra, 89-2 BCA ¶ 21,736,
at 109,310 (citing, United States v. Hamilton Enterprises,
Inc., supra, 711 F.2d at 1046; Bromley Contracting Co. v.
United States, supra, 596 F.2d at 448; Charnick v. United
States, supra, 178 Ct.Cl. at 498, 372 F.2d at 492).
The type of claim presented by the Appellant has been
considered by the Board in numerous other cases. See, e.g.,
Taggart Printing Corporation, supra, Sl. op. at 6-7; Peake
Printing, Inc., supra, Sl. op. at 8; Federated Lithographers-
Printers, Inc., supra, Sl. op. at 5; Graphicdata, Inc., supra,
Sl. op. at 6. In that regard, the ultimate issue in this
appeal is whether or not the Contractor has a right to
reformation of the contract so that it can be paid more for
the contract work than it originally bid, because the
information in the contract specifications detrimentally
misled the Appellant into submitting an erroneous bid which
was only discovered after award. In the Board's view, the
settled law in this area requires that the question be
resolved against the Appellant.
Under the law, reformation of the Appellant's contract is
indicated if one of three circumstances is present: (a) there
is proof of a mistake by clear and convincing evidence;29 (b)
there is evidence of a unilateral mistake of such a nature as
to put the Contracting Officer on notice of the error; or (c)
the parties have made a mutual mistake.30 See, Construction
Administrative Services, Inc., supra, 93-3 BCA ¶ 26,091, at
129,682; Diamond Shamrock Refining and Marketing Company,
supra, 92-3 BCA ¶ 25,132, at 125,293. At the outset, it is
clear that we are not dealing here with a mutual mistake.
That is, there is no evidence in the record establishing the
criterion for a mutual mistake, which is that both parties
entered the contract unaware of a fact material to its
successful performance or that both parties entertained an
erroneous belief as to the existence of a matter material to
the contract. See, Construction Administrative Services,
Inc., supra, 93-3 BCA ¶ 26,091, at 129,683 (citing, Elias
Brothers, Inc., supra, 88-3 BCA ¶ 21,091). Instead, the issue
before the Board clearly concerns a claim of a unilateral
mistake by the Appellant in interpreting the contract
specifications which resulted in an erroneous initial offer
for the contract work.
The cases tell us that for reformation of a contract where a
unilateral mistake has been made by a bidder, the mistake must
be "a clear cut clerical or arithmetic error, or a misreading
of specifications," and not a mistake in judgment. See,
Bromley Contracting Co., Inc. v. United States, supra, 794
F.2d at 672; United States v. Hamilton Enterprises, Inc.,
supra, 711 F.2d at 1038; Aydin Corp. v. United States, supra,
230 Ct.Cl. at 886, 669 F.2d at 681; Ruggiero v. United States,
supra, 190 Ct.Cl. at 327, 420 F.2d at 709. See also,
Universal Construction Company, supra, 93-3 BCA ¶ 26,173;
Outside Plant Engineering & Construction Company, Inc., supra,
93-1 BCA ¶ 25,489; Baltazar Torres, supra, 92-3 BCA ¶ 25,178.
In addition, the bidder must establish that the Government
either knew or should have known of the mistake at the time
the offer was accepted. See, Bromley Contracting Co., Inc. v.
United States, supra, 794 F.2d at 672; Wender Presses, Inc. v.
United States, supra, 170 Ct.Cl. at 483, 343 F.2d at 961. See
also, Packard Construction Company, supra, 94-1 BCA ¶ 26,512;
Universal Construction Company, supra, 93-3 BCA ¶ 26,173;
Construction Administrative Services, Inc., supra, 93-3 BCA ¶
26,091; Baltazar Torres, supra, 92-3 BCA ¶ 25,178; George A.
Harris Enterprises, Inc., supra, 90-1 BCA ¶ 22,405. Stated
otherwise, the controlling legal principle with respect to
unilateral mistakes, is that a mistake of one party at the
time of contract formation may permit rescission or
reformation only if the mistaken party "does not bear the risk
of the mistake" and either "(a) the effect of the mistake
[would make] enforcement of the contract unconscionable, or
(b) the other party had reason to know of the mistake or his
fault caused the mistake." See, Diamond Shamrock Refining and
Marketing Company, supra, 92-3 BCA ¶ 25,132, at 125,293
(citing, CESICA S.p.a., supra, 92-2 BCA ¶ 24,964; Uniflite,
Inc., ASBCA No. 27818, 85-1 BCA ¶ 17,813; Robert S. Davies,
ASBCA No. 27334, 83-2 BCA ¶ 16,556; Restatement of the Law,
Contracts 2d, § 153 (1981).
In the Board's view, the Appellant has not sustained its
burden of proof on this issue. To begin with, the Board does
not find clear and convincing evidence of a the sort of
mistake which would allow reformation of the contract.
Instead, the Board believes that the Appellant's argument that
the specifications gave it inadequate notice that there would
be differences in all seven jackets, is a mistake in judgment
and not a mere misreading of the specification itself. See,
e.g., Federated Lithographers-Printers, Inc., supra, Sl. op.
at 5; Taggart Printing Corporation, supra, Sl. op. at 8; Peake
Printing, Inc., supra, Sl. op. at 8; Great Lakes Lithograph
Company, supra, Sl. op. at 26. Accord, Universal Construction
Company, supra, 93-3 BCA ¶ 26,173, at 130,226; Construction
Administrative Services, Inc., supra, 93-3 BCA ¶ 26,091, at
129,682. In that regard, the disputed statement on the front
of the specifications is express and unambiguous, and clearly
provides that anything mentioned in the specifications is of
like effect on all of the forms, unless otherwise noted. Cf.,
Carothers Construction Company , Incorporated, ASBCA No.
41268, 93-2 BCA ¶ 25,628. Thus, the Contractor's mistake is
the product of its failure to read the specifications
carefully and making assumptions that were not justified.
Such a mistake is not a misreading of the specifications, but
a mistake in judgment that does not provide a basis for
relief. See, Universal Construction Company, supra, 93-3 BCA
¶ 26,173; Electrical Systems Engineering Company, ASBCA No.
37147, 90-2 BCA ¶ 22,715; Hanna Contracting Company, ASBCA No.
38597, 90-1 BCA ¶ 22,306.
Furthermore, the Appellant has not established by clear and
convincing evidence that the Respondent either knew or should
have known of the mistake at the time the offer was accepted.
See, e.g., Federated Lithographers-Printers, Inc., supra, Sl.
op. at 5; Graphicdata, Inc., supra, at Sl. op. 6. Certainly,
there was nothing in the Contractor's bid to give the
Contracting Officer notice of the error. As a rule, a
difference in price alone is not necessarily enough to put a
contracting officer on notice that a mistake has been made,
even if the price differential is great. See, Packard
Construction Company, supra, 94-1 BCA ¶ 26,512, at 131,972
(citing, Wender Presses, Inc. v. United States, supra, 170 Ct.
Cl. at 483, 343 F.2d at 961). However, in this case the
Appellant's corrected bid price was in line with the other
bids, and any price disparity was so negligible that it could
not possibly be a basis for charging the Contracting Officer
with constructive notice of the probability of a mistake.
See, Packard Construction Company, supra, 94-1 BCA ¶ 26,512,
at 131,971-72; Universal Construction Company, supra, 93-3 BCA
¶ 26,173, at 130,227. See also, P.J. Valves, Inc., ASBCA No.
39398, 91-3 BCA ¶ 24,251. Indeed, the $6.65 difference
between the Appellant's corrected initial bid price, which
resulted in the award of the contract to it, and the next
lowest offer from Valley Forms (as well as the $385.73
difference with the third lowest bid from Mid-America Business
Forms), is so tiny (.1 percent and 6 percent, respectively)
that it is ludicrous to think that this disparity should have
alerted the Contracting Officer to the existence of an error
in the Contractor's offer. See, e.g., Construction
Administrative Services, Inc., supra, 93-3 BCA ¶ 26,091, at
129,683 (a mistake on a bid which was only 8 percent lower
than the next lowest bid and 12 percent lower than the
Government estimate, was not of the significance to place the
Contracting Officer on notice of a possible mistake prior to
award of the contract); Diamond Shamrock Refining and
Marketing Company, supra, 92-3 BCA ¶ 25,132, at 125,294 (price
differences of 2.19 percent and 3.99 percent, respectively,
were not so large as to have alerted the contracting officer
to a mistake).
In the final analysis, what this case boils down to is a
situation where the Appellant made an erroneous assumption
about how the specifications applied to each of the seven
strapped jackets. While the Board is sympathetic to the
Contractor's predicament, its mistake cannot serve as the
basis for reformation of this contract.31 See, Baltazar
Torres, supra, 92-3 BCA ¶ 25,178, at 125,469. See also,
Liebherr Crane Corp. v. United States, supra, 810 F.2d at
1153; Fan Inc., supra, 91-1 BCA ¶ 23,364. For the Board to
reform the contract under these circumstances, would destroy
the integrity of the competitive procurement process.
Federated Lithographers-Printers, Inc., supra, Sl. op. at 5.
ORDER
Because the Board finds and concludes that the contract
specifications were clear and unambiguous, and that the
Appellant has not sustained its post-award mistake in bid
claim, the decision of the Contracting officer is AFFIRMED,
and the appeal is DENIED.
It is so Ordered.
September 30, 1994 STUART M. FOSS
Administrative Judge
_______________
1 The Contracting Officer's appeal file, assembled pursuant
to Rule 4 of the Board's Rules of Practice and Procedure, was
delivered to the Board on July 25, 1989. GPO Instruction
110.12, Subject: Board of Contract Appeals Rules of Practice
and Procedure, dated September 17, 1984, Rule 4(a) (Board
Rules). It is referred to hereinafter as the R4 File, with
an appropriate Tab letter also indicated. The R4 File
consists of 13 documents identified as Tabs A through M.
2 By letter dated January 17, 1989, the Appellant advised the
Board that it had elected to have its appeal decided on the
record without a hearing. Board Rules, Rules 8 and 11.
3 The factual description of this case is based on: (a) the
Appellant's Notice of Appeal, dated June 5, 1989; (b) the R4
File; (c) the Appellant's Letter, dated January 17, 1989,
requesting that the Board decide the case on the basis of the
written record pursuant to Rule 11 of the Board Rules; (d)
the Appellant's Letter, dated July 20, 1989, constituting its
Complaint pursuant to Rule 6(a) of the Board Rules and
submitting additional information in accordance with Rule
4(b); and (e) the Report of Telephone Status Conference,
dated August 13, 1992 (RTSC). In addition, at the status
conference, which was held on July 28, 1992, the Board
informed the parties that the former Administrative Judge had
prepared a draft Prehearing Telephone Conference Report,
dated April 23, 1990 (Draft Report), of the meeting he held
on April 19, 1990, but had not issued it to them because an
agency reorganization soon afterward resulted in his
reassignment to another senior position within GPO. Since
the Board believed that the Draft Report should be included
as part of the appeal record, it told the parties that they
would be provided a copy for their comments and/or
corrections. RTSC, pp. 1, 3. Although the Board sent each
party a copy of the Draft Report on August 14, 1992, neither
of them submitted comments and/or corrections for the Board's
consideration. Consequently, the Board included the Draft
Report in the record as originally written. See, Order
Establishing A Briefing Schedule and Setting a Date for
Settling the Record, dated September 16, 1992, p. 2. See
also, Web Business Forms, Inc., GPO BCA 31-89 (July 22,
1994), Sl. op. at 2, fn. 3. The facts, which are essentially
undisputed, are recited here only to the extent necessary for
this decision.
4 The GFM consisted of a negative for the masthead and a
reprint copy of a two-part marginally punched continuous
form, containing type and rule matter with a masthead on the
face of Part One, to be used as camera copy (R4 File, Tab A,
p. 3).
5 The invitation for bids also indicated that the contract
would be covered by the relevant provisions of GPO Contract
Terms, Solicitation Provisions, Supplemental Specifications
and Contract Clauses, GPO Publication 310.2, Effective
December 1, 1987 (Rev. 9-88) (GPO Contract Terms) (R4 File,
Tab A, p. 3).
6 In addition to the offers of the Appellant and Valley
Forms, bids were also submitted by Mid-America Business
Forms, Phillips Business Forms, Forms Express, Recording and
Statistical Corporation, De Marco Forms, Inc., Forms
Corporation of America, Digimatics, and Hoosier Data Forms
(R4 File, Tabs B and C).
7 The Valley Forms contract is identified in the record as
Jacket Nos. 232-106 through 232-112, Purchase Order 12789 (R4
File, Tab F).
8 As corrected, the Appellant's total bid for the work was
$5,552.75, or a difference of $6.65 from Valley Forms' offer
of $5,559.40 (not counting the differences in discount terms
for payment within 20 days; i.e., 5 percent and 1/4 percent,
respectively) (R4 File, Tab C). The next lowest
bid-$5,938.48-was received from Mid-America Business Forms
(R4 File, Tab C). The remaining offers ranged in price from
$7,847.00 (Phillips Business Forms) to $10,231.00 (Hoosier
Data Forms) (R4 File, Tabs B and C).
9 The requested modification amounted to a 32 percent
increase in the contract price (from $5,552.75 to $7,352.75).
10 However, the record also indicates the Contracting Officer
thought that the disputed price agreed with the remaining
quotations (R4 File, Tab H).
11 The Appellant is apparently referring to the paragraph in
the contract's "Disputes" clause, which states, in pertinent
part: "Pending final decision of a dispute hereunder, the
contractor shall proceed diligently with performance and in
accordance with the Contracting Officer's decision." See,
GPO Contract Terms, Contract Clauses, ¶ 5(d) (Disputes).
During the prehearing conference held on April 19, 1989, the
Board observed that this provision, by its terms, only
applies when a contracting officer, notwithstanding a
dispute, specifically directs the contractor to continue
performance. Draft Report, p. 8. However, in response to a
question from the Board, the Contracting Officer denied ever
directing the Appellant to continue the job. Id. Indeed,
from the evidence in the record, the Board thought it most
likely that the Contractor took it upon himself to continue
the work. Draft Report, p. 9.
12 The Contracting Officer also observed that: "Webster also
defines the word equal as having the same capability,
quantity, "or effect as another:" equal strength, equal
weight and equal damage." See, R4 File, Tab M, p. 2.
13 The Respondent did not file an Answer in this case.
Therefore, pursuant to the Board's rules of practice, on
February 22, 1990, the Board entered a "general denial" on
behalf of GPO. See, Board Rules, Rule 6(b). However, the
Respondent did submit a written brief in this appeal. See,
Respondent's Brief, dated October 16, 1992 (hereinafter R.
Brf.). No brief was received from the Appellant.
14 In support of its position, the Appellant submitted a copy
of the specifications for Jacket No. 614-130, which was
issued by GPO's New York Regional Printing & Procurement
Office (NYRPPO), with its Complaint letter to the Board.
See, Letter from the Appellant to the Board, dated July 20,
1989 (Exhibit B). The specifications for Jacket No. 614-130,
which covered four separate forms, was introduced to show
that the NYRPO's contracting officer placed the statement "4
lots-same specs[,] different copy" on the face of the
invitation for bids in order to emphasize that the forms had
the same construction specifications but different copy.
See, Letter from the Appellant to the Board, dated July 20,
1989, p. 2. Early in the prehearing telephone conference
held on April 19, 1990, the Board stated the NYRPPO
specifications were of little weight because, inter alia, the
issuing office was not same one involved in this dispute, and
indicated its intention to disregard that evidence. See,
Draft Report, p. 4. Although the Board later said that it
would look at those specifications and give them whatever
evidentiary weight they were worth, see, Draft Report, p. 12,
it has concluded that its initial decision not to consider
the specifications for Jacket No. 614-130 in the context of
this case, was correct. In that regard, the Board has stated
on numerous occasions that except for default termination
cases where a reprocurement contract is under review because
the contractor is contesting the assessment of excess
reprocurement costs, see, e.g., Sterling Printing, Inc., GPO
BCA 20-89 (March 28, 1994), Sl. op. at 55-63, its narrow
jurisdictional mandate prevents it from considering other
contracts unrelated to the one involved in the appeal and it
has consistently refused to consider matters outside the
scope of the disputed contract, see, e.g., Universal Printing
Company, GPO BCA 09-90 (June 22, 1994), Sl. op. at 26, fn.
27; Shepard Printing, GPO BCA 23-92 (April 29, 1993), Sl. op.
at 7, fn. 11; B. P. Printing and Office Supplies, GPO BCA
14-91 (August 10, 1992), Sl. op. at 14-15.
15 The record on which the Board's decision is based consists
of: (a) the Appellant's Notice of Appeal, dated June 5, 1989;
(b) R4 File; (c) the Appellant's Letter, dated January 17,
1990, requesting that the Board decide the case on the basis
of the written record pursuant to Rule 11 of the Board Rules;
(d) the Appellant's Letter, dated July 20, 1989, constituting
its Complaint, and submitting additional information in
accordance with Rule 4(b); (e) the draft Prehearing Telephone
Conference Report, dated April 23, 1990; and (i) the Report
of Telephone Status Conference, dated August 13, 1992.
Furthermore, although the record was mostly compiled before
the undersigned was appointed GPO's Administrative Judge, see
note 3 supra, that fact is not an impediment to his
authorship of this decision. See, Web Business Forms, Inc.,
supra, Sl. op. at 12, fn. 18. Accord, C&L Construction
Company, Inc., ASBCA Nos. 22993, 23040, 81-2 BCA ¶ 15,373, at
76,168 (citing, Sternberger v. United States [13 CCF ¶
82,085], 185 Ct.Cl. 528, 401 F.2d 1012 (1968); Sundstrand
Turbo v. United States [12 CCF ¶ 81,589], 182 Ct.Cl. 31, 389
F.2d 406 (1968)).
16 Contract interpretation is clearly a question of law, see,
e.g., Pacificorp Capital, Inc. v. United States, 25 Cl.Ct.
707, 715 (1992), aff'd 988 F.2d 130 (Fed. Cir. 1993); 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); Fry
Communications, Inc.-InfoConversion Joint Venture v. United
States, 22 Cl.Ct. 497, 503 (Cl.Ct. 1991); Hol-Gar
Manufacturing Corp. v. United States, 169 Ct.Cl. 384, 386,
351 F.2d 972, 973 (1965); General Business Forms, Inc., GPO
BCA 2-84 (December 3, 1985), Sl. op. at 16 (citing, John C.
Grimberg Company v. United States, 7 Ct.Cl. 452 (1985)); RD
Printing Associates, Inc., GPO BCA 02-92 (December 16, 1992),
Sl. op. at 13, as is definition of the contract. See, 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). Any decision by this Board concerning such a
matter is reviewable by the Courts under the Wunderlich Act,
41 U.S.C. §§ 321, 322. Fry Communications, Inc./
InfoConversion Joint Venture v. United States, supra, 22
Cl.Ct. at 501, fn. 6; General Business Forms, Inc., supra,
Sl. op. at 16.
17 The United States Claims Court has observed that: "[a]
mere dispute over the terms does not constitute an ambiguity,
and an interpretation which is merely possible is not
necessarily reasonable." Ceccanti, Inc. v. United States, 6
Cl.Ct. 526, 528 (1984). An ambiguity must have two or more
reasonable interpretations and the intent of the parties must
not be determinable by the normal rules of interpretation.
McDonald & Eudy Printers, Inc., supra, Sl. op. at 14, fn. 12;
R.C. Swanson Printing and Typesetting Company, supra, Sl. op.
at 42. See also, International Business Investments, Inc. v.
United States, 17 Cl.Ct. 122 (1989), aff'd, 895 F.2d 1421
(Fed. Cir. 1990) (contract terms are not rendered ambiguous
by the mere fact that the parties disagree as to their
meaning; there must be reasonable uncertainty of meaning).
18 In such cases, the doctrine of contra proferentem applies
and the dispute language will be construed against the
drafter, Fry Communications, Inc./InfoConversion Joint
Venture v. United States, supra, 22 Cl.Ct. at 503 (citing,
William F. Klingensmith, Inc. v. United States, 205 Ct.Cl.
651, 657 (1974)); R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 41, fn. 22, if the non-drafter can
show that he/she relied on the alternative reasonable
interpretation in submitting his/her bid. Fry
Communications, Inc./ InfoConversion Joint Venture v. United
States, supra, 22 Cl.Ct. at 510 (citing, Fruin-Colon
Corporation v. United States, 912 F.2d 1426, 1430 (Fed. Cir.
1990)); Lear Siegler Management Services v. United States,
867 F.2d 600, 603 (Fed. Cir. 1989)).
19 Where there are such discrepancies, errors, or gaps, the
contractor has an affirmative obligation to ask the
contracting officer to clarify the true meaning of the
contract language before submitting its bid. See, Interstate
General Government Contractors, Inc. v. Stone, 980 F.2d 1433
(Fed. Cir. 1992); Fry Communications, Inc./InfoConversion
Joint Venture v. United States, supra, 22 Cl.Ct. at 504
(citing, Newsom v. United States, 230 Ct.Cl. 301, 303
(1982)); Enrico Roman, Inc. v. United States, 2 Cl.Ct. 104,
106 (1983); S.O.G. of Arkansas v. United States, 546 F.2d
367, 212 Ct.Cl. 125 (1976); Beacon Construction v. United
States, 314 F.2d 501 (Ct.Cl. 1963)). See also, Universal
Construction Company, NASA BCA No. 83-1092, 93-3 BCA ¶
26,173, at 130,227; Harwood Construction Company, NASA BCA
No. 1165-45, 68-1 BCA ¶ 6768.
20 The purpose of any rule of contract interpretation is to
carry out the intent of the parties. Hegeman-Harris and
Company, 440 F.2d 1009 (Ct.Cl. 1979). The test for
ascertaining intent is an objective one; i.e., the question
is what would a reasonable contractor have understood, not
what did the drafter subjectively intend. Corbetta
Construction Company v. United States, 461 F.2d 1330, 198
Ct.Cl. 712 (1972). See also, Salem Engineering and
Construction Corporation v. United States, 2 Cl.Ct. at 806.
The provisions of the contract itself should provide the
evidence of the objective intent of the parties.
21 It is unnecessary to set forth in detail the rules of
contract construction which apply when interpreting an
agreement. Suffice it to say that, within the contract
itself, ordinary terms are to be given their plain and
ordinary meaning in defining the rights and obligations of
the parties. Elden v. United States, 617 F.2d 254, 223
Ct.Cl. 239 (1980). Similarly, technical terms are given
their technical meaning. Coastal Drydock and Repair
Corporation, ASBCA No. 31894, 87-1 BCA ¶ 19,618; Industrial
Finishers, Inc., ASBCA No. 6537, 61-1 BCA ¶ 3,091. Likewise,
terms special to Government contracts will be given their
technical meanings. General Builders Supply Company v.
United States, 409 F.2d 246, 187 Ct. Cl. 477 (1969) (meaning
of "equitable adjustment"). As for extrinsic evidence of the
intent of the parties, the rules of construction allow, among
other things, custom and trade usage to explain or define
terms. W. G. Cornell Company v. United States, 376 F.2d 199,
179 Ct. Cl. 651 (1967); Harold Bailey Painting Company,
ASBCA No. 27064, 87-1 BCA ¶ 19,601 (used to define "spot
painting"). However, custom and trade usage may not
contradict clear or unambiguous terms. WRB Corporation v.
United States, 183 Ct.Cl. 409, 436 (1968). On the other
hand, the Board is not bound by what the parties call a
contract, Ralph Construction, Inc. v. United States, supra,
4 Cl.Ct. at 731 (citing, Torncello v. United States, supra,
681 F.2d at 760; 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, supra, 2 Cl.Ct. at 808.
22 See, GPO Contract Terms, Contract Clauses, ¶ 7, which
provides, in pertinent part: "The contractor is required to
examine the furnished property immediately upon receipt. If
at that time there is disagreement with the description or
the requirements as presented in the specification (or print
order/GPO Form 2511), and prior to the performance of any
work, the contractor shall contact the U.S. Government
Printing Office, Central Office Printing Procurement
Division, Washington, DC 20401, or the originating Regional
Printing Procurement Office, and contest the description.
(Failure to examine the GFP/specification and bring any
discrepancies to the attention of the Contracting Officer
will not relieve the contractor of responsibility to
perform.) The Contracting Officer will then investigate and
make a determination which will be final. If the decision is
reached that the original description is proper, the
contractor will be required to proceed with the work.
Failure to agree to the description shall be a dispute within
the meaning of article 5 "Disputes." . . . " A contractor's
duty to notify GPO under the circumstances described in this
clause is an affirmative one. Custom Printing Company, GPO
BCA 10-87 (May 10, 1988), Sl. op. 12. Accord, Southern
Athletic Company, Inc., ASBCA No. 9258, 65-1 BCA ¶ 4,649;
Sidran Sportswear Company, Inc., ASBCA No. 9557, 65-1 BCA ¶
4,632; Kilgore, Inc., ASBCA No. 1387 (1953).
23 Essentially, the Board held that without any positive
proof in the record to show that the Contractor fully met its
notification responsibilities under GPO Contract Terms, it
was left with mere unsubstantiated assertions by the
Appellant that the GFM and the Respondent's instructions,
were "bad" and "incomplete", which standing alone do not
constitute proof. See, Web Business Forms, Inc., supra, Sl.
op. at 15. See also, R.C. Swanson Printing and Typesetting
Company, supra, Sl. op. at 45-46; Fry Communications,
Inc./InfoConversion Joint Venture, supra, Sl. op. at 33, fn.
31, 40. Accord, Singleton Contracting Corporation, GSBCA No.
8548, 90-2 BCA ¶ 22,748; Tri-State Services of Texas, Inc.,
ASBCA No. 38010, 89-3 BCA ¶ 22,064; Gemini Services, Inc.,
ASBCA No. 30247, 86-1 BCA ¶ 18,736.
24 The Board was created by the Public Printer in 1984. GPO
Instruction 110.10C, Subject: Establishment of the Board of
Contract Appeals, dated September 17, 1984. Prior to that
time, appeals from decisions of GPO Contracting Officers were
considered by ad hoc panels of its predecessor, the GPO
Contract Appeals Board (GPOCAB). The Board has consistently
taken the position that it is a different entity from the
GPOCAB. See, The Wessel Company, Inc., GPO BCA 8-90
(February 28, 1992), Sl. op. at 25, fn. 25. Nonetheless, it
has also been the Board's policy to follow the holdings of
the ad hoc panels where applicable and appropriate, but the
Board differentiates between its decisions and the opinions
of those panels by citing the latter as GPOCAB. See, e.g.,
Shepard Printing, supra, Sl. op. at 11, fn. 10; Stephenson,
Inc., GPO BCA 02-88 (December 20, 1991), Sl. op. at 18, fn.
20; Chavis and Chavis Printing, GPO BCA 20-90 (February 6,
1991), Sl. op. at 9, fn. 9.
25 The Board observes that this is the second "mistake" claim
made by the Appellant with respect to this contract. The
first one concerned a clerical error in its initial bid, and
was instrumental in the Contracting Officer's decision to
terminate the Valley Forms contract for convenience of the
Government and award the work to the Appellant. See, Factual
Finding No. 5. Here, the Contractor's post-award mistake
claim is advanced as justification for its request for an
increase in the contract price. While there is certainly no
fixed ceiling on the number of mistake claims in any one
contract, it is also true that a contractor's too frequent
reliance on its own errors will leave the Board wondering
about the integrity of the bid preparation practices used,
and will tend to cast doubt upon the accuracy and bona fides
of the entire bid.
26 It is generally accepted that a mistake of fact supporting
reformation does not arise merely from an inability to
predict the future, but rather must be a bona fide mistake
regarding the existing facts on which a bargain is based.
See, Southern Dredging Company, Inc., ENG BCA No. 5843, 92-2
BCA ¶ 24,886, at 124,117 (citing, Martin-Copeland Co., ASBCA
No. 26551, 83-2 BCA ¶ 16,752; Hilton Construction Co., Ltd.,
DOT CAB No. 1035, 80-1 BCA ¶ 14,318. See also, Restatement
of the Law, Contracts 2d, § 151, Comment a. (1981).
27 Reformation of a contract requires that a contract appeals
board find the existence of a qualifying "mistake." See,
Atlas Corporation et al. v. United States, 15 Cl.Ct. 681
(1988); Johns-Manville Corporation v. United States, 12
Cl.Ct. 1 (1987); Olson Plumbing and Heating Company v. United
States, 221 Ct.Cl. 197, 591 F.2d 1308 (1979); ITT Artic
Services, Inc. v. United States, 207 Ct.Cl. 533, 513 F.2d 588
(1975); Foster Wheeler Corp. v. United States, 206 Ct.Cl.
533, 513 F.2d 588 (1975). See also, EDC/MTI Joint Venture,
ENG BCA No. 5631, 90-2 BCA ¶ 22,669. In that regard, FAR §
14.406-4 (Mistakes after award) defines what would be
considered a qualifying mistake.
28 FAR § 14.406-4 (Mistakes after award) states, in pertinent
part: ". . . (a) When a mistake in a contractor's bid is not
discovered until after the award, the mistake may be
corrected by contract modification if correcting the mistake
would make the contract more favorable to the Government
without changing the essential requirements of the contract.
(b) In addition to the cases contemplated in paragraph (a)
above or as otherwise authorized by law, agencies are
authorized to make a determination-(1) To rescind a contract;
(2) To reform a contract (i) to delete the items involved in
the mistake or (ii) to increase the price if the contract
price, as corrected, does not exceed that of the next lowest
acceptable bid under the original invitation for bids; or (3)
That no change shall be made in the contract as awarded, if
the evidence does not warrant a determination under
subparagraphs (1 or (2) above. (c) Determinations under
subparagraphs (b)(1) and (2) above may be made only on the
basis of clear and convincing evidence that a mistake in bid
was made. In addition, it must be clear that the mistake was
(1) mutual, or (2) if unilaterally made by the contractor, so
apparent as to have charged the contracting officer with
notice of the probability of mistake."
29 There must not only be evidence of the mistake, but the
contractor must also establish by clear and convincing proof
what his bid price would have been but for the error. United
States v. Hamilton Enterprises, Inc., supra, 711 F.2d at
1046; W.B. & A., Inc., supra, 89-2 BCA ¶ 21,736, at 109,310.
30 In at least one case, the Board, apparently interpreting
PPR, Chap. XI, Sec. 6, ¶ 4(b), has indicated that the
contracting officer has the exclusive discretion to remedy
unilateral mistakes, after properly verifying both the
erroneous offer and the intended bid price, finding the
latter bid lower than the next lowest offer, and ascertaining
that correction of the mistake would make the contract more
favorable to the Government. See, Atlantic Research
Corporation, supra, Sl. op. 5-6. Consequently, under this
principle the Board's review would be limited to a
consideration of whether or not the contracting officer
abused his/her discretion. However, the standard of review
enunciated in Atlantic Research Corporation appears in no
other Board post-award mistake in bid case, and thus that
decision is probably sui generis.
31 In so ruling the Board notes that, in any event, the PPR
would preclude reformation of the Appellant's contract by a
32 percent increase in the contract price, as it requested.
See, note 9 supra. The PPR states quite clearly that in
correcting a post-award mistake in bid, the increase in the
contract price may not ". . . exceed that of the next lowest
acceptable bid under the original invitation for bids." See,
PPR, Chap. XI, Sec. 6.b(ii). See also, Atlantic Research
Corporation, supra, Sl. op. at 6. The same rule applies in
reforming contracts under the FAR. See, FAR § 14.406-4(b)(2)
(ii), note 28 supra. In this case, the ceiling on any
increase in the Appellant's contract price was established by
Valley Forms' original bid of $5,559.40. Stated otherwise,
even a favorable ruling for the Appellant would only have
resulted in a contract price increase of $6.65.