U.S. GOVERNMENT PRINTING OFFICE
BOARD OF CONTRACT APPEALS

Panel No. 17-84
DREW SPALDING, Chairman
RICHARD R. HEROUX, Member

Appeal of THE AMERICAN PRESS, INC.
Jacket 760-516
September 4, 1991

OPINION

   This appeal, timely filed by The American Press, Inc.
   (appellant), is from the April 23, 1984, final decision of
   Robert G. Seibert, Contracting Officer, Columbus Regional
   Printing Procurement Office, U.S. Government Printing Office
   (respondent).  Respondent terminated the contract for default
   after appellant failed to comply with the contracting
   officer's order to reprint the product following a quality
   rejection.  The appeal is DENIED.

Background

   Respondent, by Purchase Order H-4185, of January 30, 1984,
   awarded a U.S. Government Printing Office (GPO) contract,
   Jacket No. 760-516, to appellant in the amount of $7,250.00.
   Appeal File, Exhibit B.  Appellant was required by the terms
   of the contract to print, bind, and ship f.o.b destination a
   wire-bound book entitled "OHIO RIVER NAVIGATION CHARTS, 1984"
   for the U.S. Army Corps of Engineers.  The specifications
   called for appellant to print 1,500 copies, each consisting of
   172 pages plus a 2-piece cover trimmed to 14 in. x 8 in.
   Appeal File, Exhibit A.

   According to the schedule established in the contract, the
   copy and Government-furnished negatives were to be picked up
   by appellant by
April 20, 1984.  In addition, 750 finished copies were required
to be delivered to the Huntington District Corps of engineers,
Huntington, West Virginia, on or before April 30, 1984, with the
balance to arrive by May 8, 1984.  Id.

   The contract award was made "in strict accordance with"
   appellant's competitive bid, dated January 19, 1984, and
   respondent's specifications.  Appeal File, Exhibit B.  In
   addition, contract modification No. COL-84-288, dated February
   21, 1984, increased the contract price by $252.00 to cover the
   cost of additional performance required of appellant that was
   not included in the original specifications.  Appeal File,
   Exhibit C.

   The specifications, in pertinent part, called for the
   Government to furnish appellant camera copy, plus one black
   and white glossy photograph for cover #1, two negatives for
   cover #2 and #3, text negatives (133 negatives for black
   printing, 81 negatives for red printing, and 81 negatives for
   blue printing), pagination sheets, and a construction dummy.
   Appellant was required to use ink colors Black, Process Blue,
   and 185 Red.  The specifications also stated "Note:  Register
   marks 1  must print on all pages, all colors."  Appeal File,
   Exhibit A.

   The product quality level for both printing and finishing
   attributes was to be equal to the level III standards for such
   attributes as set forth in the GPO Quality Assurance Through
   Attributes Program (QATAP), GPO

1  "Register marks" are defined as "[c]rosses or other devices
applied to original copy prior to photography.  Used for
positioning negatives in register, or for register of two or more
colors in process printing."  "Register" is defined as the
"fitting of two or more printing images on the same paper in
exact alignment with each other."  POCKET PAL - A GRAPHIC ARTS
PRODUCTION HANDBOOK 203 (13th ed. 1988).

Publication 310.1, revised June 1981.  The QATAP itself was made
a part of the contract by reference.  Appeal File, Exhibit A,
pages 1, 2.

   After appellant delivered the completed product to the Army
   Corps of Engineers, it was discovered that some of the
   navigation charts contained in the book were incorrectly
   printed.  Each navigation chart contained a red line printed
   over a map of a portion of the Ohio River.  The red line was
   to represent the channel line which was to be used by boaters
   to navigate the river.  Because of incorrect registration of
   the red ink, the channel line was incorrectly placed on
   certain of the charts, thus presenting an inaccurate channel
   line for navigation purposes.

   The defects were initially brought to the attention of the
   Columbus RPPO by Jackie D. Pullin, Army Corps of Engineers, on
   March 15, 1984.  Appeal File, Exhibit H.

   By letter dated March 15, 1984, the contracting officer placed
   appellant on notice that the printed product was "suspect of
   not being acceptable."  The letter advised that the situation
   was being further investigated and that appellant would be
   advised when the contracting officer arrived at a
   determination as to acceptability.  In a handwritten addition
   to the letter was the comment: "Note:  Poor Registration."
   Appeal File, Exhibit D.

   The GPO requested that appellant return the Government-
   furnished negatives.  On March 22, 1984, appellant returned
   the materials mounted on flats. 2  It was discovered that
   appellant had placed masking sheets over the registration
   marks on the negatives, thus preventing the marks from

2  A "flat" is defined as "the assembled composite of negatives
or positives, mostly on goldenrod paper, ready for platemaking."
POCKET PAL - A GRAPHIC ARTS PRODUCTION HANDBOOK 193 (13th ed.
1988).

being printed. 3  The Army Corp of Engineers made a positive
print of one of the flats and found that none of the pages lined
up in proper registration.  Appeal File, Exhibit H.

   By letter dated April 2, 1984, Colonel John W. Devens,
   District Engineer, Huntington District, Corps of Engineers,
   Department of the Army, formally advised the contracting
   officer that the navigational charts printed by appellant had
   been inspected by the Corps of Engineers, and that "numerous
   errors were discovered.  The errors were due to faulty
   printing."  Colonel Devens further noted:

Because of the legal exposure the Corps of Engineers could incur
if the charts were distributed in their present condition, the
Huntington District will not be able to use them.  Accidents
could occur should vessel navigators rely upon the erroneously
placed sailing line in the charts, since their vessels would be
off-course in unsafe waters.

Appeal File, Exhibit E.  The Corps of Engineers returned the
charts to the contracting officer and requested that they be
corrected and returned as soon as possible.  Appeal File, Exhibit
E.  Enclosed with the letters was a summary of the Corps of
Engineers' inspection results.  The summary indicated that 8
books were inspected and defects were found on pages 110 through
119.  The inspection summary was signed by Jackie D. Pullen,
Acting Chief, Reprographics Branch, and Laddie D. Meadows, Chief,
OAS.  Appeal File, Exhibit E.

   Upon receipt of the inspection results from the Corps of
   Engineers, the contracting officer wrote to appellant.  The
   letter, dated April 4, 1984, informed appellant that "[t]he
   books are rejected because the printing does not meet the
   specifications.  Specifically, the color registration does not

3  The specifications required that the registration marks be
printed.  Appeal File, Exhibit A.

meet the QATAP LEVEL III assigned to the printing specifications
. . ."  The contracting officer explained that:

The negatives furnished with [the] original order had "pin bar
register holes, register marks on left side of page and negative
identification written on masking tape placed on each negative."
However, when the negatives were returned to this office March
22, 1984 on flats (5 up), the register holes and the
identification markings had been cut off a large percentage of
the negatives.  Your attention is directed to Contract Terms No.
1, dated October 1, 1980, Page 7, paragraph 2-7 "Risk or [sic]
Lost."  The Government had to make a complete new set of
negatives with two Pin bar register holes plus having register
marks on left/binding side for registration and checking
purposes.

A new set of negatives are being returned hereunder for
reprinting the complete job at no cost to the Government because
register marks for the black, red, and blue were not printed,
making it difficult to assess registration without checking the
negatives.  However, register marks are vital guides in
maintaining control of registration of the three colors, you are
authorized to print all three color registration marks.  The
image printing on left hand pages in "Black Ink" only should be
centered all sides.  This will afford your firm the opportunity
to instantly recognize any deviation of registration during press
run.  Further furnish three complete books to us for approval
prior to binding.

The books must be reprinted, per specifications, and must arrive
at destination by April 27, 1984.  Let us know after review of
the enclosed printed samples and the negatives whether or not
your firm feels it can reprint the product per LEVEL III
specifications.

Further, let us know by April 9, 1984 whether you will make
arrangements to pick up the rejected books or whether the
Government may dispose of the materials at its discretion.

   Enclosed with the letter were two copies of the rejected
   books, negatives for reprinting, and a previously printed
   sample.  Appeal File, Exhibit F.

   Appellant replied to the contracting officer's letter with a
   letter dated April 6, 1984.  Appellant stated:

The printing was registered as close as possible by us with the
negatives that were furnished to us.  At no time on this order,
or any order for that matter, did we cut any pin bar register
holes from any negatives.  No printer in his right mind would
ever consider that.

I would like to bring to your attention that we have printed
several Ohio River Charts and have never been furnished with
negatives that have been "pin bar register punched."  A few
scattered negatives have been punched but never adequately enough
to be utilized.

Had you not requested the negatives rush, as they were, on flats,
on March 21, 1984, they would have been returned in their proper
envelopes, identified with tape as before.

In my telephone conversation with [Columbus Regional Printing
Procurement Office Manager Joseph] Oberst on March 30, 1984, he
stated that he did not think the job could ever register with the
current negatives in question.

I would like to make note that on the previously printed sample
furnished us, there are no register marks printed, and there are
numerous pages "off register."

Had we been allowed to print the register marks on the finished
sheet, as you are now requesting, we believe that any
"misregister" would have been within government standards.  I
would like to make note that under Item 3-7, Contract Terms No.
1, register marks "must not print on the finished product."

As you are aware, the book had other wrong printing not of our
doing, that makes it undesirable; and I do not feel we should be
required to re-print the job at no expense to the government,
when we performed as well as the material furnished to us would
allow.  Please advise.

We have printed several Level III color jobs for your office
during the past several months and see no reason we cannot
continue to meet these standards when provided with proper
material.

Please note this paragraph:

We opened the negatives that you sent us for use in the re-print,
proofing three at random.  You will note that the cross hair
registration marks are lined up but there are still some areas
(noted) that do not fit.

Appeal File, Exhibit G.

   In a telephone conversation with the contracting officer on
   April 11, 1984, Mr. Robert E. Stevenson of The American Press,
   Inc., stated to the contracting officer that his firm would
   not be able to complete the job as directed.  Appeal File,
   Exhibit H.

   By memorandum dated April 12, 1984, the Assistant Manager of
   the Columbus Regional Printing Procurement Office requested
   the concurrence of the GPO's Contract Review Board in
   terminating the contract for default.  The memorandum recites
   the factual basis for the request:

Suspect letter sent to contractor on March 15, 1984 after phone
complaint from Department.

On March 15, 1984, Mr. Jackie D. Pullin, Army Corps of Engineers,
called Mrs. Karen Day, Columbus RPPO to complain that the
"channel line was printed off register" and he was sending 26
random samples and a letter.  Copy of letter dated April 2, 1984
attached.  Samples received March 20, 1984.  Initial review of
the samples were inconclusive without having the Government
furnished negatives to make a judgment.  Negatives were received
March 22, 1984 in the Columbus RPPO mounted on flats.  The
following was noted:

1.   Most of the negatives had the pin registration holes and
identification information cut off.
2.   Masking sheets were not cut out in areas of the negatives
where the registration tick marks were so they could not be
printed.
3.   Department made a set, one each red, black, and blue, of
positions of one flat with five pages on the flat.  None of the
pages line-up and register.

By certified mail on April 4, 1984, the contractor was sent a
complete new set of negatives and a letter instructing him to
reprint the entire order because the first printing was rejected
for failure to meet QATAP Level III quality.  Copy attached.
Contractor received letter and GFM [Government furnished
material] on April 6, 1984 as per certified receipt.

A letter from the contractor dated April 6, 1984 was received in
the Columbus RPPO on April 9, 1984.  Copy attached.

Attempts to reach Mr. Stephenson by phone on April 10, 1984 were
unsuccessful.  Requests for him to return my calls were made
without success.  On April 11, 1984, I talked with Mr. Stephenson
to ascertain if he was going to reprint this order.  He indicated
that the new negatives would not register as per the proofs he
sent to our office.  A review of the proofs indicated the red
negative was twisted.  I informed Mr. Stephenson of this and
informed him he was to reprint the order using the new set of
negatives.

Mr. Stephenson then stated that he could not obtain paper until
April 17, 1984 and that his bindery sub-contractor could not bind
the books until the week of May 7.

Mr. Pullen, Army, was asked if the Army would accept this delay.
He informed me he had to have 750 books minimum by April 30, 1984
and that the balance on May 8, 1984 would be alright.  Mr.
Stephenson said he could not deliver the partial quantity by
April 30, 1984.  I told Mr. Stephenson to return all GFM to my
attention ASAP.  Material received at Columbus RPPO April 12,
1984.

Because the American Press did not produce in accordance with
QATAP Level III and refuses to reprint as per GPO Pub. 3101,
request concurrence to Terminate for Default and requirements be
procured in the most economical and expeditious manner.

The Contract Review Board concurred with the proposed default
action.  Appeal File, Exhibit H.

   By letter dated April 23, 1984, the contracting officer issued
   a Notice of Termination to appellant, terminating the contract
   for default, "because you refused to reprint the order in
   accordance with the specifications."  The letter noted that it
   was the final decision of the contracting officer, and advised
   appellant of its right to file an appeal.  Appeal File,
   Exhibit L.

   Thereafter the contracting officer reprocured the OHIO RIVER
   NAVIGATION CHARTS by placing the requirement for competitive
   bid.  Appeal File, Exhibit L.  A contract was awarded to Hicks
   Printing, Inc., by

Purchase Order H-4361, dated April 19, 1984.  The contract price
was $9,490.00. 4  Appeal File, Exhibit M.

   Appellant then filed a letter of appeal, addressed to the
   Public Printer, dated April 25, 1984.   Appellant claimed that
   the findings of the contracting officer were inaccurate and
   alleged that

we registered the work to the negatives furnished to us. . . .
The finished job (jacket 760-516) was of comparable quality to
the previously printed sample furnished us. . . . We believe part
of the decision to hold us at fault originated because the book
had other unwanted features, not of our doing. . . . Your claim
that we refused to reprint the book is only valid when you
consider the response we gave you-furnished negatives still
unsatisfactory, proofs were sent to you.

Appeal File, Exhibit K.

   Appellant's appeal letter was docketed by the Board of
   Contract Appeals pursuant to GPO Instruction 110.10B, and
   Panel No. 17-84 was constituted, upon receipt from the
   contracting officer of the Appeal File.  That file consisted
   of Exhibits A through Q.

   By letter dated June 5, 1984, appellant was notified of the
   docketing of the appeal, and the contents of the official
   appeal file and was given the opportunity to examine that
   file.  Appellant was given 30 calendar days from the receipt
   of the letter to submit additional materials for the record.
   Appellant was also advised of its right to have the appeal
   decided, either on the record or after an informal hearing.

   In a response, dated July 6, 1984, appellant elected to have
   the case decided on the written record and noted:

4 The contract price was subsequently increased by the amount of
$455.00 by contract modification No. COL 84-439.  The
modification states in part "[y]ou are authorized to reprint 1500
copies of "Chart No. 128" in 3 colors:  black, red, and blue ink
as per original specs, and to reprint the reverse side in black
ink only.  A new black negative is furnished for the reprinting
of the black plate.  This reprint is required because the
printing is unacceptable due to the quality of negative furnished
by the Government."  Appeal File, Exhibit N.

2.   Our appeal notice letter and the letter to Mr. Seibert
   dated April 6, (copy enclosed) fully states our case.

3.   However we would like to note:

   The question is, did American Press print from
   materials furnished to them, by the government as
   good as this material would allow?

This is a question at hand, not numerous other "chronologies"
that the Columbus G.P.O. has entered into the appeal record to
cover the real problem at hand.

4.   During the past year, the American Press has printed some 63
different orders for the U.S. Government-all acceptable.  Since
this complaint we have been denied two orders that we were low
bidder on and cut completely off from receiving any bid
specifications from the Columbus Office.

We failed to see why after establishing this work record we have
been treated as such.  In my personal phone conversations with
Oberst and Hammitt, concerning this matter (jacket 760-516) we
were treated rudely and certainly not to the standards that I
think government officials should hold themselves to.

Please consider the above information as part of our appeal file.
If there are any other questions, please feel to call.

   Thereafter the record was closed.  The appeal now comes to the
   Board in this form for decision. 5

Analysis

   In cases of termination for default, the Government has the
   initial burden of showing that the contractor has defaulted in
   its performance of

5  The Record consists of the Appeal File, Exhibits A to Q, and
Chronology of Jacket 760-516 dated May 11, 1984; a Memorandum to
the Board of Contract Appeals from the Assistant Manager,
Columbus RPPO, dated May 23, 1984; a letter from The American
Press to R.J. Garvey, dated July 6, 1984.
the contract.  Caskel Forge Inc., ASBCA No. 6205, 61-1 BCA 
2,891; National Aviation Electronics, Inc., ASBCA No. 18256, 74-2
BCA  10,677.  Once the default has been established, the
contractor then has the burden of demonstrating that the default
was excusable.  B.M. Harrison Electrosonics, Inc., ASBCA No.
7684, 1963 BCA  3,736; Hy-Cal Engineering Corp., NASA BCA Nos.
871-18 and 772-7, 75-2 BCA  11,399; see also, Article 2-18,
supra.

   In the instant case, the burden of proof placed upon the
   Government to demonstrate that appellant had defaulted on the
   contract is easily met through the submission of
   correspondence and inspection results which indicate that the
   product produced by appellant was defective.  The inspection
   report from the Army Corps of Engineers shows that the final
   printed product produced by appellant contained numerous
   printing errors caused by appellant's misregistration of the
   Government furnished negatives.  See Appeal File, Exhibit E.

   In contrast to the Government's showing, appellant has
   produced no evidence that the product met specifications.
   Instead, appellant argues that the Government-furnished
   negatives were defective, and that the product it produced was
   no worse than the Government-furnished negatives.  However,
   appellant has failed to provide any proof to support that
   allegation.  Indeed, the only evidence in the record shows
   that when the flats provided by appellant were examined, it
   was found that appellant had misregistered the Government
   furnished negatives and had blocked out the register marks.
   Appeal File, Tabs F, H.

   The Government, as a matter of contract law, is generally
   entitled to require strict compliance with its contract
   specifications, including those of fixed-price supply
   contracts.  American Electric Contracting Corp. v.
United States, 579 F.2d 602, 608 (1978); Red Circle Corp. v.
United States, 185 Ct. Cl. 1, 8 (1968); Jefferson Construction
Co. v. United States, 151 Ct. Cl. 75 (1960); Dependable Printing
Company, Inc., GPO BCA 5-84 (1985).  The determination of whether
a product conforms with the contract specifications must rest
with the contracting officer, as this determination is within his
discretion in administering a contract.  Thomas W. Yoder Co.,
Inc., VACAB 997, 74-1 BCA  10,424.  One of the purposes of the
strict compliance rule is to ensure that the integrity of the
bidding system will not be compromised.  Ideal Restaurant Supply
Co., VACAB 570, 67-1 BCA  6237 (1967).

   This strict compliance can be enforced either by rejecting the
   defective product or, if for reasons of economy or urgency,
   acceptance is in the Government's best interest, by requiring
   a price reduction for nonconforming work.  However, the
   Government is not required to accept nonconforming supplies,
   and the discretion to refuse such acceptance is the
   prerogative of the procuring agency.  Famous Model Co., Inc.,
   ASBCA No. 12526, 68-1 BCA  6902 (1968).  A contractor has no
   contractual right to force the Government to accept defective
   products at a reduced price, even if the defects are
   relatively minor.  Cherry Meat Packers, Inc., ASBCA No. 8974,
   1963 BCA  3937 (1973).

   In this case, the contracting officer acted reasonably in
   rejecting and requiring reprinting. 6  The defects in the
   product were not merely cosmetic, but were ones that
   jeopardized the safety of boaters relying on the charts'
   depiction of the Ohio River channel line.  In addition to the
   misregistration

6 Although appellant claims that the contracting officer
terminated the contract for default because "the book had other
wrong printing not of our doing" (Appeal File, Exhibit G)
appellant has failed to identify the "other wrong printing."
Accordingly, the Board cannot consider this argument.
defects, appellant totally failed to follow the specifications by
omitting registration marks.  The printing of these registration
marks would have allowed appellant and subsequent users to easily
determine whether the channel line was properly placed on the
maps.

   Appellant contends that it did not print the registration
   marks because GPO Contract Terms No. 1, incorporated by
   reference into Jacket 760-516, prohibits the printing of
   registration marks.  This is correct, however, the purchase
   order/specifications for Jacket 760-516 specifically required
   the printing of registration marks.  The specifications also
   contained the following order of precedence clause:

NOTICE: The bidder agrees that any contract resulting from the
bidder's offer shall be subject to all terms and conditions of
U.S. Government Printing Office Contract Terms No. 1. (GPO Pub.
310.2) . . . In case of conflict the provisions of this
specification will prevail.

Appeal File, Exhibit A.

  Thus, appellant was contractually obligated to print the
  register marks.

   Appellant was placed on notice of the defects by the
   contracting officer's letter of April 4, 1984.  Appellant was
   informed that the products submitted by appellant were
   rejected, and appellant was ordered to reprint the books and
   deliver to destination by April 27, 1984.  Appellant did not
   reprint the books as directed by the contracting officer.  In
   a telephone conversation with the contracting officer on April
   11, 1984, Mr. Robert E. Stevenson of The American Press, Inc.,
   stated to the contracting officer that his firm would not be
   able to complete the job as directed.  The contracting officer
   then terminated the contract for default based on appellant's
   failure to reprint as directed.

   Appellant does not dispute that it failed to reprint the
   order.  However, appellant argues that the negatives it was
   furnished by the Government to be used to reprint were
   "unsatisfactory."  Appeal File, Exhibit K.

   Appellant's explanation of its refusal to reprint is not
   persuasive.  The record shows that the same negatives which
   appellant claimed were "unsatisfactory" were used by the
   reprocurement contractor to successfully reprint the channel
   maps. 7   Memorandum of May 23, 1984.

   It is well established that a contractor is obligated to
   perform in accordance with the direction of the contracting
   officer and to seek relief in the form of additional
   compensation under an appropriate contract provision.  Brenner
   Metal Products Corporation, 82-1 BCA  15,462.  The underlying
   merits of the controversy have no effect on the requirement
   that the contractor continue performance while a dispute is
   pending.  Eriez Construction, Inc., 78-2 BCA  13,547.  The
   disputes clause, contained in Contract Terms No. 1, which is
   incorporated by reference into this contract, also requires
   the contractor to perform pending final decision of a dispute.

   Appellant has produced no evidence indicating that the request
   of the contracting officer to reprint was in any way an
   improper direction or otherwise impossible to comply with.

7  Although the record shows that the negatives for Chart 128 had
to be replaced to enable the reprocurement contractor to print
(Appeal File, Exhibit N) this was not one of the charts which was
found to be defective in appellant's printing.  See, Appeal File,
Exhibit E; note 4 supra.

Decision

   Examining the issues in this case, in light of the record and
   applicable Government contract law, it is the decision of this
   Board that the appeal is DENIED.