Fry Communications, Inc. GPO BCA 22-84 February 20, 1986 Michael F. DiMario, Administrative Law Judge Opinion This appeal, timely filed by Fry Communications, Inc., 800 W. Church Road, Mechanicsburg, PA 17055 (hereinafter "Fry" or "Appellant"), arises under the disputes clause of the U.S. Government Printing Office Contract Terms No. 1, (GPO Pub. 310.2) dated October 1, 1980, which was incorporated in and .made a part of a certain contract identified as Purchase Order No. 05899, Jacket No. 438-615, dated April 6, 1984, between Appellant and the U.S. Government Printing Office (hereinafter "GPO" or "Respondent"). The contract in the amount of $8,019 was for the production of 12,000 size 8 1/2 x 11", 144-page Export Trading Companies Guidebooks for the Department of Commerce. The appeal is from the final decision of James L. Leonard, Contracting Officer, GPO, of July 10, 1984, affirming his earlier decision to accept the product at a 18.9 percent discount in price because "[t]est results showed that the paper was not equal to specifications in color." (Appeal File, hereinafter "R4 file", Tab 8) The appeal is remanded back to the contracting officer for reconsideration for the reasons set forth hereinbelow. Statement of Facts The contract specifications (R4 file, Tab 1) required that the contractor furnish the following in producing the required product: PAPER - COLOR AND KIND (must be of a uniform shade in each copy) Contractor will furnish JCP Basis - 500 Sheets Code No.* (Size) (Weight) Inches Pounds Text - White Offset Book A60 25 x 38 50 Cover - White Litho Coated L1O 20 x 26 80 Cover *Must be in accordance with JCP Paper Specification Standards, in effect on date of this order. . . . . Moreover, the specifications state that: "Quality Assurance Through Attributes (GPO Pub. 310.1) in effect on date of this order, applies. Level 3." (R4 file, Tab 1) One-thousand copies were to be delivered to the Department of Commerce by April 9, 1984, and apparently were so delivered. However, on April 14, 1984, G. F. Flemion, Printing Specialist, Quality Assurance Section, Printing Procurement Department, GPO, inspected the product in accordance with the contract terms and found from a sample of some 32 books that there was an apparent color deviation in the paper; and that the defect was major (32 demerits). He recommended having the paper tested and, if his judgment of deficiency was correct, accepting the product at an 18.9 percent reduction in price (R4 file, Tab 2) pursuant to.the Quality Assurance Through. Attributes Program ("QATAP") discount guidelines (GPO Pub. 310.1, supra). On April 30, 1984, Sylvia S. Y. Subt, Chief, Paper and Physical Testing Division, Quality Control and Technical Department, GPO, issued a report stating that the products tested for "[c]olor, finish, formation, and cleanliness [did not] match . . ." the "Standard Sample . . ." for "JCP A60, 50-pound . . ." offset paper in that the color was "[e] xcessively dark and red. DE (FMC-II) = 8.7 (36 demerits)." The products were thus "[n]ot equal to specifications. Wrong color of text paper. Each publication (for text only) is assessed 36 demerits." (R4 file, Tab 3) By letter dated May 2, 1984, Appellant was notified of the finding and the proposed decrease of "up to 18.9% of the invoice billing price." (R4 file, Tab 4) On May 17, 1984, a contract modification reflecting this change and the reason therefore was issued to Appellant (R4 file, Tab 5). Appellant apparently sent letters on May 15, May 17, and July 3, 1984, attempting to perfect an appeal by taking exception with the test results "[p]ursuant to the disputes clause in contract terms No. 1. . ." [based] upon belief that the paper used] "is equal to the terms in the contract." [and] "was of uniform shade and therefore not subject to . . ." the proposed price reduction (R4 file, Tab 6). The contracting officer, Mr. Leonard, contacted Appellant's Mr. Ron Wentz by telephone on July 10, 1984, and made a handwritten memorandum of the conversation. The memorandum reflects that Mr. Wentz apparently said that he believed the discount should be 3 to 4% but was told the price reduction would stand, and that it was much better to accept this than to have the entire job rejected subject to reprinting (R4 file, Tab 7). The contracting officer's final decision letter followed (R4 file, Tab 8). By letter of July 24, 1984, Appellant wrote to the Public Printer, GPO, perfecting the appeal in accordance with the terms of the disputes clause, supra. The letter stated in pertinent part that: The test results did not state which standard applies to this test. We also take exception because the standard sample sent to us does not meet the cromaticity standard. In this we ask that contract modification 0203 be dropped as we met all standards that we had control over in the printing of this job. The text stock passed all the tests that were asked for and was all of one shade per contract" R4 file, Tab 9. The contracting officer apparently believed that this "letter did not address the final decision of the contracting officer . . ." and would thus not be accepted as a letter of appeal (R4 file, Tab 10). The Appellant sent another letter of July 31, 1984, specifically referencing the "final decision by the contracting officer" (R4 File, Tab 11).. This letter apparently satisfied the contracting officer's requirement for specificity, since Appellant was notified of receipt of the appeal and that it was being forwarded to the Board of Contract Appeals for decision. By letter of October 1, 1984, Appellant requested an informal hearing and added the following points to its written record: (A) The text stock used in this publication closely matches the standard sample for color. We will bring our sample at the time of the hearing and show the board what we mean. (B) The test for the color attribute is subjective. Thus a contractor cannot know in advance of performance if his paper is going to be judged in conformance. Nor can he tell from job to job how it will be judged because the paper may be judged by different inspectors or by the same inspector in a different mood. Nor can he be sure he is on an equal footing with other contractors. Nor can he convey to his paper suppliers the paper standard which is required. (C) Compounding the subjectivity of the test for paper color conformance is the fact that standard viewing conditions are not described in the QATAP book. The degree of color conformance varies by the way it is viewed as we will demonstrate at the hearing. Official File, Tab 5. Thereafter, a procedural change occurred in the Board of Contract Appeals structure causing Appellant to renew its request for an informal hearing and to restate points A, B, and C, supra (Official file, Tab 7). Subsequently, a prehearing conference was held wherein Appellant was represented by Mr. Henry Fry, its President. The prehearing conference report (Official file, Tab 11) reflects that upon convening the hearing the undersigned presiding hereat briefly stated the facts in the appeal asdescribed above and then asked Mr. Fry if they were substantially correct. Mr. Fry advised that they were but stated that he was withdrawing his earlier position that the standard sample did not itself meet the chromaticity standard. Thereafter, the report in pertinent part reflected: Mr. Fry went on to say he did not understand the DE (FMC II) = 8.7 coordinates (referring to the specification). The undersigned explained that the DE reference is to the mathematical calculations that the testing personnel use in computing the test results. Mr. Fry had additional questions concerning how the standard relates to the QATAP; how it relates to mismatched shades; how many points may a product be off from the standard before demerits are assessed. At this point the undersigned gave Mr. Fry a copy of page 21 from the QATAP to review; specifically, the section that refers to "Demerit Table." . . . . After some discussion between the parties, it was agreed that . . . Mr. [John A.] Tanner, [Quality Control & Technical Department] QT&TD, [be made] available for questioning. Upon . . . arrival Mr. Tanner was called as a witness by the undersigned and asked the following: Q. Explain the testing process used in this instance. A. The testing was done by machine, an abridgespectrophotometer. Q. Does the person using the machine need any special qualifications? A. No. The machine makes the judgment; it is not subjective. Q. Does the machine calculate the demerits? A. No. The numbers do not indicate demerits but the total color deficiency. The demerits assigned for this relative deficiency come from another source document and were determined after a 5- year study of gathering responses from various individuals. GPO presented these figures to the Joint Committee on Printing ("JCP") and the JCP adopted these numbers. Q. How often is the machine calibrated? A. The machine is calibrated daily. Q. (Mr. Fry) Can the "white tiles" go bad? A. Not likely . . . they are made to last a lifetime. Q. (Undersigned) Would it be helpful to see how the machine actually works? A. It takes at least 30 minutes to prepare the machine. Mr. Fry did not think this would be helpful to him. . . . . Mr. Fry went on to say that he was totally unaware of any [requirement for quantitative] testing of paper only subjective testing in comparing sample to standard. Mr. Tanner added that the 5-year study was for white paper. There are no published standards as of yet for color paper. Mr. Fry said he would like to see the paper showing the adopted standard used by the testing personnel in making their determinations. There was a brief recess. After the recess, Mr. Fry was handed a copy of the "Report by GPO Paper Specification Committee" to the JCP. Mr. Fry asked if this document had been referenced in the specification. However, no one could answer that question on the spot. The undersigned pointed out that on the specification it refers to JCP A-60 with an asterisk which reads, "[m]ust be in accordance with JCP Paper Specification Standards in effect on the date of this order." Also referenced on the specification is Publication 310.1, "QATAP", which was later determined to still be in effect. The undersigned added that it had not been determined that the GPO Paper Report had been mentioned or referenced in the specification. However, the basic specification adopts the entire JCP standard. It was apparent to the undersigned that GPO's testing people had based their results in this matter on the GPO Paper Study Report. Mr. Fry assumed that color was classified [in the QATAP] under judgment characteristics, but according to the "GPO Paper Study Report", color deficiency is not a judgment characteristic. Mr. Fry asked on what QATAP grounds he had been assessed demerits. Q. (Undersigned) Mr. Tanner, with respect to the analysis of paper and color (white), what QATAP portion do.you use to assess demerits? A. I am not sure off the top of my head. Mr. Tanner went on to say that he referred to the numbers published in the "GPO Paper Study Report." Mr. Fry replied that they were not the same numbers. Mr. Fry contends that the area he was found defective in is not included in the QATAP. He felt the testing was subjective at one time and was [therefore] never included in the present QATAP. Government counsel felt Mr. Fry's argument was "just a smoke screen," but would need additional time to respond. [He] said he would have the sample product available at the hearing to compare to the finished product. He felt the difference in color of paper would be obvious to see by all. Mr. Fry then added the comparison of products could be done at this time. In fact, he added, "I came prepared today to make that comparison." Mr. Fry contends that there is not an obvious difference. The undersigned, for clarification purposes, asked Mr. Fry if he wanted him to make that determination now on his own without any technical results. Mr. Fry responded yes. (Prior to making the visual comparison, the undersigned asked if samples (standard sample and finished product) could be tested one against the other by the GPO testing equipment, but the response was that the standard sample had not been put through. the equipment.) The undersigned compared the record standard sample (only one sheet of paper) with the finished product. (A sheet of white paper was placed behind each piece of paper being reviewed.) It was clear to the undersigned that there was a difference in color. He inquired about the testing conditions at GPO and was informed that a standard booth is used. Mr. Fry felt there was an "OK" deviation. The undersigned went on to say that often physical evidence is used and the ruling authorities' subjective judgment often applies. From his visual observation, the undersigned then ruled that the paper submitted by Fry did not match the standard sample. He informed the parties that he would confirm his decision in writing. The appeal comes before the Board for final written decision in this form. Issues Issue 1 - Whether a product printed upon white paper which by visual comparison and technical testing does not match in color a contractually indicated standard sample is rejectable under the terms of the contract. Issue 2 - If found rejectable, is the discounted price at which the Government indicates its willingness to accept the defective product reasonable? Discussion Despite the undersigned's oral ruling upon his visual comparison of the contested product and standard sample that the colors of the two products are distinguishable one from another, the determination of issue number one is still necessary since pursuant to the contract certain defective paper products are acceptable within limits. Moreover, other paper products which fall outside such limits, if deemed rejectable, may be accepted at the discretion of the contracting officer at a discounted price. The first issue raises a question of law and as such, any decision by an administrative Board on such issue is reviewable by the Federal Courts (Wunderlich Act, 41 U.S.C. §§ 321 and 322). The second issue raises a question of fact pursuant to a contractual provision, infra. The examination of issue number one must necessarily start with the contract. The key provisions are set forth in part in each of the contract documents; i.e., the purchase order, Contract Terms No. 1, QATAP, and U.S. Government Paper Specification Standards (hereinafter "JCP Paper Specification Standards"). Accordingly, it will be helpful to examine those provisions for comparison purposes to aid our analysis. (THE CONTRACT) (1) The contract purchase order incorporating the paper specification specifies that the required 25 x 38" 50 lb. Offset Book paper, JCP Code. A-60, "[m]ust be in accordance with JCP Paper Specification.Standards, in effect on date of this order." (2) The purchase order also specifies that "Quality Assurance Through Attributes Program (GPO Pub. 310.1) in effect on date of this order, applies. Level 3 [and that] U.S. Government Contract Terms No. 1 (GPO Pub. 310.1), in effect on date of this order, applies." Level III is not defined in the QATAP Contract Terms but within separate guidance given all contractors on such terms. Such guidance in pertinent part states: Level III: (Good Quality) Level III conformance is typically required for products which contain illustrations used for identification or which must transmit precise information even though minute detail is not required. These products typically involve above average quality workmanship, materials, composition, typography, reproducibles and production methods. Products in this level typically require clean, sharp printing of single- or multi-color work (general process work) and halftone reproductions up to 150 line screen. Finishing must be held to above average standards of accuracy, durability and appearance. (3) The order also required that two copies of the finished product be mailed "to GPO Quality Assurance Section Marked: Inspection Sample". (4) Article 2-12(a) of U.S. Government Printing Office Contract Terms No. 1, revised October 1, 1980, provides that: (a) All supplies (which term, throughout this. article, includes without limitation, raw materials, components, intermediate assemblies, and end products) shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to acceptance. (b) In case any supplies or lots of supplies are defective in materials or manufacture or otherwise not in conformity with the requirements of the contract, the GPO shall have the right either to reject them (with or without instructions as to their disposition) or to require their correction. . . . If the contractor fails . . . to promptly replace or correct such supplies or lots of supplies, the GPO either (i) may by contract or otherwise replace or correct such supplies and charge to the contractor the cost occasioned the Government thereby, or (ii) may terminate the contract for default as provided in the article entitled "Default" of these contract terms. Unless the contractor corrects or replaces such supplies within the established delivery schedule, the Contracting Officer may require the delivery of such supplies at a reduction in price which is equitable under the circumstances. Failure to agree to such reduction of price shall be a dispute concerning a question of fact within the meaning of the article entitled "Disputes" of these contract terms. (5) The JCP Paper Specification Standards of December 1, 1981, for JCP A-60 printing paper require that in its color "[p]aper shall conform to the standard sample(s) as adopted by the Joint Committee on Printing.. (For information only, the chromaticity coordinates and luminance value for the standard adopted by the Joint Committee on Printing are: x=0.316, y= 0.326, and Y=83.0 pct.) "Sampling and testing shall be conducted in accordance with standards in Part 2, Paper Specification Standards." (6) Part 2 of the JCP Paper Specification Standards captioned "Testing Standards and Definitions" provides for testing "[c] olor by visual comparison" and by "spectral reflectivity" and under the caption "General Information" specifies that "[t]he methods given in this Part of the Standards are required to be used in measuring the characteristics of papers that are specified in Part 1, Specifications." Paper suppliers are required to make such tests as may be necessary, to ensure the delivery of finished paper fully complying with the applicable specifications and standard samples. . . . All paper, including paper in the manufacturing process, shall be subject to inspection as authorized or required by the Committee. Following the subcaption "[c]olor by visual comparison", part 2 specifies: Use method T-508, with a qualified observer. A qualified observer is a person with considerable experience in paper color matching, who is able to attain a score of at least 75 in the ISCC Color Aptitude Test (obtainable through the Federation of Societies for Paint Technology, 121 South Broad Street, Philadelphia, Pa. 19103). Following the subcaption "[c]olor by spectral reflectivity" part 2 specifies: "Use method E-308 of ASTM." Under the subcaption "[g]eneral information", supra, ASTM is identified as the American Society of Testing and Materials, followed by its address. (7) Part 4 of the specification standards captioned "Acceptance Criteria", specifies: Paper that does not meet all specification values shall be accepted with no discount providing that the minimum acceptable Product Quality Index (PQI) of 70 is met. The PQI for a specific paper is determined by assigning demerits to each deficient quality characteristic based on test results. The demerits assigned will vary with the category of deficiency. A minor defect shall be assigned 4 demerits, a major defect 12 demerits, and a critical defect 36 demerits. . . . . Definitions: Minor Defect: Any deficiency from specified values which does not materially reduce the usability of the paper for its intended purpose; or require special procedures for printing or processing. Major Defect: Any deficiency from specified values, other than critical, that could result in failure, or materially reduce the usability of the paper for its intended purpose; or may require special procedures for printing or processing, or is a significant deviation from specifications, established standards, or average process capability, or may materially affect the appearance of the product. Critical Defect: Any deficiency from specified requirement that judgment and experience indicate would result in the paper being unusable for its intended purpose; or is a serious departure from specifications, established standards, or average process capability. There follows a mathematical equation for computing the PQI; namely, that: "Product Quality Index is equal to 100 minus the sum of the assessed demerits [which] [e]xpressed mathematically [is] PQI=100 -- i=N \ \Ci / / i=1 Thereafter, part 4 states that "[p]aper having a PQI of 70 or better shall be accepted at the contracted price as meeting the intent and requirement of the specification. That having a PQI below 70 shall be considered as critically defective, subject to outright rejection." There follows "[c]riteria for establishing the category of defect and demerits . . .", however, no specific criteria are set for "color" but such characteristic would necessarily have to fall either in No. 23, "All Other Measurable Characteristics" or No. 24, "Judgment Characteristics." If held to come under the former characteristics, the category = demerit allocation would be: Category Demerits Minor 4 Major 24 Critical 36 While if found to be under the latter characteristic it would be: Category Demerits Minor 2 Major 14 Critical 36 (8) The Quality Assurance Through Attributes Program (GPO Pub. 310.1) as revised 6/1/81 in pertinent part provides that: 1-1. Quality Attribute - A quality attribute is a property of a printed product which affects its quality. Examples are trim size, image position, type quality, and paper. . . . . 1-3. Critical Defect - A critical defect is a serious deviation from specifications. Critical defects are designated in the tolerance tables for finishing attributes and the paper attribute. 1-4. Major Defect - A major defect is a deviation from specifications which is less serious than a critical defect. Major defects are designated in the tolerance tables for printing attributes, finishing attributes, and the paper attribute. 1-5. Total Defects - Total defects are the sum of all critical and all major defects (e.g., 3 critical defects + 2 major defects = 5 total defects). 1-6. Acceptable Quality Levels (AQL's) - The AQL's are the maximum number of defects per 100 copies that the Government will accept at the contract price. Unless otherwise specified, the AQL's are 1.0 for critical defects and 6.5 for total defects. . . . . 1-11. Standard Viewing Conditions Standard viewing conditions are those defined in "ANSI PH2.32-1972 American National Standard Viewing Conditions for the Appraisal of Color Quality and Color Uniformity in the Graphic Arts, Part 1, 'Viewing Conditions for the Appraisal of Color Quality in the Graphic Arts'." 2. DETERMINATION OF PRODUCT QUALITY a. QATAP establishes attributes for quality and it defines tolerances for those attributes for five quality levels of printing. When attributes deviate from the allowable tolerances, the deviations will be classified as either major or critical defects pursuant to the applicable tolerance table. . . . . 3. DETERMINING ACCEPTABILITY - Because.inspection of all copies of a publication is usually impractical, the Government will utilize statistical sampling to determine quality. When the Government determines that both the number of critical defects and the number of total defects in the lot or batch do not exceed their respective AQL's, the lot or batch will be accepted at the contract price. MIL-STD-105D will be used to make this determination. If the defects exceed both AQL's, the Government will have the option of having the lot or batch replaced, having the defects corrected, or accepting the lot or batch with an equitable reduction in the contract price. The discount tables contained in Appendices A & B will be used as a guide by the Contracting Officer to determine reductions. Failure to agree to such reduction of price shall be a dispute concerning a question of fact within the meaning of the article entitled "Disputes" of Contract Terms No. 1. In all cases it is the intent of the Government that the products meet the quality required in the specifications. 4. CATEGORIES OF ATTRIBUTES - Quality attributes are divided into three categories which consist of printing attributes, finishing attributes, and the paper attribute. (9) The "Paper Attributes" on page 39, et seq., of the QATAP cover acidity, alpha cellulose, basis weight, bursting strength, etc., but have no express standards for "color". They do, however, in item 22 cover "all other measurable characteristics" and in item 23 "judgment characteristics". The same is almost identically true of the "Acceptance Criteria", part 4, of the JCP Paper Specification Standards. The two criteria listings differ only in respect to the characterization of the category of deficiency. In the QATAP, items 22 and 23 define such deficiencies as insignificant, significant, and excessive, while the JCP Paper Specification Standards refer to these as minor, major, and critical, clearly referring back to the definitional statement for such terms set forth in paragraph (7) herein above. Analysis Analyzing the above provisions, it becomes clear that "color" falls under either a judgment characteristic or measurable characteristic under both the QATAP and the JCP Paper Specification Standards. It is also clear that if it is deemed to be a judgment characteristic, then such judgment must be made by a person meeting certain established qualifications and be undertaken under certain prescribed viewing conditions. The judgment, however, is subjective and visually made by comparison with the standard sample. The person making such judgment is to then characterize the compared product according to such judgment as having no defects, minor defects, major defects, or critical defects and allocate demerits according to a table correlated with such characterization; i.e., critical defect = 36 demerits. Demerits are then used within the prescribed formula to determine Product Quality Level (PQL) and if above 70 the product must be accepted, but if below 70 the product must be rejected. If rejected or more accurately, rejectable, the product may be accepted by the contracting officer at a discount, such being determined under the discount tables appearing on pages 42 through 46 of the QATAP. The same process is generally carried out if color is deemed a "measurable" characteristic with testing by spectral reflectivity except that in such instance there is a requirement that the testing procedure follow certain technical standards. No technical standard for product color variations itself has been adopted. The standard to be met is still the match of the product with the standard sample using the same acceptance criteria based upon the same system of demerits and PQL formulation. Despite precise measurements, the allocation of demerits still requires a subjective characterization of any defective product as one with no defects, or minor, major, or critical defects, etc. It is this very subjectivity to which the Appellant is objecting. The contract provisions, however, seem to allow for this subjectivity while at the same time recognizing that they may not always result in a proper judgment being made. Thus, there are provisions allowing the matter of rejection or discount amount to be appealable under the "Disputes" article of Contract Terms No. 1. With respect to any such appeal, the amount of discount is deemed to be a question of fact rather than question of law in recognition, we presume, of the subjectivity of such judgment. Thus far from our analysis it would appear that the Respondent followed precisely the provisions of the contract and afforded the Appellant the requisite rights to which it was entitled. The product was being judged in accordance with what appeared to those making the judgment to be all of the requirements of the contract. Both inspectors' (Mr. Flemion and Mr. Tanner) assessments of demerits to the product were based upon "color" being a judgment characteristic, and that the product was defective in a major (32 demerits) or critical (36 demerits) way based upon their assessment of the defects. Moreover, Mr. Tanner's judgment was buttressed by an additional supposition that differences in "color" could be measured scientifically by calibrated equipment and that demerits could be allocated pursuant to standards arrived at from study results compiled over a 5-year period of time although unpublished. In either case, once demerits were determined, the discount was arrived at by reference to the discount table for critical defects appearing on pages 42 and 43 of the QATAP. The problem with judgments so made is not their qualified subjectivity which after all are the same kinds of judgments which physicians, judges, and other professionals must regularly make. The problem is that they overlook an important element of the characterization requirements.set forth in the definitional section of the JCP Paper Specification Standards, supra, for minor, major, and critical defects. That is, to look at the defects with respect to whether or not they "materially reduce the usability of the paper for its intended purpose," or they "result in the paper being unusable for its intended purpose" (in this case, as a guidebook for the Department of Commerce). This examination requirement is set forth in standards adopted by the JCP pursuant to law and therefore has the force and effect of law. Thus, there is a legal requirement to make a.judgment of the defective product against its intended use. It does not appear in any of the documentation or testimony that such judgment was made. If such judgment were to be made, however, it does seem that mere acceptance of the product at any discount whatsoever militates against it being deemed "unusable for its intended purpose" and thus "critically" defective as it has been characterized. Moreover, if such judgment were that the usability of the product has been materially reduced by the color defect, the question which must still be addressed is the rational extent of such reduction. Is 18.9% as the contracting officer has determined by mechanical application of the QATAP reasonable? This is the very question raised by our statement of the second issue in this appeal. It seems to this Board that the use of the QATAP discount table provision in this manner is tantamount to having a liquidated damage provision which is confiscatory and penalizing and thus, against public policy as we have held in the appeal of Edwards & Broughton, Co., GPO BCA 6-84, wherein at page 5 we said: This Board has ruled that this method of adjusting.the contract price using the QATAP operates as a liquidated damage clause. Appeal of Edward Brothers, Inc., GPO CAB 3-83, May 3, 1984. In order to have an enforceable liquidated damage clause, the clause must fix damages that are reasonable compensation for the harm caused by the contractor's failure to perform. Priebe & Sons v. United States, 332 U.S. 407 (1947). As the Board stated in Edward Brothers, the discount tables cannot be applied mechanically. Rather, they must be utilized on a case- by-case basis. Although liquidated damage clauses are used where damages are difficult to estimate at the time the contract is awarded, the liquidated damages assessed must bear some rational relation to the actual damages suffered by the Government. Graybar Electric Company, Inc., ICBA No. 773-4-69, 70-1 BCA ¶ 8121. Decision The case is remanded back to the contracting officer for reconsideration of his final decision in light of this opinion. If after reconsideration the contracting officer finds that his prior judgment is still supported, he is directed to submit documentation of such support back to the Board through counsel with appropriate copy to Appellant. The Board will retain jurisdiction to determine the appropriateness of such contracting officer's judgment as part of this appeal.