U.S. GOVERNMENT PRINTING OFFICE BOARD OF CONTRACT APPEALS The Appeal of PENNSYLVANIA PRINTED PRODUCTS CO., INC. Docket No. GPO BCA 29-87 January 22, 1990 MICHAEL F. DiMARIO Administrative Law Judge OPINION This appeal, timely filed by Pennsylvania Printed Products Co., Inc., Hatboro, PA 19040 (hereinafter "Appellant"), is from the December 14, 1987, final decision of Douglas M. Faour, Contracting Officer, Atlanta Regional Printing Procurement Office (ARPPO), U.S. Government Printing Office (hereinafter "Respondent"), terminating a certain contract with Appellant identified as Purchase Order F 9938, Jacket 736-202, "for default for failure to perform under the provisions of the contract." The decision of the Contracting Officer is reversed for the reasons set forth hereinbelow. BACKGROUND On or about September 25, 1987, Appellant, by the above referenced Purchase Order, was awarded a contract to produce 150,000, plus or minus one percent, 4-color (silver, blue, red, and black), die cut, "Express Mail Craft (leave behind) Card" folders as requisitioned from the Respondent by the U.S. Postal Service (Req. No. 7-00032). Respondent was to furnish necessary camera copy and a construction model to Appellant by September 25, 1987. Appellant was to provide all other materials necessary to produce the job which was to be delivered in-hand by October 23, 1987. No proofs were required by the specifications. The purchase order more fully describes the work to be performed as: Die cut folder printing type & rule with line art. Face side prints 4 colors with reverse areas. Back side prints black only. See attachment 1.) Do not print outlining border! R4 File, Tab L, page 1 The attachment to the purchase order shows an illustration of an Express Mail collection box with instructions for the placement of colors and printing in various locations thereon. Among these is an instruction stating "bottom half of collection box -- #G-5115, blue (see attached)." This instruction is encircled and bears a line pointing to an area on the lower half of the illustration below two diagonal lines and above a quasi-rectangular area with rounded upper corners. The rectangular area bears no separate instruction pointing to it. The intention of the Postal Service was to have the rectangular portion remain white in order to create the effect of legs on the mailbox. R4 File, Tab L, pages 2 and 3 During the course of production, Appellant, among other things, printed the entire bottom portion, including the rectangular area, in blue. Appellant, at that point (October 15, 1987), raised the question with the Government as to whether it had, in fact, produced the illustration correctly. R4 File, Tab J, page 1 Appellant was advised that it appeared that it had not. Appellant was then requested to furnish a press sample to the Postal Service in Miami, FL. Appellant complied with this request and, by letter of October 15, 1987, so advised the ARPPO's Mr. James E. Olson. The letter, in further pertinent part, stated: On looking at what we were given (enclosed) I feel we were correct in our color separation of what we were given. If you will look at the instructions for the color separation, you will see that the instructions marked by me as "A" tells us to print the upper 1/2 of the front in Silver (the line points to only one block however) and the instructions I have marked as "B" tells us to print the bottom half in Blue. The strip is to be printed in red and the only place for the black ink is in the logo at the bottom right side. I feel therefore, we should be reimbursed for the time lost in taking the job off the press and for the proof we sent. As we only had 1/2 of the front printed, our costs so far are for 2 additional washups and 2 plate make readies at a cost of $498.00. Should "Janice", after seeing the proofs, decide on changes we will have to charge for what additional costs might be incurred. App 3 The press sample was received and reviewed by the Postal Service on October 22, 1987. Following various conversations on the 22nd and 23rd, Melodie K. Ransom for Kathleen Boehm, U.S. Post Office, Miami, FL, wrote to Mr. Jim Olson at the ARPPO furnishing a construction model of the Express Mail craft leave behind card. The letter, dated October 23, 1987, in pertinent part, stated that the construction model was being furnished in order to alleviate any further problems or discrepancies and that the following ". . . is a list of corrections and questions on the press sample . . . : 1) Color of blue incorrect shade. 2) Area between "legs" of collection box to be white. (Art work specifically points into collection box; lower half to be blue.) 3) Top of collection box wrong. Does not show inset lines depicting lid of box and also is not centered on card. 4) Several samples were received and no two cards exactly the same cut, etc. (See enclosed marked press samples.) 5) Print ("EXPRESS MAIL NEXT DAY SERVICE") and lines not clear and clean print. 6) Card is to be folded in half; back half which is to be black print on silver-#877C. (Why is press sample not finished folded size?) 7) Die cut to be made at top of card; both front and back to round off top of collection box graphic. (Die cut not yet completed on press sample submitted?) 8) Per questions in letter enclosed with press samples from contract printer, black and red print to be as shown as enclosed construction model. In addition, a photo, art work and a brochure depicting graphic art of Express Mail collection box was originally submitted in printing package." R4 File, Tab H The letter was forwarded to Mr. William H. Brehm, II, Appellant's President, on October 26, 1987, with a note, "Bill, Call me when you receive this. J.E. Olson" R4 File, Tab J, page 2 Appellant apparently complied with this request since by an October 28, 1987, letter to John Edridge, ARPPO, Appellant, responding to the Postal Service letter, stated, in pertinent part, that: After talking with Mr. Olson and you, I am sending both you and Kathleen Boehm color "proofs" with the bottom of the mail box now white, not blue. I maintain that the "arrows" pointing to the top and bottom of the original art work are miss-leading [sic] in how to "handle" the bottom of the "box" that they now want white. I do not feel we were wrong in printing the entire bottom blue. I do acknowledge that the blue is off shade [sic]. Now to the new issues: 1. There is no way we should know that the black line in the art work prints black. 2. The black line is very bad-it was never cleaned up-is rough, thick and thin and "wavey" and "fat" and smudged. 3. In the letter we are told that the words "Express Mail" (paragraph 5) are not clear and clean print. The lettering in the art work is like that- 4. The type on the inside of the card is, if possible, worse. It is smudged-runs into itself and is not clear and clean. 5. We cannot make a silk purse out of a pigs ear! 6. We are printing flake silver #877 which will spread some on the press. This, together with bad type will not produce the "perfect" result as if they had the type set. Please examine the proof we have enclosed and you will see my concern over this art work." App 5 Subsequently, by letter dated November 24, 1987, Appellant advised Olson as follows: Listed below are the additional charges we are incurring (or have incurred) to re-do the art work, die and step and repeat on the "all-new" art work. Cost of 2 make readies and washup $ 498.00 Cost of 2 sets of Dylux color proofs 193.00 Cost to send overnight 4 @ 10.75 each 43.00 Cost of 5 new plate negs-step and repeat, etc. 529.00 Cost to re-do die outline and step and repeat 191.00 Cost of new steel rule die, 48 up 356.00 Cost of replacement of 1600 sheets of 8pt.KKC1S 534.00 (23 X 35 - 220 @ $1.517 cwt) ______ Total Cost $ 2344.00 +5% discount $2,467.00 We are proceeding with the order on a rush basis and have it scheduled to ship December 4th 1987. R4 File, Tab C However, this was not done. Accordingly, on December 11, 1987, the Post Office telephonically notified the ARPPO that the job had not yet been received. By return call the ARPPO Compliance Officer determined that since the order was so late, the Post Office no longer had a need for the job. Appellant's Mr. Brehm was then called by the Compliance Officer and Brehm advised that the job was completely printed but that a die which he had ordered from a subcontractor had not arrived as planned. Notwithstanding this, Brehm was advised that he was in default for not shipping the order on December 4, 1987, as per his signed letter of November 24, 1987. He was also told that the agency no longer had a need for the order and to put a hold on the die since it was no longer needed. R4 File, Tab B That same day, the Contracting Officer advised the U.S. Government Printing Office Contract Review Board (CRB) in writing that Appellant was in default with respect to shipping by December 4, 1987, and that he was going to terminate the contract for default but with no excess reprocurement costs being charged since the Postal Service no longer had a need for the order. Concurrence to this action was given by the CRB on December 14, 1987. This was followed by the Contracting Officer's "final decision" letter to Appellant, dated December 14, 1987, supra. The letter is captioned "NOTICE OF TERMINATION, Complete." R4 File, Tab A Thereafter, by letter, dated December 22, 1987, Appellant noted its appeal to this Board. The appeal was docketed on December 22, 1987, and Appellant was so advised by letter, dated December 30, 1987. The letter furnished Appellant a copy of the Rules of Practice and Procedure of this Board and advised that a more complete Complaint was required under Rule 6.(a). By letter, dated January 25, 1988, Appellant responded to this direction as follows: This letter is to comply with your Rule 6. (a) "Pleadings" of your, instructions: GPO 110.12 and letter dated December 30th, 1987. We claim that there were no grounds to terminate this purchase order. We were able to make delivery of this job in a timely manner, considering the many changes made by your customer, The Postal Service. We feel we should be paid for the work we completed and all the extra work that was requested and we furnished. I have requested several times, substantiating dates from your Atlanta office which will make it quite evident that we proceeded with this order in a most timely manner. We are asking for: (1) The original amount of $3,997.00 (2) The "washups" $ 498.00 (3) The second set of work $2,467.00 Total Due $6,962.00 I have not, as yet, been provided with the information requested from Atlanta-see my letter of December 31st. When I receive this information, I will file with you a much more concise set of facts. I do wish a hearing on this. By letter received February 18, 1988, Appellant filed a more complete statement of its case in the form of a Complaint. Respondent, in turn, filed its Answer to this latter communication on April 5, 1988. A subsequent prehearing conference was held on April 27, 1988. At the conference, the Board requested that a statement be obtained from Mr. James E. Olson respecting certain issues. Mr. Olson's response is set forth in a Declaration made under penalty of perjury. The Declaration was received by the Board on June 15, 1988, and states as follows: 1. I currently hold the position of Printing Specialist, Atlanta Regional Printing Procurement Office, U.S. Government Printing Office. 2. Purchase Order 9938, Jacket No. 736-202, was awarded to Pennsylvania Printed Products Company, Inc. (PPP) on September 22, 1987. 3. The specifications called for PPP to deliver (not ship) the completed product on October 23, 1987, and allowed a production schedule of 30 calendar days. 4. On October 15, 1987, only six working days before the delivery date, Bill Brehm, the President of PPP called me with the concern that he was not printing the job correctly. After talking with him and Melodie Ramson [sic] of the Miami office of the U.S. Postal Service, I advised Mr. Brehm to put the job on hold and send a sample of his work to myself and the Postal Service. 5. We examined the sample sent by PPP and concluded that it was, as Mr. Brehm suspected, printed incorrectly. In addition, the sample was printed with the wrong color ink. Had PPP processed this job to completion, it would have been rejected. 6. The Postal Service, after receiving their sample, now requested the opportunity to OK a proof before printing, to prevent any more problems with PPP. The Postal Service also took the opportunity to make changes in the camera copy. 7. New camera copy was forwarded to PPP on November 3, 1987, and received by them the next day. 8. On November 24, 1987, Mr. Brehm informed me that he had an OK proof from the Postal Service, which he had received November 19, 1987. We discussed reestablishing the delivery date and Mr. Brehm agreed to complete and ship (not deliver) the job in the first week in December. The reestablished ship schedule was confirmed by Mr. Brehm in his letter of November 24, 1987, where he agreed to ship by December 4, 1987 (which was 30 calendar days from receipt of new camera copy). 9. If there was any delay in completing the contract, it was caused by PPP. At the time PPP advised us that they were producing the job incorrectly, they had 6 working days left to complete and deliver the order. On November 19, 1987, when PPP got the OK from the Postal Service they had a full 10 working days in which to produce and ship the job. 10. The reason no change order or contract modification was issued was because we had a letter from PPP confirming the ship date, and because Mr. Edridge, the Assistant Manager and myself did not agree that all costs billed by PPP were in fact due, or were fair and reasonable. We decided to negotiate after the job was delivered and approved by the Postal Service. A copy of the said Declaration was served upon Appellant by mail from Government counsel that same day. By letter, dated July 27, 1988, Appellant served Interrogatories and Requests for Admissions upon Mr. Olson through this Board. Subsequently, extended discovery was conducted by both parties, culminating in a submission from Appellant, entitled "Summary of Facts," setting forth Appellant's final argument which was received by this Board on July 31, 1989. A copy of this submission was furnished to Respondent by the Board. However, no response was received from Respondent. Accordingly, by letter, dated October 31, 1989, received by the Board on November 8, 1989, Appellant demanded a directed judgement in its favor as follows: We have and still are seeking a judgement for the following amount: Origional [sic] Quoted Amount: $3997.00 Additional costs per letter of Nov.24, 1987: $2464.00 Factoring costs @ 1.5% per month (24 MONTHS) $2326.33 TOTAL AMOUNT: $8787.33 The Appeal comes now before the Board in this form for decision. DISCUSSION The Board disagrees with the Government's computation of Appellant's entitlement to time for its performance of the contract. The facts presented show that the Appellant, under the terms of the purchase order, was entitled to 29 days to perform its work; i.e., from September 25, 1987, the date by which the Government was to furnish materials, until October 23, 1987, the date in which delivery was to be made in-hand. The facts also show that the instructions given to Appellant on the illustrations furnished as attachments to the original camera copy respecting the placement of blue ink were facially ambiguous, notwithstanding the Government's allegations concerning defects in Appellant's performance of the original work. Thus, in this Board's view the point at which the Government furnished replacement copy and a new construction model marked the commencement of an entirely new 29 calendar day period of time for contractor performance, with the contractor being entitled to be paid for all previous work performed prior to that date as an additional cost over and above the contract price. Finding this to be the case, the commencement date for performance was November 4, 1987, with the completed product due delivered "in-hand" by December 3, 1987, subject to any additional time to which Appellant was contractually entitled for Government delay. The Government denies causing any such delay; however, the Government, by its own admission, requested black and white proofs from Appellant on the same date the second set of camera copy and construction model were received; i.e., November 4, 1987. The proofs were furnished to the Government at some point thereafter and returned to the Contractor with an "OK to print" on November 19, 1987. Examining this in the light of the fact that the contract terms have no requirements for proofs, we conclude that the Government, while entitled to make such request under Article 2-2, entitled "Changes," of Contract Terms No. 1 (GPO Publication 310.2, Revised October 1, 1980, incorporated into the contract by reference), nevertheless caused a 15 calendar day delay for the Contractor. Applying the provisions of Contract Terms No. 1, we find that pursuant to Article 2-11.(c), entitled "Extension of schedules," Appellant was entitled to have the shipping schedule automatically extended by the total number of workdays that work was delayed, plus a grace period of one workday for each day of delay, not to exceed three workdays. Examining our 1987 calendar, we find that there was an 11- workday delay, excluding Saturday, Sunday, and the Veterans' Day holiday. Accordingly, Appellant was entitled to a 14- workday extension of schedule. Therefore, adding the 14 workdays to the due date of December 3, 1987, brings the contractual due date to December 22, 1987, unless there was a valid, enforceable agreement between the parties to modify that date. Examining the file in this regard to see whether the "agreement" respecting the December 4, 1987, date constituted such an "enforceable agreement," we note that there is no evidence in the file of the exchange of any additional legal consideration between the parties concerning an accelerated delivery date. Thus, it appears to the Board that while a delivery date of December 4th was used by the parties and certainly was mentioned by the Appellant in its letter of November 24, 1987, such use and mention was without legal force and effect. Given this analysis, the Board holds that the Appellant was not in default at the time of the termination. Accordingly, it reverses the Contracting Officer's decision in its entirety. The Board remands the case back to the Contracting Officer with direction to convert the termination to one of convenience for the Government with negotiated settlement of payment to be made to Appellant accordingly. Reversed and remanded. It is so Ordered.