U.S. Government Printing Office
Office of General Counsel
Contract Appeals Board

Appeal of Datafold Forms, Incorporated
September 19, 1975

Vincent T. McCarthy, Chairman
Jay E. Eisen, Member
Robert M. Diamond, Member
Panel 74-10

This is an appeal filed.on July 26, 1974, by Datafold Forms, Incorporated, 2300 9th Street, South,
Arlington, Virginia 22204, herein also referred to as the contractor, under the disputes clause of
the contract, Article 29, U.S. Government Printing Office Contract Terms No. 1, Revised July 15,
1970.

I.  Findings of Fact

  A.  This case arises out of a contract entered into by the appellant, Datafold Forms,
  Incorporated, and the U.S. Government Printing Office, herein referred to as the GPO, for the
  production of 450,000 sets of marginally punched continuous forms.

  B.  The contract, designated as GPO Jacket No. 534-601, Purchase Order 5282, is a fixed price
  agreement for the procurement of the forms, awarded at a cost of $8,973 to the contractor, the
  low bidder.  GPO accepted the.bid of the contractor on April 10, 1974 and issued the purchase
  order on April 11, 1974.

  C.  GPO Jacket No. 534-601 is a requirement of the Department of State for the production of the
  450,000 marginally punched continuous forms (duplicating masters), guaranteed to produce a
  minimum of 500 copies printed with black ink; the stock to be furnished by the contractor is
  yellow direct image coated paper offset masters, size 9-1/2" x 11" (Type 1, Class 1, Grade C);
  must be Addressograph Multigraph Series 3000 or equal.  They must work on A and Multilith Models
  2850, 2650, 2575 and 2550 presses with pre-wetting attachment.

  D.  The schedule in the contract called for copy to be furnished by April 15, 1974.  The shipping
  instructions are "Ship F.O.B. Destination," Department of State Warehouse, 8400 Terminal Road,
  Newington, Virginia, complete on or before June 7, 1974.

  E.  The terms of the contract provided for a pre-production sample requirement consisting of not
  less than 50 forms produced in a continuous marginally punched strip as described in the
  contract.  The forms must be of the kind and quality the contractor will furnish in producing the
  order.  The clauses for this purpose stated in pertinent part are as follows:

Pre-production Sample Requirement

    (a) The pre-production sample requirement for this contract is not less than 50 forms produced
    in a continuous marginally punched strip.  Each form must be specified herein (including size),
    forms must be printed using the form, ink, equipment, and method of production to be used in
    producing the finished product, and must be of the kind and quality the contractor will furnish
    in producing the order.

    (b) Prior to the commencement of production of the contract production quantity, the contractor
    shall deliver the preproduction sample to the Government addressed to the U.S.  Government
    Printing Office. . . .

.  .  .

    (d) The Government will approve, conditionally approve, or disapprove the pre-production
    samples within 8 working days of the receipt thereof.  Samples will be inspected and tested and
    must comply with the specifications as to kind and quality of materials, quality of
    reproduction, clarity, and legibility.  Approval or conditional approval shall not relieve the
    contractor from complying with the specifications and all other terms and conditions of the
    contract.  A conditional approval shall state any further action required by the contractor.  A
    notice of disapproval shall state the reasons therefor.

    (e) If the pre-production sample is disapproved by the Government, the Government at its option
    may require the contractor to submit additional samples for inspection and test, in the time
    and under the terms and conditions specified in the notice of rejection.  Such additional
    samples shall be furnished and necessary changes made at no additional cost to the Government,
    and with no extension in the delivery schedule.  The Government will require the time specified
    above to inspect and test any additional samples required.

    (f) . . . in the event pre-production samples are disapproved by the Government, the contractor
    shall be deemed to have failed to make delivery within the meaning of the default clause in
    which event the contract shall be subject to termination for default, . . . ."

  F.  The prior production samples of the form were received from the contractor by GPO on May 16,
  1974.  The samples were tested by the Quality Control and Technical Department, GPO and found not
  equal to the specifications.  Its report, dated June 5, 1974, stated the following:

"The referenced samples have been tested and found not equal to the specifications.  The
specifications stipulates that the masters shall be yellow, direct image, coated paper Type 1,
Class 1, Grade C and must be flat after being automatically pre-wet on machine.  The samples
submitted did not comply with this description and specifications since they were white  paper
masters which curled when pre-wet and therefore could not be used as specified." (Emphasis added.)

  G.  The contractor was notified on June 5, 1974, that the sample did not conform to the
  requirements specified in the contract.  On June 13, 1974, GPO made arrangements with the State
  Department to have the contractor observe a usage test at their agency as requested by the
  contractor.  The meeting convened on June 18, 1974.  The personnel in attendance included the
  contractor's representative, State Department and GPO personnel, and Mr.  Victor Dick of the A.
  B. Dick Company, a supplier to the contractor.  Mr. Dick upon viewing the equipment, acknowledged
  that the masters supplied by his firm to the contractor could not be used without difficulty.

  H.  The contractor was notified by a mailogram on June 19, 1974 to the effect that it failed to
  meet the requirements as to the submission of acceptable pre-production samples in accordance
  with the specifications; that unless acceptable pre-production samples were submitted by June 24,
  1975 it may be considered that none exists.  The contractor responded by a mailogram, June 24,
  1975, stating in part that the specifications were "misleading, in stating an A and M Series 3000
  or Equal Master would be acceptable.  . . . The specifications were incomplete in not indicating
  that the pre-wetting of the master would be performed both face and back and that the master must
  therefore have the additional specification of a back coating." The contractor requested the
  termination of the contract without prejudice.

  I.  The contracting officer notified the contractor on June 25, 1974, that the contract is
  terminated for default by reason of its failure to submit acceptable pre-production samples in
  accordance with the specifications and Article 13, U.S. Government Printing Office Contract Terms
  No. 1.

  J.  The GPO readvertised the requirements with invitations to bid on July 8, 1975.  The
  invitations to bid included in the specification substantially the same requirements as were
  provided in the initial contract.  The bids were opened on July 18, 1974 and award made to the
  lowest bidder, The Modern Copy Corporation, 151 N. Morgan Street, Chicago, Illinois 60607 (GPO
  Jacket No. 534-601, Purchase Order 31733).  The cost was $10,161.00.  The State Department
  reported that the forms submitted by the Modern Copy Corporation were acceptable.

II.  Opinion

  The United States Government Printing Office Contract Terms No. 1, Revised July 15, 1970, is
  incorporated by reference as part of the contract and contains the following relevant material in
  part in Article 13, entitled "Inspection and Tests:"

". . . in case any article is found to be defective in material or workmanship or not in conformity
with the requirements of the specifications, the Government shall have the right to reject such
articles or require their correction.  If the contractor fails to proceed properly with the
replacement or correction thereof, the Government may, by contract or otherwise, replace or correct
such articles and charge to the contractor the excess cost occasioned the Government thereby, or
the Government may terminate the right of the contractor to proceed as provided in the contract and
charge to the contractor the excess cost occasioned thereby."

The contractor was notified by the contracting officer on June 19, 1974 of the rejection of the
pre-production sample of the marginally punched continuous forms, and on June 25, 1974, the
contracting officer terminated the contract for default citing as the reason therefor the failure
of the contractor to submit acceptable pre-production samples in accordance with the
specifications.

In support of its appeal the contractor presented to the Board its letter of July 26, 1974, wherein
it was requested that the termination be without prejudice.  The contractor also alleges that its
samples met the contract requirements, but all evidence is to the contrary.

The contractor stated in a mailogram dated June 24, 1974:

"In fact, the only master available with a coating face and back, so as to function on an A & M
Multilith 2850 with pre-wetting attachments both face and back, is the A & M Series 3000 Master.
There is no 'or equal' available.

We therefore feel your specifications were misleading in stating an A and M Series 3000 or Equal
Master would be acceptable."

The evidence in the record indicates that there were other sources for this paper other than
Addressograph Multigraph.  The specifications in addition stipulates that the masters shall be
yellow direct image coated paper, but the samples submitted were white paper masters which curled
when pre-wet and therefore could not be used.

We find that appellant was in default on June 25, 1974, the date of the termination for default;
that the right to terminate existed on that date; and that the right was effectively exercised.  We
find that the contractor failed to deliver acceptable pre-production samples; the unrebutted
evidence for the GPO establishes non-conformance which justified the rejection action.  The only
causes advanced are (1) an erroneous rejection.of the pre-production samples followed by, (2) an
allegation that the specifications were misleading in that there is "no equal" available.  The
Board has found the facts to the contrary (Filmohm Corp., ASBCA 66-1 BCA  5698).

Accordingly the appeal is hereby denied.