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.