U. S. Government Printing Office
Contract Appeals Board

Appeal of Di Line Litho, Incorporated
C.A. 77-3; Request for Reconsideration
April 24, 1978

Vincent T. McCarthy. Chairman
Samuel Sooper, Member
Drew Spalding, Member

Appellant, Di Line Litho, Inc., requests a reconsideration of the Board's decision of January 24,
1978, denying its appeal.  The facts are set out in detail in that opinion and need not be
recounted.  We adhere to those findings, and add some additional findings of fact below.

Appellant has submitted evidence in support of its request which the Board has examined along with
additional material put forth by the contracting officer.  After careful consideration, we grant
the appeal to the extent described below.

A.  Sufficiency of Notice

Before we can consider the merits of this appeal, we must deal with a procedural objection raised
by the contracting officer.  He points out, quite correctly, that Article 17 of U.S. Government
Printing Office Contract Terms No. 1 (1970), dealing with excusable delay, requires:

"The Contractor shall, within 10 calendar days from the beginning of such delay, notify the
Contracting Officer in writing of the cause of the delay [and] [t]hat such notice to the
Contracting Officer shall contain the justification for such delay."

Appellant was first notified of its supplier's new distribution system on July 20, 1976.  On July
21, 1976, appellant notified the contracting officer of this situation.  Appellant first became
aware that there would be delays caused by this change on September 20, 1976.  The same day,
appellant notified the contracting officer of this fact by telephone.  These facts are not in
dispute.

The first written notification by appellant to the contracting officer of these matters which
appears in the record is a letter dated November 23, 1976.  We, therefore, find that appellant did
not provide a written notification within 10 days of the beginning of the delay as required by the
contract.  We also find, however, that appellant did provide such notice orally within the given
time period, and later on in writing by the November 23rd letter.

We do not feel that the failure of the contractor to offer timely written notice is fatal to its
appeal.  In reaching this result, we have sought guidance from board and court decisions construing
various contract notice provisions.  Two significant principles merge.  The first is "that where
the responsible Government officials are aware or should be aware of the facts giving rise to a
claim, then strict compliance with the written notice requirements is not required." Davis
Decorating Service, ASBCA No. 17342, 73-2 BCA  10,107 (1973) at 47,475; Hoel-Steffen Construction
Company v. U.S., 197 Ct.  Cl. 561, 456 F.2d 760 (1972).

The second is that "[p]roof of prejudice due to lack of notice has been a significant element in
determining whether failure to comply with a contractually-required notice provision warrants,
under the particular circumstances, denial of claim." Interlog Corporation, ASBCA No. 21212, 77-1
BCA  12,362 (1977) at 59,836; Hartford Accident and Indemnity Company, IBCA No. 1131-1-77, 77-2
BCA  12,604 (1977).

Here, as we have stated, the contracting officer was kept informed of the operative facts by the
contractor in a timely fashion.  It appears that the fact that the Government was so informed
eliminates the possibility of prejudice.  At any rate, no prejudice to the Government stemming from
the lack of a writing is suggested by the contracting officer or apparent from the record.  The
purpose of the notice proviso in Article 17 is to prevent the Government from being caught short
due to a contractor's unforeseeable delays.  This purpose was accomplished by the oral
notification.  The requirement of describing the justification for the delay serves the dual
purpose of alerting the contracting officer to problems in the marketplace as well as permitting
him to make a determination as to whether the Contractor's delay is excusable.  The timely oral
notification was at least sufficient to satisfy first purpose.  And while we agree with the
contracting officer that it was not sufficient to satisfy the second, there was no injury to the
Government due to this failure, especially since the contractor did subsequently furnish such
written justification.  Rather, the contractor bore the brunt of its own delay, since a more
detailed justification, such as has been submitted to the Board, perhaps would have made this
appeal unnecessary.

We hold that under these circumstances, appellant's delay in providing written, as opposed to oral,
justification cannot be a barrier to its claiming excusable delay.

B. Excusable Delay

In our previous opinion, we found that appellant had reasonably assured itself of sufficient supply
of press plates.  We noted that appellant had regularly purchased plates from Bell Industries, its
immediate supplier, without hindrance prior to the change in distribution system.  Additionally,
appellant maintained a 250 plate per press size inventory.  We further found that appellant had
made reasonable efforts under the circumstances, considering its resources, to remedy the situation
when a possible plate shortage was imminent.  However, we also considered the possibility that
appellant may have been negligent in accepting orders under the contract once the plate problem had
commenced.  No specific findings on the latter point were made, though, since appellant had not
shown sufficiently that Bell Industries had not been negligent.

Specifically, we faulted Bell for failure to timely inform appellant of the change in the
distribution system, and the lack of any indication that Bell had sought to purchase plates from
manufacturers other than the S. D. Warren Company, which was not claimed to be a sole source.

Appellant has submitted documents to answer both of these contentions.  A letter from Garry
Goodbar, Sales Manager, Bell Industries, to appellant, February 2, 1978, states:

Although SD Warrens [sic] letter to dealers, informing them that filling GSA orders from stock was
no longer allowed, was dated June 25, 1976, we did not receive it until the middle of July.  The
delay is not unusual since after the letter is written, it has to be printed and distributed to all
Warren GSA dealers across the country.  Enclosed is the original letter we received.  We retrieved
it from our purchasing department files.

We at Bell Industries contacted all the Plate manufacturers we represent such as 3M Company,
Azoplate, Eastman Kodak, Sumner Williams, Western Plate Company, etc. and other dealers on the west
Coast [sic] such as Smart Supply, Forrest Chemical Co., Stewart Co., R & P, etc.  None had paper
offset plates in your sizes or larger.  Azoplate Company had marketed a paper laminated offset
plate called the Pacemaster but had dropped it from the line and none were available.  3M
manufactures a foil laminate plate called the 'type E', that your [sic] presently using, in the 10"
x 15" range but it is not manufactured 35 x 45 range.  We also contacted McClellan AFB who had
purchased plates in your size in the past but were advised they no longer used that equipment and
had cut the remaining material to fit smaller presses."

Additionally, Bell submitted the original of the memo from Warren detailing the distribution
change.  It is marked as having been received by Bell on July 16, 1976, only a few days before Bell
notified appellant of the change.  None of this evidence has been contested by the contracting
officer.

We therefore hold that appellant has sustained its burden in showing that its first tier supplier
was not negligent with respect to this delay.

We must therefore return to the issue of appellant's acceptance of orders during the shortage
period.  We view a contractor's obligation in this situation as analogous to its decision on
whether to bid for a contract:

"[E]very reasonably prudent bidder prior to bidding should have some assurance that the materials
needed to complete the work in accordance with the contract requirements will be furnished.  Bayou
Culvert Mfg., Inc., AGBCA No. 400, 76-1 BCA  11,796.  Or, stated another way, it is encumbent
[sic] upon every bidder to assure himself of a dependable source of supply prior to bidding and to
take such action as may be necessary to assure that if awarded the contract he will be able to
perform.  Essential Construction Company, Inc. & Himount Constructors, Ltd., A Joint Venture, ASBCA
No. 18463 & 18509, 75-2 BCA  11,469; William Logan & Son, GSBCA No. 3597, 72-2 BCA  9759."
Fidelity Construction Company, Inc., DOT CAB Nos. 75-19, 75-19A, 77-2 BCA  12,831 (1977) at
62,452.

On September 20, 1976, appellant was notified by S. D. Warren Company that, for unspecified
reasons, the plate shipments ordered directly under the new system were going to be delayed.
Appellant's other sources of supply by now had dried up.  Between this time and November 22, 1976,
when the contractor went back into.full production and returned to a normal schedule, the shortage
of plates was not unforeseeable.  Appellant attempts to explain away this objection by listing
several points:

"a. Di Line's gross annual sales are 98 percent government work.

b. The work we accepted after September 23 all had 4 to 5 week delivery dates.

c. We were being assured by the Warren Company that their production schedule was improving and
shipments were being made, through this proved not to be the case as explained in our original
letter of appeal.

d. Without this additional workload Di Line would have been forced to close down its operation by
the end of October." Submission of Di Line Inc., October 18, 1977.

We do not find this response convincing.  The 4 to 5 week delivery date does not seem to be much of
a safety margin under the circumstances:  Warren could not specify a delivery date, and appellant
had run out of alternative sources.  Vague assurances by Warren are not sufficient to take the
place of a firm delivery date.  Nor is potential financial hardship caused by forgoing the orders
relevant, any more than it is to the assessment of liquidated damages.  See Industrial Precision
Products Company, DCAB No.  NOAA-4-77, 75-1 BCA  11,221 (1975) at 53,424.  Appellant, by the terms
of the contract, did not have to accept these orders.

C. Conclusion

We thus conclude that the delay on orders accepted prior to September 20, 1976, was not foreseeable
and is excusable under the terms of Article 17.  On the other hand, the delay caused by shortage of
plates on orders accepted between September 20, 1976 and November 22, 1976 was foreseeable and
cannot be excused under that clause.

While the contractor has the burden of showing that its delay was excusable, "such a showing need
only be a reasonable one, such as here occurred, and not be beyond all reasonable doubt,
particularly when liquidated damages are involved." Rusty's, Inc., ASBCA No. 13214, 69-2 BCA  8065
(1969) at 37,502.  We are satisfied that appellant has meet its burden in this case concerning the
delays prior to September 20, 1976.

Because of the lack of clarity of the record, we do not attempt to decide the dates of the
particular print orders involved.  See Appellant's Answer to Interrogatory No. l, September 28,
1977.  Nor have we dealt with the amount of the damages in question.

The appeal is sustained to the extent noted above.