U.S. Government Printing Office Contract Appeals Board Jay E. Eisen, Chairman Paul L. Hollenbach, Member Melvin E. Jacob, Member Appeal of Longmont Printing Company Panel 79-15 April 18, 1980 1. Preliminary statement This decision concerns an appeal filed on July 6, 1979, by Longmont Printing Company, 100 Bowen Circle, Longmont, Colorado 80501, hereafter referred to as the contractor, under the "Disputes" clause of the contract, Article 29, United States Government Printing Office, Contract Terms No. 1, dated July 1, 1943, revised July 15, 1970. On August 23, 1979, Mr. Thomas L. Mehlhorn, President of Longmont Printing Company, requested an informal hearing to be convened at the Government Printing Office. The Board of Contract Appeals convened on February 20, 1980, at GPO, Washington, D.C. and followed the procedure provided in paragraph 13, GPO Instruction 110.10, June 6, 1979. Mr. Thomas L. Mehlhorn, who was offered an opportunity to be heard, represented himself before the Board. Mr. James Lane, Office of General Counsel, GPO, represented the procurement officer, Mr. John D. Chapman, who was present during the proceedings. II. Issue Presented The issue presented is whether the U.S. Government Printing Office, hereafter referred to as the GPO, Properly assessed liquidated damages in a total amount of $13,689.15 for failure to comply with the contracts. The total amount arises from the assessment of liquidated damages listed as follows: Program 1802M 77 print orders $ 13,029.29 Program 1800M 3 print orders 119.15 Program 1803M 52.27 Jacket 778-740 245.00 Jacket 779-074 233.44 $ 13,679.15 III. Findings of Fact 1. The Longmont Printing Company was awarded a multiple-award term contract, on July 6, 1978, by the U.S. Government Printing Office, (Regional) Denver, Colorado during the period beginning August 1, 1978 and ending July 31, 1979, for the printing and binding of books and pamphlets for Federal agencies in Federal Printing Region No. 8 comprising the following States: Colorado, New Mexico, Utah and Wyoming. Programs 1800M, 1801M, and 1802M were combined into this program. The multiple award was made to 13 bidders in Category I and to 11 bidders in Category II. The contractor, was listed in the abstract of bidders in both categories. The estimated value for the term of the contract for one year was $1,600,000.00. 2. The contract was awarded in accordance with GPO Contract Terms No. 1 and GPO Form 2459D (Revised Jan. 1978). They are incorporated by reference as part of the contract. 3. The contract provided that a GPO jacket number will be assigned and a purchase order issued to the contractor to cover work performed. The purchase order to be supplemented by an individual print order for each job placed with the contractor. The contract further provided that: "The Government will be obligated to offer each order to the low contractor determined in this manner in the corresponding Category first, the next low contractor second, and so on until the order has been accepted or the cut-off point has been reached. The low contractor and each successive next low contractor shall be obligated to accept each order offered them except when they are unable to meet the shipping schedule. When the contractor accepts, a formal print order will be issued. The only valid reason for declining an offer shall be the inability to meet the shipping schedule. (Emphasis supplied.) . . . "Reply to Offers: All offers will be made by telephone and contractor must reply within 1/2 hour whether or not he can accept the offer. If the contractor does not reply within 1/2 hour the job will be offered to the contractor next in sequence." 4. The contractor, in a letter dated October 10, 1978, to the GPO stated that due to paper shortages and a rail strike, the ten print orders listed therein will be delayed in shipment (Exhibit 1). The contracting officer responded that [there could be] no contract adjustment or waiver of liquidated damages without evidence supporting the appellant's claim that the delay was beyond his control, including what efforts were made to get paper from other than the Dixon Paper Company (Exhibit 2). The contractor in a letter dated November 3, 1978, informed GPO that it would not be able to complete all print orders listed on the schedule since paper was no longer available, and that a four-day rail strike took place which delayed shipments. The contractor stated that prior to September 18, 1978, they were able to obtain all the necessary paper stock on a three-day delivery schedule or ten days on mill shipments. A letter from the Butler Paper Company dated November 2, 1978, directed to the contractor, recited in general that delays in mill shipments of paper resulted from labor difficulties with eastern railroads and that the situation was further compounded due to the labor situation at paper mills in the northwestern section of the United States. A letter to the contractor dated October 11, 1978, from the Dixon Paper Company, cited in general similar reasons, plus inflation causing a high demand for paper which resulted in a shortage (Exhibit 3). 5. The contractor in a letter dated November 20, 1978, to GPO requested that the 13 print orders listed therein be rescheduled for delivery because of the shortage of paper. The contracting officer in a letter November 30, 1978, informed the contractor in regard to his request for an extension of time for deliveries that a sufficient basis did not exist to justify the granting of the waiver. The contractor was requested to produce evidence to show he had on hand or had reason to know that the paper stock was available to him at the time the print orders were accepted and that the source of the delay stemmed from the paper supplier and that a serious effort was made to locate alternate sources of supply. The contracting officer also informed the contractor that despite his efforts to locate paper on September 22, 1978, he accepted the 13 print orders referred to in his letter of November 20, 1978, which indicated that the contractor had no commitment of a paper supply at the time he accepted the orders by telephone (Exhibits 5 and 6). 6. The contractor in a letter dated January 9, 1979, notified the contracting officer that rescheduling of the jacket and print orders listed therein was due to the late arrival of paper. It recited that all paper was ordered on the day that the print orders were accepted from normally reliable sources (Exhibit 7). 7. The contractor, in a letter dated February 27, 1979, objected to the imposition of a substantial penalty on the attached list of print orders under Programs 1802 and 1803 and requested a review of the orders. The contractor contended that liquidated damages should not be imposed in instances occasioned by unforeseeable causes beyond the control and without the fault or negligence of the contractor, which includes acts of the Government and strikes. The contractor contended that the primary reason that orders were delayed arose as a result of a four-day railroad strike, 40 paper mills were on strike, and the failure of the President of the United States to enforce the labor laws which could have prevented the rail and paper mill strikes (Exhibit 8). 8. The contracting officer, in a letter dated March 7, 1979, responded in part that many, if not most of the jobs were accepted by the contractor subsequent to the time that the contractor was on notice that the strikes were taking place. The contractor was advised that Article 17, GPO Contract Terms No. 1, provides in part: ". . .That the contractor shall, within 10 calendar days from the beginning of any such delay, notify the contracting officer in writing of the cause of the delay: Provided further, That such notice to the contracting officer shall contain the justification for such delay. . . ." 9. The contracting officer requested that the contractor, in order to justify being excused for the delays in shipment of the orders, submit documentation as to each job the following: the date of the onset of the delay, when he became aware of it, how it was beyond his control and what action was taken as a result thereof (Exhibit 9). The contractor did not respond to the contracting officer's letter dated May 7, 1979, in that he failed to submit specific documentation that would relieve him of his responsibilities under the contract, nor submit evidence that supplies were unavailable from other sources in sufficient time to meet the schedule established by the contract. (Exhibit 10). 10. The contracting officer, by letter dated May 21, 1979 to the contractor, issued his final decision relevant to the assessing of liquidated damages on 90 jobs for a total of $13,689.15 and that the GPO was correct in its assessment of liquidated damages. This gave rise to the appeal filed by the contractor under the "Disputes" clause dated July 6, 1979. Since the contracting officer's decision became final on June 8, 1979, the contractor's appeal was timely (Exhibit 12). IV. Findings and Conclusions The matter at hand concerns multiple award requirement type contracts entered into between the Longmont Printing Company and the United States Government Printing Office. The contractor agreed upon being awarded the contract to perform certain acts in a specified manner and at specified scheduling dates. In consideration for this promise, GPO agreed to pay Longmont the cost as related to each print order. All offers to the contractors listed on the abstract of contractors for placement of work were made to the low contractor, then to the next contractor in sequence. The contractors including the appellant, tendered print orders were obligated to accept each print order, except when unable to meet the shipping schedule. The Longmont Printing Company upon receipt of the telephonic print orders listed in this appeal had the option of declining the offers if unable to meet the shipping schedules. The evidence as adduced fails to reflect that the contractor ever refused to accept a print order. The terms of the contract, however, provided in part GPO 2459D, Special Terms and Conditions (Supplemental to the Basic Specifications) [which] reads a follows: "LIQUIDATED DAMAGES: Should the contractor default on shipping schedules stated in the specifications, the contractor will be assessed liquidated damages against that part or parts of an order which have not been shipped to the specified destination on the specified date. Damages will not be assessed against that part or parts of an order which have been shipped on schedule. . . ." Article 17 GPO Terms No. 1 provided in part the following: "Penalties and/or damages shall not be applied against the contractor for delays in delivery occasioned by unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or the public enemy, acts of the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unusually severe weather, and delays of a subcontractor due to such causes unless the contracting officer shall determine that the services, materials, or supplies to be furnished under the subcontract were obtainable from other sources in sufficient time to permit the contractor to meet the required delivery schedule: Provided, That 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: Provided further, That such notice to the contracting officer shall contain the justification for such delay. . . ." The facts presented to this Board clearly and irrefutably show that the contractor did not perform in accordance with the terms of the contract. The course of conduct which the contractor agreed to as far as timely deliveries was not fulfilled. Mr. Tom Mehlhorn, President of Longmont Printing Company, was offered a full opportunity at the informal hearing to supply evidence supporting his contention as relating to each separate print order that he could not perform as agreed because of unforeseeable causes beyond his control including a four-day rail strike and labor strikes at paper mill suppliers. He was unable to state the date of the railroad strike. The Board provided Mr. Mehlhorn with a graphic listing of all purchase and print orders with jacket numbers of all the requirement term contracts to include: Program 1802M August 1, 1977-July 31, 1978 $ 20,000.00 Program 1800M August 1, 1977-July 31, 1978 25,000.00 Jacket 778-740 August 1, 1978 10,706.00 Program 1802M August 1, 1978-July 31, 1979 150,000.00 Program 1803M August 1, 1978-July 31, 1979 30,000.00 Jacket 779-074 Sept. 15, 1978 1,459.00 Mr. Mehlhorn amended his appeal to withdraw the print orders of Programs 1800M, August 1, 1977 - July 31, 1978; 1802M, August 1, 1977 -July 31, 1978, apparently since the paper shortage did not occur until about September 18, 1978. 1 Mr. Mehlhorn did not offer any additional facts to support his defense that a national rail strike over a period of four days and strikes at paper mills affected his supply of paper stock. He was unable to show that he had the paper on hand or a commitment from a paper supplier at the time that he accepted any of the print orders. The facts and law, however militate against the argument advanced by the appellant that the delays in delivery were occasioned by unforeseeable causes without the fault or negligence of the contractor; to wit, railroad and paper mill strikes. His contention that the U.S. Government must share the responsibility for the delay in shipments because the demands of the employees labor organizations exceed the guidelines on wages is irrelevant and immaterial and not worthy of further comment. It has been held that a contractor impliedly represents when he makes his bid that he can accomplish what he sets out to do within the time upon which there is an agreement. Woodhull Construction Company, ASBCA, 57-1 BCA ¶ 1260. It is a well settled principle of contract law that a contractor who claims that its late performance and delivery is excusable has the burden of proving the same under the terms of the contract. It must prove affirmatively that the failure to achieve timely performance was caused by or caused out of a situation beyond its control and without its fault or negligence. Lee K. Geiger Construction Company, GSBCA, 67-1 BCA ¶ 6189. In the case of Federal Roofing and Painting, Inc., Eng. BCA, 68-1 BCA ¶ 6912, the Board held that the appellant had an obligation to determine the availability and delivery dates of materials needed for the contract. In the matter at hand, the contractor was on notice before some of the print orders were awarded, that strikes had affected the availability of paper, yet continued to accept print orders. Thus the fact remains that the problem in paper supply was not unforeseeable. In the correspondence between the contractor and the contracting officer as provided in the file, the contracting officer repeatedly informed the contractor that it could not change the established delivery schedule unless the contractor provided documentation within 10 calendar days from the beginning of such delay of the cause and justification of the delay as required by Article 17 of GPO Contract Terms No. 1. Perusal of the evidence presented to this Board indicated that the only documentation provided by the contractor were general self- serving statements concerning the nonavailability of paper, a newspaper article, and general statements of his paper suppliers. This type of evidence does not constitute the documentation mandated by the contract as a basis for relief of liquidated damages. The contractor had the burden of proving that the delay was due to causes beyond his control. Alpha Roofing and Sheet Metal Corp., GSBCA, 1964 BCA ¶ 4461. The unavailability of supplies does not excuse default of a contractor under contracts accepted subsequent to its discovery that there was a shortage of material for its pending contracts. Beco, Inc., ASBCA, 1964 BCA ¶ 4493. In this regard, it has been held that if the contractor could prove that his delay was justified, his delay in performance might be excused. Transatlantic Financing Corp. v. United States, 363 F.2d 312, 315. Further in the matter of Empire State Tree Service, VACAB, 71-1 BCA ¶ 8716, the Board held: ". . . mere statements in claim letters, unsupported by corroborative evidence of probative value, are not sufficient proof of essential facts which are in dispute." In its review and examination of the evidence. the Board finds that the contractors failure to deliver the supplies on schedule was not caused by conditions beyond his control. Accordingly, in view of the facts and evidence presented by the parties, it is the decision of this Board to deny the appeal of the Longmont Printing Corporation. _______________ 1 Board Exhibit "A" consisting of 5 pages on graph paper.