UNITED STATES GOVERNMENT PRINTING OFFICE CONTRACT APPEALS BOARD Appeal of Serigraphic Arts, Inc. Date of decision: May 8, 1980 Panel 79-22 Thomas O. Magnetti, Chairman Robert W. Armentrout, Member Charles D. Collison, Member PRELIMINARY STATEMENT This is a decision on a timely appeal entered by the appellant, Serigraphic Arts, Inc. (hereafter referred to as the contractor). This appeal disputes the final decision of the Contracting Officer which denied a claim of the contractor for certain costs incurred in the printing of items under a Government contract, Jacket Nos. 294-603 and 294-604. The appeal was taken pursuant to Article 29 (the "Disputes" clause) of the Government Printing Office (GPO) Contract Terms No. 1 as incorporated by reference into the Bid and Acceptance of this contract. See Exhibit 3 of the Appeal File. 1/ The contract required this contractor to print and ship die-cut, numbered, pressure sensitive adhesive stickers for the Department of Transportation (DOT). Because of a misunderstanding arising from a telephone conversation between the contractor and an employee of the GPO, the contractor began to print before certain changes were made by the ordering agency in the original color scheme as had been specified in the contract specifications for these decals. Consequently, the contractor alleged that it had incurred extra costs amounting to over $5,000 which, in addition to the contract price, the Government should pay. Exhibit 12. In accordance with the request of the contractor, the decision of this panel is based solely upon the record as evidenced by the documents and exhibits that constitute the Appeal File. This procedure is in accordance with GPO Instruction 110.10 titled "Board of Contract Appeals Rules of Practice and Procedure", dated June 6, 1979. STATEMENT OF FACTS On June 28, 1979, in accordance with GPO contract award procedures, a purchase order for Jacket Nos. 294-603 and 294-604 was issued to the contractor for the printing of 465,000 numbered, pressure sensitive adhesive decals with a shipping date of August 1, 1979. These decals were divided into two separate groups with item 1 consisting of linework in white and printing green, both dropping out of a brown background, and if white vinyl was to be used, item 2 would have the same color scheme as item 1. The contractor was to match Pantone 375 green and 470 brown. See Exhibit 2, "Printing" clause. On July 25, 1979, Frank Newman, a GPO employee within the Contract Compliance Section of the Central Office, Printing Procurement Division, contacted the contractor because GPO records indicated that the proofs that the contractor was to have sent to the GPO had never been received. In reply, Mr. Janes, the president of Serigraphic Arts, stated that the proofs had been mailed on July 10, 1979 and according to its records had been received by the GPO on July 13, 1979. The contractor gave the GPO employee sufficient information to trace the proofs and even offered to send additional proofs. Mr. Newman stated that that was not necessary and that if the contractor did not hear from the GPO then everything was okay. The proofs were eventually found to have been misplaced in the GPO mailroom and were forwarded to the proper department. Although the proofs, as originally submitted by the contractor, complied with the contract specifications, the ordering agency (DOT) requested a substantial color change. Exhibit 9. After this set of proofs was returned by the ordering agency to the GPO with the alterations, Mr. MacBride, another GPO employee, phoned the contractor on August 1, 1979. The purpose of this call was to ascertain if any additional cost would be incurred by the color reversal. At this time the GPO was informed by the contractor that after receiving verbal agency approval to begin to print on July 25, 1979 the job had already gone to press. The contractor claimed that its understanding from the telephone conversation of July 25 between the contractor and Mr. Newman of the GPO was that if Mr. Newman did not call back about the misplaced proofs the contractor could proceed with the printing. The contractor was then informed by Mr. MacBride that it had not been authorized to print as provided for by the procedures within the contract specifications, and that the additional costs which it had incurred by printing the contract prematurely could not be reimbursed. The contractor asked for reconsideration of this decision by letter dated August 6, 1979 wherein it was claimed that the additional costs ($5,769.00) should be repaid to the contractor on the grounds that it reasonably construed the conversation with Frank Newman to mean that it could proceed with the printing. Exhibit 12. The Final Decision of the Contracting Officer was issued on August 21 1979 denying the request of the contractor, stating that: "It is clear as stated in your letter that the call made to you on July 25, 1979 from a Government Printing Office employee was merely in regard to the status of the proofs. There was no intention nor implication that that person had the authroity [sic] to allow you to proceed with the production. Approval for Printing can only be accomplished by receipt in your plant of the proofs you submitted marked 'ok [sic] to print,'. . . as outlined on page 1 & 2, under 'Proofs,' in the specifications." (Exhibit 15.) By letter dated September 18, 1979, the contractor appealed the final decision of the Contracting Officer to the Public Printer. Exhibit 16. The appeal is now being decided by this panel on the evidence contained in the Appeal File. Since neither party requested the inclusion of any additional evidence the record was closed effective February 29, 1980. DISCUSSION The issue to be resolved in this appeal is whether, under the terms of the contract, it would be reasonable for the contractor to interpret the telephone conversation between an officer of that firm and a GPO employee as the proper approval to begin to print. On July 25, 1979, Frank Newman, a GPO employee, called Serigraphic Arts, Inc. to ascertain the whereabouts of certain proofs required by the contract specifications to be submitted by the contractor as soon as possible. Mr. Janes, president of the printing firm, informed the employee that the proofs had been mailed and that Serigraphic had been notified that the proofs had been received by the GPO on July 13, 1979. Mr. Janes then offered to mail in new proofs. However he was.told that the GPO would look for the proofs and if he was not called back, then ''everything was o.k." It is clear from the Appeal File that although both parties may differ in the inferences drawn from the above-mentioned telephone conversation, both parties agree to the underlying substance of the call. See Exhibits 10, 16 and 17. Mr. Janes interpreted the statement to mean that if he was not contacted by the GPO he could proceed with the printing. Printing did begin sometime after this July date. Meanwhile, back at the GPO, the original proofs were located. The contractor was notified by telephone on August 1, 1979 that although the proofs were in accordance with the specifications, the ordering agency wanted the colors reversed. The contractor complied with this request but claimed that since it had received approval to print on July 25, it should be compensated for the initial printing. The Government contended that the July 25 telephone call did not constitute any such approval and that approval for printing could only be accomplished by receipt in the contractor's plant of the submitted proofs. Exhibit 15. The applicable clause in the contract can be found on page 1 and 2 of the Contract Specifications under the heading "Proofs." This provision reads in relevant part as follows: "Submit 5 proofs of each item representative of the finished product per these specifications (unnumbered) along with the furnished copy for approval before printing . . . Submit the proofs as soon as possible to allow for the possibility of necessary corrections. These proofs are scheduled to be back at the contractor's plant within 9 working days after receipt at the GPO." (Exhibit 2.) This clause does not set forth with any particularity what constitutes approval; i.e., verbal or written approval, or who must provide this approval. Where the language of a contract bears more than one reasonable meaning, the clause is considered to be ambiguous and usually is construed against the drafter, in this case the United States Government. W.P.C. Enterprises, Inc. v. United States, 323 F.2d 874 (1963). This rule is set out more aptly in Peter Kiewit Sons' Co. v. United States, 109 Ct. Cl. 390 (1947) where the court stated at 418: "Where the Government draws specifications which are fairly susceptible of a certain construction and the contractor actually and reasonably so construes them, justice and equity require that that construction be adopted. Where one of the parties to a contract draws the document and uses therein language which is susceptible of more than one meaning, and the intention of the parties does not otherwise appear, the meaning will be given the document which is more favorable to the party who did not draw it. This rule is especially applicable to Government contracts where the contractor has nothing to say as to its provisions." However, to make sense of the first sentence of this provision it is necessary to read it in conjunction with the rest of the contract clause. Daniel H. Foster, Jr. ASBCA No. 21965, October 31, 1978, 78-2 BCA ¶ 13,541; on reconsideration, ASBCA No. 21965, September 19, 1979, 79-2 BCA ¶ 14,161. If verbal approval of the proofs would have been sufficient to begin to print then it would not have been necessary for the GPO to return the proofs to the contractor within a certain number of days as required by the last sentence of the clause. When one reads the entire clause together, the reasonable interpretation is that the contractor must receive the proofs prior to printing. To begin printing without such authorization is to act unilaterally and to assume the risk of incorrectly interpreting the contract. California Shipbuilding and Dry Dock Company, ASBCA No. 21394, April 14, 1978, 78-1 BCA ¶ 13,168. Furthermore, based on our analysis of the circumstances of the aforementioned telephone conversation, we conclude that the only object of the telephone call from the GPO to the contractor on July 25, 1979 was to ascertain the whereabouts of the proofs and not to provide approval to print. Since this was the case, it is logical to interpret that the remark "If I do not call you back, everything is o.k." to mean that if the contractor was not contacted the proofs had been located. Under the terms of the contract the contractor should have requested some sort of further confirmation before unilaterally proceeding to print the order. Its action, albeit taken under the time limitations of the contract, risked the possibility that some alteration of the proofs would be necessary. CONCLUSION Based upon the above reasoning the appeal of Serigraphic Arts, Inc. is denied in its entirety. _______________ 1/ Hereafter, unless otherwise noted, every citation to an exhibit is from the Appeal File.