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.