Appeal of Graphic Litho
Appeal dated November 23, 1983
Decision dated May 25, 1984

Panel 83-11


Graphic Litho (hereafter the contractor) has appealed the
decision of a Contracting Officer of the U.S. Government Printing
Office (GPO) terminating a contract for default.  The appeal was
filed in a timely fashion and was in accordance with the
"Disputes" clause of the contract.  Article 2-3, Contract Terms
No. 1, GPO Publication 310.2, revised October 1, 1980.  This
Board has jurisdiction over this appeal pursuant to GPO
Instruction 110.10B, entitled "Board of Contract Appeals Rules of
Practice and Procedure" and Contract Terms No. 1, supra.  As the
contractor was given the opportunity to have its appeal heard at
an informal hearing, but did not so request, the decision is
based solely on the written record.  That record consists of an
Appeal File with 43 exhibits.

By Purchase Order 28319 dated April 7, 1983, the contractor was
awarded a contract by the GPO to produce a folded form printed in
four color process, entitled "Rank Recognition Chart of Africa -
South of the Sahara."  According to the contract specifications,
the contractor was to furnish proofs and, if necessary, revised
proofs to the GPO.. The proofs were to be held by the GPO for 5
workdays and then returned to the contractor.  The contractor was
to ship the completed product by April 29, 1983.  After a series
of extensions were granted by the GPO in the contract schedule,
the contractor submitted proofs on June 29, 1983.  Exhibit 25.
On July 19, 1983, the color proofs were inspected and rejected.
Exhibits 28, 29 and 30.  By letter dated July 28, 1983, the GPO
informed the contractor of its decision to reject the proofs.
The contractor was also notified that it would have to correct
the proofs.  Exhibit 32.  On August 3, 1983, the contractor
contacted the GPO and informed it that the contractor's plant
would be closed the week of August 8, 1983, and that it would
have the corrected proofs ready by August 30, 1983.  Exhibit 34.

The GPO notified the contractor by a Contract Modification dated
August 7, 1983, that it had to submit proofs to the GPO on or
before August 11, 1983.  Id.  Apparently the contractor was aware
that it would have to supply the proofs by August 11th before the
Contract Modification was issued, because it contacted the GPO on
August 5, 1983, stating that it could not comply with the change
order.  Exhibit 35.  The contractor sent a telegram to this
effect on August 9, 1983.  Exhibit 37.  By letter dated August
16, 1983, the GPO rejected the contractor's proposed date for
submission of the revised proofs.  Id.  The contract was
terminated by letter dated August 25, 1983, for default because
of the contractor's failure to adhere to "the mutually agreed
adjusted schedule." Exhibit 39.  The contractor was informed that
it would be liable for any excess costs for reprocurement.  The
contract was reprocured on September 12, 1983, with a shipping
date of October 12, 1983, for a cost of $11,152.00. Exhibit 43.
The contractor appealed the default termination on November 23,


The GPO defaulted the contract because the contractor allegedly
failed to adhere to the "mutually agreed adjusted [contract]
schedule."  Under the default article of the contract, the GPO is
authorized to terminate a contract if the contractor fails to
make delivery of the supplies within the time specified by the
contract or any extension thereof.  Article 2-18 (a)(l), Contract
Terms No. 1, supra.   In the instant case, the evidence of record
demonstrates that the GPO granted the contractor several
extensions in the contract schedule.  Exhibit 38.  In early
August, the GPO notified the contractor that it had to submit
proofs by August 11, 1983.  The contractor did not comply and the
contract was terminated for the aforementioned reason.

However, there is no evidence in the record that would indicate
the contractor failed to meet a "mutually agreed" adjusted
schedule.  In fact, the evidence indicates that there was no
mutually agreed adjusted schedule for submission of the proofs.
Exhibits 34 - 37.  The contractor informed the GPO that it could
not deliver the corrected proofs until August 30, 1983.  The GPO
rejected that date, informing the contractor that it would have
to perform by August 11, 1983.

Although the GPO did not waive its right to timely delivery by
granting numerous extensions in the contract schedule, it did
establish a schedule for the submission of the proofs which it
knew to be impossible for the contractor to meet.  On August 3,
1983, the contractor informed the GPO that its plant would be
closed the week of August 8, 1983.  The GPO then notified the
contractor that it had to submit the proofs by August 11, 1983.
According to the evidence of record, this date was designated for
the purpose of giving the GPO "another point to default [the
contractor] from."  See Exhibit 34, the handwritten draft of the
Contract Modification.  It would seem that the GPO wished to be
in the best possible possible position to default the contractor.
A delivery date was chosen, knowing that the contractor could not
perform, so the contractor.could be defaulted for late delivery.
1/  Given this questionable method of contract administration, it
would be against equity and good conscience to enforce this
termination for default.  Therefore, the Board finds that, in
this case, scheduling a delivery date, with the foreknowledge
that it would be impossible for the contractor to meet the
schedule is inappropriate and renders the default termination
improper.  As the GPO has not alleged or proven that it had other
grounds to default the contractor on August 25, 1983, the
termination for default is not sustained.

Accordingly, the Board remands this appeal to the Contracting
Officer to convert the default termination to one for the
convenience of the Government.  See Articles 2-17 and 2-18(e),
Contract Terms No. 1, supra.  In the event that negotiations
regarding the contractor's recovery prove unsatisfactory to the
contractor, it has the right to appeal the matter to the Board in
accordance with the "Disputes" clause of the contract.


1/ The Contracting Officer attempted to default the contractor in
June 1983 for failure to adhere to the delivery schedule.
Exhibit 38.  However, the GPO did not proceed with that default
action.  Exhibit 25.