Appeal of Edwards Brothers, Inc.
Appeal filed on May 5, 1983
Motion to Dismiss filed on July 14, 1983
Decision dated September 19, 1983

Panel 83-3
Thomas O. Magnetti
Brian Morrissey
Edwin P. Dolan


1.  A contract to produce the Occupational Outlook Handbook, 1982-83, was awarded to Edwards
Brothers, Inc. (hereafter the contractor) by the U.S. Government Printing Office (the GPO) on
February 16, 1982.  Exhibit 7 of the Appeal File. 1/.  The contract, Purchase Order 22344,
incorporated by reference the contract specifications which in turn incorporated by reference GPO
Contract Terms No. 1, revised October 1980 and the GPO Quality Assurance Through Attributes (QATA)
Program, revised June 1981.  Ex. 2.

2.  The contractor was informed in a document entitled "Contract Modification" and dated April 29,
1982, that because of the unsatisfactory quality of 80,000 paperbound copies of the Handbook, the
payment price was to be adjusted by a reduction of 20.3%.  Ex. 38.

3.  Citing the contract's "Disputes" clause, the contractor protested this reduction in a letter to
the Contracting Officer dated May 14, 1982.  Ex. 48.

4.  The Contracting Officer issued a final decision on July 14, 1982, stating that the contractor
had not complied with the product quality and standards required by the contract.  Ex. 49.  The
letter also stated that


1/ Hereafter citation to the Appeal File will be noted by the abbreviation "Ex."

the price reduction was imposed in accordance with the QATA program.  The contractor received the
decision letter on July 19, 1982.  Ex. 50.

5.  The contractor submitted a voucher for payment, dated July 15, 1982, for work performed under
the contract.  The invoice represented a claim for the full amount of the contract - $307,148.09.
Ex. 52.  On the last page of the invoice there is a typed note stating that: "[a] reduction equal
to 20.3 percent on perfect bound copies currently under appeal. . .."

    6. On August 17, 1982, the GPO paid the contractor $304,078.91.
Ex. 53.

7.  Approximately one year later, the contractor billed the GPO for $15,185 for work performed on a
second contract, Purchase Order 26989.  Ex. 53.  The GPO refused to pay this amount, and further
informed the contractor that it owed the GPO a balance of $16,337.55.  Ex. 53.  Apparently, the GPO
was setting off the amount owed this contractor under this second contract (Purchase Order 26989)
by the amount of the price reduction which it had failed to recover from the first contract
(Purchase Order 22344).

8.  The contractor appealed this price reduction by letter dated May 5, 1983.  Ex. 53.

9.  Counsel for the Contracting Officer filed a motion to dismiss this May 1983 appeal on the
grounds that it was untimely.  In this motion, the GPO argued that, based upon the contract's
"Dispute" clause, decisions of the Contracting Officer are final and conclusive unless the
contractor mails or otherwise furnishes to the Contracting Officer a written appeal of that
decision within 90 days from the date of receipt thereof. See Article 2-3, Contract Terms No. 1,


The "Disputes" clause sets out the requirements for filing appeals after receipt of a final
decision from the Contracting Officer.  Article 2-3, supra.  This provision requires that
dissatisfied contractors appeal these final decisions within ninety days in order to preserve their
right to challenge these decisions.  Ordinarily, this Board would strictly adhere to this temporal
limitation.  Appeal of National Typesetting, Inc., GPO BCA 13-80 (1980).  However, in the instant
case, to hold that the contractor should be barred by this provision of the contract would be
manifestly unjust.

The contractor was informed by letter dated July 14, 1982, that because it had not complied with
the quality standards set out in the QATA program and required by the contract, the contract price
was to be reduced by 20.3%.  The contractor had ninety days to appeal this decision.  During this
same time period, the middle of July, the contractor submitted an invoice requesting payment in
full in the sum of $307,148.09.  On August 17, 1982, almost the entire amount was paid to the
contractor ($304,078.91).  Although this amount is slightly smaller than the amount originally
submitted by the contractor in its invoice, it is clear that the amount paid the contractor was not
reduced in accordance with the decision of the Contracting Officer.  If this had occurred, the
contract price would have been reduced by over $31,000.  Ex. 53.

Having been paid almost the full amount of the contract price by the GPO Financial Management
Service over one month after the contractor had received the decision of the Contracting Officer,
the contractor reasonably relied on the fact that there was no existing controversy surrounding the
20% contract price reduction.  Therefore, it was reasonable for the contractor to believe that it
did not have to take any further steps to appeal the price reduction.  This reliance becomes even
more reasonable and justifiable since the contractor itself had put GPO officials on notice of the
controversy by stating on the invoice that "a reduction equal to 20.3% percent on perfect bound
copies [was] currently on appeal." Ex. 52.  Despite this notification by the contractor that there
was a dispute over the contract price, the GPO paid the contractor over $304,000.  Based on this
belief that the controversy had been resolved, no action was taken by the contractor.  Ex. 53.

However, approximately one year later, after discovering its mistake, the GPO refused to pay the
contractor for work it had performed on another contract.  It withheld a payment of $15,185 and
notified the contractor that it owed the GPO a balance of $16,337.55.

Having lulled the contractor into believing that the matter was settled, the GPO now seeks to
prevent the contractor from exercising its right to appeal the initial decision that was basis for,
not only the original price reduction, but also the $15,000 set-off and the demand for an
additional $16,000.  This Board holds that the contractor is not so barred.  The contractor's
reliance on the actions of the GPO was both reasonable and logical.  Given the facts of this case,
it would be inequitable to exalt the letter of the law over its spirit by permitting the
Contracting Officer's decision of July 15, 1982 to be final and conclusive.  Therefore, the motion
to dismiss is denied in its entirety and this appeal will be processed in accordance with this
Board's procedures.