United States Government Printing Office Contract Appeals Board Appeal of TOTAL PRINTING SERVICES Contractor's Appeal dated July 5, 1983 Decision dated November 4, 1983 CAB Panel 83-6 Thomas O. Magnetti, Chairman John A. Tanner, Charlie Peel, Members Preliminary Statement Total Printing Services (hereafter the contractor) has appealed the decision of the Contracting Officer to terminate for default its contract (Purchase Order 81966) with the United States Government Printing Office (GPO). The contractor appealed this decision in accordance with the "Disputes" clause of the the contract. Article 2-3, Contract Terms No. 1, GPO Publication 310.2, revised October 1, 1980. The contractor in its appeal maintains that the work was accepted by the Government. Exhibit 21 of the Appeal File. The GPO Contract Appeals Board has jurisdiction over this appeal pursuant to GPO Instruction 110.10B, entitled "Board of Contract Appeals Rules of Practice and Procedure" and Contact 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, this decision is based solely on the record, an Appeal File containing the 25 exhibits. Statement of Facts 1.) The contract at issue called for the printing and binding of 1000 copies of the Chemline workbook. Exhibit 3. Each workbook contained a colored cover, an insert and textual matter and was to be produced from camera copy furnished by the Government. Id. As this contractor provided the lowest, responsive bid, it was awarded the contract by issuance of Purchase Order 81966, dated April 20, 1983. Exhibits 2 and 3. The Purchase Order set out the qualitative level that the work would have to attain in order to comply with the standards for this type of work. Exhibit 3. These standards are set out in the Quality Assurance Through Attributes (QATA) Program (GPO Publication 310.1). Exhibit 25. Although the contract was with the GPO, the contractor was required to ship the workbooks to the Department of Health & Human Services (HHS). Exhibits 1 and 3. 2.) The original delivery date was May 4, 1983. However, as the contractor did not receive camera-ready copy of the cover until April 28, 1983, an extension on the delivery date was granted. Exhibits 5 and 6. The documents were shipped on May 9 and received by HHS on May 19, 1983. Exhibits 7 and 22. 3.) HHS inspected a random sample of the documents. It determined from this inspection that the books were of poor quality. Exhibits 9 and 12. Following receipt of HHS' complaint, the GPO Quality Control and Technical Department inspected thirteen books and determined that there were defects in the uniformity and quality of the type and in the color match. Exhibit 10. The documents also failed to meet the standards set for extraneous marks. Id. Their report indicated that the work should be rejected by the GPO and reprinted by the contractor. Id. The job was rejected on May 23, 1983. Exhibit 17. The contractor was informed of the results of the inspection and was directed to reprint and redeliver by June 7, 1983. Exhibit 11. 4.) The contractor did reprint the documents and delivered them on June 6, 1983. An inspection of a random sample of this printing indicated that the reprinted product was as defective as the first printing. Exhibit 13. This printing was rejected on June 7, 1983. Exhibit 17. 5.) The GPO telephonically communicated its dissatisfaction with the poor quality of the contractor's work. Exhibit 15. The record indicates that at that time the contractor asked to be defaulted. Id. The GPO proceeded with the termination for default based upon the inability of the contractor to produce a satisfactory product. Exhibits 17 and 19. The contractor was notified of this decision by letter dated June 24, 1983. Exhibit 19. 6.) The contractor appealed this default termination by letter dated July 5, 1983, arguing that the agency (HHS) had accepted the job. Exhibit 21. The contractor claimed that it had requested that samples be returned and the books be held for pickup. Id. The contractor then alleged that the samples were not sent and the job not made available and that these actions constituted acceptance by the agency. Id. 7.) The Government maintains that Miriam Perkins, an employee of HHS, packed the defective books up and delivered them to the loading dock in order that they could be picked up by the contractor. Exhibit 23. Since, the documents had not been picked up by June 30, 1983, the HHS had the workbooks destroyed. Id. Applicable Contract Provisions 2-12. Inspection and Tests (a) All supplies . . . shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to acceptance. (b) In case any supplies or lots of supplies are defective in materials or manufacture or otherwise not in conformity with the requirements of the contract, the GPO shall have the right either to reject them (with or without instructions as to their disposition) or to require their correction. Supplies or lots of supplies which have been rejected or required to be corrected shall be removed . . . by and at the expense of the contractor promptly after notice, and shall not thereafter be tendered for acceptance unless the former rejection or requirement of correction is disclosed. If the contractor fails to promptly remove such supplies or lots of supplies which are required to be removed, or to promptly replace or correct such supplies or lots of supplies the GPO . . . may terminate the contract for default as provided in the article entitled "Default'' of these contract terms. . . . 2-18. Default (a) The Government may . . . by written notice of default to the contractor, terminate the whole or any part of the contract in any one of the following circumstances: (1) If the contractor fails to make delivery of the supplies or to perform the services within the time specified herein or any extension thereof; or (2) If the contractor fails to perform any of the other provisions of the contract, or so fails to make progress as to endanger performance of the contract in accordance with its terms, and in either of these two circumstances does not cure such failure within a period of 10 days (or such other period as the Contracting Officer may determine to be reasonable and authorize in writing) after receipt of notice from the Contracting Officer specifying such failure. Discussion The evidence of record indicates that the contractor never delivered goods that were in conformance with the terms of the contract. Inspection of the printed material indicated that the product was defective and substandard. This failure to provide a conforming product permitted the GPO to reject the goods and require their correction. See Article 2-12, supra. The contractor was given an opportunity to correct the defects. However, it again provided defective books that did not conform with the standards established in the QATA program for this level of printing. The results of these inspections have not been challenged by the contractor. Confronted with the contractor's inability to supply a conforming product within the time allotted under the contract or any extension thereof, the GPO terminated the contract for default. Articles 2-12 and 2-18, supra. Moreover, there is evidence in the record that indicates that the contractor may have acquiesced to this course of action. Exhibit 15. Given the above set of facts, this Board finds the termination of this contract to be appropriate. The contractor now claims that HHS, by its actions, accepted the books. Exhibit 21. There is no indication in the record that there was any act of acceptance on the part of either HHS or the GPO. The second printing was delivered on June 6, 1983. A representative sample was inspected the next day. Exhibits 13 and 17. The record indicates that the shipment was rejected immediately after the inspection had taken place. Exhibit 17. On June 8, 1983, the defective books were packed up and delivered to the HHS loading dock to be picked up by the contractor. Exhibit 23. The contractor was contacted telephonically on June 9, 1983, concerning a possible default. Exhibit 15. The GPO moved formally to default the contractor on June 24, 1983. Exhibit 19. These actions do not indicate acceptance of the tendered product. The rejection of the second shipment and default occurred so soon after delivery that it would be unreasonable for the contractor to believe that acceptance of the nonconforming product had taken place. There is no evidence of record that would indicate that HHS took any actions that might have constituted acceptance. See Exhibits 22 and 23. The contractor alleges in its appeal that, despite its request, the shipment was not held by HHS for pick-up by the contractor. The evidence of record indicates otherwise. The defective goods were made available to the contractor. Exhibit 23. It is the contractor's responsibility under the contract to make suitable arrangements to remove the rejected items. Article 2-12, supra. Since the contractor has submitted no proof that it was prevented from retrieving the rejected books, the Board finds that the Government acted appropriately in disposing of books after their rejection. Decision Based upon the foregoing analysis, the decision of the Contracting Officer to terminate this contract for default is affirmed. Accordingly, the contractor's appeal is denied in its entirety.