Appeal of Himark. Printing Co.
Appeal dated December 9, 1983
Decision dated March 16, 1984

Contract Appeals Board
Panel 84-1
Thomas O. Magnetti, Chairman
Joseph Nadler, Member
Morris J. Mervis, Member


   Himark Printing Company (hereafter the contractor) has
   appealed the Contracting Officer's decision which terminated
   the contract that the contractor had with the U.S. Government
   Printing Office (GPO), for default and assessed the contractor
   for the excess costs of reprocurement.  The contractor
   appealed this decision in accordance with the "Disputes"
   clause of the contract.  See Article 2-3, Contract Terms No.
   1, GPO Publication 310.2, revised October 1, 1980.  The
   contractor in its appeal asserts that it should not be liable
   for excess costs.

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 Contract Terms No.
1, supra.  As the contractor was given an 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 13 exhibits.


1).  By Purchase Order K0743, dated August 19, 1983, the
contractor was awarded a contract to produce 2,700 Smyth-sewn
books.  Exhibit 4.  The contractor received the award because it
was lowest responsible responsive bidder.  Exhibit 2 and 3.  On
August 18, 1983, prior to the contract's award, the contractor
reviewed and confirmed his bid.  See Exhibit 2.  The
specifications for the contract called for delivery of the books
by October 3, 1983.  Exhibit 1.

2).  On August 26, 1983, the contractor contacted the GPO and
alleged that, due to an error made by its subcontractor in
estimating the cost of sewing the books, the bid submitted by the
contractor was $1,000 too low.

Exhibit 6 and 8.  However because the subcontractor refused to
supply an affidavit attesting to its error, the contractor was
unable to substantiate the alleged post award error in bid.
Exhibit 6.

3).  By letter dated September 1, 1983, the contractor informed
the GPO that it could not perform the contract for the original
bid price.  Exhibit 8.  It returned the negatives of the book and
the sample to the GPO with this letter.

4).  By letter dated September 12, 1983, the contractor was
notified that the contract was terminated for default.  Exhibit
10.  The reason for default was the contractor's stated and
demonstrated inability to proceed with the performance of the
contract in accordance with the contract terms.  In this
termination notice, the contractor was informed that it would be
liable to the Government for any excess costs that may arise from
reprocuring the contract.

5).  The contract was reprocured from the next lowest bidder at a
cost of $7,816.00.  Exhibits 2 and 11.  The excess cost for
reprocuring the defaulted contract was $2,030.88.

6).  The contractor appealed the decision asserting that it was
improper for the GPO to hold the contractor liable for excess
costs.  Exhibit 12.  With its appeal letter, the contractor
submitted the incorrect bid supplied by the subcontractor and a
corrected bid.


   The contractor argues that, because its subcontractor provided
   the contractor an incorrect price for the Smyth sewing machine
   operation, the contractor should not be liable for any of the
   excess costs for reprocurement. 1/ However, the Government has
   the contractural right to assess a contractor for the excess
   costs for reprocuring a contract that was terminated for
   default.  Article 2-18(b), supra.

   The contractor is not liable for these excess costs only if
   its failure to perform the contract arises out of causes
   beyond the control of contractor and without its fault or
   negligence.  Article 2-18(c), supra.  In the instant case, the
   contractor's failure to perform was directly related to its
   decision not to perform the contract.  See Exhibits 6 and 8.
   By returning the Government's material (samples & negatives)
   to the GPO, the contractor abandoned performance.  As stated
   above, the contractor's decision not to perform was allegedly
   based upon its subcontractor's error in the bid provided to
   the contractor for subcontracting the Smyth sewing machine
   operation.  However, neither the contractor nor the
   subcontractor substantiated that claim by submitting
   affidavits attesting to the error.  Exhibits 6, 9 and 12.  The
   documentation submitted by the contractor was insufficient to
   establish an error in bid.

Having failed to demonstrate that its nonperformance was beyond
its control, the contractor was properly defaulted and is
contractually liable to the Government for the excess costs of
reprocurement.  Therefore, the appeal is denied in its entirety.


1/ In its appeal the contractor does not contest the validity of
the termination for default.  See Exhibit 12.