U.S. GOVERNMENT PRINTING OFFICE BOARD OF CONTRACT APPEALS The Appeal of BUSE PRINTING & ADVERTISING, INC. Docket No. GPO BCA 6-89 April 5, 1990 MICHAEL F. DiMARIO Administrative Law Judge OPINION This appeal, timely filed by Buse Printing & Advertising, Inc., 1616 East Harvard, Phoenix, Arizona 85006 (hereinafter Appellant), is from the final decision of David G. Sever, Contracting Officer, Columbus Regional Printing Procurement Office (RPPO), U.S. Government Printing Office (GPO) (hereinafter Respondent), dated March 2, 1989, completely terminating a certain contract identified as Purchase Order H3808, Jacket 649-103(R), for default for failure to produce in accordance with the schedule. The decision of the Contracting Officer is affirmed for the reasons set forth hereinbelow. BACKGROUND Appellant, by the above-cited Purchase Order, dated December 2, 1988, was awarded a contract in the amount of $1,292.00 to produce 1200, plus or minus 5 percent, copies of a certain pocket folder requisitioned from Respondent by the Department of Health and Human Services, Requisition Number 9-00008-NIOSH. A logo was to be printed upon the face of each folder. The completed product was to be delivered to NIOSH, Cincinnati, Ohio, by December 23, 1988. Instructions for producing the logo stated in pertinent part ". . . Contractor to make color separations for logo (3 colors). Register is critical. Folder is to be printed by thermographic printing process. Colors must not overprint ea. other on logo." The folder was to be constructed of white litho coated cover stock. Inks for the three colors, red, blue, and gold, were specified by Pantone numbers subject to the condition that they must match such Pantones. (Tab A, Rule 4 File) Appellant was furnished three pieces of camera copy for the logo. The first piece of camera copy was for the blue color and consisted of an approximately 4" x 4" rectangular border 1/4" in width with the acronym NIOSH printed beneath it in block letter outline form. The second piece of camera copy was for the red color and consisted of a solid image reminiscent of a gear wheel approximately 2 1/4" in diameter. The third piece of camera copy was for the gold color and consisted of a stylized caduceus with the acronym NIOSH printed beneath it in solid image block letter form. The traditional staff and serpentine of the caduceus was represented in the camera copy by a series of outlined circles of narrow width and diminishing size, top to bottom, with an elongated, narrow, perpendicular, solid image, inverted triangle running through the center of the circles. The space between the inner edge of each outlined circle and the triangular segment was left blank on the camera copy. (Tab B, Rule 4 File) Thus, when printed, the completed logo was to be of a gold caduceus with part of its staff and serpentine superimposed over a red "gear wheel," all within a blue border, over the word NIOSH in gold block letters outlined in blue. In producing the product, however, Appellant omitted the red color from the space between the circular portions of the serpentine outline and the center triangular shaft, which, as pointed out above, were left blank on the "gold" camera copy, thus allowing the unprinted white paper stock to show through. By "suspect letter," dated January 6, 1989, Appellant was advised that the product which it delivered was "suspect of not being acceptable. . . . Preliminary examination of the product indicates, but may not be limited to, the following discrepancies: hickies or spots and the color gold does not match. If further examination reveals that this deviation or any additional deviations would affect the acceptance of this product, corrective action may be necessary. . . . Such action may be: (1) have the defective products replaced by your firm, (2) have the defect(s) corrected, or (3) accept the products with an appropriate reduction in cost. . . ." (Tab D, Rule 4 File) Thereafter, the defect was confirmed by Respondent's Quality Assurance and Compliance personnel with a determination that the Appellant caused the error since "the neg[ative] for the red has tape applied around the knockout for the gold." 1 (Tab E, Rule 4 File) Appellant was telephonically advised of this fact by Respondent's Quality Control and Compliance Officer, Gerald J. Finnegan, on January 26, 1989. Finnegan's contemporaneous notes of the conversation show that Appellant's President, "Ray Buse . . . stated that they cannot get the color within the gold area" and requested a default termination of the contract. (Tab E, Rule 4 File) But in a subsequent telephone conversation with Finnegan that same day, Buse ". . . stated that there may be a 10% chance that they may be able to drop in the color but will not know until after he gets the folders back. . . ." (Tab E, Rule 4 File) Finnegan advised Buse that he "could send 3 for testing, further agency needs folders NLT [no later than] COB [close of business] 2-22-89. Ray [Buse] stated that he would know within 24 hrs after receipt if it would work." (Tab E, Rule 4 File) As a matter of required procedure, Appellant, at that time, was telefaxed a "cure notice reprint" letter, dated January 26, 1989, advising in pertinent part that ". . . the Government . . . considers your failure to produce an acceptable product . . . a condition that is endangering performance of the contract in accordance with its terms." Appellant was directed to pick up the defective folders ". . . at the Cincinnati, Ohio, address as listed in the specifications . . ." and ". . .As mutually agreed . . . to correct the defect by reprinting the entire quantity in strict accordance with the specifications as published." [Underlining added for emphasis.] The "cure notice reprint" letter further advised that ". . . All of the above is to be accomplished at no expense to the Government not later than the date listed below. . . ." [February 22, 1989]. (Tab G, Rule 4 File) Discussions held on February 8, February 16, and February 28, 1989, established that although the above "cure notice reprint" letter directed that the product be reprinted, the Contracting Officer acquiesced to Appellant's attempt to correct the defective product "if possible" so long as the delivery was by the February 22nd date. (Tab E, Rule 4 File) Appellant did not comply with this requirement. In consequence of this, on March 2, 1989, its President was telephonically advised by Finnegan that the contract was being terminated for default and to return all Government furnished material to Respondent. (Tab G, Rule 4 File) By letter, telefaxed to Appellant that same day, the contract was terminated completely for default for failure to produce in accordance with the schedule with advice that Appellant could appeal this decision to this Board. (Tab H, Rule 4 File) Appellant thereafter appealed to this Board, its principal contentions being that: (1) the art was not clear; (2) it did not have sufficient time to correct the product because it was not advised of the problem with the red color until a contracting officer called "later in January" [than its receipt of the "suspect letter," supra]; and (3) the Government caused delay which resulted in Appellant's not being able to recover the folders which it needed to correct until the week of February 24th via UPS and that at that time one box was still missing. (Appellant's Appeal of Termination) Respondent, by Answer, asserts that none of Appellant's contentions are supported by the record for the reasons that: (1) the Contracting Officer's January 6, 1989, "suspect letter" advised Appellant that an "intensive evaluation will be made by the Government Printing Office. If our evaluation confirms the agency's complaint or reveals any additional defect(s), corrective action on your part may be necessary." Tab C, Rule 4 File. The Contracting Officer's "Cure Notice Reprint" letter of January 26, 1989, listed only one defect, the failure of the contractor to properly print the color red through the gold illustration as shown in the furnished camera copy, as the defect upon which the rejection was based. Exhibit F. and (2) . . . Appellant was solely responsible for arranging for the pick up of the rejected materials. The Contracting Officer, in his "Cure Notice Reprint" letter of January 26, 1989, had clearly directed Appellant to pick up the defective products and to reprint and deliver no later than February 22, 1989. Appellant failed to follow the Contracting Officer's directions. (Respondent's Answer) The Appeal comes before the Board in this form for decision. DISCUSSION Having examined the record in its entirety, the Board finds that Appellant's assertions are without merit for the following reasons. First, the Purchase Order instructions to the contractor, when read together with an examination of the furnished camera copy, make it abundantly clear that the red color was to be applied to the entire "gear wheel" except in those locations where the gold color was to be applied for the serpentine and staff of the caduceus. The taped negatives examined by Respondent's quality control personnel clearly established that the contractor did not follow this directive. As a result, the product was improperly printed in nonconformance with the specification and thus fully rejectable by the Contracting Officer. In this regard, U.S. GPO Contract Terms (see footnote #2, below) provides in Article 14.(f), Contract Clauses, that: The Government has the right either to reject or to require correction of nonconforming supplies. Supplies are nonconforming when they are defective in material or workmanship or are otherwise not in conformity with requirements. The Government may reject nonconforming supplies with or without disposition instructions. Second, Appellant was not directed to correct the defective products, but rather to reprint the entire order anew. Then, without rescinding this directive, the Contracting Officer, as a matter of purely gratuitous accommodation agreed to accept corrected products provided they were in full compliance with the specifications and delivered to NIOSH Cincinnati by February 22, 1989. The contract gave Appellant 18 days (December 5, 1988, to December 23, 1988) to complete and deliver the entire order. The January 26, 1989, directive gave Appellant 27 days to reprint the entire order. Moreover, the default termination did not come until March 2, 1989, affording Appellant an additional 6 days more to complete its work. Surely, such largess on the part of the Contracting Officer is beyond what a reasonable sense of fairness would demand. Third, as pointed out by Respondent's Answer, the January 26, 1989, "cure notice reprint" letter clearly directed Appellant to pick up the defective products. Again, there is no evidence to show that the Contracting Officer ever rescinded or modified this directive. In this regard, Article 14.(g), Contract Clauses, of the said Terms, in pertinent part, provides: The contractor shall, promptly after notice, remove supplies rejected or required to be corrected. . . . and Article 14.(h) provides that: If the contractor fails to promptly remove, replace, or correct rejected supplies that are required to be removed or to be replaced or corrected, the Government may . . . terminate for default as provided in article 20 "Default". . . . From these provisions we conclude that the burden for picking up the rejected material was solely that of the Appellant and cannot now be shifted to the Respondent as means of avoiding responsibility for the consequences of default. Accordingly, the appeal is denied and the decision of the Contracting Officer affirmed. It is so Ordered. _______________ 1 The contractor returned the negatives at the time of delivery of the job per instructions in the Purchase Order. 2 Article 7, Government Furnished Property, Contract Clauses, of U.S. GPO Contract Terms, GPO Publication 310.2, effective December 1, 1987, (Rev. 9-88), adopted by reference in the contract, requires the contractor to examine government furnished property immediately upon receipt and prior to performance and to advise the Government Printing Office of any discrepancies.