Contractor's Appeal dated October 13, 1983
Decision dated March 8, 1984

Contract Appeals Board
Panel 9-83


   B & W Press, Inc. (hereafter the contractor) has appealed the
   decision of the U.S. Government Printing Office (GPO)
   Contracting Officer which rejected the contractor's claim for
   a price increase due to the increased cost of paper.  The
   contractor's appeal of the Contracting Officer's decision was
   filed in accordance with the "Disputes" clause of the
   contract.  Article 2-3, Contract Terms No. 1, GPO Publication
   310.2, revised October 1, 1980.  Contract Terms No. 1 is
   incorporated by reference into the specifications of the
   contract.  See Exhibit 2, p. 2 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 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, this decision is based solely on the
   record, an Appeal File containing 10 exhibits.


1. The contract at issue, identified as Program A382-S, called
for the production of self-mailers (envelope style).  Exhibit 2.
It was a requirements contract whose term was from January 1,
1983 to December 31, 1983.  The type of paper required by the
contract was set out in Section 2 of the Specifications.  Id., p.

2. The contract's specifications contained no provision for an
escalation in the contractor's prices.  Exhibit 2.  The
specifications provided that, if the Government's requirements
did not result in orders in the amounts or quantities that were
estimated, that fact would not constitute the basis for an
equitable price adjustment under the contract.  Id., Section 1.
Under Section 4 of the specifications, "Schedule of Prices" the
prospective contractors were notified that the prices bid had to
include the cost of all required materials for each of the listed
items.  Exhibit 2, p. 11.

3. In accordance with the contract specifications, the contractor
bid a firm, fixed price for the contract.  Exhibit 4.  Because
the contractor was the lowest responsive bidder, it was awarded
the contract by issuance of Purchase Orders 27214 and 27205.
Exhibit 7.

4. By letter dated August 18, 1983, due to the increased cost of
paper, the contractor requested a price increase on any print
orders placed after September 1, 1983.  Exhibit 8.  With this
request, the contractor submitted letters from its paper
suppliers that indicated that various prices for paper would be
increased during 1983.  The Contracting Officer responded to this
request by letter dated August 25, 1983.  Exhibit 9.  The
contractor was informed that, because the contract did not
provide for any cost escalation, any increase in material costs
must be borne by the contractor.

5. The contractor appealed this decision in a letter to the
Public Printer dated October 13, 1983.  Exhibit 1.  In its
appeal, the contractor alleged that its paper costs had increased
since May 1, 1983.  Because the contractor did not inventory
paper stock, these price increases had to be passed on to its
customers.  The contractor requested that the contract price be
increased by $ .45 per thousand on the 8 x 3-1/2 " mailers and $
.26 per thousand on the 6-1/2 x 4-1/4 " mailers.


   Ordinarily, a contractor is not entitled to a price adjustment
   for unforeseen difficulties or unexpected losses that may
   arise during the performance of a firm, fixed price contract.
   Construction Contracts & Trading, ASBCA No.  20899, 78-1 BCA 
   13,121.  Such risks include increased costs attributable to
   inflation.  Absent a price escalation clause in a fixed price
   contract that would shift the risk of price increases from the
   contractor to the Government, the risk of an unanticipated
   price increase by a supplier of material needed by a
   contractor is assumed by the contractor.  McNamara
   Construction of Manitoba, Ltd. v. United States, 206 Ct. Cl.
   1, 8 (1975); Nedlog Company, ASBCA No. 26034, 82-1 BCA 
   15,519.  Since there is no clause in this contract to provide
   the relief sought by the contractor, the increased cost of
   paper, by itself, does not provide a basis for recovery.
   Finding of Fact No. 2.  See also, Lynch Foods, VABCA No. 1620,
   81-2 BCA  15,402.

   To recover, the contractor must show the costs would not have
   occurred but for a cause for which the Government is
   responsible.  Claude C. Wood Company, AGBCA Nos. 79-176-1,
   80-134-1, 82 BCA  15,706.  In the instant case, the
   contractor alleges that, although the contract provides that
   only six print orders would be placed with the contractor, as
   of October 13, 1983, 14 print orders had been placed with the
   contractor.  As this was a requirements-type contract, the
   Government was not contractually bound to place only six print
   orders with the contractor.  Under this type of contract, the
   contractor is required to produce all of the Government's
   requirements.  In bidding on a requirements-type contract, a
   contractor is presumed to have considered that it might be
   responsible for producing work in quantities greater than
   those estimated in the contract.  Shader Contractors v. United
   States, 149 Ct. Cl.  535, 538 (1960); Propane Industrial, Inc.
   v. General Motors Corp.., 419 F.Supp.  214, 218 (W.D. Mo.

   Here, the contractor has not proved that the quantities
   ordered under the 14 print orders were appreciably greater
   than the estimated quantities that could have been ordered
   under six print orders.  For example, the specifications
   inform prospective contractors that there could be two orders
   that would possibly require the production of 12 million
   copies each.  Exhibit 2, p. 4.  The other four orders might
   require the production of 500,000 copies each.  Id.
   Therefore, to bid properly on this contract, the contractor
   had to anticipate the possible production of 26 million
   copies.  The evidence shows that in the 14 print orders that
   were placed with the contractor, the Government ordered
   approximately 25,200,000 copies.  See Exhibit 10.  Therefore,
   the record of this appeal does not provide any evidence that
   would permit recovery based upon Government fault.

   Although this Board sympathizes with a contractor who must bid
   on fixed price contracts in the face of the rising cost of
   paper, since there is no clause that would shift the risk of
   this occurrence to the Government, the contractor cannot
   recover for such unanticipated costs.  For this reason, the
   appeal is denied in its entirety.