U.S. GOVERNMENT PRINTING OFFICE BOARD OF CONTRACT APPEALS Appeal of Printing Corporation of the Americas, Inc. GPO BCA 14-84 January 28, 1985 MICHAEL F. DiMARIO, Administrative Law Judge OPINION This appeal is from the decision of J. G. Marken, Government Printing Office Contracting Officer, dated April 11, 1984, terminating a contract with Printing Corporation of the Americas, Inc. (PCA), for default for "failure to produce acceptable proofs in time to meet the scheduled shipping date." The Board denies the appeal and affirms the decision of the contracting officer. FINDINGS OF FACT On March 2, 1984, appellant, PCA, was awarded a contract identified as Purchase Order 31968, Jacket No. 432-384, by respondent, United States Government Printing Office (GPO) (Exhibit 5). The award was based upon a telephone bid by appellant of February 29, 1984, made in response to its receipt of specifications and Invitation for Bids issued by respondent on February 23, 1984 (Exhibit 2), and an amendment thereto telegraphically issued February 27, 1984 (Exhibit 3). The bid quote by appellant of $17,240 with shipping from its Pompano Beach, Florida plant (Exhibit 4) was the lowest competitive bid (Exhibit 1). The telephone bid, GPO specifications, and GPO Publication 110.2, "Contract Terms No. 1," were incorporated into the contract by reference thereto in the Purchase Order (Exhibits 2, 4, & 5). The contract called for the production of 112,139 folded 4-color forms entitled "License Plates 1984" for the United States Department of Transportation per its requisition no. 4-00630 to be shipped by March 26, 1984, F.O.B. destination (Exhibits 2, 3, 4, & 5). The specifications required the respondent to provide the appellant with certain materials; e.g., art work, camera ready copy, and a sample from a previous printing of the form to use as a folding dummy (Exhibit 2, page 1). The appellant was to receive these materials by March 5, 1984 (Exhibit 2, page 6). In turn the appellant, before receiving an "OK to print", was to furnish the respondent with two sets of full color proofs and "one progressive proof book of face and two top sheets only of back." (Exhibit 2, page 2) The appellant was to submit the proofs as soon as it deemed necessary to comply with the shipping schedule (Exhibit 2, page 6). The proofs were to "be withheld 5 workdays from receipt in the GPO to receipt in contractor's plant." (Exhibit 2, page 6) The GPO shipping schedule set a due date for proofs from the appellant of March 12, 1984 (Exhibit 10). The specifications contained a paragraph (Exhibit 2, page 2) cautioning that: If any contractor's errors are serious enough in the opinion of the GPO to require revised proofs, the revised proofs are to be provided at no extra expense to the Government. No extra time can be allowed for this reproofing; such operations must be accomplished within the original production schedule allotted in the specifications." The respondent issued the Purchase Order (Exhibit 5) and prepared to mail the materials to the appellant on March 2, 1984 (Exhibit 5A). The Purchase Order and materials were in fact mailed on March 5, 1984 (Exhibit 7). Appellant claimed receipt of material on March 8, 1984, at 2:45 p.m. (Exhibit 9) some 3 days after the date of March 5 provided for in the specifications (Exhibit 2, page 6). The appellant asserts that because of this late receipt of materials, he telephoned respondent on March 12 at 10 a.m. to ask for an extension of time and was advised by a Mr. Vollmer that such extension would be automatic upon respondent's receiving the [certified mail] returned receipt. The appellant was in fact granted an extension of time for the late copy (Exhibit 6 & 9). The extension was to the final product shipping date which was revised from March 26, 1984 to April 3, 1984. On March 13, 1984, the Contract Compliance Section issued a computer generated Exception Report (Exhibit 6). A handwritten note thereon states: 1/ & 2/ K claims proofs will ship 3-19-84 from FLA 1 & 2 3-19 + 5 day hold = 3-26-84 3-26 is ship date On March 14, 1984, based upon this calculation, Mr. R. C. Pearson, Contract Compliance Section, recommended corrective action (Exhibit 6). The Contracting Officer then directed that a Show Cause Notice be sent to the appellant. The Notice telegrammed on March 15, 1984, stated that "since you have failed to perform the schedule requirements . . . the government is considering terminating said contract . . . " for default. Appellant was given 5 days from receipt of the Notice to present extenuating factors (Exhibit 8). The appellant received the Notice on March 16, 1984 (Exhibit 9) and responded in writing that same day setting forth the essence of his conversation of March 12, 1984, with Mr. Vollmer concerning the purported late receipt of materials and his request for an extension. The appellant's response also stated: "Proofs shipped this date via Air Express." (Exhibit 9) The proofs were received from the appellant on March 19 (Exhibit 10). They were then routed through respondent's Office of Typography and Design (T&D) (Exhibit 10) as required by the specifications (Exhibit 2, page 3). Mr. Whitmore, T&D, "rejected the proofs because of blue cast overall due to cyan dot doubling. Cyan out of register. All inks printing heavy and slurring problems." (Exhibit 19.) Whitmore claimed to have "contacted printer about all the problems, and he assured me they would be corrected on second set of proofs." (Exhibits 10 & 19.) The proofs were returned to the appellant from T&D by certified mail on March 22, 1984. That same date, as a result of the need for revised proofs, Mr. Pearson, Contract Compliance, recommended that corrective action be taken (Exhibit 10). As a result, the contracting officer on March 23, 1984, directed that a Cure Notice be sent appellant (Exhibit 10). The Notice telegrammed March 23, 1984, stated that respondent considers your inability to deliver satisfactory proofs within time to meet specified delivery date . . .. a condition that is endangering performance of the contract in accordance with its terms. . . . you are . . . afforded the opportunity to present, in writing, in 5 days from receipt thereof, the measures adopted which have cured such condition. Unless such condition has been cured, the Government may terminate . . . for default . . . . (Exhibit 13) The telegram was delivered to appellant on March 27, 1984, at 11:38 a.m. (Exhibit 13). Appellant claims receipt of returned proofs on March 29, 1984 (Exhibit 20). However, the return receipt shows a Pompano Beach, Florida, USPS registry stamp dated March 27, 1984, a signature of appellant's recipient, and handwritten, undated time entry of 10:45 a.m. (Exhibit 12). The appellant then made color corrections and on April 3, 1984, sent a second set of proofs to respondent (Exhibit 20). The proofs were received on April 5, 1984 (Exhibit 14) at which time they were forwarded to T&D (Exhibit 14). On April 6, 1984, Mr. Whitmore, T&D, rejected the second set of proofs due to doubling on magenta and cyan poor registration (stripping problem). . . . Also, only one top chart was sent in on second set of proofs. (Exhibit 19) He also contacted the appellant the same day concerning the rejection. He was told that there was a press problem. He then told the appellant he would need a third set of proofs (Exhibits 14 and 19). Mr. Whitmore in his "MEMO FOR THE RECORD" (Exhibit 19) states: The second set of proofs came back from the department marked "OK to print." I reviewed these proofs, realized it would be impossible to match on press, contacted Mr. Ed Zolek who agreed we should see a third set of proofs. 3/ Mr. Whitmore then proceeded to return the rejected proofs to appellant. Indeed, the materials were delivered to the respondent's mail room on April 9, 1984, where they were stopped at the request of the contracting officer (Exhibit 14). Appellant claims that: A phone call to Contract Compliance on the morning of April 9, 1984, indicated that the proofs were approved by the Agency, and would be returned to us the next day. We did have a discussion about the "doubling in red and blue," and I indicated that we had a press problem on our 38/4 color for which we had flown in a Miller mechanic for 5 days to successfully eliminate the "doubling" . . . and we were in a position to immediately go-to- press with this undertaking. 4/ (Exhibit 20.) On April 11, 1984, the contracting officer, through his contract administrator, advised the respondent's Contract Review Board that the contractor is currently in default, asked for concurrence to default, and recommended reprocurement because of appellant's failure to meet scheduled shipping date. All in accordance with Part II, 2-18, Default of Contracts Terms No. 1. (Exhibit 15.) The Contract Review Board by a vote of 4 to 0 gave its concurrence that same date (Exhibit 15). The appellant was notified of the termination for default by letter dated April 11, 1984 (Exhibit 16) "because [sic] your failure to produce acceptable proofs in time to meet the scheduled shipping date." By letter of April 12, 1984, the respondent advised appellant of its reprocurement from another contractor at $17,795, and that the excess costs for this action would be deducted from appellant's account (Exhibit 17). Appellant, by letter of April 19, 1984, filed a timely Notice of Appeal to the termination for default (Exhibit 20). The Notice does not request a hearing but does set forth some seven numbered facts upon which appellant relies. 5/ It also sets out objections to the termination for default for the following reasons: 1) Late arrival of artwork. 2) Late return of proofs on the part of the Government and asserts that: . . . upon receipt of "OK to print," in conjunction with the "Press Inspection" indicated in the contracts, I am certain that completed product would be consistent with GPO approved standards and shipments would be started within five (5) days and the job completed within 8 working days. The appeal comes to the Board in this form for decision on the written record. 6/ ISSUES PRESENTED 1. Did the late delivery of artwork and purported late return of rejected proofs by respondent operate to deny the government entitlement to terminate the contract for default for "failure to produce acceptable proofs in time to meet the scheduled shipping date." 2. Did the request of respondent's T&D agent for a third set of proofs modify the contract terms with respect to appellant's time of performance. DISCUSSION The original production schedule was set forth in the specifications substantially as follows: 1) Materials to contractor by March 5, 1984. 2) Contractor to submit proofs as soon as contractor deems necessary to comply with the shipping schedule (Exhibit 2, page 6). 3) Proofs to "be withheld 5 workdays from receipt in the GPO to receipt in the contractor's plant." (Exhibit 2, page 6) ("Workday" is defined as Monday through Friday of each week exclusive of the days on which Federal Government holidays are observed. U.S. Government Printing Office Contract Terms No. 1, paragraph 2-1.) 4) Complete final product to be shipped on or before March 26, 1984. No express date was set in the specifications for the contractor to ship the proofs to the respondent. Such a date, March 12, 1984, was established, however, in the GPO shipping schedule on the compliance record presumably for compliance monitoring purposes only (Exhibit 10). The contract specifications contained an express provision concerning the effect on time of failure to produce acceptable proofs within the established production schedule: No extra time can be allowed for this reproofing; such operations must be accomplished within the original production schedule allotted in the specifications. (Exhibit 2, page 2) Thus, the original schedule gave the contractor 22 calendar days from and including date of receipt of furnished Government materials until and including the date of shipment of complete final product with no additional time for reproofing. The appellant received the material on March 8th, 3 days later than the date set forth in the specifications (Exhibit 9). Because of this late receipt of material the final shipping date was extended from March 26 to April 3. Extensions of schedules are governed by GPO Contract Terms No. 1, paragraph 2-11(c) (1) as follows: (c) Extension of schedules. (1) In the event a delay is caused by any action of the Government, including failure to furnish purchase/print order, copy and/or materials as scheduled, the shipping schedule will be extended automatically by the total number of workdays that work was delayed PLUS 1 workday for each day of delay; such period of grace not to exceed 3 workdays. For example: Order, etc., 1 workday late + 1 workday grace = 2 workdays extension Order, etc., 2 workdays late + 2 workdays grace = 4 workdays extension Order, etc., 3 workdays late + 3 workdays grace = 6 workdays extension Order, etc., over 3 workdays late: total number of workdays late + 3 workdays grace = total number of workdays extension." Thus, it appears that with respect to the first Government delay, appellant was adequately compensated within the terms of the contract. Now let us examine the facts with respect to the second Government delay. The contractor made the shipment of the first set of proofs to the respondent on March 16, 1984, 8 days after his receipt of the materials from respondent. Respondent received the materials March 19, 1984, 3 days after transmittal by the appellant and some 7 days after the original internal GPO scheduled date for receipt of the materials. At this point 11 days of the contractor's allotted time from receipt of materials to shipment of final product had been consumed. The proofs were rejected by the respondent and returned to appellant on March 22, 1984. The appellant received them on either March 27, 1984 as shown by the postal registry stamp or March 29th as claimed by appellant. In either event, it is clear that the period "from receipt in the GPO until receipt in the contractor's plant" was a period greater than 5 workdays. 7/ Arguably, the appellant, at that point in time, was entitled to 1, 2, or 6 days additional time for its performance depending upon the date used for actual receipt and the construction given the grace period limitations clause of the Extension of Schedule Provisions, supra. The respondent, using the March 27th date and construing the grace period limitation to be a sum total of 3 days irrespective of the number of delays occasioned by the Government, granted a l-day extension to "4-4" as shown on its compliance record (Exhibit 14). However, using the same date of receipt but construing the grace period limitation to apply to each and every delay caused by the Government would result in a 2-day extension to April 5, 1984. Using the contractor's claimed date of receipt and the latter construction would result in a 6- day extension to April 9, 1984. The Board finds that there is substantial evidence in the documented postal registry stamp date and the wording of the Extension of Schedule provision as applying to "a delay" to support the second construction. Thus, the final shipping date should have been extended to April 5, 1984, the date respondent received the second set of proofs. It is clear, however, that at that point in time the appellant was in fact in default and could have been right there and then terminated by the contracting officer. Appellant's argument that the termination for default should be reversed because of this second Government delay is thus without merit. Rather than terminate the contract, respondent availed itself of its right to a second 5-day withholding period in order to examine the second set of proofs, whereupon finding them to be defective, it so notified the contractor. In doing so, its agent, Mr. Samuel Whitmore, a laboratory technician, may have conveyed an impression to the appellant that the contract was continuing. Be that as it may, the express terms of the contract with respect to delays caused by reproofing were still in effect. Moreover, the appellant could not lawfully rely upon Mr. Whitmore's representations with respect to additional time for performance, if any were in fact made, since any actual authority he possessed was circumscribed by his assignment to the Typography and Design Division, an entity in respondent's organization separate from its Printing Procurement Department. The record is devoid of any evidence showing that Mr. Whitmore or the T&D Division were held out to possess any contracting authority with respect to the time elements of the contract. It is well established Federal procurement law that the Government is not bound by unauthorized agents. Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380 (1947). In order to bind the Government, employees who act as its agents must have actual authority. Jackson v. United States, 216 Ct. Cl. 25, 41, N. 2, 573 F.2d 1189, 1197, N. 2, (1978), and proof or acknowledgment of that authority is necessary to a claim. Robert P. Lewis, Sr. v. United States, 231 Ct. Cl. 799 (1982). Moreover, the appellant must show that the Government employee upon whom it relied had actual authority to bind the Government in the specific regard in question. Alabama Rural Fire Insurance Company v. United States, 215 Ct. Cl. 442, 458-59; 572 F.2d 727, 736 (1978). No such proof, acknowledgment, or showing has been proffered by the appellant. CONCLUSION The Board finds that the appeal is without merit and thus affirms the decision of the contracting officer. _______________ 1/ Presumably, the symbol K is used for its common procurement and legal shorthand meaning of contractor. 2/ The revised shipping date had not yet been entered on the compliance record, since respondent had not yet received the certified mail return receipt, and indeed it was not received until March 27th at 11:17 a.m. (Exhibit 5A). 3/ Mr. Zolek is the Department of Transportation's representative. 4/ This apparently was the same call identified by Mr. Whitmore as being April 6, 1984. 5/ The appellant's facts, not controverted by the submissions of respondent, are substantially incorporated in this Statement of Findings where relevant to the issues presented. They are identified by parenthetical reference to the Notice of Appeal (Exhibit 20). Where such facts are controverted they are included together with the relevant evidence submitted by respondent. 6/ Appellant did not affirmatively avail itself of its right to a hearing. Accordingly, the right was deemed waived pursuant to the Board's rules (letter to Appellant dated November 22, 1984). 7/ March 24th and 25th, 1984, were a Saturday and Sunday, respectively, and thus not "workdays" as such term is defined in the contract.