BOARD OF CONTRACT APPEALS U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC 20401 In the Matter of ) ) the Appeal of ) ) QUALITYPE, INC. ) Docket No. GPOBCA 21-95 Program 1020-S ) Purchase Order R-0143 ) Print Order 80000 ) For the Appellant: Qualitype, Inc., Macedon, New York, by Frederic G. Antoun, Jr., Attorney at Law, Chambersburg, Pennsylvania. For the Respondent: Kerry L. Miller, Esq., Associate General Counsel, U.S. Government Printing Office. Before BERGER, Ad Hoc Chairman. DECISION AND ORDER Qualitype, Inc. (Appellant), 201 Heather Lane, Macedon, New York, timely appealed the April 26, 1995, final decision of Contracting Officer Michael J. Atkins of the Seattle Regional Procurement Office of the U.S. Government Printing Office (Respondent), determining that Qualitype had been billing incorrectly for work done under its contract and directing that the amount erroneously paid be recovered. For the reasons which follow, the Contracting Officer's decision is AFFIRMED and the appeal is DENIED. I. BACKGROUND 1. The Appellant was awarded the Program 1020-S requirements contract, calling for reproduction proofs for the Fishery Bulletin, a publication of the National Oceanic and Atmospheric Administration, for the 1993-1994 period and again for the 1994-1995 period. 2. Under these contracts, the Government furnished magnetic media data files, and hard copy output of the data files containing author's alterations. The contractor was required to insert these author's alterations into the data files. 3. The contracts' Schedule of Prices contained the following items for composition work: A. Author's Alterations (the minimum charge shall be $10.00 per print order, when applicable): (1) Alterations marked on hard copy (or manuscript copy) that requires insertion into furnished data files, requested before proofs/repros are delivered to the Government (text editing): (a) Text matter. . . . . . . . per 1,000 characters. . . . $_________ (b) Tabular matter. . . . . .per 1,000 characters. . . . $_________ (2) Alterations marked on proofs (made subsequent to delivery of proofs to the Government): * * * * * B. Electronic photocomposition charges (from telecommunicated and/or storage media). . . per page. . . .$ ________ Rule 4 File, Tabs D and H.1 4. For the 1993-1994 contract, the Appellant bid a unit price of $ .001 for item A(1)(a) and a unit price of $9 for item B, with a total evaluated bid price of $15,879.33. Rule 4 File, Tab E. Billings under the contract totaled $9,272. Gov't Exh. No. 1.2 5. For the 1994-1995 contract, the Appellant bid unit prices of $12.50 for item A(1)(a) and $2 for item B. The evaluated bid price was $9,673.97. Rule 4 File, Tab I. 6. After performing in response to the first print order under the 1994-1995 contract, the Appellant submitted a voucher for $12,854. This was followed by a voucher for work performed under the second print order in the amount of $16,490.50. Rule 4 File, Tab J. Since these voucher amounts exceeded the Respondent's estimates by a significant amount, the Contracting Officer was informed; he then contacted the Appellant and learned that the Appellant was billing under item A(1)(a) for the total number of characters in a document to which author's alterations were made, instead of for just the number of author's alterations (per character) actually made. 7. The Contracting Officer, believing that the Appellant was entitled to be paid only for the number of actual author's alterations and therefore had not billed in accordance with the contract, issued a final decision informing the Appellant that GPO's Financial Management Service (FMS) had been directed to recover the amounts already paid the Appellant in excess of what the Contracting Officer considered to be proper. Rule 4 File, Tab K. II. DISCUSSION The issue presented by this appeal is simple-what is meant by the contractual language providing for payment for author's alterations for text matter "per 1,000 characters"? Both parties insist that the meaning is clear and unambiguous. They are, however, 180 degrees apart on what that meaning is. The Appellant states that the language calls for pricing and payment "based on the number of 1,000 characters in the document to be edited," App. Brf. at 4, while the Respondent asserts that the language can mean only that the contractor is to be paid for the number of 1,000 characters that are changed by author's alterations. Each also insists that only its interpretation make sense and reflects what the contractor should be paid for in light of the effort the contractor is called upon to put forth. The Appellant further states that its interpretation is longstanding and reflects its prior course of dealing with GPO, including the prior year's Program 1020-S contract. Resolution of this matter is controlled by well-established principles of contract interpretation. The Board has had several occasions to set forth and discuss these principles at length, see, e.g., Custom Printing Co., GPOBCA 28-94 (March 12, 1997), slip op. at 30-35, 1997 WL 128720; MPE Business Forms, Inc., GPOBCA 10-95 (August 16, 1996), slip op. at 42-48, 1996 WL 812877; The George Marr Co., GPOBCA 31-94 (April 23, 1996), slip op. at 41-44, 1996 WL 273662, and need not do so again here. Briefly stated, the fact that two contracting parties have different interpretations of the same contract language raises the possibility that the language is ambiguous, RD Printing Associates, Inc., GPOBCA 23-94 (February 24, 1998), slip op. at 6, 1998 WL 148997; B & B Reproductions, GPOBCA 09-89 (June 30, 1995), slip op. at 22, 1995 WL 488447, although the disagreement over the proper interpretation of the contract language does not automatically mean that there is an ambiguity. International Business Investments, Inc. v. United States, 17 Cl. Ct. 122 (1989), aff'd without op., 895 F.2d 1421 (Fed. Cir. 1990); United Computer Supplies, Joint Venture, GPOBCA 26-94 (January 23, 1998), slip op. at 14, 1998 WL 148845. To be ambiguous the disputed language must be susceptible to more than one reasonable interpretation. The George Marr Co., supra, at 41. Determining whether contract language is susceptible to two or more reasonable interpretations and thus ambiguous requires a careful reading not only of the disputed language but of the contract as a whole so that all of its provisions are given effect. MPE Business Forms, Inc., supra, at 45-46; The George Marr Co., supra, at 43-44; see IPI Graphics, GPOBCA 04-96 (April 9, 1998), slip op. at 7, 1998 WL ____. When considered by itself, the phrase "per 1,000 characters" obviously is susceptible to both proffered interpretations-it could refer to all the characters in the document, and it could refer to the characters changed by author's alterations. When the contract is read as a whole, however, only one of those interpretations is reasonable. The contract is for the production of photo reproduction proofs, with the contractor required to engage in such operations as photocomposition and page makeup. The contract's Schedule of Prices divides the composition work for which the contractor is to be reimbursed into two categories: author's alterations (made both prior and subsequent to delivery of proofs by the contractor), and electronic photocomposition. While typesetting was a requirement of the contract (the contract stated that "the typesetting is considered more difficult than average," that a "moderate portion of the typesetting will be multiline equations," and that "30 percent of the typesetting will be tabular"), the contract also made it clear that significant keying was not envisioned or required. The contract specifications identified the work as composition from "furnished word processing storage media and/or telecommunicated data" and precluded the contractor from re-keying or altering the data "unless so specified." The contract further stated that "[a] pproximately 10% of the above copy will require contractor to key from manuscript copy; this operation will be paid for under 'author's alterations (text editing).'" "Text editing" was defined as "[e]ditorial changes indicated on hard copy or manuscript copy that is to be inserted within furnished data files." (Emphasis supplied.) These provisions establish the contract as one requiring photocomposition work with data that to a significant extent has been keyed and is furnished to the contractor in electronic storage (diskettes or tapes) or teleprocessed format, with some keying required from furnished manuscripts. As such, it is not reasonable to read the Schedule of Prices section of the contract as providing for payment to the contractor as though the contractor had to key an entire document. It is axiomatic that the contractor is entitled to be paid for, and the Government is required to pay for, the work ordered under a contract. ("Payment is the Government's principal contractual obligation . . . ." John Cibinic, Jr. and Ralph C. Nash, Jr., Administration of Government Contracts 1135 (Third ed. 1995) (hereafter Cibinic & Nash, Administration)). The corollary, of course, is that the contractor is not entitled to be paid for work it is not called upon to do. See Sears Petroleum & Transport Corp., ASBCA 41401, 94-1 BCA ¶ 26,414. Since this contract calls for keying only to reflect author's alterations (by inserting the changes within the data files furnished), the only reasonable interpretation of the disputed language is the Respondent's-that is, that "per 1,000 characters" refers to the number of characters changed by author's alterations.3 Further evidence that the contractor is to be paid for actual author's alterations only is provided by the "Author's Alterations" clause incorporated into the contract by reference. That clause requires the contractor to submit with its vouchers "all marked proofs, or facsimiles thereof, showing author's alteration marks." GPO Contract Terms, Solicitation Provisions, Supplemental Specifications, and Contract Clauses, GPO Pub. 310.2 (Rev. 9-88) (hereafter GPO Contract Terms), Supplemental Specifications, ¶ 17. See Universal Printing Co.,GPOBCA 9-90 (June 22, 1994), slip op. at 36 n. 37, 1994 WL 377586 (although the custom in the printing trade is to provide documentation to support charges for author's alterations upon request, under GPO contracts "such documentation is required." (Emphasis in original.)) Although the Appellant's owner testified that he has not furnished such documentation, HT 135, this contract language clearly envisions reimbursement based on actual alterations. There would be no need for such documentation if the basis for reimbursement were total character count. This reading of the contract is buttressed by the contract estimate of 540 for the line item in question. The Respondent's estimate of a total of 540,000 characters of author's alterations for the entire year (during which the contractor was to expect four orders, each for a publication of approximately 150 pages) was a clear indication that "per 1,000 characters" was not a reference to the total character count of the publications since, as the Appellant's own invoices show, Rule 4 File, Tab J, each one contained more than one million characters. Although the Appellant's owner testified that he knew, from his experience with the prior year's contract, that the estimate "would be inaccurate," HT 130, and was "pretty much meaningless," HT 131, he was not free to so quickly and cavalierly dismiss that estimate. In this regard, although the estimate was not binding on either party and did not preclude orders that went beyond it, the Government is required to exercise due care in developing good faith, reasonable estimates based on all available information and may not evaluate bids and award a contract on the basis of quantities other than what are actually anticipated to be ordered under the contract. United Computer Supplies, Joint Venture, GPOBCA 26-94 (January 23, 1998), slip op. at 11, 1998 WL 148845; Shepard Printing, GPOBCA 37-92 (January 28, 1994), slip op. at 23, 1994 WL 275077. While this does not foreclose the possibility of some inaccuracy in the estimate, the gross disparity between the estimate and the expectations of the Appellant under its interpretation of the contract should have alerted the Appellant to at least the possibility that its interpretation was incorrect. Moreover, the Appellant's appreciation of this latter possibility should have been reinforced by the change made from the previous year's estimate. Despite the common experience of the Respondent and the Appellant with the previous year's contract, which had an estimated quantity for these author's alterations of 750,000 characters, the Respondent did not raise the estimate for the 1994-1995 contract, as it reasonably would have been expected to do if the "per 1,000 characters" language referred to the total characters in the document. Instead, it lowered the estimate to 540,000. In the Board's view, the contract provisions discussed above, when read together with this lower estimate, leave no room for the Appellant's interpretation.4 The Appellant's owner, explaining the basis for his interpretation, testified that making author's alterations and performing text editing involves certain work, in particular with respect to spacing and margins, HT 32, that goes well beyond keying or re-keying characters. He stated: "Well, as soon as the disk comes in, we convert it to a format that is compatible with the equipment we are using. We delete the unnecessary space ems, unnecessary carriage returns, unnecessary tab stops, insert em spaces in literature cited sections, insert em spaces for level 3 and level 4 headings, replace hyphens with dashes between all numbers and month, re-key all mathematical symbols, all mathematical equations, tables supplied in text programs that are not compatible with IBM or Macintosh. Sometimes . . . they have . . . some really, really weird stuff that cannot be translated, we re-key the tables, and then we repaginate, that is, in the next chapter, repaginate author's alterations. HT 62. He further stated that making author's alterations affects not only the line and page on which the alterations are made but also the ensuing pages. HT 65. The Appellant suggests that in large measure it is all of this work, involving the entire text of the document being created, that makes reasonable its interpretation that it is entitled to payment based on the total character count of the document. The Appellant's position is flawed, primarily because it equates this work described in the quoted testimony with author's alterations/text editing and considers text editing to be editing of the entire text regardless of the number of changes made. In this regard, the Appellant's owner testified: To me, and probably every other printer out there, text editing means just that, it is text editing. So, if you supply to me 10,000 characters on disk, and you make 2,000 changes, you get charged for 10,000 characters, and that is text editing. HT 213-14. The contract, however, defined text editing "for purposes of this contract" as editorial changes on hard or manuscript copy to be inserted into the furnished data files. This is obviously a far more limited concept of text editing than the Appellant's; it is also one that is consistent with the concept of author's alterations as described in the Schedule of Prices ("[a]lterations marked on hard copy (or manuscript copy) that requires insertion into finished data files") and in the "Author's Alterations" provision of the Supplemental Specifications5 (". . . all marks made by the author at variance with the original manuscript as submitted to the contractor . . . ." GPO Contract Terms, Supplemental Specifications, ¶ 17). Thus, while the record provides no basis to question the Appellant's statement that it performs the tasks described and that the tasks affect most or all of the text, under the contract most of those tasks are not text editing and, since they go well beyond the insertion of marked changes, are not author's alterations. In fact, most of those tasks, involving formatting and layout, would be required even if there were no author's alterations at all. Logically, then, under this contract the Appellant's reimbursement for this work should be realized not through the author's alterations line item, but through the Appellant's per page price for electronic photocomposition. While the Appellant was free to structure its bid, within reasonable limits,6 as it chose, and could, as the Respondent suggests that it did, shift composition charges into the pricing for author's alterations, Resp. Brf. at 3, the Appellant cannot expect reimbursement for author's alterations when the work performed is not encompassed by the author's alterations line item of the contract. To the extent that some of this work is directly related to author's alterations because when changes are made text often shifts from one location or one page to another, thereby requiring reformatting and repagination,7 the Board notes that the Appellant, rather than any contract requirement, is responsible for its having to perform some portion of the work because of its preferred approach to sequencing the tasks involved.8 Moreover, while reformatting and repagination may be required as a result of author's alterations, those tasks, as discussed above, are not encompassed by this contract's line item for pre-proof author's alterations. The Appellant also asserts that its interpretation of the contract is reasonable because of its prior course of dealing with GPO. The Appellant states that "[i]n all cases prior to the instant dispute where the contract called for 'per 1,000 characters' text editing prices, invoices billing the line item price multiplied by the number of thousand character units in the entire text were submitted" and paid. App. Brf. at 8. The Appellant identifies and relies on three contracts where this occurred-the 1993-1994 Program 1020-S contract, and two other contracts, for the 1023-S and 1098-S programs, also awarded by Respondent's Seattle office.9 In all relevant respects regarding text editing and author's alterations, the language of the specifications and the Schedule of Prices in the 1993-1994 1020-S contract is the same as in the 1994-1995 contract. The 1023-S contract, for the procurement of reproduction proofs for technical reports, also contained virtually the same language. The 1098-S contract, for reproduction proofs for the "Marine Fisheries Review", again contained virtually the same language, except that it identified 25 percent instead of 10 percent as the approximate amount of copy that would require keying and would be paid for under the author's alterations line item. Both the RESTATEMENT (SECOND) OF CONTRACTS and the Uniform Commercial Code describe a course of dealing as a sequence of conduct between the parties which fairly is to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. See Longmire Coal Corp., ASBCA 31569, 86-3 BCA ¶ 19,110, recon. denied, 87-1 BCA ¶ 19,454. Thus, a prior course of dealing between the parties may establish the meaning of disputed contract language. United Computer Supplies, Joint Venture, supra, at 15. Contract payments can establish a course of dealing. Healy Tibbits Builders, Inc., ASBCA 45269, 94-1 BCA ¶ 26,409. This prior course of dealing concept is predicated on the presumption that where the parties disputing contract terms have interpreted the provisions of a similar, previously performed contract in a certain manner, they intend the same meaning for those provisions in the disputed contract. MPE Business Forms, Inc., supra, at 59, quoting Publishers Choice Book Mfg. Co., GPOBCA 4-84 (August 18, 1986), slip op. at 10-11, 1986 WL 181457; Cibinic & Nash, Administration at 200. This presumption is rebuttable; it also requires that both parties have actual knowledge of the prior course of dealing and of its significance to the contract. See Cibinic & Nash, Administration at 200, 202. The Appellant's argument founders on this last point. It is clear from the testimony that the Respondent was not explicitly aware of how the Appellant was billing for author's alterations under the three prior contracts and did not recognize that it was paying on the basis of total text characters. In this regard, the Contracting Officer testified that the Appellant's invoices are not sent to him for review and payment approval; rather, they go directly to FMS for payment. HT 148. The Contracting Officer first learned that the Appellant was billing for total text characters when FMS brought the Appellant's invoices on the contract in dispute to his attention because they far exceeded the estimates for the print orders involved. HT 148. He stated that had he ever seen any of the Appellant's invoices for any of the prior contracts "there is no way they would have been paid for this" (total character count). HT 197. FMS, which did see the Appellant's invoices on these prior contracts, has no authority to interpret contracts; it is responsible for reviewing contractors' vouchers and invoices, matching them to receiving reports and to the contract/purchase order, and processing payment. GPO Instr. 445.9, March 14, 1975. FMS, during its voucher/invoice review, may find apparent discrepancies in contractor billing amounts when they are blatant, see, e.g., Swanson Printing Co., GPOBCA 27-94 (November 18, 1996), slip op. at 7-8, 1996 WL 812958 (billing included charge for unauthorized second printing); RD Printing Associates, Inc., GPOBCA 2-92 (December 16, 1992), slip op. at 7, 1992 WL 516088 (high dollar difference between billing amount and perceived proper billing amount), and report the matter to the Contracting Officer. In other cases it may not notice a discrepancy until it makes a further invoice review at the end of the contract term, see B & B Reproductions, GPOBCA 09-89 (June 30, 1995), slip op. at 7, 1995 WL 488447, or upon review of additional invoices for work performed under subsequent print orders. See Publishers Choice Book Mfg. Co., supra, at 6. In still other cases, charged as it is with ensuring that contractors are paid promptly, GPO Instr. 445.9, FMS may not notice a billing discrepancy at all, and the matter will first be brought to the Contracting Officer's attention by a customer agency concerned that its printing bill is too high. See, e.g., United Computer Supplies, Joint Venture, supra, at 3; Olympic Graphic Systems, GPOBCA 01-92 (September 13, 1996), slip op. at 5, 1996 WL 812957. For the Respondent to be bound to a particular contract interpretation as a result of a course of dealing, that course of dealing "had to involve a GPO contracting officer or someone with authority to act on [his] behalf . . . ." United Computer Supplies, Joint Venture, supra, at 16. The record in this case establishes that the Contracting Officer had no actual knowledge that the Appellant, under its prior 1020- -S contract and the prior 1023-S and 1098-S contracts, billed and was paid on the basis of total text characters. Moreover, even if FMS' knowledge could be imputed to the Contracting Officer, see Western Avionics, Inc., ASBCA 33158, 88-2 BCA ¶ 20,662, the record here falls short of establishing that FMS itself knew of the Appellant's billing approach on the previous contracts. As the Respondent points out in its briefs, because the Appellant's "per 1,000 characters" price on those contracts was very low (a tenth of a cent on the 1020-S contract, 25 cents on the other two contracts), its nominal billing prices for author's alterations (only $10, the contract-specified minimum charge, for the 1020-S contract, and an average of $104 per print order for the 1023-S contract and $42 for the 1098-S contract) did not alert FMS to the Appellant's basis for the billings or to any reason to question the billed amounts. The Appellant has introduced no evidence showing that either the Contracting Officer or FMS knew or should have known of the precise basis for the prior billings and payments. Thus, the Appellant has not met its burden of proof to establish a prior course of dealing here, and its course of dealing argument accordingly must fail. III. ORDER For the foregoing reasons, the Board concludes that the Appellant was not entitled to reimbursement for author's alterations on the basis of total characters in the edited document. ACCORDINGLY, the Contracting Officer's final decision is AFFIRMED and the appeal is DENIED. It is so Ordered. April 21, 1998 Ronald Berger Ad Hoc Chairman GPO Board of Contract Appeals _______________ 1 The Contracting Officer's appeal file, assembled pursuant to Rule 4 of the Board's Rules of Practice and Procedure, was delivered to the Board on September 15, 1995. It will be referred to as the Rule 4 File, with an appropriate Tab letter also indicated. The Rule 4 File consists of 12 tabs identified as Tab A through Tab L. 2 A hearing was held in this matter on December 3, 1996. The transcript of the hearing will be referred to as HT with appropriate page citations. Exhibits introduced into evidence at the hearing are identified as either App. Exh. or Gov't Exh. followed by the appropriate number. 3 In so concluding, the Board is mindful that the answer might be otherwise if the nature of the contract were different. For example, in Fry Communications, Inc.\InfoConversion Joint Venture, GPOBCA 8-84 (May 19, 1986), slip op., 1986 WL 181460, the contractor was also to engage in photocomposition work based on text and other data furnished through manuscript copies and various electronic formats. There, however, the scope of the contract was stated to be "data capture," the contract provided for payment to the contractor for initial data capture "per 1,000 characters"of output, and the Schedule of Prices contained line items for initial data capture from each possible format (manuscript, word processing media, magnetic tapes, and teleprocessing), with each line item price being "all inclusive." Under that structure the contractor could indeed expect to be paid its initial data capture bid price for each 1,000 characters of output. 4 The best that can be said for the Appellant's position is that there was a patent ambiguity between the estimate and the meaning ascribed by the Appellant to the "per 1,000 characters" language. The Appellant made no inquiry about this ambiguity, however, and it is well-settled that in such a case the ambiguity is construed against the Appellant. Allied Technology Group, Inc. v. United States, 39 Fed. Cl. 125, 138 (1997); MPE Business Forms, supra, at 44. 5 This provision, incorporated into the contract by reference, states that "[a]uthor's alterations shall be charged on a per- line basis." There is no explanation in the record for the use of the different pricing and reimbursement approach at issue here. 6 The Schedule of Prices warned that the Contracting Officer "reserved the right to reject any offer that contains prices for individual items of production . . . that are inconsistent or unrealistic in regard to other prices in the same offer . . . ." 7 The Respondent points out that with the advent of computer- based composition and the "consignment of hot metal Linotype machines to the trash heap," this work is virtually accomplished automatically because computer programs "'reflow' and repaginate the text without . . . manual intervention." Resp.R.Brf. at 2. 8 The Appellant testified that rather than key the author's alterations first and then format, etc., it preferred to engage in the formatting work first and then make the author's alterations because of "dictionary factors" (related to foreign language text) and considerations relating to mathematical equations. It admitted, however, that it could make the author's alterations first. HT 117-21. 9 The Appellant's owner, during his testimony, also referred to another contract, for the 535-S program. HT 123. However, no part of this contract was entered into evidence and the Appellant made no mention of this contract in its brief.