BOARD OF CONTRACT APPEALS U.S. GOVERNMENT PRINTING OFFICE WASHINGTON, DC 20401 In the Matter of ) ) the Appeal of ) ) WICKERSHAM PRINTING COMPANY, INC. ) Docket No. GPOBCA 23-96 Program D688-S ) Purchase Order 95912 ) For the Appellant: Wickersham Printing Company, Inc., Lancaster, Pennsylvania, by Frederic G. Antoun, Jr., Attorney at Law, Chambersburg, Pennsylvania. For the Government: Kerry L. Miller, Esq., Associate General Counsel, U.S. Government Printing Office. Before BERGER, Ad Hoc Chairman. DECISION ON MOTION FOR RECONSIDERATION AND ORDER Wickersham Printing Company, Inc. (Appellant) has filed a Motion for Reconsideration of the Board's Decision on Motions for Summary Judgment and Order of December 18, 1998, in the above- captioned appeal, in which the Board denied the Appellant's motion for summary judgment but granted the motion for summary judgment of the U.S. Government Printing Office (GPO or Respondent). For the reasons which follow, the Motion is GRANTED but upon reconsideration the original decision is AFFIRMED. I. BACKGROUND In its appeal the Appellant challenged the excess costs of reprocurement that were assessed after its contract, for loose- leaf printed products, was terminated for default. This challenge was predicated on the Contracting Officer's alleged failure to mitigate the excess reprocurement costs by not taking into account a decline in paper prices before awarding the reprocurement contract to the next low bidder at its original bid prices. The Board held that on the facts presented the Appellant was not entitled to summary judgment on that issue, but that summary judgment for the Respondent was appropriate. The Board ruled in favor of the Respondent because final statistics for the period involved from the Bureau of Labor Statistics (BLS) showed that the price of offset paper, the paper primarily used on the contract, increased each month from the time of bidding on the original contract until the reprocurement contract was let, so that the reprocurement, based on prices offered before that increase, could not have subjected the Appellant to unreasonable reprocurement costs because of any changes in the price of paper. II. DISCUSSION The Motion for Reconsideration is based on the Board's issuance of its decision prior to receipt of the Appellant's brief opposing the Respondent's summary judgment motion. As the Appellant states: A telephone conversation between Appellant's attorney's secretary and the Board's secretary apparently resulted in a misunderstanding: the Board secretary was under the impression that not only was Appellant not going to file a response to the Respondent's Response to Appellant's Motion for Summary Judgment, but that Appellant was also not going to file a response to the Respondent's Motion for Summary Judgment; Appellant's Counsel's secretary was under the impression she conveyed that Appellant was 1/4 going to file a response to Respondent's Motion for Summary Judgment. The Appellant's Brief in Response to Respondent's Motion for Summary Judgment, along with a supporting affidavit, was filed on December 21, 1998, one business day after the Board's decision was issued on December 18. Rule 29 of the Board's Rules of Practice and Procedure allows either party to an appeal to file a motion for reconsideration within 30 days of the party's receipt of the Board's decision. The traditional grounds for reconsideration are newly discovered or newly available evidence, or error in the Board's findings of fact or conclusions of law; reconsideration, however, is discretionary with the Board and will not be granted in the absence of specific and compelling reasons. Qualitype, Inc., GPOBCA 21-95 (June 24, 1998), slip op. at 2, 1998 WL 350480; Univex International, GPOBCA 23-90 (February 7, 1996), slip op. at 4-5, 1996 WL 112554; Sterling Printing, Inc., GPOBCA 20-89 (July 5, 1994), slip op. at 3-4, 1994 WL 377592; Graphic Litho, Inc., GPOBCA 17-85 (September 30, 1988), slip op. at 2-3, 1988 WL 363516. Arguments already made, reinterpretation of old evidence, and mere disagreement with the Board's decision do not provide a basis for reconsideration. Univex International, Inc., supra. The Respondent, opposing the motion, points out that the motion is not based on an alleged factual or legal error in the Board's decision, and states that the motion also "presents no relevant evidence that was not considered by the Board." The Respondent concludes that the only basis for the motion is that the Board did not have the opportunity to consider the Appellant's December 21 submission and that while the timing of the Appellant's submission "may have been caused by its misunderstanding, that misunderstanding does not state a valid ground for reconsideration." Respondent's Opposition to Appellant's Motion for Reconsideration. The misunderstanding, however, was not about the timing of the December 21 submission. The misunderstanding was over whether there was going to be such a submission at all. The Board understood that the Appellant did not intend to file a brief in response to the Respondent's summary judgment motion; had the Board understood that the Appellant's intention was to the contrary, as the Appellant believed the Board had been advised, it would not have issued a decision on December 18. Moreover, while the Appellant's Motion for Reconsideration does not itself present any new evidence, the Appellant's December 21 submission included evidence in the form of an affidavit. This affidavit, which the Board obviously did not consider before issuing its decision, dealt with the efficacy of the Contracting Officer's reliance on BLS statistics to determine market prices. Although reconsideration of the Board's decisions is strongly disfavored, Univex International, supra, at 5-6, the Board, as are other administrative forums, is sensitive to fundamental notions of justice and fair play. Id. at 12; see, e.g., Freedom, NY, Inc., ASBCA 43965, 35671, 96-2 BCA ¶ 28,502; Washington State Comm'n for Vocational Education, 64 Comp. Gen. 681 (1985), 85-2 CPD ¶ 59. Through a mutual misunderstanding, the Board issued a decision without considering the evidence and arguments the Appellant intended to present and did present within the Board's time frame for such a submission. In the Board's view, therefore, fundamental notions of fairness require that the Board reconsider its decision in light of the Appellant's December 21 submission. Accordingly, the Appellant's motion is granted. In its brief the Appellant argues that the Respondent failed to mitigate reprocurement costs because it did not employ the reprocurement methodsealed biddingwarranted by the circumstances and mandated by GPO's Printing Procurement Regulation, GPO Pub. 305.3 (Rev. 10-90). The Appellant further argues that the Contracting Officer failed to obtain the lowest reasonable price because he improperly relied on BLS data. In this regard, the Appellant furnishes an affidavit from the president of a GPO printing contractor in which the affiant explains why BLS data would not be relevant to a contracting officer's proper determination of market price. Since the decision of the Board was predicated on BLS statistics, it is this second argument to which the Board turns. The affidavit is from Richard Lindemann, who states that he is the president of TPS Enterprises, Inc., "which has produced GPO products for many years." Mr. Lindemann states that he is familiar with the BLS monthly paper price index utilized by GPO and that since the early 1990s he has found the BLS pricing "to be consistently in error." According to Mr. Lindemann, BLS "indices and pricing related to paper are often based on the suggested or retail price set by paper manufacturers or mills" and that BLS relies on prices furnished by the mills and manufacturers rather than conducting a market survey of printers or paper merchants from which printers acquire paper. Mr. Lindemann further states that BLS does not calculate "market- oriented discounts offered by the individual paper merchants or distributors." BLS figures, says Mr. Lindemann, "do not accurately reflect the prices which TPS and other printers have paid for paper since 1994, including the period of time between January 1996 and June 1996." The BLS Producer Price Index does indeed reflect pricing set by producers and reported by them to BLS. BLS Handbook of Methods, Ch. 14 (April 1997 ed.). It also does not take into account discounts and rebates offered by dealers and wholesalers if that cost is not absorbed by the manufacturer. Id. It does, however, reflect the producers' actual selling prices for what is shipped each month. Id. In this regard, and contrary to what is suggested by Mr. Lindemann and by the Appellant in its brief, BLS states that the Index does not routinely reflect producers' list prices. In this regard, BLS states that "it emphasizes 1/4 the need for reports of realistic transaction prices 1/4 rather than list or book prices," that the use of list prices "has been the exception rather than the rule," and that the use of list prices under current methodology is infrequent. Id. Moreover, the courts, while recognizing that BLS statistics do not always take every possible factor into account, regard the statistics as the most reliable data available and on which an agency may reasonably rely. See, e.g., Mt. Diablo Hospital v. Shalala, 3 F.3d 1226 (9th Cir. 1993); Timken Co. v. United States, 788 F. Supp. 1216 (Ct. Int. Trade 1992). In the Board's view, while there can be some disparity between what a buyer experiences when acquiring a commodity through a middleman and what is indicated by BLS producer price data for the period, in general the producer pricing levels and trends reflected in BLS data should be an overall accurate picture of what transpired in the marketplace. For example, if producer prices are holding steady or rising, it is not apparent why wholesalers or other middlemen would routinely be lowering prices and maintaining lower price levels in the face of steady or rising prices from their suppliers. In other words, although the wholesalers/middlemen might have any number of business reasons at a given time for offering some kind of discount pricing to bolster sales, the general pricing trend necessarily is set by the producers. Thus, despite the middleman discounting that may occur, ultimately pricing must move in the direction set by the producers. Accordingly, unless there is persuasive evidence of some meaningful reason for market pricing varying substantially from that reflected by BLS data, the Board is not inclined to view the BLS data as unreliable. While Mr. Lindemann states that he has routinely found the BLS data to be unreliable, neither he nor the Appellant has provided any persuasive evidence of why that should be so. Under the circumstances, the Board remains of the view that the final BLS data, indicating that price of offset paper increased between the time of bidding for the initial contract and the reprocurement, can be reasonably relied upon as indicative of what occurred during that time period. That being so, the Board also remains of the view that the bid prices that would have been received had the Contracting Officer conducted a new competition for the reprocurement would not likely have been lower than the next low bidder's price from the original competition. Moreover, even if the Board were to conclude that it should not rely on the final BLS statistics, the Respondent would still be entitled to summary judgment. In the Board's original decision it noted several weaknesses in the Respondent's position, particularly with respect to the Contracting Officer's explanation for his decision to award the reprocurement contract to the next low bidder on the original procurement. Rather than determine whether the Contracting Officer acted reasonably notwithstanding those weaknesses, the Board simply determined on the basis of the final BLS data that "the Contracting Officer did not fail in his duty to the Appellant because, had the Contracting Officer conducted a competition for the reprocurement, the resulting bid prices would not likely have been lower than the original prices and well may have been higher." The Board has now considered the facts of record and concluded that, despite its concerns regarding aspects of the Respondent's position, the Contracting Officer did act reasonably in the circumstances. Bid opening and award of the original contract occurred on April 1996. The contract was terminated for default on July 17, 1996, and a reprocurement contract was awarded on July 22 to Goodway Graphics of Virginia, the next low bidder, after that firm agreed to accept award at its original bid prices. The Respondent's Contract Review Board (CRB) approved the reprocurement contract with one member dissenting. The dissenting member was concerned that in light of declining paper prices the Contracting Officer's reprocurement approach did not sufficiently mitigate the excess costs of reprocurement. In response to that concern the Contracting Officer examined certain BLS data available to him and concluded that "there was little likelihood that 1/4 paper prices would have a significant effect on reprocurement costs." He reached this conclusion after noting that paper represented only slightly more than a third of the total contract price and finding from the BLS data that significant paper price decreases had occurred earlier in 1996 but that paper prices had fallen just under 5 percent from April to May and for offset paper, the type primarily used on the contract, the price drop was only .9 percent. He also noted that paper price adjustments under a GPO price adjustment clause found in certain GPO term contracts were not warranted for the April to July period. The Board did not find all aspects of this explanation to be completely convincing; it pointed out that under the clause price adjustments are warranted only when there has been a change in the relevant BLS index of more than 5 percent, so that it was possible that paper price decreases approaching 5 percent had occurred and that such a price decrease could have resulted in lower bid prices. Nonetheless, it is well established that the Contracting Officer's duty is not to obtain the lowest possible price-his obligation is to act reasonably and prudently under the circumstances to obtain a reasonable price. Cascade Pac. Int'l v. United States, 773 F.2d 287 (Fed. Cir. 1985); Barrett Refining Corp., ASBCA 36590, 91-1 BCA ¶ 23,566; Gold Country Litho, GPOBCA 22-93 (September 30, 1996), slip op. at 30-31, 1996 WL 812956. The Contracting Officer here determined that the original bid price of Goodway Graphics represented a reasonable price because a new competition was not likely to produce significantly lower prices in that offset paper prices had declined only slightly and paper represented only 35.7 percent of Goodway Graphics' total price ($77,986.40 out of $218,013.30). In other words, the Contracting Officer considered that a new competition might produce bid prices that were lower by only approximately $700 (.9 percent of $77,986.40). The Contracting Officer's analysis was based on BLS data for April. He apparently had no comparable information regarding offset paper for May and June. Thus, it is possible that, unbeknownst to the Contracting Officer, offset paper prices could have decreased by more than .9 percent during those two months. The Contracting Officer, however, is not required to base his decisions on information that is not reasonably available to him, and there is no suggestion from the Appellant that the May and June BLS data were or should have been available to the Contracting Officer or that they would have reflected a more substantial drop in the price of offset paper. Thus, based on what the Contracting Officer actually knew in July1, his determination that the market price for offset paper had not dropped significantly in the April to July time frame was reasonable. As the Board has noted, the Contracting Officer's duty is not to obtain the lowest possible price on reprocurement, but the lowest reasonable price. Given the cost and delay attendant to conducting any new competition, the fact that a new competition might result in a lower price than that available from the next low offeror on the initial procurement does not require the Contracting Officer to resort to a new competition if the price likely to be obtained thereby would not be meaningfully lower. In the Board's view, whether a price would be meaningfully lower would depend not only on the actual dollar amount of the difference but also on the relationship of that difference to the total value of the procurement. Here, the Goodway Graphics total bid price was just over $218,000. The potential decrease in bid pricing perceived by the Contracting Officer was less than .3 percent of that amount. In the Board's opinion, neither that amount nor any other amount that the Contracting Officer, from the information before him, could have reasonably ascertained as a likely decrease from the Goodway Graphics pricing would give rise to a meaningful price difference such that the Contracting officer was required to conduct a new competition. Accordingly, the Board concludes that the Contracting Officer's decision not to conduct a new competition and to negotiate a reprocurement contract with Goodway Graphics at that company's initial bid prices was a reasonable one. The Appellant points out that the PPR states that when reprocuring "the Contracting Officer should use sealed bidding procedures except where negotiation is necessary." PPR, Chap. XIV, Sec. 1, ¶ 3.f.(2). The Appellant asserts that there is no evidence that negotiation was "necessary" here. The Appellant further asserts that the Contracting Officer failed to comply with the further requirement in the same PPR section that he note in the contract file the reason for deciding to negotiate. In the Board's view the PPR is not quite as restrictive as the Appellant would read it. The first sentence of section 1, ¶ 3.f.(2) states that "If the repurchase is for a quantity not in excess of the undelivered quantity terminated for default, requirements for advertising are not mandatory." The second sentence goes on to state that the Contracting Officer "should" use sealed bidding except where negotiation is "necessary." While the PPR does not define or describe what might be regarded as "necessary" under this provision, it is clear from the prior decisions of the Board that where solicitation of firms reasonably is not expected to result in lower prices than those produced in the original competition, such solicitation would be unnecessary. See, e.g., Gold Country Litho, supra, at 32-33, and cases cited thereat. Where that is the case and the prior bids/offers received have expired, negotiation obviously becomes necessary so that the Respondent can obtain the agreement of the offeror that was next in line for award to perform the remainder of the contract at its original prices. The evidence establishes that this is precisely what occurred here. While the PPR may anticipate that the Contracting Officer will document the contract file as to the reason for negotiating a reprocurement contract, the Board views the Contracting Officer's failure to do so under these circumstances as a procedural defect that does not affect the validity of the award process. III. ORDER For the reasons set forth above, the Appellant's Motion for Reconsideration is GRANTED. Upon reconsideration, however, the prior decision granting summary judgment for the Respondent is AFFIRMED. It is so Ordered. March 1, 1999 Ronald Berger Ad Hoc Chairman GPO Board of Contract Appeals _______________ 1 The Board considers only BLS data to be relevant here since the evidence establishes only that the Contracting Officer had that data available to him. While the Appellant makes much of the differing data found in Pulp & Paper Week, there is no evidence that the Contracting Officer was aware of that data. Indeed, the Appellant has never even alleged that the Contracting Officer knew or should have known of that data. Moreover, there is no indication in the record that anyone at GPO involved in this case was aware of the Pulp & Paper data. In this regard, the dissenting member of the CRB, who first expressed concern about declining paper prices, stated in a Declaration that his concern was based "solely" on BLS data and "not on any other data."