In the Matter of            )
the Appeal of               )
BLUEBIRD FORMS, INC.        )         Docket No. GPOBCA 27-95
Program 1303-M              )
Purchase Order 71223        )

For the Appellant:  Bluebird Forms, Inc., Sikeston, Missouri, by
Frederic G. Antoun, Jr., Attorney at Law, Chambersburg,

For the Government:  Thomas Kelly, Esq., Assistant General
Counsel, U.S. Government Printing Office.

Before BERGER, Ad Hoc Chairman.


This is a decision on a motion to dismiss the appeal of Bluebird
Forms, Inc. (Appellant), 501 Davis Boulevard, Sikeston, Missouri,
arising out of Bluebird's claim that it is entitled to additional
compensation for its work under U.S. Government Printing Office
(GPO or Respondent) Program 1303-M contracts for the 1990-1991,
1991-1992, and 1992-1993 contract periods.  For the reasons that
follow, the motion is GRANTED.


1.  Bluebird was awarded a contract under the 1303-M Program,
calling for the production of forms, for three consecutive
contract terms beginning with May 1, 1990, and ending on April
30, 1993.

2.  For orders received in 1990, 1991, and 1992, Bluebird
submitted vouchers to GPO and received payment.

3.  In May 1993, Bluebird prepared a voucher for work performed
in response to Print Order 71223.  That Print Order required
parallel and right angle folds.  Bluebird's president determined
that it was appropriate to bill for both types of folds at the
contract price for "continuous folds."  The voucher amount of
$194,909.52 included $14,800 for right angle folds.  GPO paid
this voucher.

4.  While reviewing the voucher for Print Order 71223, Bluebird's
president was advised by his staff that the company had not
previously billed for right angle folds because the contracting
officer had advised that billing for right angle folds was not
authorized under the contract.  Believing that to be incorrect,
the president prepared supplemental vouchers for all prior work
under the 1303-M contracts that had involved right angle folds.
These vouchers,  totaling $137,202, were submitted to GPO on June
1 and 3, 1993, and received in GPO's Office of Financial
Management on June 7 and 9.

5.  On September 24, 1993, GPO debited Bluebird's account for an
overpayment of $20,748 on Print Order 71223 in connection with
"films and folding charges not authorized."  This amount was
recouped between September and November through offset against
other contract payments owed to Bluebird.

6.  On April 18, 1995, counsel for Bluebird wrote to the
Contracting Officer, stating that Bluebird had "registered a
complaint" about the $20,748 deduction, had "resubmitted
billings," and had submitted supplement vouchers, but had never
received a final decision on the matter.  In response, Bluebird's
counsel received a letter from GPO counsel advising that the
claim was barred because Bluebird had not taken written exception
to the payments within 60 days thereof as required by the terms
of the contract.

7.  On August 15, 1995, Bluebird appealed the Contracting
Officer's refusal to issue a final decision, and subsequently
requested the Board to treat the Contracting Officer's refusal as
an appealable denial of Bluebird's claims for $20,748 and
$137,202.  Complaint at 3, 4.


The Respondent's motion to dismiss is predicated on the contract
clause captioned "Payments on Purchase Order," GPO Contract
Terms, Solicitation Provisions, Supplemental Specifications, and
Contract Clauses, GPO Pub. 310.2 (Rev. 9-88) (hereafter GPO
Contract Terms), Contract Clauses,  24.  That clause states:

(b) Checks tendered by GPO in payment of any invoice submitted by
the contractor, whether equal to or less than the amount
invoiced, are tendered as final payment.  Acceptance of payment
of any check so tendered shall operate as a bar to the assertion
of any exceptions by the contractor to the amount paid by GPO
unless the contractor notifies the Contracting Officer in writing
within 60 calendar days of the date of such check. Such notice
shall specify the exceptions taken to the sum tendered, and the
reasons therefor.

The Respondent states that the Appellant did not take written
exception within 60 days to any of the payments it received in
1990-1993, including the payments that were subject to offset in
the fall of 1993, and that therefore its claims are now barred by
the quoted clause.

The Appellant argues that its claims are not so barred.  First,
with respect to the payments that were subject to setoff, it
asserts that the Respondent's right of setoff  "is separate and
distinct from GPO Contract Clause 24(b)," and that the Appellant
"was not charged with the responsibility of raising any
exceptions to a check which did not represent full payment for
all services or claims." Appellant's Brief (hereafter App.Brf.)
at 9.  The Appellant states that instead it promptly contacted
the Contracting Officer regarding the setoff to "register a
dispute" and to request return of its money, and that it was
entitled to a final decision on the matter, which the Contracting
Officer has yet to provide. With respect to the other contract
payments, the Appellant asserts that the quoted clause is
irrelevant to two of its supplemental vouchers because they were
submitted within 60 days of the final payment received on Program
1303-M.   As for its other supplemental vouchers, the Appellant
contends that they are not barred because in 1991 it discussed
with the Contracting Officer its belief that it should be able to
bill separately for right angle folds, that this "claim or
dispute" was never resolved, that the Contracting Officer knew of
this pending "claim" when the contracts for 1990-1991 and
1991-1992 were closed out, and that therefore no final payment
could have taken place with respect to those contracts.  The
Appellant further contends that its claim should not be barred
because it detrimentally relied on inaccurate information from
the Contracting Officer which kept it from billing for right
angle folds.

The "final payment doctrine" embodied in the "Payments on
Purchase Order" clause was discussed at length in Media Press,
Inc., GPOBCA 03-93 (April 30, 1997), slip op., 1997 WL 742507,
and need not be repeated here.  Suffice it to say that the
purpose of the "final payment doctrine" is "to protect the
government against stale claims by establishing a cut-off date to
ensure that timely claims are asserted within the life of a
contract."  Media Press, Inc., supra, at 32.  While the term
"final payment" generally refers to the last payment made under a
contract,   Midwest Bank Note Company, GPOBCA 13-95 (June 22,
1998), slip op. at 6-7, 1998 WL ______ (holding that this is what
was meant by the term in GPO's "Warranty" clause, GPO Contract
Terms, Contract Clauses,  15),  in the "Payments on Purchase
Order" clause, which refers to "any" check tendered by GPO in
payment of  "any invoice submitted by the contractor," the term
"final payment" means each payment made under the contract, not
just the last payment.   Id. at 7.  Thus, with respect to the
"final payment doctrine," GPO's "Payments on Purchase Order"
clause does two things: 1) it permits contractors to take
exception, and in effect file a claim, up to 60 days after the
date of the last contract payment, Media Press, Inc., supra, at
41, but 2) with respect to earlier payments, requires contractors
to file any exceptions with respect to those payments within 60
days of the payment dates.  Midwest Bank Note Company, supra, at

It is not disputed that the Appellant received and accepted
payments from GPO in 1991, 1992, and 1993 and in no case took
written exception to any of those payments within 60 days
thereof.  Thus, by virtue of the language in paragraph (b) of the
"Payments on Purchase Order" clause, the Appellant's acceptance
of those payments bars the Appellant from taking exception to the
amounts paid.  The various arguments raised by the Appellant to
avoid this obvious conclusion simply are not convincing.
First, the Appellant argues that this clause has nothing to do
with set-offs and therefore, in effect, that it does not impose a
final payment limitation upon its right to object to the set-

This argument ignores the very precise language of the clause:
"Acceptance of payment of any check so tendered shall operate as
a bar to the assertion of any exceptions by the contractor to the
amount paid 1/4." (Emphasis added.)  The final payment rule
established by the clause is predicated on contract payments, and
when a setoff is involved, the amount paid to the contractor
obviously is the amount to which the contractor is entitled
pursuant to its voucher less the amount that is set off.  Thus,
the "Payments on Purchase Order" clause literally encompasses
setoff actions.

The Board recognizes that the Government's right of setoff is
very broad and can be used to satisfy  all kinds of debts owed by
the contractor to the Government.  See Comp. Gen. Dec. B- 176791,
Sept. 8, 1972.  For example, while the amounts set off may arise
from a perceived contract overpayment, either on the same
contract or, as here,  on a different GPO contract,  in other
circumstances the debt giving rise to the setoff action may be
related to  contracts of other federal agencies or to non-
contract matters such as unpaid taxes.  See, e.g., UNIDEV, Inc.,
B-184067, June 19, 1975, 75-1 CPD  375.  Despite the
encompassing literal language in the "Payments on Purchase Order"
clause, the Board would be hesitant to view the clause as
applicable to these non-GPO and non-contract matters as the
underlying debts would be subject to different contract clauses
(there is no clause comparable to the "Payments on Purchase
Order" clause in Executive Branch contracts.  Media Press, Inc.,
supra, at 39-41) and/or different rules, and it not apparent how
the purpose of the clause-bringing finality to GPO contracts
within 60 days of each payment unless an exception is filed-would
be served by applying it to matters unrelated to GPO contracts.

Here, however,  application of the clause, where the debt giving
rise to the setoffs arose out of a GPO contract, is entirely
consistent with the purpose and intent of the clause.  The Board
sees no difference, for purposes of the "Payments on Purchase
Order" clause, between an initial contract payment that reflects
a GPO deduction for a perceived overcharge and a later payment on
another GPO contract that reflects a deduction, or setoff, for an
earlier overpayment on a different GPO contract.  In both cases,
the contractor is placed in the same position-it receives less
money than the amount to which it believes it is entitled under
the relevant contract.  The only difference is that in the case
of an initial overpayment the contractor receives, and has the
benefit of, a larger sum than the Government otherwise would have
paid it.  Accepting the Appellant's argument-that the clause
applies to contract payments but not to setoffs reflected in a
contract payment, would lead to an incongruous result-GPO, where
it recognizes an overcharge on a contractor's voucher and makes
payment after adjusting the voucher to eliminate the overcharge,
would be free from contractor claims with respect to the work
encompassed by that voucher if a claim is not made within 60
days, but would not be so insulated if it initially fails to
recognize the overcharge and remedies that failure by exercising
its right of setoff against other payments due the contractor
under another contract.  The Appellant offers no rationale for
such a result.  Accordingly, the Board concludes that under the
circumstances here the "Payments on Purchase Order" clause and
its final payment rule apply to contract payments reflecting a
setoff for overpayments on other GPO contracts.   Therefore, the
Appellant's claimed contact with the Contracting Officer (who
denies that such contact occurred. Declaration of Chris J. Brown,
accompanying Respondent's Reply Brief) to "register a complaint,"
which the Appellant does not allege to have been in writing,
cannot preserve its right to challenge the setoff as it does not
comply with the requirements of the clause.

Second, the Appellant argues that two of its supplemental
vouchers are not barred from consideration because they were
filed within 60 days of the last payment made on the contract.
According to the Appellant, it is entitled to payment on its
supplemental invoices for Print Orders 60161 and 60369 because
they were received by GPO on June 9, 1993, within 60 days of the
final contract payment made in May.  The Appellant ignores,
however, the requirement of the "Payments on Purchase Order"
clause that exceptions to contract payments received be filed
within 60 days of those payments, not within 60 days of the last
contract payment.  See Midwest Bank Note Company, supra, at 7.
GPO has furnished a statement from the chief of its Examination
and Billing Branch,  Procurement Accounting Division, with
supporting documentation, establishing that the original vouchers
for these two print orders were paid on September 17, 1992 and
January 5, 1993, respectively.  Declaration of Philip L. Jones,
accompanying Respondent's Motion to Dismiss.  Accordingly, the
Appellant's argument is baseless.

Third, the Appellant asserts that as a result of a discussion
with the Contracting Officer in 1991 the Contracting Officer knew
that the Appellant believed it was entitled to bill separately
for right angle folds, that this discussion gave rise to a claim
or dispute,  that under such circumstances the matter is not
foreclosed by the final payment rule, and that therefore the
supplemental vouchers it submitted are not time-barred.  It is
true that a final payment will not foreclose a contractor's right
to pursue a claim if prior to that payment the contractor
"reasonably manifested to the Government a present intention to
seek recovery of money based on a claim of legal right under the
contract" or if at the time of payment the contracting officer
knew that "the contractor is asserting a right to additional
compensation, even though no formal claim has been filed."  Media
Press, Inc., supra, at 36; Gulf & Western Industries, Inc. v.
United States, 6 Cl. Ct. 742 (1984).  Moreover, in determining
whether a claim had been asserted prior to final payment "the
oral and written communications between the parties are construed
liberally."  Media Press, Inc., supra, at 37.   Those
communications, however, must bear some attributes of a claim,
id. at 38; the key attribute of a claim, of course, is a demand
for money or other adjustment.  Id. at 47.  The Appellant states
that its officials would testify that in 1991 during the term of
the first contract the company contacted the Contracting Officer
"and had discussions about the fact that Bluebird believed it
should be able to bill separately for right angle folds."
App.Brf. at 13.  Such testimony would fall far short of
establishing  the existence of a claim.  At best it would
establish that somebody (not the company President, who,
according to the Complaint, learned much later of  GPO's position
regarding right angle folds) from Bluebird had discussions with
the Contracting Officer about whether the Appellant could
separately charge for right angle folds.  It would not establish
that the discussions ended in disagreement, or that Bluebird did
anything to place the Contracting Officer on notice that it was
disputing the Contracting Officer's view or expecting a final
decision on the matter.  See Media Press, Inc., supra, at 47-48
(contractor's letter expressing "strong disagreement" with GPO's
position and setting forth contractor's belief was not a claim
because it lacked a key attribute of a claim,  a demand for
money).    Indeed, the fact that Bluebird was awarded two follow-
on contracts for the 1303-M program, apparently without any
further discussion of this matter or expression of continuing
disagreement with the Contracting Officer's position, strongly
suggests that Bluebird itself did not consider the matter to be
an on-going, unresolved dispute.  Moreover, it is well
established that when one party to a contract knows the other
party's interpretation of the contract and does not object to it,
the first party will be bound to that interpretation.  E.I. Du
Pont De Nemours & Co. v. United States, 24 Cl. Ct. 635 (1991),
aff'd, 980 F.2d 1440 (Fed. Cir. 1992); Keno & Sons Constr. Co.,
ENGBCA 5837, 95-2 BCA  27,687; MJW Enters., Inc., ENGBCA 5813,
93-1 BCA  25,405.  Thus, even if the 1991 "discussion" could be
said to have given rise to a claim, the Appellant's acceptance of
the subsequent contracts without objecting to the Contracting
Officer's interpretation would preclude the Appellant from now
arguing for a different interpretation with respect to those

Finally, the Appellant seeks to avoid the consequences of the
final payment rule by arguing that it relied to its detriment on
"inaccurate information"-that it could not separately bill for
right angle folds-provided by the Contracting Officer in 1991.
The concept of detrimental reliance has various applications in
contract law.  For example, it is an indispensable element of 1)
equitable estoppel, see, e.g., Advanced Materials, Inc., ASBCA
47014, 96-1 BCA  28,002, and B & B Reproductions, GPOBCA 09-89
(June 30, 1995), slip op., 1995 WL 488447; 2) defective pricing
claims by the Government, see, e.g., Motorola, Inc., ASBCA 48841,
96-2 BCA  28465; and 3) claims of delivery date waiver
precluding terminations for default.  See, e.g., Nimbus Mfg.,
Inc., GPOBCA 21-96 (July 9, 1998), slip. op., 1998 WL ______ and
Precision Standard, Inc., ASBCA 41375, 96-2 BCA  28,461.  It
also can preserve appeal rights in circumstances where a
contractor is given incorrect appeal information by the
Government and the contractor relies on that information.  See
Decker & Co. v. West, 76 F.3d 1573 (Fed. Cir. 1996).  The Board
is at a loss to understand its application in this case, however,
since at this point there is only the Appellant's allegation that
the information allegedly provided by the Contracting Officer in
1991 was inaccurate; there is nothing in the record establishing
that to be so.  Moreover, the facts presented by the Appellant do
not make out a case of reliance since, notwithstanding what the
Contracting Officer supposedly said in 1991, the Appellant's
president included a charge for right angle folds when billing
for Print Order 71223 and had supplemental vouchers prepared when
he learned from his staff that the company had not previously
billed for them.  In other words, it appears that the failure to
bill previously simply was due to a lack of communication between
the president and his staff.  Furthermore, even if the company
did rely on contracting officer advice as the basis for not
initially billing for right angle folds, nothing the Contracting
Officer did precluded the Appellant from challenging the
Contracting Officer's position if it desired to do so.  There is
no detrimental reliance here.


In light of the above, the Board finds and concludes that the
Appellant's claim is barred by the final payment rule embodied in
the "Payments on Purchase Order" clause in its contracts and that
the Board therefore is without jurisdiction to consider it.
Accordingly, the Respondent's motion to dismiss is GRANTED and
the appeal is DISMISSED.

It is so Ordered.

August 20, 1998                     Ronald Berger
Ad Hoc Chairman
Board of Contract Appeals