U.S. Government Printing Office
Office of General Counsel
Contract Appeals Board

Appeal of Scanforms, Incorporated
Docket 75-6
September 24, 1975

Vincent T. McCarthy, Chairman
Jay E. Eisen, Member
Essie A. Ablove, Member

This is an appeal filed.on April 28, 1975, by Scanforms,
Incorporated, Keystone Park, 181 Rittenhouse Circle, Bristol,
Pennsylvania 19007, herein also referred to as the contractor,
under the disputes clause of the contract, Article 29, United
States Government Printing Office Contract Terms No. 1.

I.  Findings of Fact

a.  This case arises out of a contract entered into by the
appellant, Scanforms, Incorporated, and the U.S. Government
Printing Office, herein referred to as the GPO, for the
production of 400,010 four-part multiform forms as described in
the specifications of the invitation to bid.

b.  The contract, designated as GPO Jacket No. 534-513, Purchase
Order 58322, is a fixed price agreement for the procurement of
the form for use by the U.S. Postal Service, pursuant to their
Requisition No. 608-4830.  The title of the form is designated as
"Rail Van Control System, Load/Dispatch Record." The type of
paper to be used in the production of the item was specified in
the contract as follows:

"At contractor's option, paper may be NCR Bond or 3-M Type 200 of
comparable color and weight as follows:  Part l-CB, Sub. 30, Part
2-CFB, Sub. 34, Part 3-CFB, Sub. 34 and Part 4-CF, Sub. 30."

c.  The contract was awarded to the contractor on April 9, 1974,
and confirmed by issuance of the Purchase Order 58322 in
acceptance of their bid in the amount of $21,175.40.  The "copy"
was furnished to the contractor on April 15, 1974 as agreed.

d.  The schedule required delivery of the forms to three listed
destinations on or before May 24, 1974, as follows:

Pauline, Kansas 66601   200,000 sets
Somerville, N.J. 08887   200,000 sets
Washington, D.C.  20260   10 sets

e.  The contractor by letter, dated May 21, 1974, stated that due
to a sudden shortage of all types of carbonless paper,
performance would be delayed.  The contractor was advised on June
11, 1974 that the ordering agency required 100,000 sets of the
forms by July 11, 1974, the balance later; also that they would
accept a carbon interleaved product.  The contractor issued a
purchase order to a paper supplier, Frye Copy Systems, Inc., Des
Moines, Iowa, on April 19, 1974, for delivery of paper by May 13,
1974.  Frye acknowledged receipt of the order on May 8, 1974.
The supplier stated he could not ship the paper until September
13, 1974.  An alternate supplier, Paper Mart, Inc., Livingston,
New Jersey, pursuant to a purchase order for paper issued by Scan
Forms, Inc., dated May 30, 1974, agreed to make delivery of the
ordered paper on July 15, 1974.

f.  The date of delivery of the completed forms to the three
specified destinations was on August 30, 1974.

g.  As a result of delays in performance and pursuant to the
terms of the contract, the contracting officer assessed
liquidated damages against the contractor.  Damages were computed
at the rate of one percent of the contract price plus overruns
totaling $21,175.00 for each working day the contractor was in
default of the shipping schedule; that is at the rate of $211.75
per day covering a period of 68 days default of the shipping
schedule (scheduled delivery date of June 24, 1974).  However,
the total damages assessed represents the maximum allowable under
the terms of the contract, that is, not in excess of 50% of the
total value of the entire order.  Thus, the liquidated damages
amounts to a total of $10,587.50.

h.  The contractor sought relief from the contracting officer,
asserting by letter dated December 20, 1974, that the delay in
performance was due to circumstances beyond its control and not
due to its fault or negligence.

i.  The contracting officer, by letter dated January 10, 1975,
rejected the contractor's request to extend the shipping

j.  The contracting officer on April 8, 1975, rendered his final
decision denying the contractor's request for relief of
liquidated damages.  He indicated in pertinent part in the letter
that the "documentation submitted to date fails to establish an
original commitment for the stock and the specific nature of the
delay encountered by your supplier.  Your request for an
extension of the shipping date is denied."

II.. .Opinion

The contract provided in pertinent part the following:

"The shipping schedules must be maintained.  See Liquidated
Damages and Penalty Payments in GPO Form 2873c."  (Emphasis

The reference to liquidated damages in GPO Form 2873c provides in
pertinent part the following:

"Liquidated Damages:  Should the contractor default on shipping
schedules stated in the specifications, the contractor will be
assessed liquidated damages against that part or parts of an
order which have not been shipped to the specified destination on
the specified date.  Damages will not be assessed against that
part or parts of an order which have been shipped on schedule.
The amount of damages will be computed at the rate of one percent
(1%) of the contract price of the quantity not shipped in
accordance with specifications for each working day the
contractor is in default of the shipping schedule(s): Provided,
That the minimum amount of liquidated damages shall not be less
than $5 for the entire order and not more than $500 per day on
the entire order, except the total damages assessed against the
contractor shall in no case exceed fifty percent (50%) of the
total value of the entire order.  Liquidated damages will not be
assessed if the contractor has shipped at least ninety percent
(90%) of the quantity ordered for shipment to a specified
destination on or before the scheduled date." (Emphasis added.)

It is well established that a contractor who claims that his late
performance and delivery is excusable has the burden of
establishing the same under the contract.  The contractor must
prove affirmatively that the failure to achieve timely
performance was caused by or arose out of a situation which was
beyond his control and he was not at fault or negligent.  In
addition. the contractor must show that he could have performed
on time save for the occurrence of the event he claims as an
excusable delay. Lee K. Geiger Construction Company, GSBCA, 67-1
BCA  6189; American Construction Company, Inc., GSBCA, 65-2 BCA

The appeal in this case arose out of the application of the
liquidated damages clause of the contract due to delayed
performance.  The contract provided that delivery of the
completed forms was to be made in the required quantities to the
locations prescribed in the contract on or before May 24, 1974.
The appellant's first written request for an extension was dated
on December 20, 1974; it was denied.  The contractor stated in
his appeal of April 28, 1975, that because of the "chaotic
conditions of the paper market prevailing at that time due to
pulp shortages, fuel shortages and titanium shortages," it was
unable to obtain paper in time to conform to the schedule.

The contractor submitted a purchase order to his supplier to
acquire the needed paper on April 19, 1974, which was after the
date of the award, although he states that an original commitment
for paper was made by phone before the award.  There was not any
supporting evidence submitted to support the telephonic
commitment by a paper supplier.  Every contractor impliedly
represents, when he makes his bid, that he can accomplish what he
sets out to do, within the time upon which there was an
agreement; and by such implied representation, he is not, in the
eyes of the law, entitled to maintain a mental reservation, to
the effect, that he can perform within the time required provided
the material suppliers lives up to their commitment and he can
obtain the paper stock in time to maintain the required schedule.
Woodhull Construction Company, ASBCA, 57-1 BCA  1260.  The
failure of the paper supplier to make timely delivery of the
necessary stock does not excuse the contractor from resulting
delays in contract completion. First Dominion Corp., GSBCA, 69-1
BCA  7488 (1967).

The contractor alleges that the specific nature of the delay that
affected his supplier's inability to provide the adequate paper
stock was because of "the chaotic conditions of the paper market
prevailing at that time due to pulp shortages. . . ."  While it
is noted that a tight supply and demand condition may have been
present in the paper industry during the period under
consideration in this appeal, the evidence of record does not
reflect in any substantial manner that paper stock of the
required quality and quantity was unavailable in the market
place.  The cause of the delay was due to the contractor not
having the firm commitment from a supplier on the date of
tendering his bid to the effect that the material will be
delivered in time to complete the order to meet the delivery

The cause of the delay was not unforeseeable and beyond the
control and without the fault or negligence of the contractor.
We are constrained to hold that appellant is not entitled to an
extension of time to relieve it from the imposition of liquidated
damages for its delay in performing the contract. Lewis
Enterprises, Inc., GSBCA, 67-2 BCA  6681; Acme Paving Company,
Inc., AGBCA, 73-2 BCA  10,092; 34 Comp. Gen. 251.

The contractor has not convinced us that the "liquidated damages
for delay provided for, are beyond damages reasonably
contemplated by the parties at the time of the contract." The
circumstances under which a provision fixing in advance the
amount of damages payable in the event of its breach will be
enforced depends on whether the amount so fixed is a reasonable
forecast of just compensation for the harm that is caused by the
breach and that the harm that is caused by the breach is one that
is incapable or very difficult of accurate estimation.  The
reasonableness of a liquidated-damages provision must be judged
as of the time the parties entered into the contract, rather than
at the time of the breach Federal Roofing and-Painting, Inc.,
Eng. BCA, 68-1 BCA  6912.  Liquidated damages are properly
imposed, however, even where the Government has failed to show
actual damages by the delay; nor does the fact that the
liquidated damages imposed resulted in a hardship to the
contractor in any way impugn the validity of the assessment.
Sunset Construction, Inc., IBCA, 65-2 BCA  5188.

On the basis of the facts found, the Board concludes that
liquidated damages were properly assessed for delayed performance
not found to be an excusable delay.

In view of the foregoing, the appeal is denied.