U.S. Government Printing Office Contract Appeals Board Vincent T. McCarthy, Chairman Jay E. Eisen, Member Drew Spalding, Member Panel 78-4 Appeal of the September 19, 1978 This is an appeal filed on March 1, 1978, by the Wessel Company, 1201 Kirk Street, Elk Grove Village, Illinois 60007, herein also referred to as the contractor, under the disputes clause, Article 29, U.S. Government Printing Office, Contract Terms No. 1, Jacket No. 752-100, Purchase Order G-1508. I. Findings of Fact (a) This case arises out of contract 752-100 entered into by the appellant, the Wessel Company, Inc., and the U.S. Government Printing Office, Procurement Department, at the Regional Printing Procurement Office, Chicago, Illinois, (herein referred to as the GPO) for the production of 22,697,200 newspaper inserts for the U.S. Army Recruiting Command, Fort Sheridan, Illinois. (b) The contract, Purchase Order G-1508 is a fixed price agreement for the procurement of recruiting brochures for the U.S. Army, at a cost of $266,500.00, awarded on November 11, 1977. (c) The contract specified the following requirements as to the type and quality of the paper stock: "Paper; 140 - lb. White Hi - Bulk Offset paper, basis 25 x 38" - M with the following minimum requirements: 1. Thickness: Minimum 0.006" 2. Porosity: Minimum 22 seconds (Gurley) 3. Brightness: 80% average, plus or minus 1. 4. Opacity: Not less than 92% 5. Stock must be free from ground woodpulp" (Emphasis supplied) (d) The contract specified in pertinent part that perforations will be made horizontally in nine places and vertically in seven places using regular slit or slot perforations. That the: "Dimensions specified for perforations are approximate: follow film for exact positioning. All perforations must be clean and sharp for easy separation and must register exactly on the printed form. Face and back must line up properly and stamp area must be perforated from the face side of the form." [Emphasis in original] 2 (e) The schedule for shipment by the contractor required delivery of the inserts to 117 newspaper destinations for scheduled insertion dates. Except as otherwise indicated in the contract, all insertions in newspapers were scheduled for Saturday, January 29, 1978. (f) In accordance with the contract, a GPO contract compliance officer and a U.S. Army representative inspected the press sheets for quality performance during production on January 3, 1978, at the contractor's plant. Their inspection of the paper led them to question whether the opacity and weight of the paper complied with the specifications; they also questioned the quality conformance of the press perforations. The contractor sent a sample of the paper to Bradner & Smith Paper Co., Chicago, Illinois and a verbal response from the firm confirmed the suspicions as to the low opacity. (g) A request for material tests on press sheets and blank sheets was submitted by GPO to the Quality Control and Technical Department, Central Office GPO, Washington for testing. In addition, 25 trimmed and folded samples furnished by the contractor taken from various stages in the press run were tested. The results are as follows: 1. Test #1. 1/10/78 Specification Test Results Difference Basis Weight 140 (+/-5%) 125.0# -8.0# Opacity 92% 86.8% -5.2% Paper not equal to specifications. Low Opacity, low basis weight. 2. Test #2. 1/20/78 Specification Test Results Difference Brightness 80% (+/-1%) 81.4% +0.4% Paper not equal to specifications, High Brightness. 3. Test #3. 1/30/78 Specifications Test Results Difference Lot 1. Basis Weight 140# 126.7 -6.3# Opacity 92% 87.9% -4.1% Lot 2. Basis Weight 140# 127.4 -5.6# Opacity 92% 88.3% -3.7% 3 Lot 3. Basis Weight 140# 127.4 -5.6# Opacity 92% 88% -4.0% Lots 1, 2, 3 Not equal to specifications. Low Basis Weight and Low Opacity. Lot 4. Specification Test Results Difference Opacity 92% 90.9% -1.1% Lot 5. Basis Weight 140# 130 -3.0# Opacity 92% 90.3% -1.7% Lots 4 and 5 not equal to specifications. Lot 4 - Low Opacity; Lot 5 - Low Opacity and Low Basis Weight. (h) Inspection of the samples submitted by contractor to the Contracting Officer revealed that the horizontal perforations did not align properly where they met the vertical perforations, and made the separation difficult and caused in some instances tearing of the paper. (i) The contractor, upon notification that the paper was not equal to specifications stated that replacement paper would not be received in time to meet the required newspaper insertion date for the forms. The customer agency refused to consider a delay in printing due to their contractual obligations with newspapers throughout the United States for insertion of the brochures necessary to their recruiting program. (j) The Contracting Officer, by letter dated February 10, 1978, notified the contractor that test results indicated that 130 pound paper was used with an opacity of less than 92%. It was computed that the weight of 22,697,630 trim size sheets using 140 pound stock is 491,176 pounds; that the weight of the same number of sheets using 130 pound stock would be 455,995 pounds, a difference of 35,181 pounds. The Contracting Officer, being advised that GPO procures both weights of paper at $0.231 per pound, deducted the cost of 35,181 pounds of stock at $0.231, totaling $8,126.81, from contractor's voucher because of the deficiency. In addition, the Contracting Officer deducted 1% of the total bid price $2,665.00 from the contractor's voucher because of the deficiency as related to the perforations which did not meet the requirements as provided in the specifications. A total of $10,791.81 was deducted from the contractor's voucher for the above noted deficiencies. (k) The contractor filed notice of appeal by letter dated March 1, 1978. Opinion The Contract Appeals Board notified the contractor by letter on March 17, 1978, and June 12, 1978,of the opportunity to offer evidence in support of its appeal pursuant to the disputes clause in the contract. The disputes clause, Article 29 U.S. GPO Contract Terms No. 1, is incorporated by reference and is part of the contract. The letter dated June 12, 1978, was forwarded by certified mail and receipt acknowledged on June 14, 1978. The contractor did not submit any additional evidence, and apparently has elected to waive a hearing and submit its case on the record. GPO Contract Terms No. 1 incorporated by reference Article 13. - Inspection and Tests - provides the following clause in pertinent part: "All material or workmanship shall be subject to inspection at all times and places by employees or representatives of the Government. In case any article is found to be defective in material or workmanship or not in conformity with the requirement of the specifications, the Government shall have the right to reject such articles or require their correction. . . . In the event public necessity requires the use of materials as supplies not conforming to the specifications, payment shall therefore be made at a proper reduction in price.'' (Emphasis added). The test results indicated that 130 pound, not 140 pound paper was used for four of the five lots tested and that the opacity did not measure 92% as required. Likewise inspection of the samples submitted to GPO revealed that the horizontal perforations of the brochure did not align properly where they met the vertical perforations and none of the perforations were deep enough. These two deficiencies made separation from the form, even after folding on the perforation line, very difficult; and in some cases caused tearing of the paper. It was only because replacement paper would not be received in time to meet the required insertion dates for the forms and the Department of the Army would not agree to a delay in the printing due to contractual commitment with the newspapers for distribution of the recruiting material, that there was a relaxation by GPO of the requirements called for in the specifications. The contractor asserted in its letter of March 1, 1978, that it used 543,729 pounds of paper and that total number of sheets used amounted to 4,244,000; that the weight per thousand sheets equals 128,117 pounds and one thousand sheets at 140 pounds would equal 130,517 pounds. The contractor asserts that with the trade custom allowing a +/-5% variance in all aspects of paper specifications, their paper would be within acceptable standards. 5 The attempt by the contractor to qualify the paper as acceptable is ineffective because of the stringent requirements in the contract. By the very nature of the contract, the contractor was required to perform in accordance with the specifications made a part of the contract. W. M. Schlosser Co., Inc., GSBCA 1966, 66-2 BCA ¶ 5796. The GPO's test results clearly indicated that 130 pound, not 140 pound paper was used and that the opacity did not measure 92%. It is a matter of common sense that the use of 130 pound stock in lieu of 140 pound paper would reduce the total weight of the manufactured product. The formula used by GPO to compute the cost of the reduced weight in paper appears fair and reasonable. Likewise the deduction of 1% or $2,665.00 for the deficiency relating to the perforations was reasonable. There was sufficient evidence submitted to show that public necessity required the immediate need or use of the recruiting material, despite its not conforming to the specifications. Complaints were forwarded by the Department of the Army, the Minneapolis Tribune and the Pittsburgh Press that mechanical problems were encountered in attempting to insert the recruiting material because of poorly aligned perforations. In addition, the Government is entitled to a price reduction for the savings in the amount of $8,126.81, that resulted from the contractor's using the 130 pound paper, in lieu of the required 140 pound paper stock. A. W. Barnhart Co., Inc., (1970) 70-1 BCA ¶ 8105; Techni Data Laboratories, (1977) 77-2 BCA ¶ 12667). It is therefore concluded that a total reduction in payment in the amount of $10,791.81 was fair and reasonable. Decision The appeal is denied.