B-169452, NOV 19, 1970, 50 COMP GEN 369

B-169452: Nov 19, 1970

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AS THE REVIEW IS RESTRICTED TO THE RECORD BEFORE THE CONTRACTING AGENCY AT THE TIME THE HEAD OF THE AGENCY RENDERED HIS DECISION. 1970: REFERENCE IS MADE TO YOUR LETTERS OF MAY 26 AND 27. THE EFFECT OF THE REQUEST IS TO SUBMIT THE CLAIM TO THIS OFFICE FOR CONSIDERATION UNDER OUR SETTLEMENT AUTHORITY. THE SPECIFICATIONS INCLUDED THE FOLLOWING REQUIREMENT RELATING TO "FOLD-INS": *** ON MOST ORDERS THE FOLD-INS ARE TO BE COLLATED IN PROPER SEQUENCE AND GATHERED FOLLOWING LAST PAGE. FOLD-INS ARE TO BE INSERTED INTO MANUALS IN PROPER LOCATION AND SEQUENCE AS INDICATED ON INSTRUCTION SHEET ACCOMPANYING NEGATIVES AND/OR COPY. THERE WAS ISSUED ON NOVEMBER 21. ON THE LOWER PORTION OF THE FORM FOLLOWING AN ASTERISK THERE IS THE STATEMENT.

B-169452, NOV 19, 1970, 50 COMP GEN 369

CONTRACTS - INCREASED COSTS - ADDITIONAL WORK OR QUANTITIES - DISALLOWANCE OF CLAIM A CLAIM SUBMITTED FOR CONSIDERATION UNDER THE SETTLEMENT AUTHORITY IN 31 U.S.C. 71 FOR ADDITIONAL COMPENSATION TO COVER A REQUIRED CORRECTION IN THE PRINTING OF A TECHNICAL PUBLICATION, WHICH HAD BEEN DISALLOWED BY THE CONTRACTING OFFICER AND AN APPEAL TO THE DISALLOWANCE DENIED BY THE ADMINISTRATIVE OFFICER, MAY NOT BE PAID ON THE BASIS PRIOR UNCORRECTED ORDERS HAD BEEN ACCEPTED, WHERE THE RECORD SHOWS THE CONTRACTOR AGREED TO CORRECT THE ERROR WITHOUT COST TO THE GOVERNMENT, AND A SUPPLEMENTAL AGREEMENT PROVIDING A CHARGE FOR THE WORK - INSERTION OF FOLD-INS IN THE PUBLICATION IN INDICATED SEQUENCE - HAS REFERENCE TO FUTURE ORDERS. FURTHERMORE, AN ALLEGED SUBSEQUENT ORAL AGREEMENT MAY NOT BE CONSIDERED, AS THE REVIEW IS RESTRICTED TO THE RECORD BEFORE THE CONTRACTING AGENCY AT THE TIME THE HEAD OF THE AGENCY RENDERED HIS DECISION.

TO MASTERS, GARDNER & ASSOCIATES, NOVEMBER 19, 1970:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 26 AND 27, 1970, REQUESTING THAT OUR OFFICE REVIEW THE MAY 4, 1970, DECISION OF THE PUBLIC PRINTER WHICH DENIED THE APPEAL OF LITHO PRESS, INC., FROM THE CONTRACTING OFFICER'S DISALLOWANCE OF A CLAIM FOR ADDITIONAL COMPENSATION FOR WORK ON PRINT ORDER 557, PROGRAM 827-S. THE EFFECT OF THE REQUEST IS TO SUBMIT THE CLAIM TO THIS OFFICE FOR CONSIDERATION UNDER OUR SETTLEMENT AUTHORITY, 31 U.S.C. 71.

THE GOVERNMENT PRINTING OFFICE (GPO) AWARDED ON JUNE 27, 1968, TO LITHO PRESS PURCHASE ORDER 42000, JACKET 343-672, FOR THE PRINTING AND BINDING OF TECHNICAL PUBLICATIONS TO BE ORDERED BY THE DEPARTMENT OF THE AIR FORCE DURING THE PERIOD JULY 1, 1968, THROUGH JUNE 30, 1969. THE SPECIFICATIONS PROVIDED THAT DURING THE TERM OF THE PURCHASE ORDER THERE WOULD BE ABOUT 3,740 ORDERS RANGING FROM ABOUT 90 TO 450 PER MONTH. THE SPECIFICATIONS INCLUDED THE FOLLOWING REQUIREMENT RELATING TO "FOLD-INS":

*** ON MOST ORDERS THE FOLD-INS ARE TO BE COLLATED IN PROPER SEQUENCE AND GATHERED FOLLOWING LAST PAGE. WHEN SO INDICATED ON INDIVIDUAL PRINT ORDERS, FOLD-INS ARE TO BE INSERTED INTO MANUALS IN PROPER LOCATION AND SEQUENCE AS INDICATED ON INSTRUCTION SHEET ACCOMPANYING NEGATIVES AND/OR COPY.

UNDER THE PURCHASE ORDER, THERE WAS ISSUED ON NOVEMBER 21, 1968, PRINT ORDER NO. 557 OF PROGRAM 827-S CALLING FOR THE PUBLICATION OF 1,100 COPIES OF A BOOK ON THE 1F-111 PROGRAM. ON THE PRINT ORDER FORM, UNDER "FOLD- INS," THERE APPEARS THE NUMBER 363 FOLLOWED BY AN ASTERISK. ON THE LOWER PORTION OF THE FORM FOLLOWING AN ASTERISK THERE IS THE STATEMENT, "FOLDINS PER ASSEMBLY SHEET". THE ASSEMBLY SHEET LISTS EACH PAGE NUMBER IN THE BOOK IN SEQUENCE. CERTAIN OF THE PAGE NUMBERS ARE PRECEDED BY THE SYMBOL "F," DESIGNATED ON THE ASSEMBLY SHEET AS "FOLDOUT."

THE BOOKS WERE DELIVERED TO THE AIR FORCE IN DECEMBER 1968 AND JANUARY 1969. THEY WERE SUBSEQUENTLY REJECTED AS UNACCEPTABLE AFTER PAYMENT HAD BEEN MADE. THE BASIS FOR THE REJECTION IS CONTAINED IN A LETTER DATED FEBRUARY 6, 1969, FROM HEADQUARTERS TACTICAL AIR COMMAND, LANGLEY AIR FORCE BASE, VIRGINIA, LISTING THE FOLLOWING DEFICIENCIES;

(1) BOOKS ARE DATED JULY 5, 1968, ALTHOUGH PRINTED IN DECEMBER 1968;

(2) PAGES ARE OUT OF NUMERICAL SEQUENCE;

(3) 89 PAGES ARE MISSING.

ITEM (2) HAD REFERENCE TO THE FACT THAT FOLD-INS WERE FURNISHED AS A GROUP AT THE BACK OF THE BOOK INSTEAD OF INTERLEAVED IN SEQUENCE THROUGHOUT.

LITHO PRESS IN A LETTER DATED FEBRUARY 7, 1969, TO THE GPO CONTRACTING OFFICER STATED THAT IT WOULD CORRECT THE DEFICIENCIES AND RETURN THE BOOKS ON NO ADDITIONAL EXPENSE TO THE GOVERNMENT. IT STATED AT A CONFERENCE IN DALLAS, TEXAS, ATTENDED BY GPO AND AIR FORCE REPRESENTATIVES, THAT THE CRITICISM WAS DIRECTED NOT SO MUCH AGAINST THE MISSING PAGES IN THE BOOK AS IT WAS AGAINST THE FOLDING AND COLLATING OF FOLD-INS. IN THAT REGARD, THE LETTER STATED:

THE REMARK WAS MADE THAT THIS ORDER WAS "THE STRAW WHICH BROKE THE CAMEL'S BACK," BUT I FEEL THAT IT WAS NOT THE MISSING PAGES IN THIS BOOK AS MUCH AS THE OVERALL SUBJECT OF FOLDING AND COLLATING FOLDINS. AGAIN, I REGRET THAT ERRORS WERE MADE IN THE ASSEMBLY OF THIS VERY COMPLEX PUBLICATION. ITS PRODUCTION ALSO CAME DURING OUR PERIOD OF UNCONTROLLABLE ABSENTEEISM AND WE WERE ATTEMPTING TO MEET AN ACCELERATED SHIPPING DATE. WE WILL DO ANYTHING ASKED OF US TO RECTIFY THIS ERROR AT NO COST TO THE GOVERNMENT.

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

SUBSEQUENTLY, GPO ISSUED SUPPLEMENT NO. 1, DATED MARCH 10, 1969, PROVIDING CHANGES WITH RESPECT TO THE PREPARATION AND INSERTION OF FOLD INS IN THE TEXT. THE SUPPLEMENT ALSO STATED:

*** ON APPROXIMATELY 95% OF THE ORDERS THE CONTRACTOR WILL BE REQUIRED TO COLLATE THE FOLD-INS IN PROPER SEQUENCE AND INSERT INTO TEXT IN PROPER LOCATION, AS INDICATED ON INSTRUCTION SHEET ACCOMPANYING NEGATIVES AND/OR COPY. ON THE REMAINING ORDERS THE CONTRACTOR WILL BE REQUIRED TO COLLATE FOLD-INS IN PROPER SEQUENCE AND GATHER AFTER THE LAST TEXT PAGE.

ADDITIONAL CHANGES WERE PROVIDED FOR INSERTING THE FOLD-INS IN THE TEXT IN SEQUENCE. THE CONTRACTOR SIGNED THE SUPPLEMENT, BUT BEFORE DOING SO INSERTED A NOTATION AS FOLLOWS:

IT IS UNDERSTOOD BY AND AGREED TO BY THE U.S. GOVERNMENT PRINTING OFFICE AND LITHO PRESS, INC. THAT ANY ADDITIONAL PRICING ITEMS OR PRICE ADJUSTMENTS TO THIS PROGRAM 827-S CONTRACT SHALL BE RETROACTIVE TO AND INCLUDE ANY ORDERS DELIVERED ON OR AFTER FEBRUARY 6, 1969, WHICH WERE PRODUCED AND DELIVERED IN ACCORDANCE WITH THE AGREEMENT ON FEBRUARY 6, THAT ALL ORDERS IN PRELIMINARY STAGES OF PRODUCTION WOULD BE PRODUCED WITHIN THE SCOPE OF THE REVISED SPECIFICATIONS REQUIRING THAT ALL FOLD INS BE INSERTED INTO TEXT PAGES PER ASSEMBLY SHEET AND VERBAL INSTRUCTIONS FROM REPRESENTATIVES OF THE AIR FORCE.

THIS NOTE WAS INITIALED BY THE CONTRACTOR AND THE SUPPLEMENTAL AGREEMENT WAS SIGNED BY THE CONTRACTING OFFICER FOR GPO.

THE CONTRACTOR CORRECTED THE DEFECTIVE WORK ON ORDER 557 AFTER FEBRUARY 6, 1969, AND MADE DELIVERY ON MARCH 19, 24, AND 29, 1969. SUBSEQUENTLY, THE CONTRACTOR SUBMITTED A VOUCHER FOR AN ADDITIONAL $11,969.10 FOR THE WORK. THE CONTRACTOR BASED THE CLAIM UPON THE CONTRACT SUPPLEMENT. THE CLAIM WAS CONSIDERED BY THE DIRECTOR OF PURCHASES AND DENIED ON THE BASIS THAT THE SPECIFICATIONS REQUIRED THE FOLD-INS TO BE INSERTED IN THE TEXT IN SEQUENCE AND THAT THE CONTRACT SUPPLEMENT WAS NOT APPLICABLE TO ORDER 557. THE DENIAL WAS SUSTAINED BY THE PUBLIC PRINTER UPON APPEAL.

YOUR BRIEF SETS FORTH ARGUMENTS IN FAVOR OF THE ALLOWANCE OF THE ABOVE CLAIM. YOU STATE THAT THE ORIGINAL CONTRACT DIFFERED FROM THE SUPPLEMENTAL AGREEMENT WITH REGARD TO FOLD-INS AND THAT THE EXACT REVERSE OF THE PERTINENT ORIGINAL CONTRACT PROVISION WAS SUBSTITUTED IN THE SUPPLEMENTAL AGREEMENT. FURTHER, YOU STATE THAT THE NEGOTIATIONS BETWEEN THE REPRESENTATIVES OF THE AIR FORCE, GPO, AND THE CONTRACTOR LEADING UP TO THE SUPPLEMENTAL AGREEMENT ESTABLISHED THAT THE SUPPLEMENTAL WAS TO BE EFFECTIVE ON FEBRUARY 6, 1969, AND WAS TO COVER SPECIFICALLY PRINT ORDER NO. 557. IN ADDITION, IT IS STATED THAT ALL 191 OF THE PRIOR PRINT ORDERS, CONTAINING THE SAME LANGUAGE "FOLD-INS PER ASSEMBLY SHEET," WERE ALL DELIVERED AND ACCEPTED WITH THE FOLD-INS COLLATED IN PROPER SEQUENCE AND GATHERED FOLLOWING THE LAST PAGE; AND THAT IS AN INDICATION THAT THE GOVERNMENT AND THE CONTRACTOR CONCURRED THAT THE FOLD-INS WERE TO BE FURNISHED IN THAT MANNER ON ORDER 557. ALSO, IT IS STATED THAT THE ASSEMBLY SHEET FURNISHED TO THE CONTRACTOR REFLECTS THAT NO SPECIAL INSTRUCTIONS OF ANY KIND WERE GIVEN TO THE CONTRACTOR WITH REFERENCE TO PRINT ORDER NO. 557 BY THE ORDERING AGENCY.

THE BASIC QUESTION IS WHETHER THE CONTRACTOR WAS REQUIRED TO FURNISH THE FOLD-INS IN SEQUENCE THROUGHOUT THE TEXT WITHOUT ADDITIONAL COST. ALTHOUGH THE SPECIFICATIONS IN THE PURCHASE ORDER UNDER WHICH THE PRINT ORDER WAS ISSUED STATED THAT ON "MOST ORDERS" THE FOLD-INS WOULD BE FURNISHED AFTER THE LAST PAGE, THE SPECIFICATIONS SPECIFICALLY PROVIDED THAT THE INSTRUCTIONS ON THE PRINT ORDERS AS TO LOCATION AND SEQUENCE OF FOLD-INS WERE TO BE FOLLOWED. IT FOLLOWS THAT IF "MOST ORDERS" WOULD PROVIDE FOR FOLD-INS AT THE END OF THE TEXT, THEN SOME FOLD-INS WOULD NOT BE SO INSERTED. AS INDICATED ABOVE, THE PRINT ORDER REFERRED THE CONTRACTOR TO THE ASSEMBLY SHEET AND THE LATTER DESIGNATED THE LOCATION OF THE FOLD-INS IN THE TEXT. WE, THEREFORE, CANNOT AGREE WITH YOUR POSITION THAT THE ORIGINAL CONTRACT AND THE PRINT ORDER AND THE ASSEMBLY SHEET TAKEN TOGETHER DID NOT REQUIRE THE COLLATING AND INSERTION IN NUMERICAL SEQUENCE OF FOLD-INS THROUGHOUT THE TEXT.

WHILE THE ORDERING AGENCY MAY HAVE BEEN REMISS IN ACCEPTING FOLD-INS ON PRIOR ORDERS AT THE END OF THE TEXT, WHEN OTHERWISE REQUIRED, THE FACT REMAINS THAT THE INSTRUCTIONS WERE SPECIFIC AS TO ORDER 557. ALTHOUGH AFTER THE INCIDENT WITH ORDER 557, GPO AGREED TO A CONTRACT SUPPLEMENT TO PROVIDE THAT 95 PERCENT OF THE ORDERS WOULD REQUIRE FOLD INS TO BE LOCATED IN THE TEXT, THE CONTRACTOR WAS NOT HARMED BY THE ORIGINAL PROVISION SINCE THE PREVIOUS ORDERS IT HAD FURNISHED WITH THE FOLD-INS AT THE END OF THE TEXT HAD BEEN ACCEPTED WITHOUT EXCEPTION. UNDER THE ORIGINAL LANGUAGE, THE ORDERING AGENCY WAS ENTITLED TO REQUEST AT LEAST SOME OF THE ORDERS TO HAVE FOLD-INS IN THE TEXT. THEREFORE, IT WAS NOT INAPPROPRIATE TO REQUIRE FOLD-INS IN THE TEXT IN CONNECTION WITH ORDER 557.

THE QUESTION THEN BECOMES WHETHER IT WAS AGREED BY THE CONTRACT SUPPLEMENT TO REIMBURSE THE CONTRACTOR FOR INSERTING THE FOLD-INS IN PLACE IN THE TEXT ON ORDER 557. THE NOTE ADDED TO THE SUPPLEMENTAL AGREEMENT BY THE CONTRACTOR STATES THAT IT WAS TO APPLY TO ALL ORDERS IN "PRELIMINARY" STAGES OF PRODUCTION ON FEBRUARY 6, 1969. AS TO WHAT WAS MEANT BY THIS LANGUAGE IS PROBABLY BEST ILLUSTRATED BY THE CONTRACTOR'S OWN STATEMENTS MADE IN ITS LETTER OF FEBRUARY 7, 1969, IMMEDIATELY AFTER THE MEETING WITH GPO AND AIR FORCE PERSONNEL ON ORDER 557. AS THAT PORTION OF THE LETTER, QUOTED ABOVE, INDICATES, THE CONTRACTOR POINTED OUT THAT FOLDING AND COLLATING WAS THE MAJOR PROBLEM ON ORDER 557 AND THAT IT WOULD DO ANYTHING TO CORRECT THE ERROR AT NO COST TO THE GOVERNMENT. IT DID RESERVE A RIGHT IN THE LETTER TO BE PAID FOR COLLATING, BUT THAT WAS STATED WITH RESPECT TO "ALL FUTURE ORDERS." IN THAT CONNECTION, IT STATED:

"MR. GOLTZ REQUESTED AND WE AGREED TO (1) START IMMEDIATELY TO FOLD ALL FOLDINS WITH ACCORDIAN-TYPE FOLDING AND (2) COLLATE FOLDINS IN PAGE SEQUENCE ACCORDING TO THE REPRODUCTION ASSEMBLY SHEET.

" *** AS MENTIONED ABOVE, WE TOLD MR. GOLTZ THAT WE WOULD FOLLOW THESE INSTRUCTIONS ON ALL FUTURE ORDERS. OF COURSE, WE WILL REQUEST A CONTRACT SUPPLEMENT TO INCLUDE A PRICING ITEM FOR THIS ADDITIONAL SERVICE SINCE IT WAS NOT ANTICIPATED IN OUR ORIGINAL BID, BUT WE WILL DO THIS AT A LATER DATE."

WE BELIEVE THAT THE FEBRUARY 7, 1969, LETTER REFLECTS THE AGREEMENT OF THE CONTRACTOR TO CORRECT ORDER 557 WITHOUT COST TO THE GOVERNMENT AND ALSO THAT THE CHARGES IN THE CONTRACT SUPPLEMENT WOULD APPLY TO FUTURE ORDERS. THE NOTE IN THE SUPPLEMENT MUST BE READ IN THE LIGHT OF THESE STATEMENTS WHICH WOULD INDICATE NO INTENT TO CHARGE FOR CORRECTING ORDER 557.

FURTHER, WE MIGHT POINT OUT THAT CONTRARY TO THE ALLEGATION IN YOUR LETTER OF MAY 26, 1970, THE CHIEF OF THE GPO PROCUREMENT SECTION BY AFFIDAVIT HAS DENIED BEING A PARTY TO AN ORAL AGREEMENT WITH THE CONTRACTOR THAT ANY ADDITIONAL COSTS INCIDENT TO CORRECTING ORDER 557 WOULD BE BORNE BY THE GOVERNMENT OR PROVIDED FOR IN THE SUPPLEMENTAL AGREEMENT. IN ANY EVENT, OUR REVIEW IS RESTRICTED TO THE RECORD THAT WAS BEFORE THE CONTRACTING AGENCY AT THE TIME THE HEAD OF THE AGENCY RENDERED THE DECISION. THEREFORE, WE MUST DENY THE REQUEST IN THE MAY 26 LETTER FOR AN OPPORTUNITY TO PRESENT EVIDENCE TO REBUT THE CHIEF OF THE PROCUREMENT SECTION IF CONTRARY TO YOUR ALLEGATION.

WE FIND NO LEGAL BASIS TO PAY AN ADDITIONAL AMOUNT FOR THE WORK CONTAINED IN PRINT ORDER NO. 557 AND THE CLAIM THEREFORE IS DENIED.