DENIED: March 15, 1994 GSBCA 11951, 11952 NASH METALWARE COMPANY, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Sam Zalman Gdanski, Montebello, NY, counsel for Appellant. Michael D. Tully, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, VERGILIO, and GOODMAN. GOODMAN, Board Judge. This appeal arises from a contract awarded to appellant, Nash Metalware Company, Inc. (Nash), by the General Services Administration (GSA or respondent) for kitchen utensils. On April 22, 1992, respondent's contracting officer issued decisions terminating outstanding purchase orders under the contract for default. Appellant appealed these decisions to this Board, and the two appeals were consolidated. A hearing on the merits was held on August 24, 1993. For the reasons stated below, we deny the appeals. Findings of Fact 1. On March 18, 1991, respondent issued solicitation number 7FXG-M4-90-7309-S (the solicitation) for the procurement of Federal Supply Code Class 7330, Commodity: Stainless Steel Utensils and Food Handling Tools. Appeal Files, GSBCA 11951, 11952, Exhibit 3. 2. On April 15, 1991, appellant submitted its bid to respondent in response to the solicitation. Appeal Files, GSBCA 11951, 11952, Exhibit 3. 2 3. On October 25, 1991, respondent awarded to appellant contract number GS-07F-48210 (the contract), for the period October 25, 1991, through July 31, 1993, for the supply of several sizes of kitchen ladles, including the following which are the subject of these appeals: Ladle, Kitchen (Stainless Steel), Size 3 - 8-ounce (0.236 liter[[foot #] 1]) capacity, NSN [National Stock Number] 7330-00-248-1153 (hereinafter 8-ounce ladles); Ladle, Kitchen (Stainless Steel), Size 1 - 2-ounce (0.059 liter) capacity, NSN 7330-00-254-4793 (hereinafter 2-ounce ladles); and Ladle, Kitchen (Stainless Steel), Size 2 - 4-ounce (0.118 liter) capacity, NSN 7330-00-680-0865 (hereinafter 4-ounce ladles).[[foot #] 2] Appeal Files, GSBCA 11951, 11952, Exhibits 1, 3 at 12-13, 17. 4. The contract required the ladles to be manufactured in accordance with commercial item description (CID) A-A-1956A, dated February 23, 1989. Appeal Files, GSBCA 11951, 11952, Exhibit 3 at 12-13, 17, 22-27.[foot #] 3 The ladles are for serving or transferring food between containers. Id. at 22. 5. The contract permitted a tolerance, or a variance, of "+/- 5%" in the capacity of the ladles. Appeal Files, GSBCA 11951, 11952, Exhibit 3 at 12-13, 17. 6. The contract required delivery of all contract items at the designated locations within sixty days after receipt of order. Appeal Files, GSBCA 11951, 11952, Exhibit 3 at 34. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The capacity of the ladles will be referred to in milliliters (ml) in this opinion. [foot #] 2 Appellant was also awarded the contract to supply two other contract items which are not the subject of these appeals. [foot #] 3 Federal Specification RR-L-30C, dated May 26, 1977, was changed to CID A-A-1956, dated June 15, 1982. Appellant's Exhibit 1. CID A-A-1956, dated June 15, 1982, was changed to CID A-A-1956A, dated February 23, 1989. Appeal File, GSBCA 11951, 11952, Exhibit 3 at 22. ----------- FOOTNOTE ENDS ----------- 3 7. The contract contained General Services Acquisition Regulation (GSAR) clause 552.246-70 (DEC 1990), which stated, in pertinent part: (c) Inspection by Government personnel. (1) Although the Government will normally rely upon the Contractor's certification as to the quality of supplies shipped, it reserves the right under the Inspection of Supplies -- Fixed Price clause to inspect and test all supplies called for by this contract, before acceptance, at all times and places, including the point of manufacture. When the Government notifies the Contractor of its intent to inspect supplies before shipment, the Contractor shall notify or arrange for subcontractors to notify the designated GSA quality assurance office 7 workdays before the date when supplies will be ready for inspection. Shipment shall not be made until inspection by the Government is completed and shipment is authorized by the Government. . . . . (d) Quality deficiencies. . . . . (2) If supplies in process, shipped, or awaiting shipment to fill Government orders are found not to comply with contract requirements, or if deficiencies in either plant quality or process controls are found, the Contractor may be issued a Quality Deficiency Notice (QDN). Upon receipt of a QDN, the Contractor shall take immediate corrective action and shall suspend shipment of the supplies covered by the QDN until such time as corrective action has been completed. The Contractor shall notify the GSA quality assurance office, within 5 workdays, of corrective action taken or to be taken to permit onsite verification by a Government representative. Shipments of nonconforming supplies will be returned at the Contractor's expense and may constitute cause for termination. Delays due to the issuance of a QDN do not constitute excusable delay under the Default clause. Failure to complete corrective action in a timely manner may result in termination of this contract. Appeal Files, GSBCA 11951, 11952, Exhibit 3 at 31-32; 48 CFR 552.246-70 (1991). 4 8. Clause A-FSS-23 (JAN 1991) of the contract incorporated by reference GSA Form 3507, GSA Supply Contract Clauses, December 1989 edition, which contained Federal Acquisition Regulation (FAR) clause 52.249-8, Default (Fixed-Price Supply and Service) (APR 1984). FAR clause 52.249-8 stated, in pertinent part: (a)(1) The Government may, subject to paragraphs (c) and (d) below, by written notice of default to the Contractor, terminate this contract in whole or in part if the Contractor fails to -- (i) Deliver the supplies or to perform the services within the time specified in this contract or any extension; (ii) Make progress, so as to endanger performance of this contract (but see subparagraph (a)(2) below); or (iii) Perform any of the other provisions of this contract (but see subparagraph (a)(2) below). (2) The Government's right to terminate this contract under subdivisions (1)(ii) and (1)(iii) above, may be exercised if the Contractor does not cure such failure within 10 days (or more if authorized in writing by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure. Appeal Files, GSBCA 11951, 11952, Exhibit 3 at 4; 48 CFR 52.249-8 (1991). 9. On October 25, 1991, the contracting officer delegated the contract administration to an administrative contracting officer (ACO). Appeal Files, GSBCA 11951, 11952, Exhibit 2. 10. By March 23, 1992, appellant had failed to timely deliver under nine purchase orders. In lieu of respondent terminating the contract for default, appellant and respondent executed modification A-3, dated March 23, 1992, which extended the delivery dates until April 18, 1992. The purchase orders and the original delivery dates are set forth below: Ladles Purchase Order Original Delivery Date 4-ounce SWX43241 2/12/92 AWF02531 2/20/92 AWX43511 2/20/92 FWX53161 3/14/92 AWX53291 3/19/92 5 2-ounce SWF17861 2/13/92 NWX53111 3/14/92 8-ounce AWF12371 2/20/92 SWF12373 2/20/92 Appeal Files, GSBCA 11951, 11952, Exhibit 4; Transcript at 13-14. 11. Modification A-3 stated, in pertinent part: Failure to meet the revised delivery due date may result in termination for default. All other terms and conditions remain the same. Appeal Files, GSBCA 11951, 11952, Exhibit 4 at 2. GSBCA 11952 - Termination for Default - 4-ounce Ladles 12. On March 25, 1992, respondent's quality assurance specialist (QAS) conducted an inspection of 4-ounce ladles ordered under purchase order SWX43241. The QAS measured the capacity of the 4-ounce ladles by filling a ladle with water and transferring the water for measurement to a graduated cylinder. The ladles had a capacity of approximately 5.085 ounces (150 ml) instead of the required capacity of 4 ounces (118 ml) (+/-5%). Transcript at 45-47, 61-62; Appeal File, GSBCA 11952, Exhibit 5. 13. The QAS prepared quality deficiency notice (QDN) number C1892-07 and transmitted it to Nash. The QDN stated: DEFICIENCY EXISTS IN YOUR QUALITY CONTROL SYSTEM. THE NATURE OF THE DEFICIENCY IS: REQUIRED: CAPACITY; 4 OZS, (118 ml) (+/- 5%) FOUND: SAMPLES INSPECTED HAD A CAPACITY OF APPROXIMATELY 150 ml. IMMEDIATE ACTION IS REQUIRED TO CORRECT THE DEFICIENCY AND THE CONDITION THAT CAUSED IT. SHIPPING NONCONFORMING MATERIAL AND/OR FAILURE TO TAKE ACCEPTABLE CORRECTIVE ACTION ON TIME MAY RESULT IN TERMINATION OF YOUR RIGHT TO PROCEED WITH THIS CONTRACT. . . . PLEASE PROVIDE A WRITTEN RESPONSE OF CORRECTIVE ACTION TAKEN OR TO BE TAKEN . . . WITHIN 5 WORKDAYS AFTER RECEIVING THIS NOTICE. Appeal File, GSBCA 11952, Exhibit 5; Transcript at 65. 14. The QAS also prepared GSA Form 1679 and transmitted it to the ACO. That form stated: 6 IT IS MY OPINION THAT THIS DEFICIENCY WILL NOT AFFECT THE FIT, FORM, OR FUNCTION OF THE ITEM AND THAT THE ITEM BE ACCEPTED AS IS IF OFFERED BY THE CONTRACTOR AT A PRICE CONSIDERATION. THE DESIGN OF THE ITEM WILL APPARENTLY PROHIBIT ANY CORRECTION IN THE DEFICIENCY AND WOULD THEREFORE NECESSITATE THE MANUFACTURE OF A NEW ITEM. Appeal File, GSBCA 11952, Exhibit 5. 15. The QAS was questioned by both respondent's and appellant's counsel as to the basis for his opinion that the deficiency would not affect the fit, form or function of the item and that the item be accepted "as is" if offered by the contractor at a price consideration. Q [Respondent's counsel]: . . . there's a GSA Form 1679, which mentions the issuance of this particular QDN, and the oversize capacity, and your opinion that this deficiency would not necessarily [a]ffect the function of the item, and that it be considered to be accepted if there's a proper consideration tendered. Can you explain . . . why you put that opinion in there. A: . . . I discussed the deficiency with the contractor['s president] and [general manager]. Basically, I wanted to know how they could correct the item, and they said they could not correct the item because that's the way it was made, and they would have to get new dies to make the item, which would necessitate contract extension, delivery extensions because it would mean some more time would be necessary before that item could be made. I thought about that, and I said well, if the item will become delinquent, I thought it would be prudent if the item, based on prior usage, as the contractor told me or insinuated that if that's the case, we could accept that purchase order . . . if the government . . . had a need for the item right away, and if it was still functional. So I said maybe they could accept it, but I had no authority to accept it, so that's why I recommended it that way. Transcript at 48-49. Q [Appellant's counsel]: . . . About four lines down . . . on that page 3, [Appeal File, GSBCA 11952, Exhibit 5] it says, . . . it is my opinion that this deficiency will not affect the fit, form or function of the item. Now, how did you reach that conclusion? 7 A: . . . When I inspect an item and the item does not meet specification, I have to reject it on that basis. However, I also supply information that I think is pertinent . . . if a waiver is requested by the contractor, . . . because routinely we supply information to the contracting officer on waiver requests. Transcript at 67-68. 16. The QAS informed the contractor of his opinion stated on the GSA Form 1679. Transcript at 69. 17. In a letter dated March 30, 1992, signed by appellant's president, appellant responded to QDN number C1892-07 by requesting that the rejected 4-ounce ladles be accepted "in light of the fact that it has always been acceptable in the past to allow over capacity especially because the ladle does not call for any ounce markings which would indicate its use for portion control." Appeal File, GSBCA 11952, Exhibit 6. 18. According to appellant's president, appellant never made a request to deviate from the specifications for the 4-ounce ladles, because she did not believe a request for deviation was necessary. Transcript at 108. 19. The ACO determined appellant's response unacceptable as there was no admission of deficiency and no statement of intent to provide corrective action. Transcript at 15. 20. On March 31, 1992, the QAS returned to appellant's manufacturing facility and found that appellant had taken no corrective action to remedy the overcapacity deficiency that he had noted in QDN number C1892-07. In this QDN, the QAS stated that "[t]he Contractor's response to Quality Deficiency Notice #C1892-07 was received this date, evaluated and deemed unacceptable. The Contractor failed to address the corrective action to be taken to prevent a recurrence of this deficiency. It is therefore requested that a cure letter be issued to the contractor to correct the unacceptable contract status." Appeal File, GSBCA 11952, Exhibit 7. 21. On April 3, 1992, an ACO mailed appellant a "cure" letter which notified appellant of the overcapacity deficiency discovered by the QAS on March 25, 1992, and put appellant on notice that its failure to provide respondent with an acceptable response within ten days of receipt could result in respondent's terminating for default all affected purchase orders pursuant to FAR 52.249-8(a)(1)(ii), i.e., contractor's failure to make progress. Appeal File, GSBCA 11952, Exhibit 8. On April 6, 1992, this cure letter was received by appellant's president. Id., GSBCA 11952, Exhibit 11. 8 22. As of April 21, 1992, appellant failed to make delivery of the 4-ounce ladles which modification A-3 required to have been delivered by April 18, 1992. Appeal File, GSBCA 11952, Exhibit 9. 23. In a memorandum dated April 21, 1992, the ACO requested concurrence with her decision to terminate for default the entirety of the contract relating to 4-ounce ladles (NSN 7330-00- 680-0865), as appellant had "outstanding unacceptable response to QDN and lack of response to cure notice." Appeal File, GSBCA 11952, Exhibit 9. 24. In response to the ACO's memorandum of April 21, 1992, the Director, General Procurement Division, issued a memorandum concurring with the ACO's decision to terminate for default the entirety of the 4-ounce ladles (NSN 7330-00-680-0865) portion of the contract. Appeal File, GSBCA 11952, Exhibit 10. 25. As of April 22, 1992, appellant had failed to provide a written response to the cure letter, dated April 3, 1992. Appeal File, GSBCA 11952, Exhibit 11. Appellant's president claims to have verbally responded to the cure letter by stating that no corrective action was necessary. Transcript at 112-13. 26. On April 22, 1992, the ACO issued a decision terminating for default the 4-ounce ladles (NSN 7330-00-680-0865) portion in its entirety, including outstanding purchase orders SWX43241, AWF02531, AWX43511, FWX53161, NWX67011,4 and AWX53291, for appellant's failure to cure the overcapacity deficiency which had been noted in QDN number C1892-07 regarding the 4-ounce ladles, and for failure to respond to the cure letter. The decision terminated the purchase orders pursuant to the Default clause, FAR 52.249-8(a)(1)(iii), failure to perform provisions of the contract. See Finding 8; Appeal File, GSBCA 11952, Exhibit 11; Transcript at 38. 27. Appellant appealed the decision terminating the purchase orders for default by notice of appeal to this Board dated July 21, 1992. GSBCA 11951 - Termination for Default - 2-ounce and 8-ounce Ladles 28. On April 6, 1992, respondent's QAS visited appellant's manufacturing facility and inspected and rejected the 8-ounce ladles ordered under purchase order number SWF12373 because these ____________________ 4 This purchase order was not listed in modification A-3, but was referenced in the decision as an outstanding purchase order. 9 ladles failed to meet the required capacity of 0.236 liter [236 ml] (+/- 5%). The eight samples measured demonstrated capacities ranging between 260 ml and 270 ml. He recorded these results in QDN number C1892-08, GSA Form 3539, dated April 6, 1992. Appeal File, GSBCA 11951, Exhibit 9; Transcript at 17, 52. 29. On April 10 and 14, 1992, the QAS returned to appellant's manufacturing facility and, according to the QAS, appellant failed to have ready or available for inspection the 8-ounce ladles ordered under purchase orders SWF12373 and AWF12371 and the 2-ounce ladles ordered under purchase order NWX53111. Appeal File, GSBCA 11951, Exhibits 10, 11. 30. Appellant's president testified that 8-ounce and 2- ounce ladles for purchase orders SWF12373, AWF12371, and NWX53111 were available for inspection on April 14, 1992, prior to the termination date. Transcript at 99. However, her recollection was unclear and confused about the size of the ladles that she claimed were available for inspection. Upon cross-examination, it appeared that her testimony and recollection as to items tendered for inspection concerned the 4-ounce ladles which are the subject of the other appeal, and not those ordered under the three purchase orders in question in this appeal. Q [Respondent's counsel]: I'd like to ask you about the three purchase orders . . . AWF12371, NWX53111, and SWF12373. Do you recall what size ladles these purchase orders were? . . . . A: They were four ounce ladles. Id. at 113. 31. Appellant's general manager testified that 8-ounce and 2-ounce ladles for purchase orders SWF12373, AWF12371, and NWX53111 were ready for inspection on April 6, 1992, as evidenced by his own handwritten inspection reports which he alleges were completed that day to indicate the ladles "were ready for inspection." Transcript at 126-29. The inspection reports contained references to the specification in the contract and superseded specifications not applicable to the contract. One of the inspection reports was allegedly erroneously dated April 6, 1993. Appeal File, GSBCA 11951, Exhibit 14. Appellant's general manager offered the following testimony as to when the items were tendered, when he created the inspection reports, and the dates of the QAS visits: Q [Appellant's counsel]: Can you tell -- when would you have prepared [the inspection reports], for what purpose? 10 A: On that day [April 6, 1992]. I prepared it for inspection for shipment because if it wasn't ready for shipment, I would have never made out the inspection report. Q: So, the sole purpose of that document is to show to the government? A: That it was ready for inspection. . . . . Q: . . . Do you recall . . . whether you had offered to tender these to the government prior to the termination date? A: Well, that date right there [April 6], the stuff was ready for inspection. That's when I prepared [the inspection report]. [The QAS] was there on Tuesday to perform inspection on something. . . . So, I had made out those inspection reports, I think the day after. He was there that Tuesday. I think I made it out that Thursday, Wednesday or Thursday when I made those reports. . . . . A: . . . [W]e asked him to come back, and he said that he was coming back that Thursday, which was the following week. I think it was the following week. Yes, that Thursday. The Friday was Good Friday,5 which was a union holiday. He didn't show up that Thursday, and Friday was a union holiday, which meant that we were closed. So, he came back the following Tuesday, and I presented those inspection reports to him for inspection, and he said he couldn't inspect. Transcript at 127-29. 32. In a memorandum dated April 21, 1992, the ACO requested concurrence with her decision to terminate for default all purchase orders to appellant under the contract for 8-ounce and 2-ounce ladles, as appellant failed to make delivery under such purchase orders by April 18, 1992, as required by modification A- 3. Appeal File, GSBCA 11951, Exhibit 5. 33. In response to the ACO's memorandum of April 21, 1992, the Director, General Procurement Division, issued a memorandum concurring with the ACO's decision to terminate for default all ____________________ 5 Friday, April 17, 1992, was Good Friday. 11 outstanding purchase orders to appellant under the contract for the 8-ounce and 2-ounce ladles. Appeal File, GSBCA 11951, Exhibit 6. 34. By decision dated April 22, 1992, the ACO terminated for default purchase orders AWF12371, SWF12373, and NWX53111, pursuant to the Default clause, FAR 52.249-8(a)(1)(i), for failure to deliver the supplies within the time specified in the contract or any extension. See Finding 8; Appeal File, GSBCA 11951, Exhibit 7; Transcript at 18. 35. On April 22, 1992, the QAS noted on GSA Form 1679 that on that day, appellant had tendered for inspection the 2-ounce ladles ordered under purchase order NWX53111. The QAS indicated that he had neither inspected nor approved for shipment the 2- ounce ladles appellant had tendered, based on instructions he had received as to the termination of these purchase orders. Appeal File, GSBCA 11951, Exhibit 12. 36. Appellant appealed the decision terminating the purchase orders for default by notice of appeal dated July 21, 1992. Allegations Concerning Prior Contracts 37. Appellant's president testified that appellant has been supplying 4-ounce ladles to the Federal Government since the 1950's. Transcript at 77-78. She also testified as to changes in the specifications for 4-ounce ladles. Id. at 82-87. 38. The president testified that under prior contracts, the inspection method employed by the Government QAS was to fill a cylinder with the specified capacity of water and transfer it to the ladle. If the ladle held that amount of liquid, it was acceptable, "even though there was in the past maybe an eighth of an inch allowance on the top." Transcript at 91-92. The inspection method used to test the capacity of the 4-ounce ladles under the instant contract was to fill the ladle to the brim and measure the amount of water. Id. at 93. 39. Appellant's general manager testified as to what he believed were two other contracts for 4-ounce ladles between appellant and GSA "about two years ago, three years ago, maybe four." Transcript at 123-24. He did not think these contracts were under the same specification as the current contract. Under these past contracts, the inspection method employed by the Government was to measure and pour four ounces of water into the ladle, rather than measure water that filled the ladle. Id. at 124-26. Discussion 12 Nash contends that GSA improperly terminated the purchase orders under the contract, claiming that the ladles were timely tendered for inspection and met the specifications as established by a prior course of dealing. The Government has the burden of proving that a default termination is warranted because it is a "drastic action . . . which should be imposed (or sustained) only for good grounds and on solid evidence." J.D. Hedin Construction Co. v. United States, 408 F.2d 424, 431 (Ct. Cl. 1969). We find that GSA has met its burden of proof, and that it properly terminated the purchase orders for default. We deny both appeals. Nash failed to deliver on all the purchase orders which are the subject of these appeals by the original due dates, and entered into modification A-3 of the contract in lieu of a default termination, which established an extended due date of April 18, 1992. Finding 10. The contract allowed the Government, by written notice of default, to terminate the contract in whole or in part if the contractor failed to deliver the supplies within the time specified in this contract or any extension, or failed to comply with provisions of the contract. Finding 8. Timely performance embraces two requirements: the goods must conform to contract specifications and must be delivered by the specified due date. Air, Inc., GSBCA 8847, 91-1 BCA 23,352 (citing Radiation Technology, Inc. v. United States, 366 F.2d 1003 (Ct. Cl. 1966)). GSBCA 11952 - Termination for Default - 4-ounce Ladles The Government's Inspection Method Was Reasonable Appellant argues that the method of inspection respondent used to measure the capacity of the ladles was unreasonable. Appellant alleges that under past contracts, an amount of water equal to the specified capacity of the ladle was poured into the ladle, and the capacity was deemed acceptable if the ladle held an amount of water equal to the specified capacity. Findings 38, 39. Appellant therefore argues that it is unreasonable to measure the capacity of the ladle by filling it with water and then measuring in a graduated cylinder the amount of water the ladle held. There was no method specified in the contract to measure the capacity. Under such circumstances, an inspection method is acceptable as a basis for rejection if it is accurate and reasonably calculated to determine compliance with the specification. Lowell Monument Co., VACAB 1191, 77-1 BCA 12,439. Conversely, a method is improper if it does not reasonably measure contract compliance. Tester Corp., ASBCA 21312, 78-2 BCA 13,373, reconsideration denied, 79-1 BCA 13,725, aff'd, 227 Ct. Cl. 648 (1981). 13 We find that the method employed by respondent to measure the capacity of the ladle was accurate and reasonably calculated to determine compliance with the specification. While appellant alleges that respondent's method differed from that used in the past, this does not make the method used under the instant contract improper. The Government is entitled to use whatever test it chooses to determine contract compliance so long as it does not impose a higher standard than that included in the contract. Air, Inc., GSBCA 8847, 91-1 BCA 23,352. The contractor did not prove that the method used imposed a higher standard than that included in the contract. Unlike the method favored by the contractor, the method utilized tests for compliance within the specified tolerance of +/- 5%. Appellant Failed to Prove a Waiver Based Upon Prior Course of Dealing Appellant's president alleges that a prior course of dealing existed between itself and respondent, and that respondent had accepted ladles with similar overcapacity as meeting the specifications under prior contracts. Finding 17. It is true that even if a contract provision appears clear, the Government's prior conduct and course of dealing with a contractor with respect to that provision can be viewed as a waiver. Gresham & Co. v. United States, 470 F.2d 542 (Ct. Cl. 1972). However, appellant offers no further proof as to the details of the alleged prior contracts, such as periods of performance, specified capacity of the contract items, applicable specifications, or records supporting acceptance of goods. In fact, appellant's general manager believed that the prior contracts had specifications different than the instant contract. Finding 39. When details of alleged prior contracts and prior course of dealing are lacking, we cannot make a finding of waiver. W.S. Jenks & Son, GSBCA 10513, 92-1 BCA 24,502 (1991). We find appellant's allegations unsupported and insufficient to support a finding that respondent had previously accepted ladles of the same capacity as tendered by appellant in this instance as meeting the same specifications in the instant contract for 4- ounce ladles. Appellant further argues that the contracting officer breached a duty to cooperate by failing to respond to appellant's March 30, 1992, letter requesting acceptance of the items based upon the alleged prior course of dealing. See Finding 17. Appellant bases this argument on the fact that "[the QAS]'s own QDN and supporting material recognized that since the form, fit and function was acceptable, that a deviation be incorporated," and that appellant's request for acceptance of the items was "buttressed by [the QDN]'s own internal confirmation that the units be accepted." Appellant's Posthearing Reply Brief at 1. 14 Appellant mischaracterizes both the QAS's basis for recommending acceptance and his authority. The QAS testified that his recommendation that the ladles be accepted was based upon his discussion with appellant's president and general manager and their "insinuation" of a prior course of dealing, and also conditioned upon an offer of price consideration by appellant. Finding 15. He transmitted this recommendation to the ACO and discussed it with appellant. Findings 15, 16. Appellant offered no price consideration as recommended by the QAS. Even if it had so offered, the contracting officer had no duty to accept nonconforming goods based upon the recommendation of the QAS. The QAS himself had no authority to accept nonconforming goods, and ultimately requested that the cure notice be issued when appellant failed to offer corrective action in response to the QDN. Finding 20. The Termination was Proper The contract specified that the 4-ounce ladles should have a capacity of 118 ml (+/- 5%), a range of 112.1 - 123.9 ml. Approximately three weeks before the due date, respondent's QAS inspected the ladles under purchase order SWX43241 (for 4-ounce ladles) and issued a QDN because the ladles were found to have a capacity of approximately 150 ml (5.085 ounces). Finding 12. Thus, appellant tendered goods that exceeded the specified capacity by 27%, in excess of the acceptable variation of 5% stated in the contract. Clearly, the goods were nonconforming. All ladles tendered exceeded the specified capacity and were unacceptable. In response to the QDN, appellant proposed no corrective action, admitted the overcapacity, and proposed that the ladles be accepted "in light of the fact that it has always been acceptable in the past to allow overcapacity." Finding 17. Appellant made no request that respondent allow a deviation from the specifications, believing that no deviation was necessary, based upon the alleged prior course of dealing.6 Finding 18. The contracting officer found this response unacceptable, Finding 19, and on April 3, 1992, fifteen days before the due date, a "cure notice" was issued, requesting that appellant respond by stating corrective action to be taken within ten days of receipt. The letter was received by appellant on April 6, 1992, twelve days before the due date. Finding 21. ____________________ 6 Appellant's counsel argues that this letter was actually a request that the specification be waived and that the contracting officer acted improperly and breached her duty to cooperate by failing to respond to this request for waiver. Appellant's Posthearing Reply Brief at 1. 15 Appellant made no written response to the cure notice and failed to deliver the 4-ounce ladles under purchase orders SWX43241, AWF02531, AWX43511, FWX53161, and AWX53291 by the extended due date of April 18, 1992. Finding 22. In a memorandum dated April 21, 1992, the ACO requested concurrence with her decision to terminate for default the 4-ounce ladle line item for the entirety of the contract, as appellant had "outstanding unacceptable response to QDN and lack of response to cure notice." Finding 23. The ACO received a memorandum concurring with her decision to terminate for default the 4-ounce ladle line item for the entirety of the contract. Finding 24. By letter dated April 22, 1992, the contracting officer terminated for default those purchase orders which had not been delivered by the extended due date and purchase order NWX670117 pursuant to the Default clause, FAR 52.249-8(a)(1)(iii).8 Finding 26. GSA supports its termination for default claiming that in the instance of the 4-ounce ladles, Nash failed to tender goods which conformed to the specifications, failed to propose corrective action, and ultimately failed to deliver by the extended due date. We find that respondent properly terminated these purchase orders for default. Not only did appellant fail to deliver goods which conformed to contract specifications, but it failed to respond to the cure notice and ultimately failed to deliver the supplies by the extended due date as set forth in modification A-3. We deny appellant's appeal of the default termination of purchase orders SWX43241, AWF02531, AWX43511, FWX53161, NWX67011, and AWX53291. GSBCA 11951 - Termination for Default - 2-ounce and 8-ounce Ladles The facts of this appeal are similar to those in the companion appeal. Goods for purchase order SWF12373 for 8-ounce ladles were tendered on April 6, 1992, and rejected by the QAS for overcapacity. These ladles failed to meet the required capacity of 236 ml (+/- 5%), which establishes a rangeof 224.20 - 247.80 ml. The eight samples measured demonstrated capacities ____________________ 7 While not listed in modification A-3, this purchase order was outstanding and therefore included in the termination for default of the entire item. Finding 26. 8 This provision allows for termination for default for failing to comply with provisions of the contract if the contractor is given the required "cure notice," as was done in this case. 16 ranging between 260 ml and 270 ml, or 10% to 14% overcapacity. A QDN was issued, requesting notification of corrective action within five days, to which appellant failed to respond. Finding 28. Thereafter, the QAS visited appellant's facilities on April 10 and 14, 1992, and noted in his records that neither 2-ounce ladles nor 8-ounce ladles for outstanding purchase orders under the instant contract were tendered for inspection. Finding 29. By decision dated April 22, 1992, respondent terminated these orders for default, citing the Default clause, FAR 52.249- 8(a)(1)(i), failure to deliver the supplies within the time specified in the contract or any extension. Finding 34. Appellant argues that it did in fact tender goods for inspection for the outstanding purchase orders for the 2-ounce and 8-ounce ladles as early as April 6, 1992. However, appellant's president's recollection was very unclear, and she seemed to have these ladles confused with the 4-ounce ladles. Finding 30. Appellant's general manager's testimony was inconsistent and ambiguous. His handwritten inspection reports were offered in an attempt to prove that the ladles were tendered as early as April 6, 1992. He was unclear as to when he prepared the inspection reports. He first stated that he prepared the inspection reports on April 6, 1992, when the ladles were allegedly first tendered for inspection, and then testified he prepared the reports after the QAS's visit, when the ladles were first allegedly tendered. Finding 31. We find appellant's inspection reports to be inconsistent in some respects with the instant contract. The reports contain handwritten deletions, references to inapplicable specifications, and in one instance a date one year in the future. Finding 31. We are not convinced that the reports were actually prepared during the relevant time period in the form and content presented to the Board. We, therefore, do not give the reports any weight to support appellant's allegations that appellant actually tendered the items prior to the delivery dates of the purchase orders in question. Appellant's general manager also offered inconsistent testimony as to the alleged dates that the items were tendered. He indicated that the items were first tendered on a Tuesday, while April 6, 1992, was a Monday. Finding 31. He further alleged that the Friday following the QAS's visit on April 6 was Good Friday. Id. However, April 17, 1992, was Good Friday, eleven days later. Contrary to appellant's general manager's testimony, the QAS had visited appellant's facility three times between April 6 and the extended due date of April 18 and 17 recorded that the items had not been tendered. Findings 28, 29. Appellant has failed to offer credible evidence that it tendered the items for inspection prior to the due date on April 18, 1992.9 Accordingly, as the result of the overcapacity of the 8-ounce ladles which was not corrected, and the failure to deliver the remaining goods in a timely manner, respondent terminated for default the outstanding purchase orders for 2- ounce and 8-ounce ladles. Findings 32, 34. We find that respondent's termination for default of these purchase orders was proper and deny appellant's appeal of the default termination of purchase orders AWF12371, SWF12373, and NWX53111. Decision The appeals are DENIED. ________________________ ALLAN H. GOODMAN Board Judge ____________________ 9 On April 22, 1992, after the extended due date had passed, the QAS notes that appellant had tendered 2-ounce ladles for inspection ordered under purchase order number NWX53111. The QAS neither inspected nor approved for shipment the 2-ounce ladles appellant had tendered, based on instructions he had received that the purchase orders for this item had been terminated. Finding 35. 18 We concur: _____________________ ________________________ ANTHONY S. BORWICK JOSEPH A. VERGILIO Board Judge Board Judge