GRANTED:  July 13, 1993
                                                
 
 
                              GSBCA 11368
 
 
                    COMPUTER NETWORK SYSTEMS, INC.,
 
                                                Appellant,
 
                                   v.
 
                    GENERAL SERVICES ADMINISTRATION,
 
                                                Respondent.
 
        Carl L. Vacketta  and Richard P. Rector of  Pettit & Martin,
   Washington,  DC; and Barbara  Spencer Lamade of  Computer Network
   Systems, Incorporated, Arlington, VA, counsel for Appellant.
 
        John   E.  Cornell,  Michael   D.  Tully  and   Margaret  A.
   Dillenburg,   Office  of   General   Counsel,  General   Services
   Administration, Washington, DC, counsel for Respondent.
 
   Before Board Judges LaBELLA, HYATT, and WILLIAMS.
 
   WILLIAMS, Board Judge.
 
        On July 29,  1991, appellant Computer Network  Systems, Inc.
   (CNSI)[foot #] 1    appealed     the    contracting     officer's
   failure to issue a final  decision within the time established in
   section 6(c)(2)  of the Contract Disputes  Act of 1978, 41 U.S.C.
      601-613 (1988).   On May 16, 1991, CNSI had  submitted a claim
   requesting  $208,213.49,  subsequently  revised  to  $195,975.90,
   which represents an unpaid balance for surcharge costs for access
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1   In 1985,  appellant was  a  division of  COMNET
   Corporation,  known as  the Computer  Network  Division.   COMNET
   Corporation incorporated the Division in 1987 as Computer Network
   Systems, Inc.  and assigned  all of  its government contracts  to
   CNSI.   As  of August 1, 1991,  CNSI sold  all of its  assets and
   ceased  business operations.  Transcript at 17-22; Complaint   3;
   Answer   3.   For  purposes of this  opinion, references  to CNSI
   will mean CNSI and its corporate predecessors.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   to  PILOT software  during  fiscal  years 1989  and  1990 by  the
   General  Services  Administration's (GSA's)  Office  of Financial
   Management Systems.  For the reasons discussed below,  the appeal
   is granted.
 
 
                            Findings of Fact
 
   The TSP Program
 
        On  March 20,  1984, appellant  was  awarded multiple  award
   schedule contract  (MASC) number GS00K8502S1095  for fiscal  year
   1985  (the 85 MASC)  under the General  Services Administration's
   Teleprocessing  Services  Program  (TSP).    The  TSP  authorized
   government  agencies  and  organizations  to purchase  commercial
   teleprocessing services from any contractor that had been awarded
   a  TSP MASC  for that fiscal  year.   Complaint   1;  Answer   1;
   41 CFR 201-32.303 (1988).  Each  TSP MASC served as an "umbrella"
   contract  that  included  a  schedule  of  various teleprocessing
   services offered by participating contractors and a corresponding
   schedule of prices associated with those services, as well as the
   terms and conditions under which the contractor would perform the
   offered  services.   Appeal File,  Exhibits 1,  5; Transcript  at
   20-21;  41  CFR  201-32.303(a)(1),  (2);  Deposition   of  Maxine
   Andewelt (Andewelt Deposition) (June 26, 1992) at 11.
 
        A government agency could effect a TSP purchase by issuing a
   delivery order (DO) for services  offered by a contractor under a
   MASC.   Complaint    1; Answer    1; Andewelt  Deposition at  12;
   Transcript  at 23-24.   A  DO could  be issued directly  under an
   existing MASC or under a systems life order (SLO).  Transcript at
   21-22.   An  SLO resulted  from  an agency's  competition of  its
   teleprocessing requirements among existing MASC contractors.  Id.
   at  21-22,   159.    Following   award  of  an   SLO,  subscriber
   organizations  within the agency  could obtain TSP  services from
   the awardee by issuing a DO under the SLO.  Id. at 22-23.
 
   The IBM Architecture Center SLO
 
        In 1985,  GSA  issued  a  request for  proposals  (RFP)  for
   centralized teleprocessing  services available under the  85 MASC
   to  consolidate GSA's  IBM applications.    Transcript at  23-24;
   Deposition  of  Lynn Morgan  (June  25, 1992)  at 20.    This SLO
   procurement was known as the IBM architecture center procurement.
   Transcript at 23-24.   On July 17, 1985, GSA awarded  CNSI an SLO
   under  this RFP  to provide  centralized teleprocessing  services
   under CNSI's  1985 MASC  at an  evaluated price  of approximately
   $23 million.   Id. at 24; Appeal  File, Exhibit 2.  This  was the
   largest  SLO  awarded  under  the   85  MASC,  and  it  was  very
   significant for CNSI,  which was a small company.   Transcript at
   24, 32.  In  addition to the discounts CNSI offered  under the 85
   MASC, CNSI offered GSA a net award discount of 63.5% on this SLO.
   Id.  at 25.    The  SLO had  a  base  performance period  through
   September 30,  1985, and five one-year renewal options for fiscal
   years    1986    through    1990.[foot #] 2       Appeal    File,
   Exhibit 2.  The  deputy director  of GSA's  Systems and  Services
   Division in the Information Resources Management Service, who was
   also  chief of the Teleprocessing Services Branch, testified that
   a  MASC expired after a given fiscal year,  but an SLO did not in
   that an SLO could be modified and extended.  Transcript at 77-79.
 
 
        One  of  the subscribers  under  this SLO  was  Executrac, a
   component  of GSA  charged  with  maintaining  and  managing  the
   agency's  executive information  system.    Transcript at  25-26.
   Executrac  obtained services under  this SLO through  issuance of
   delivery orders.  Id.  at 26-27.  Under both the  85 MASC and the
   IBM  architecture SLO, CNSI  offered a software  product known as
   Professional  Office  Systems (PROFS)  which  provided electronic
   mail and information management capabilities.   Id. at 31.  Under
   the 85  MASC, there  was a surcharge  of 20%  for PROFS.   Appeal
   File, Exhibit 1 at H.19-78.
 
   The Substitution of PILOT for PROFS
 
        During  performance of the  contract in 1986,  GSA requested
   that  appellant provide a  different software, PILOT,  instead of
   PROFS.     Transcript   at   31.[foot #] 3      PILOT   was   not
   offered  under  the 85  MASC.    According to  GSA's  contracting
   officer and CNSI's  president, the 85 MASC could  not be modified
   to add  PILOT.  Transcript  at 42-43, 70; Andewelt  Deposition at
   74, 77-78.
 
        On July 31, 1986, CNSI  agreed to substitute PILOT for PROFS
   under  the IBM  architecture SLO  and  wrote GSA  a letter  which
   stated in pertinent part:
 
        Per our recent discussions, COMNET Corporation formally
        advises you of  our Agreement to offer  PILOT Executive
        Software as the replacement package for the Information
        Center  software   contained  in  the   GSA/COMNET  IBM
        Architecture Center Contract.  In addition, COMNET will
        maintain  the  20%  surcharge  and equivalent  resource
        rates (including the net discount).
 
   Appeal File, Exhibit 3.
 
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 2  GSA subsequently exercised the options to extend
   the SLO for fiscal years  1986 through 1990.  Supplemental Appeal
   File, Exhibits 14,  15.  Each  option exercise  was a  separately
   numbered  order issued  against  the  85  MASC,  referencing  the
   original IBM architecture  SLO and providing that all other terms
   and conditions remained unchanged.  Id.
                                       ___
 
        [foot #] 3  The GSA Administrator initiated this request for
   PILOT for a management information system.  Transcript at 204-05.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        GSA's contracting  officer accepted  CNSI's offer on  August
   12, 1986, in a letter stating:
 
        This  letter  confirms  the telephone  conversation  of
        August 7,  1986, between Mr.  Jeff Dorman of  your firm
        and Ms. Lynn Morgan of my staff in which he was advised
        that the  General Services Administration  accepts your
        offer of  PILOT Executive  Software as the  replacement
        package  for the  Information  Center software  (PROFS)
        contained  in the  GSA/COMNET  IBM Architecture  Center
        contract.    This  substitution  will  be  made  at  no
        additional  cost  to  the Government.    We  agree that
        COMNET will maintain  the 20% surcharge  and equivalent
        resource  rates for all PILOT usage consistent with the
        current     contract[[foot #] 4]    rates     including
        the net discount.
 
   Appeal File, Exhibit 4; Transcript at 56.
 
        On October 8, 1987, CNSI was awarded multiple award schedule
   contract  number GS00K88AFS1220  (the 88  MASC)  under GSA's  TSP
   program  for fiscal year 1988.  Supplemental Appeal File, Exhibit
   4.  Under this contract PILOT was offered at a 50% surcharge.  No
   net award  discount was negotiated  for PILOT under the  88 MASC.
   Appeal File, Exhibit 5; Transcript at 47-48. 
 
   The Problem Invoicing PILOT
 
        By letter dated September  30, 1988, GSA notified  CNSI that
   it could  not process  CNSI's July 1988  invoice for  payment for
   PILOT because PILOT  was billed under the  85 MASC and PILOT  was
   not  offered under that MASC.   Supplemental Appeal File, Exhibit
   21; Transcript at 82, 161-62.  Because PILOT could not be  billed
   under the  85 MASC, CNSI had to credit the Government monies that
   had been  paid for all  prior PILOT services received  and rebill
   the Government using a  proper billing mechanism.  Transcript  at
   57-58.   The  Government  had received  PILOT  from October  1986
   through September 1988  (FY 1987 and  FY 1988) and  had paid  for
   services through May 1988.  Id. at 33, 36.
 
        To allow CNSI to receive payment for the FY 1987 and FY 1988
   PILOT services  rendered, GSA modified  the terms of the  FY 1987
   and  FY 1988 IBM  architecture center  SLO renewals  to authorize
   CNSI to invoice and receive payment directly from Executrac,  not
   the MASC payment office.   Supplemental Appeal File, Exhibits  6,
   7;  Transcript  at 88,  148.    These modifications,  both  dated
   March 15,   1989,   contained  essentially   the   same  language
   describing the reason for the modifications:
 
        Due to  administrative oversight[,] funds in the amount
        of   $33,260.54   were  inadvertently   attributed   to
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 4  The then-current contract was the 85 MASC.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        appropriation number 127.7.S00X0230.10.25.540 under the
        ADP Fund rather than  on its own.   These funds are  to
        cover  the surcharge for  Pilot software which  was not
        covered by contract number GS00K8502S1095 [the 85 MASC]
        at that time.  [T]herefore, the ADP Fund cannot pay the
        invoices.   Services  were rendered and  the contractor
        must be paid.
 
   Supplemental Appeal File, Exhibit 6.
 
        Following  the   issuance  of   these  modifications,   CNSI
   submitted invoice numbers 279 and 280, dated March 29,  1989, for
   the  full amount  of the  "credit," for  PILOT services  plus the
   unbilled surcharge costs  for June-September 1988.   Supplemental
   Appeal  File, Exhibit 8.   GSA paid these  invoices, and CNSI has
   made no claim regarding PILOT services provided in FY 1987 and FY
   1988.  Transcript at 36; Complaint    19, 22, 25.
 
   The Delivery Orders Under the 88 MASC
 
        In  order to  enable  CNSI to  continue providing  the PILOT
   service and  receive payment,  two DOs were  issued under  the 88
   MASC.  Transcript at 41, 90, 236.  These DOs were: delivery order
   number K0089AF0001-9A  (the 89 DO),  dated January 13,  1989, and
   delivery  order number K0090AF0001-9  (the 90 DO),  dated October
   31, 1989.
 
        The 89 DO read as follows:
 
        1. DATE OF ORDER 1/13/89
 
        2. ORDER NO. K0089AF0001-9A
 
        3. CONTRACT NO. GS00K88AFS1220 [the 88 MASC]
 
        . . . .
 
        8.B.   DELIVERY  -  This   delivery  order  is   subject  to
        instructions contained herein  and is issued subject  to the
        terms and  conditions to  [sic] the  above-numbered contract
        [the 88 MASC].
 
        . . . .
 
        19. SCHEDULE. This order is  to cover the PILOT surcharge on
        TSP services provided by CNSI under System Life Order Number
        K0085AFS2681  [the  85 SLO]  dated  July 17,  1985  and 1989
        renewal Order Number K0089AF0001-9 dated 1/9/89.  This order
        covers  the period  October 1,  1988  through September  30,
        1989.  The estimated value  is $40,000.00.  The net discount
        provided by CNSI is 63.5%  which will apply for the duration
        of this order.
 
   Appeal File, Exhibit 6.   
 
        The 90 DO contained similar terms:
 
        3. CONTRACT NO. GS00K88AFS1220 [the 88 MASC]
 
        8.B.   DELIVERY  -  This   delivery  order  is   subject  to
        instructions contained herein  and is issued subject  to the
        terms and conditions of the above-numbered contract.
 
        19. SCHEDULE. THIS ORDER IS  TO COVER THE PILOT SURCHARGE ON
        TSP  SERVICES  PROVIDED  BY CNSI  UNDER  SYSTEMS  LIFE ORDER
        NUMBER K0085AFS2681 [THE  85 SLO] DATED  JULY 17, 1985,  AND
        1990 RENEWAL  ORDER NUMBER K0090AF0001-16 DATED  OCTOBER 31,
        1989.  THIS ORDER COVERS THE PERIOD OCTOBER 1, 1989, THROUGH
        SEPTEMBER 30,  1990.   THE NEW ESTIMATED  VALUE FOR  FY90 IS
        $75,000.00.   THE  NET DISCOUNT  PROVIDED BY  CNSI IS  63.5%
        WHICH WILL APPLY FOR THE DURATION OF THIS ORDER.
 
   Appeal File, Exhibit 7.
 
        The  contracting  officer  testified  that  she  directed  a
   subordinate to insert the number of  the 88 MASC in Block 3,  the
   contract number block,  of these delivery orders.   Transcript at
   216.  However, the contracting  officer had not looked at  the 88
   MASC at the time and has never looked at the 88 MASC since.  Id.
 
        The contracting officer further  testified that the language
   in Block 8(b) to the effect that each delivery order  was subject
   to  the terms and conditions  of the 88  MASC was meaningless and
   that she did  not "find it applicable to  the instant situation."
   Transcript  at  215.    She  continued:   "This  was  subject  to
   different  terms, conditions[,] and  binding agreements.   It was
   not subject totally to the '88 MASC."  Id. at 215.
 
        Under the 88 MASC, the rate for the PILOT surcharge was 50%.
   Transcript at 74.  CNSI's former president explained the increase
   from a  20% PILOT  surcharge under  the 85  MASC to  a 50%  PILOT
   surcharge under the 88 MASC as follows:
 
        That  was a  negotiated rate  that we  put into  the 88
        MASC.  Actually it started, I believe with the 87 MASC,
        I can't honestly  say why, how that rate was justified.
        I do recall though we did some calculations that it was
        still below our cost.  Fifty percent was a very typical
        kind of rate  you gave for software like  this and that
        may be the reason why it was below our cost.  Again, we
        are  trying to  encourage people  to  use the  computer
        system too so  you may have  certain pieces that  their
        [sic] offering that  are lost [sic] leaders  within the
        package. . . .   [i.e.]  [g]iving  something away  less
        expensively to get something else . . . .
 
   Transcript at 74; see Id. at 15.
 
        CNSI's manager  of business administration testified that it
   was CNSI's expectation  that these delivery orders  were governed
   by the  88 MASC rates and  that as a negotiating  concession CNSI
   provided the  same  level of  net  award discount,  i.e.,  63.5%.
   Transcript   at   91.[foot #] 5       The   contracting   officer
   disputed  this, stating that CNSI's negotiator had committed that
   CNSI would continue  to abide by the 1986  letter agreements, and
   thus that  the 20% PILOT  surcharge remained  in effect.   Id. at
   206.  The contracting officer explained:
 
        CNSI's argument seems to be that I made a complete move
        from one  contract to the other.  I am telling you that
        was  never my intent; that was never the agreement with
        [CNSI's negotiator].  [Respondent's Exhibit 1] wouldn't
        have allowed it, for a start --
 
        . . . .
 
        For  two, why  would I,  after two  years of  receiving
        product     access     at     20    percent[[foot #] 6]
        surcharge  with a 63 and a  half percent discount, when
        I'm   negotiating  for   the  federal   government  and
        therefore the taxpayer,  just out of the goodness of my
        heart agree to pay them 30 percent more?  I don't think
        so.  I mean, I really don't think so.
 
        Now, given  that they  hadn't been paid  in as  long as
        they  had,   I  certainly   had  the   upper  hand   in
        negotiations.    [CNSI's  negotiator]   agreed  to  the
        agreement as I had stated it.   He represented to me as
        the authorized  negotiator, empowered by the  firm when
        they hired him  and gave  him that  title -- .  . .  he
        confirmed to me  that the company would  adhere to this
        agreement.  He was their authorized negotiator.   I had
        no reason  to doubt that  the company was not  going to
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 5  Regarding the inclusion  of the 85 SLO  at Block
   19 of the DOs, appellant's president testified as follows:
 
        A:   I think the  easiest way to explain this  is that there
        is  a  basic service  . .  . that  being the  computer (sic)
        themselves,  the engine, the  utility.  Those  services were
        being utilized under  the 85 TSP  MASC via the  SLO . . .  .
        PILOT, while  it was  being used  in  conjunction with  that
        could not be billed  under that vehicle, was now going to be
        purchased through the  88 MASC  as referenced  by this  [89]
        delivery order.
 
   Transcript at 44.
 
        [foot #] 6     Actually,  the mistaken  rate  at  which CNSI
   invoiced  PILOT for  19 months  was 25%,  not 20%.   Supplemental
   Appeal File, Exhibit 25; Transcript at 92, 99.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        accept or adhere [to] or abide by this agreement.  They
        continued to invoice for the  next 19 months, 19 out of
        24 remaining, mind you, in the entire contract life, at
        20  percent, and then  they want to tell  me that was a
        mistake.
 
        I view that as a further confirmation  that the company
        had  accepted  the  terms of  the  negotiated agreement
        between [CNSI's  negotiator] and  I [sic].   They  were
        still operating under  the 1986 letter contract.   They
        were  adhering  and  billing  in  accordance  with  our
        agreement for 19 months.   Am I ever to anticipate that
        they're going  to come along  later and say this  was a
        mistake?  No.
 
   Id.  at  188-89.    CNSI's  president  saw   it  differently;  he
   testified:
 
        Q    Is  it your understanding that by executing the 88
        MASC  that that  in  any  way  extinguished  the  prior
        agreement  between the  parties,  the letter  agreement
        that I referred to, the 1986 letter agreement?
 
        A    The 1986  letter agreement referred to  the period
        of time  up and until  this new agreement was  put into
        place,  then in  fact we  had  a new  agreement, so  in
        essence we had two agreements, one for the . .  . prior
        period, one for the period going forward.
 
        . . . .
 
        A    . .  . [A]s far  as we  are concerned  we had  two
        agreements  distinct the  [sic] from  the  other.   One
        referred to pricing off of the 85 MASC, one referred to
        pricing off of the 88 MASC.
 
   Id. at 59-60.
 
        CNSI's president  further said he  would not have  agreed to
   provide Executrac at  a 20% surcharge for PILOT  under a delivery
   order referencing  the 88 MASC because  if he had, he  would have
   been  forced to  lower the  surcharge for  all other  PILOT users
   under the 88 MASC.  Transcript at 298-99.
 
        CNSI's  negotiator left  the company  in approximately  June
   1989.  Transcript  at 150.  The negotiator  had personal problems
   and  problems  in his  business  life, and,  according  to CNSI's
   former  president "clearly was  not proceeding in  a professional
   fashion."    Id.  at  301-02.    Both  appellant  and  respondent
   attempted to  locate him for the hearing without success.  Id. at
   253-54, 301.[foot #] 7
 
   CNSI's Billing Error
 
 
        In May  of 1990,  CNSI discovered that  it had  been billing
   PILOT at a 25% surcharge.  Supplemental  Appeal File, Exhibit 25;
   Transcript at  92.  This  occurred because  of an input  error to
   CNSI's billing  algorithm; 25% had  been keyed in.   Supplemental
   Appeal File, Exhibit 25; Transcript at 92, 111-13.
 
        Such billing  errors were  common on the  part of  CNSI, and
   invoices were  often  rejected  by  the  GSA  TSP  funds  branch.
   Transcript  at 132.   In  one instance  CNSI had  failed (through
   error)  to  bill  GSA approximately  $195,000  in  surcharges for
   another  software product.   Id.  at 143-44.   CNSI's  manager of
   business administration explained:
 
        Generalized explanation would  include the human factor
        that  related to the  creation of the  actual invoices,
        the complexity of the MASC program, and how many people
        were required  to perform  various functions of  making
        sure  that  the  proper  data  was  collected  off  the
        computer, and then  taking that data from  the computer
        and creating invoices.
 
        . . . .
 
 
        .  . .  The  timing  of getting  these  bills into  the
        Government was also  crucial.  There was  a requirement
        in  the  MASC that  the  GSA funds  branch  receive our
        invoices by the fifteenth day of the following month in
        order for them to be  paid within the twenty day prompt
        period time  that was  also part of  the contract.   If
        they  weren't submitted by the fifteenth day, they were
        allowed  to add  a certain  number  of days  on to  the
        invoice, as far as when it would be paid.
 
        Well,  CNSI .  . .  was not  a very large  company, was
        fairly reliant on  its cash flow and was under pressure
        to get their  bills in so that they  would be processed
        and paid so  that our business would run  smoothly.  If
        the  funds branch  would detect  an  error, they  might
        reject  a bill  for one  error  and not  tell us  about
        another error that was found.   We would see the error,
        correct it, resubmit it, and then have it re-rejected.
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 7   Appellant's counsel stated:  "The last  time we
   knew .  . . he was in Mexico  trying to avoid these proceedings."
   Transcript at 254.   CNSI's former  president testified that  the
   negotiator had never picked up his W-2 form.  Id. at 300.
                                                 ___
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   Transcript at 144-46.
 
 
        GSA paid CNSI's invoices for PILOT from October 1988 through
   April 1990 at the 25%  surcharge rate.  Supplemental Appeal File,
   Exhibit 25.   CNSI discovered  its billing error  and in  the May
   invoice billed PILOT  at the 50% rate.  Id.  This amount also was
   paid by  GSA.  Id.;  Complaint    17, 22; Answer    17, 22.   The
   50% PILOT  surcharge for  subsequent  months has  not been  paid.
   Transcript at 116.
 
        With the  July 1990 invoice,  CNSI enclosed a letter  to GSA
   stating that additional  surcharges for PILOT of  $360,678.25 for
   October 1988 through April 1990 were added to the current month's
   charges.  Supplemental Appeal File, Exhibit 11.  In response, GSA
   instructed  CNSI on September 14, 1990, that the proposed billing
   adjustment  was  a  claim  that   had  to  be  submitted  to  the
   contracting   officer   in    writing   with   the    appropriate
   certification.    Appeal  File,  Exhibit 9;  Transcript  at  197.
   Subsequent  to   September 14,  1990,  the   contracting  officer
   discussed  the requested billing adjustment with CNSI's treasurer
   once a week for a few months.  Transcript at 197-98.
 
   CNSI's Claim
 
        CNSI  subsequently submitted a certified claim to GSA, dated
   May 15,  1991, which represented CNSI's calculation of the unpaid
   balance due from GSA for PILOT surcharge costs incurred under the
   89 and  90  PILOT  DOs.   Appeal  File, Exhibit 10.    The  claim
   included monthly cost breakdowns for each month in FY 1989 and FY
   1990,  showing  the amounts  that  were  paid  by GSA  for  PILOT
   services and the amounts that  remained due.  Id., Attachments B,
   C.   While preparing the claim,  CNSI discovered that it had also
   improperly calculated  the PILOT  surcharge costs  at 25%  rather
   than  20% for  the months  of July  1987 through  September 1988.
   This error  resulted in an  overcharge of $15,511.42 to  GSA, and
   CNSI credited the amount of  the overcharge against the amount of
   the claim.    Id. at  4,  11, Attachment  A; Transcript  at  113.
   CNSI's total  claim, after the  credit, was $208,213.49.   At the
   hearing, CNSI identified two additional calculation errors in the
   claimed amount.   Transcript  at 52, 117-19,  120.   These errors
   reduce the  amount of CNSI's claim  by a total of  $12,237.59, to
   $195,975.90.
 
        On July 15, 1991, the contracting officer requested that the
   GSA Regional Inspector General  for Auditing perform an audit  of
   the claim and notified CNSI that a final decision would be issued
   within sixty days of receipt  of the audit results.  Supplemental
   Appeal File, Exhibit 27;  Appeal File, Exhibit 11;  Transcript at
   193.   Subsequently, GSA  concluded that an  audit should  not be
   performed.   Supplemental Appeal  File, Exhibit 28.   On July 29,
   1991, CNSI  filed its notice  of appeal based on  the contracting
   officer's deemed denial of its certified claim.
 
                               Discussion
 
        Despite the  tortuous factual  history of  this appeal,  the
   legal  issue presented is  relatively straightforward.  Appellant
   seeks to recoup $195,975.90, representing PILOT surcharges at the
   rate of 50%, which it claims is required under the FY 1988 and FY
   1989 delivery  orders which reference the 88  MASC.  We thus must
   ascertain if the terms of  the delivery orders are unambiguous or
   whether  we must resort  to extrinsic  evidence to  ascertain the
   intent of the parties.  
 
        It is well settled that, under traditional rules of contract
   interpretation,  we must  "first  examine  the  language  of  the
   contract to  ascertain whether the  intent of the parties  may be
   discerned  from their  agreement  when  read as  a  whole."   PGP
   Industries,  GSBCA 9415,  91-1  BCA    23,359,  at  117,153;  see
   Petrofsky v.  United States, 616  F.2d 494,  503 (Ct.  Cl. 1980),
   cert. denied, 450 U.S. 968 (1981) (quoting Victory Carriers, Inc.
   v.  United States, 467 F.2d  1334, 1342 (Ct.  Cl. 1972); see also
   Blackhawk Heating  & Plumbing Co., GSBCA 3500, 73-2 BCA   10,097,
   at 47,428.  Further, "an  interpretation which gives a reasonable
   meaning to all  parts of an instrument  will be preferred to  one
   which  leaves a portion of it useless, inexplicable, inoperative,
   void, insignificant, meaningless or superfluous."  Petrofsky, 616
   F.2d   at   503   (quoting   Hol-Gar   Manufacturing   Corp.   v.
   United States, 351  F.2d 972,  979 (1965));  see also  PacifiCorp
   Capital,  Inc.  v.  United States,  25 Cl. Ct.  707,  716 (1992),
   aff'd, 988  F.2d 130  (Fed. Cir. 1993)  (citing United  States v.
   Johnson Controls, Inc., 713 F.2d 1541, 1555 (Fed. Cir. 1983)). 
 
        Here,  appellant  urges  the  Board  simply  to  accept  the
   language  of  the  delivery  orders  at  face  value.   Appellant
   contends that because  the delivery orders reference the  88 MASC
   and provide by their  terms that they will be governed  by the 88
   MASC and make no  reference to any  other surcharge rate, the  88
   MASC surcharge  rate of  50% should govern.   Respondent,  on the
   other hand, claims that the delivery orders do not mean what they
   say.   Respondent argues that  the reference  to the 88  MASC was
   solely for administrative billing purposes  and that the terms of
   the  1986 letter agreements,  including the 20%  PILOT surcharge,
   still  govern, despite the fact that  the delivery orders nowhere
   reference those 1986 letter agreements and cover the same subject
   matter as the letter agreements.  
 
        We  find  that  on  their  face  the   delivery  orders  are
   reasonably   susceptible   to   only    one   interpretation   --
   appellant's.[foot #] 8      As   the   Claims   Court    recently
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 8    Even  if the Government's  interpretation were
   reasonable,   the  contract  should  be  construed  in  favor  of
   appellant: "When the  ambiguity is such that the  contract can be
   read  so as to  reasonably sustain defendant's  interpretation of
   it, just  as it could  be reasonably read to  sustain plaintiff's
   construction, the contract must be resolved against the drafter."
                                                      (continued...)
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   recognized: "A contract is unambiguous when it is reasonably open
   to only one interpretation . . . [S]tated differently, a contract
   may be  found to  be ambiguous if  the provisions  under scrutiny
   reasonably may be interpreted in at least two ways."  PacifiCorp,
   25 Cl. Ct. at 716.
 
 
        GSA's interpretation of  the delivery orders renders  two of
   the terms of the contract  meaningless:  Block 3, which says that
   the 88 MASC governs the rights of the parties, and Block 8, which
   makes the  delivery orders "subject  to the terms  and conditions
   [of] the above-numbered contract."   It is well  established that
   when interpreting the language of a contract a tribunal must give
   reasonable meaning  to all parts  of the contract and  not render
   provisions  of the contract meaningless.   PacifiCorp, 25 Cl. Ct.
   at 716; Johnson Controls, Inc., 713 F.2d at 1555.
 
        Respondent here would have us read into the delivery  orders
   terms that  directly conflict  with the  terms  of those  orders.
   This  we cannot  do.   Cooperative  Refinery  Ass'n v.  Consumers
   Public Power District, 190 F.2d 852,  856 (8th Cir. 1951)(quoting
   Housekeeper Publishing  Co. v.  Swift, 97 F.  290, 294  (8th Cir.
   1899)  ("a  subsequent  contract  completely  covering  the  same
   subject  matter, and  made by  the  same parties,  as an  earlier
   agreement,  but containing  terms  inconsistent  with the  former
   contract  so  that  the  two  cannot  stand  together,  rescinds,
   supersedes,  and is  substituted for  the  earlier contract,  and
   becomes the only agreement of the parties.")).
 
        Reading the delivery  orders as  a whole,  we conclude  that
   they  are   unambiguous;   "their  specific   words  are   clear,
   unremarkable,  everyday, short,  common  English  words, none  of
   which  are individually or collectively susceptible to other than
   their everyday meaning."  Gustafson Partnership,  GSBCA 6701-COM,
   84-1 BCA    17,086, at 85,065.  Because the  terms of the DOs are
   unambiguous, the parole evidence rule precludes us from admitting
   extrinsic evidence  to alter the  clear terms of  that agreement.
   E.g.,  SCM Corp. v.  United States,  675 F.2d  280, 284  (Ct. Cl.
   1982) ("In general,  when a  contract is  clear and  unambiguous,
   evidence   of  prior  negotiations  and  drafts  is  barred  from
   consideration by the parole evidence  rule."); see also  Greco v.
   Department of the Army, 852 F.2d 558, 560 (Fed. Cir. 1988); Garza
   v. Marine Transport Lines, Inc., 861 F.2d  23, 27 (2d Cir. 1988);
   PacifiCorp,  25 Cl.  Ct. at  715.   This  is a  classic  case for
   application of  the parole  evidence rule.   As the  Claims Court
   explained:   "the parole  evidence rule  demands  that   contract
   interpretation  be  unaffected by the   contentions of one of the
   parties that he or she meant something else."  PacifiCorp, 25 Cl.
   Ct. at  716.  To  the extent that  GSA thought  it was getting  a
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 8 (...continued)
   Max Drill,  Inc. v. United States,  427 F.2d 1233, 1245  (Ct. Cl.
   _________________________________
   1970), (citing Sun Shipbuilding and Drydock Co. v. United States,
                  _________________________________________________
   393 F.2d 807, 815 (Ct. Cl. 1968)).
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   different agreement, it should have written that agreement rather
   than  the one  it did.   Real  Estate Management  Services, Inc.,
   GSBCA 10238, 90-2 BCA   22,870, at 114,866.   Stated differently,
   "[h]ad  the Government  wanted to  reserve  its rights  under the
   first contract, it should have done so explicitly in the second."
   Harrison Western Corp. v. United States, 792 F.2d 1391, 1393 (9th
   Cir. 1986).
 
 
                                Decision
 
        The  appeal   is  GRANTED.     Appellant   is  entitled   to
   $195,975.90,  representing  the  difference  between  appellant's
   actual billing  at 25% for  PILOT services, and 50%  surcharge in
   accordance with the terms  of the 89 and 90 DOs  issued under the
   88 MASC.
 
 
 
                                      ______________________________
                                      MARY ELLEN COSTER WILLIAMS
                                      Board Judge
 
   We concur:
 
 
 
   ____________________________
   VINCENT A LaBELLA
   Board Judge
 
 
 
   ____________________________
   CATHERINE B. HYATT
   Board Judge