In the United States Court of Federal Claims

                           No. 94-185C

                     (Filed August 15, 1996)

RICHARD C. SWANSON                 )
LARRY A. FORD                      )    THIS ORDER WILL NOT
                                   )    CLAIMS REPORTER BE-
           Plaintiffs,             )    CAUSE IT DOES NOT ADD
                                   )    SIGNIFICANTLY TO THE
           V.                      )    BODY OF LAW AND IS
                                   )    NOT OF WIDESPREAD
THE UNITED STATES,                 )    INTEREST.
           Defendant.              )


This matter is before the Court on Plaintiffs' motion for partial
summary judgment and Defendant's cross-motion for judgment as to
the finality of a decision by the Government Printing Office
Board of Contract Appeals ("GPOBCA" or "Board"). The Board
determined that an agreement between the parties for the
procurement of printing services did not comprise an enforceable
requirements contract.  It is concluded that the Board's decision
is correct.


The instant dispute stems from a controversy surrounding the
Government's termination of an agreement with Plaintiffs, Richard
C. Swanson, Larry A. Ford, dba Swanson Printing & Typesetting
Company, for the production of legal briefs for the United States
Department of Justice.  Plaintiffs entered into term agreements
with the United States Government Printing Office (" GPO") for
fiscal years 1984 through 1989 under the GPO's D404-M1 Program.
In September 1989 the GPO terminated the 1989 D404-M agreement
for convenience.  Plaintiffs filed a claim for termination costs
with the contracting officer.  After the contracting of nicer
substantially denied the claim, Plaintiffs appealed the decision
to the GPOBCA.  Upon the Board's denial of the costs sought,
Plaintiffs brought this action for breach of contract and for
judicial review of the Board's decision.


On October 28, 1988 the GPO issued an Invitation for Bids ("IFB")
for the 1989 D404-M Program, which involved the production,
including printing and typesetting, of legal briefs.  See IFB
"Specifications" at 5. The IFB delineated the obligations of the
Government as well as the contractors receiving awards under the
D404-M Program. The IFB involved a "Multiple Award . . .
contract" slated from December 1, 1988 through November 30, 1989.
Id. at 1. Throughout the IFB, reference was made to a contract to
be formed pursuant to that document. E.g. id. at 2 ("Any contract
which results from this Invitation for Bid will be subject to the
applicable articles of GPO Contract Terms.... "). Further, the
IFB provided that the D404-M agreement was to be governed by the
agency contracting regulations including GPO Contract Terms, GPO
Publication 310-2, effective December 1, 1987 and GPO's Quality
Assurance Through Attributes Program, GPO Publication 310.1,
Revised September 1986, (QATAP).2  Vol.2, GPOBCA Docket 15-90,
Entry No. 15).

After the submission of bids, the GPO tabulated the contractors'
overall bids in its Schedule of Prices for the D404-M Program and
determined that Plaintiffs were the "overall low contractor," or
the contractor with the lowest overall estimate for services.
Two other contractors' bids were selected for participation in
the D404-M Program. See GPOBCA Decision and Order of March 6,
1992, at 7-8.

The IFB contemplated a requirements-type arrangement.  It stated
as follows:

ORDERING: Items to be furnished under the contract shall be
ordered by the issuance of print orders by the Government. Orders
may be issued under the contract from December 1, 1988 through
November 30, 1989.  All print orders issued hereunder are subject
to the terms and conditions of the contract.  The contract shall
control in the event of conflict with any print order.  When
mailed, a print order shall be "issued" for purposes of the
contract at the time the Government deposits the order in the

QUANTITIES: This contract is for the items and for the period
specified herein.  Shipment/delivery of items or performance of
work shall be made only as authorized by orders issued in
accordance with the clause entitled "Ordering." The quantities of
items specified herein are estimates only, and are not purchased
hereby.  Except as may be otherwise provided in this contract, if
the Government's requirements for the items set forth herein do
not result in orders in the amounts or quantities described as
"estimated," it shall not constitute the basis for an equitable
price adjustment under this contract.

Except as otherwise provided in this contract, the Government
shall order from the contractor(s) all the items set forth which
are required to be purchased by the Government activity
identified on page 1.

The Government shall not be required to purchase from the
contractor(s) requirements in excess of the limit on total orders
under this contract, if any.

The IFB also included estimated amounts of the GPO's
requirements.  It stated that GPO would place "[a]pproximately 65
orders per month," that there would be "[a]pproximately 50 to
1000 copies per order," and that the number of pages of each
order would be between 4 and 400 but could go as high as 1200
pages.  IFB at 5. However, most orders would be for 64 pages or
less.  Id. IFB at 3.

In the IFB the GPO set forth a system defining how and with whom
it would place orders for briefs under the D404-M Program.  The
"Ordering" clause provided that the GPO was to issue a separate
"print order" for each printing job required.  As it was
anticipated that one firm would not be able to meet all
requirements, the Government was to make multiple awards.  IFB at
11. Section 3 of the IFB, labeled "DETERMINATION OF AWARD AND
PLACEMENT OF WORK," stated that print orders would be offered to
contractors pursuant to certain sequences.

The standard sequencing method required the GPO to first place
its order with Plaintiffs, the overall low contractor for D404-M
pursuant to the "Schedule of Prices."  The low contractor was to
furnish all print orders, except in circumstances ". . . when the
shipping/delivery schedule [could not] be met." IFB at 4. In
cases when the low contractor refused orders it was "required to
provide the best date that [could] be met." IFB at 11. If the
Government did not accept this second date, it was required to
place its order with the next lowest contractor and so forth
according to the following system:

Subject to any limitations elsewhere in this contract, and
pursuant to the section entitled "DETERMINATION OF AWARD AND
PLACEMENT OF WORK," the low contractor and each successive low
contractor shall furnish to the Government all items set forth
herein which are called for by print orders issued in accordance
with the Ordering clause of this contract, except when the
shipping/delivery schedule cannot be met.

IFB at 4 (emphasis added).

The reference to "limitations elsewhere" in this clause of the
IFB related to an alternate method by which the GPO was permitted
to award print orders called abstracting.  Abstracting was a
process by which the GPO could re-calculate the low bidder for a
particular project based on the actual work that project
required. On projects which the GPO decided to abstract, the GPO
would calculate a sequence of contractors from lowest to highest
for that specific project and would of her orders pursuant to
that sequence notwithstanding the overall sequence of contractors
listed on the Schedule of Prices.  In such cases Plaintiffs were
not necessarily the low contractor.  The D404-M agreement
provided in pertinent part,

Notwithstanding any sequence of contractors established as a
result of the Determination of Award, the Government reserves the
right, without limitation, to establish a specific sequence of
contractors for any or all print orders to be issued under this
contract by abstracting the contract prices of each contractor
against actual print orders to be issued, and adding any
applicable costs to the Government, for transportation of the
finished product to all destinations.  In the event such a
specific sequence is established, such specific sequence of
contractors shall control the order in which the print order(s)
is offered.  The determination to establish a specific sequence
or sequences shall not be cause for an adjustment in the contract
price or any other term or condition of the contract.

IFB at 11 (emphasis added).

On occasions when the GPO chose to abstract, it would first
contact the low contractor for the particular project
["abstracted low contractor"].  As in the overall bid sequencing
method, when the low contractor could not meet a delivery time,
the next lowest contractor would be contacted and so forth.  IFB
at 11.

Additionally, with respect to accelerated orders falling outside
the scope of the D404-M agreement's minimum delivery deadlines,
the Government would first of her the work to either the
abstracted or the overall low contractor.  See IFB at 4. If the
low contractor refused the order, the Government was entitled to
procure such order from "another source." Id.

The instant controversy between Plaintiffs and the GPO arose when
the GPO decided to alter its arrangements for the requisition of
legal briefs to include a system by which the Department of
Justice could send to and receive data from printing contractors
electronically.  The D404-M Program had only provided for the
requisition of orders by transmission of manuscript copy.  To
accommodate the additional requirement, on February 7, 1989 the
GPO issued a solicitation for Program D283-M, a contract to cover
solely the electronic transmission of briefs. However, the
Government canceled this solicitation after it was determined
"that there was less than full and open competition" because the
Government had failed to include Plaintiffs and other contractors
performing on Program D404-M on the bid solicitation list.3
GPOBCA Decision and Order of March 6, 1992, at 8-9 (citing letter
of contracting officer.)

After canceling the D283-M Program, the GPO decided to account
for all of its brief transmission requirements through a new
solicitation of the D404-M Program which would include
transmission electronically and by manuscript copy. The GPO
proceeded to cancel the 1989 D404-M agreement for the convenience
of the Government.

In the new solicitations of the D404-M Program from 1990 through
1992 Plaintiffs were determined to be the overall low contractor
only with respect to the electronic transmission component of the

On September 1, 1989 Plaintiffs and the GPO entered yet another
agreement under the 308-5 Program for general typesetting
services for the United States Social Security Administration.
Compl. at 8.  The GPO also terminated this agreement for
convenience.  Id.


On September 6, 1989 the GPO sent Plaintiffs a letter providing
notification of the termination for convenience of the 1989 D404-
M Program. In the letter the GPO sought Plaintiffs' acquiescence
in a settlement of the Government's obligations under D404-M upon
payment only for the printing jobs already in progress or
completed.  Plaintiffs did not consent to the proposed
settlement. Instead, Plaintiffs filed a claim with the
contracting officer on September 9, 1989 pursuant to the disputes
clause contained in GPO Publication 310-2, which is incorporated
by reference in the D404-M agreement.  See IFB at 2. The disputes
clause provided as follows:

5. Disputes.

(a)  Except as otherwise provided, any dispute concerning a
question of fact arising under or relating to this contract which
is not disposed of by agreement shall be decided by the
Contracting Officer, who shall make his/her decision in writing
and mail or otherwise furnish a copy thereof to the contractor.

(b) The decision of the Contracting Officer shall be final and
conclusive unless, within 90 days from the date of receipt of
such copy, the contractor mails or otherwise furnishes a written
notice of appeal to the Government Printing Office Board of
Contract Appeals.

(c) The decision of the Board shall be final and conclusive
unless determined by a court of competent jurisdiction to have
been fraudulent, capricious, or arbitrary, or so grossly
erroneous as necessarily to imply bad faith, or not supported by
substantial evidence.

(d) In connection with any appeal under this article, the
contractor shall be afforded an opportunity to be heard and to
offer evidence in support of his/her appeal. Pending final
decision of a dispute hereunder, the contractor shall proceed
diligently with performance and in accordance with the
Contracting Officer's decision.

(e) This article does not preclude consideration of law questions
in connection with decisions provided for in paragraph (d);
provided, that nothing shall be construed as making final the
decision of any administrative official, representative, or board
on a question of law.

GPO Contract Terms, (Vol. 2, GPOBCA Docket 15-90, Entry No. 15.)

Plaintiffs claimed approximately $237,000 (later amended to
$245,796.75) based upon the estimated requirements alleged to be
outstanding under the agreement.  On September 26, 1989 the GPO
issued a formal "Notice of Termination," indicating that the
effective date of termination was September 6, 1989.

Upon review of Plaintiffs' claim, the contracting officer
rejected all but $283.64, which represented Plaintiffs' cost of
preparing its settlement proposal. On April 10, 1990 Plaintiffs
appealed the contracting officer's decision to the GPOBCA
pursuant to the applicable disputes procedure.  Plaintiffs sought
to overturn the contracting officer's denial of termination costs
pursuant to the termination for convenience of the government
clause incorporated in the D404-M Program, and also claimed money
damages for breach of contract.

In its decision of March 6, 1992 the GPOBCA determined that it
lacked jurisdiction over Plaintiffs' breach of contract claim.
Plaintiffs' convenience termination claim was then considered on
its merits with the GPOBCA determining that the contracting
officer had applied "the wrong cost basis of the contract" and
that Swanson had "correctly figured its termination settlement
proposal on the basis of the estimated contract price over the
life of the contract."  GPOBCA Supplemental Decision and Order of
July 1, 1993, at 68, (Vol. 2, GPOBCA Docket 15-90, Entry No. 27).
The GPOBCA remanded the matter to the contracting officer for a
determination of the exact amount of termination costs owing to

Subsequently, the GPO filed a Motion for Reconsideration
contending that the GPOBCA had misapplied the law in awarding
termination costs under the D404-M agreement.  GPO asserted that
the D404-M agreement comprised an unenforceable ordering
agreement, not a requirements contract.  On December 20, 1993,
the GPOBCA allowed the motion and vacated its July 1, 1993
opinion, reasoning that the D404-M agreement lacked
"exclusivity," a feature determined to be necessary to the
creation of a requirements contract.  GPOBCA Decision and Order
of December 20, 1993 (Vol. 2, GPOBCA Docket 15-90, Entry No. 32).

The Board again remanded the matter to the contracting officer,
this time with instructions to pay Plaintiffs $1530.89, the
amount previously determined to be owing to Plaintiffs for print
orders requisitioned under the agreement and for costs incurred
in preparation of its settlement proposal.

On March 18, 1994 Plaintiffs filed a complaint in this Court
seeking relief under the Tucker Act, 28 U.S.C.  1491, and the
Wunderlich Act, 41 U.S.C.  321, 322.  As the GPO is not an
"executive agency," its contracts are not covered by the Contract
Disputes Act of 1978, 41 U.S.C.  602. Tatelbaum v. United
States, 749 F.2d 729,730 (Fed. Cir. 1984). Plaintiffs seek
judicial review of the final decision of the GPOBCA pursuant to
the Wunderlich Act.  In this regard, Plaintiffs seek a
determination that the 1989 D404-M agreement constitutes an
enforceable requirements contract as well as an award of
termination costs. Additionally, Plaintiffs seek damages for
breach of contract pursuant to the Tucker Act for the GPO's
alleged breach of the 19894, 1990 and 1992 D404-M agreements and
the 308-S agreement.  Compl. at 9. Plaintiffs allege specifically
that Defendant (1) acted in bad faith by terminating the 1989
D404-M and 308-S agreements; (2) negligently prepared or prepared
in bad faith the solicitation estimates for the contract
following the termination of the 1989 D404-M agreement (the 1990
D404-M); and (3) breached the terms of the 1992 D404-M agreement
by diverting work away from Plaintiffs. Id.

On May 9, 1995 Plaintiffs filed an RCFC 56 motion for partial
summary judgment limited to its Wunderlich claim for judicial
review of the GPOBCA decision on termination costs:  Defendant
responded with a cross-motion for judgment upon the
administrative record pursuant to RCFC 56.1, maintaining that
finality should be accorded to the decision of the GPOBCA.


A. Standard of Review

Both parties to this matter seek a determination as to the
finality of the decision by the GPOBCA that the 1989 D404-M
agreement ("Agreement" or "D404-M agreement") does not constitute
a requirements contract.5  While facts found by the Board are
final unless it can be found that a determination is arbitrary or
capricious or not supported by substantial evidence, legal
determinations are reviewed de novo. 41 U.S.C.  321, 322.;
Vista Scientific Corp. v. United States, 808 F.2d 50, 51-52 (Fed.
Cir. 1986); Woodcrest Constr. Co. v United. States, 187 Ct. Cl.
249, 408 F.2d 406 (1969) cert. denied 398 U.5. 958, 90 S. Ct.
2164, 26 L. Ed. 2d 542 (1970).  Here neither party has sought to
overturn a factual finding by the Board.  Rather, Plaintiffs
contest the Board's legal conclusion as to the nature of the
D404-M agreement.

B. Construction of Agreement

1.  Three canons of contract construction are relevant with
respect to the analysis of the legal status of the D404-M
agreement.  First, that the name or label given to a contract is
not binding, rather, a court must characterize the contract based
upon the legal rights for which the parties bargained.  See Mason
v. United States, 615 F.2d 1343, 1346, 222 Ct. Cl. 436, 442,
cert. denied, 449 U.S. 830, 101 S. Ct. 98, 66 L. Ed. 2d 35
(1980); Ralph Construction Inc. v United States, 4 Cl. Ct. 727,
731, (1984).  Second, an interpretation that gives meaning to all
parts of a contract is preferable to one which renders provisions
of a contract meaningless.  Fortec Constructors v. United States,
760 F.2d 1288, 1292 (Fed. Cir. 1985).  Third, it is assumed that
the parties intended to form a binding contract and therefore, an
interpretation that saves a contract should be favored as opposed
to one that renders it void or unenforceable.  Torncello v.
United States, 231 Ct. Cl. 20, 27, 681 F.2d 756, 760 (1982).

In the agreement at hand, the Government arranged to procure its
requirements for printed legal briefs.  There are three possible
types of supply contracts: (1) those for a definite quantity, (2)
those for an indefinite quantity and (3) those for requirements.
Torncello, 681 F.2d 761; Mason, 615 F.2d at 1347. The parties
have not asserted that the agreement at issue was a contract for
a definite or indefinite quantity because, although estimated
minimums were contemplated, the IFB did not set a concrete
minimum quantity.  Therefore, if found to constitute a binding
contract, the D404-M agreement may only qualify as one for

A requirements contract is a bilateral contract in which the
Government promises to purchase all of its requirements for the
services or materials specified by the agreement from a
particular contractor.  1 Samuel Williston, A Treatise on the Law
of Contracts  4:25, at 578 (Richard A. Lord ed., 4th ed. 1990);
Torncello, 681 F.2d at 761-62, 768-69; Mason, 615 F.2d at 1346,
citing Media Dress, 215 Ct. Cl. at 986; Ceredo Mortuary Chapel,
Inc. v. United States, 29 Fed. Cl. 346 (1993).  To form a
bilateral contract, both parties must offer consideration. 1
Williston  4.25, at 578 (1990). Consideration will not be held
valid "where the promisor retains an unlimited right to decide
later the nature or extent of his performance" 1 Williston 
4:24, at 546 (1990), or where "the promisor retains an option
exercisable in his sole discretion," 1 id.  4:24, at 549 (1990),
cited in Ceredo, 29 Fed. Cl. at 349.

In the requirements context the seller's consideration consists
of a promise to provide the services required by the buyer.  1
Williston  4:25, at 578 (4th ed. 1990). The seller's promise
grants the buyer an option which necessarily places a detriment
on the seller as the seller is required to forego all other work
to the extent that it will be available to perform the buyer's

Conversely, consideration on the part of the buyer consists of
the promise by the buyer to purchase all of its requirements for
services covered by the agreement from the seller.  See
Torncello, 681 F.2d at 761-62, 768-69. In order that the
consideration be valid, the buyer's ability to shop elsewhere
must be limited in some real way beyond its control.  Id. at 772
(power to terminate for obtain covered services elsewhere must be
"limited in some meaningful way").

2.  In its motion for summary judgment, Plaintiffs assert that
the D404-M agreement placed "reasonable restrictions" on the
parties' obligations.  Although the GPO was permitted to order
printing services from other contractors, Plaintiffs contend that
there were "sufficient limitations" on this right such as to
preserve the consideration necessary to create a requirements
contract.  Plaintiffs point out that the Government's ability to
shop amongst printers was ascertainably limited by the D404-M
agreement's sequencing framework which required the Government to
choose between only two sequences of contractors -- the overall
sequence and the abstracted sequence.  Plaintiffs also argue that
the parties' intent as to the nature of agreement is illustrated
by the consistent references within the IFB document to the
formation of a "contract" pursuant to that solicitation.

Defendant counters by asserting that the limitations on the GPO's
ordering practices were not sufficient to constitute
consideration on its part.  Therefore, Defendant argues, the
agreement comprises an unenforceable basic ordering agreement.
In order that the GPO's ability to "shop elsewhere" be limited in
a tangible sense, Defendant maintains, controlling precedent
requires that there be an "exclusive" relationship between the
Government buyer and the contractor.  See Modem Systems
Technology Corp. v. United States, 979 F.2d 200, 205 (1992);
Torncello, 681 F.2d at 768-70; Media Press Inc. v. United States,
215 Ct. Cl. 985, 986, 566 F.2d 1192 (1977)6; cf. Locke v. United
States, 151 Ct. Cl. 262, 283 F.2d 521 (1960) (while issue was
whether damages for lost profits were to be awarded, the court
stated in dicta that consideration may exist in non-exclusive
agreements where there is a reasonable expectation of a certain
amount of work to be assigned to a particular contractor).  In
short, Defendant asserts that the relationship created by the
agreement at issue was not exclusive.

The component of exclusivity is regarded as essential for
consideration to be extant in the requirements context because it
is understood to constitute a negative covenant, a promise not to
use any other contractor, which places an ascertainable detriment
upon the buyer.  1A Arthur Linton Corbin,  156 (1963). In
agreements lacking this feature of exclusivity, the buyer is not
considered to have bound itself in any real way.  As such, non-
exclusive agreements have been held to constitute unenforceable
contracts for indefinite quantities without a required minimum.
Torncello, 681 F.2d at 768-70 (citing Willard, Sutherland & Co.
v. United States, 262 U.S. 489, 43 S. Ct. 592, 67 L. Ed. 1086
(1923)); Media Press, 215 Ct. Cl. at 986.

Exclusivity however, does not necessarily require " as Defendant
contends -- that the Government enter into only one arrangement
with one contractor for a certain type of good or service it
requires.  Rather, exclusivity has been found to be present in
situations where the Government enters requirements contracts
with several contractors, but where each agreement is narrowed to
cover a particular place or function in such a way that the
Government has not possessed discretion to shop amongst the
various contractors.  See The Franklin Company v. United States
180 Ct. Cl. 666, 672-75, 381 F.2d 416, 418-20 (1967); Erwin v.
United States, 19 Cl. Ct. 47, 55 (1989); Biener GmBH v. United
States, 17 Cl. Ct. 802, 808-09 (1989). These arrangements have
been held to constitute "limited requirements contracts.
Franklin, 381 F.2d at 420.

Under this limited requirements rubric, the United States Court
of Appeals for the Federal Circuit ("Federal Circuit") has upheld
concurrent requirements contracts in instances where
substantially identical work was divided amongst several
contractors according to specified geographic boundaries.  A-
Transport Northwest Co., Inc. v. United States, 27 Fed. Cl. 206
(1992) aff'd 36 F.3d 1576 (contract for particular trucking route
carved out of total trucking requirements); Biener, 17 Cl. Ct. at
808-09 (contract only for shipping of items pursuant to non-
international moves; as such Government may contract with other
firms on international shipments); see Mason, 615 F.2d at 1347
(stating in dicta that contract would have existed had Government
agreed to give all requirements within a geographical area to

Additionally, prior to A-Transport and Mason, in The Franklin Co.
v. United States the United States Court of Claims upheld the
enforceability of a requirements contract even though the
Government had contracted elsewhere for identical requirements,
when it found the division of requirements to be ascertainable
under the agreement based on prior custom.  381 F.2d at 418, 420;
see also Locke, 283 F.2d 521 (court read in expectation of a
reasonable award of work based on past performance in order to
illustrate the enforceability of contract).  Franklin involved
concurrent Government requirements contracts with separate
production facilities for the composition of technical manuals.
Franklin, 381 F.2d at 420.  The court reasoned that the contract
at issue delineated the portion of the manual production which
would be directed to Franklin based on the Government's
obligation to "make a good faith effort to assign to Franklin...
[the work] customarily given" to it.  Id.7

However, while courts have not hesitated to uphold these limited
requirements contracts, the Federal Circuit has refused to uphold
multi-contractor agreements which on their face appear limited
but actually allow the Government unchecked discretion to
manipulate its requirements.  See e.g. Mason, 615 F.3d at 1347
(term requirement contracts for construction work not enforceable
because they allowed Government ability to have covered work
performed by Government employees or others); Media Press, 215
Ct. Cl. at 986; but see Cleek Aviation v. United States, 19 Cl.
Ct. 552 (1990) (upholding requirements contract for fuel together
with fueling services as distinct in scope from contracts for
"fuel only," thereby allowing the Government to avoid the
fuel/service contract at its discretion by fashioning its
particular requirements as for "fuel only" when it secured a
lower price for fuel elsewhere).8

Plaintiffs seek a ruling that the D404-M Program at issue
constitutes a limited requirements contract because the
Government was required to call upon the different contractors
for orders pursuant to a pre-arranged, discernible formula set in
the D404-M agreement.

The content of the IFB in the D404-M procurement is quite similar
to the agreement presented in Media Press. 215 Ct. Cl. at 986.
As in the instant D404-M agreement, the agreement in Media Press
involved an arrangement in which the GPO utilized several
contractors to satisfy certain printing requirements. As with the
instant program, whenever the GPO required a print order, it had
two sequences of contractors from which to choose -- the overall
sequence and the abstracted sequence.  Id. GPO could either first
offer the order to the overall low contractor and then to each
next lowest bidder sequentially, or it could choose to abstract
the particular print job.  In abstracting, the Government
retained the authority to establish a new low bidder and
numerical sequence of other bidders on each particular print
order, taking into account only those variables involved in that
particular order.  Id. The Government could then first offer the
job to the abstracted low contractor and continue pursuant to the
abstracted sequence.  Id. In this circumstance, the Court of
Claims held that the Government retained discretion to the extent
that neither party to the agreement was "... so tightly and
exclusively bound to the other so as to give rise to a
requirements-type arrangement." Media Press, 215 Ct. Cl. at 986.

Similarly, although the D404-M agreement may initially appear to
create a framework limiting the scope of the Government's
discretion under the guise of a pre-arranged formula, upon closer
inspection it is evident that it actually did not curtail the
Government's discretion to shop amongst the sellers.  See
Tomcello, 681 F.2d at 772. Despite the IFB's reference to this
agreement as a contract and the various limitations it placed on
the Government's ability to place orders, the D404-M agreement
actually allowed the Government the ultimate ability to choose
which contractor to engage based upon the contractor's offered
price.  The Government could order from Plaintiffs, the overall
low contractor, or, when it saw that it could obtain a better
price by doing so, it could recalculate the price of the specific
order by abstracting, and order from another firm pursuant to
this method.  In this regard, as with the agreement in Media
Press, the agreement at issue allowed the Government the ability
to pick and choose amongst the contractors to a considerable
extent, and this very fact negates the possibility of the
existence of consideration.  See Media Press, 215 Ct. Cl. at 986.
The D404-M agreement thus did not constitute an enforceable
contract beyond the orders completed.

Further, the record developed at the GPOBCA would not support any
finding of an additional limitation on the Government's
discretion in its ability to abstract described in the IFB based
on geography, custom, or even reasonableness. Courts confronting
unclear limitations situations have at times upheld requirements
arrangements by finding, either explicitly or implicitly, that
the requirement of reasonableness or good faith has qualified the
buyer's discretion, and thereby, the scope of the contract, when
facts presented have supported such a reading.  See Locke, 283
F.2d at 523-24 (court upheld contract finding that facts
presented illustrated that contractor had a reasonable
expectation of business); see also Eastern Airlines  v. Gulf Oil
Corporation, 415 F. Supp. 429, 436 (S.D. Fla. 1975) (court
upholds limited requirements contract in which airlines' ability
to "fuel freight" -- buy extra fuel at other location and thereby
circumvent contractor's fueling stations -- where facts
illustrated past custom that fuel freighting was subject to good
faith).9  In this case, there is no basis upon which this Court
may read such limitation into the parties' agreement.10

Nonetheless, Plaintiffs argue that although the Media Press order
contains "sweeping language" regarding the nature of the
contract, that decision is not binding in the case at bar because
the Media Press court merely acted to enforce an express
contractual provision that allowed GPO to issue print orders to a
contractor other than Media Press when the other contractor had
offered the lowest price for the required work.  This argument
lacks merit.  The court in Media Press stated that it would not
enforce the language of the "contract" precisely because the GPO
maintained the right to order from other contractors.  See Media
Press, 215 Ct. Cl. at 986. This factor caused the contract to
fail for lack of sufficient consideration.  Id.

Plaintiffs further argue that the decision in Ceredo, 29 Fed. Cl.
346, is controlling of the requirements contract determination.
The issue in Ceredo was whether consideration was valid in a
requirements arrangement which provided the Government with the
authority to hire other contractors on occasions when the
contractor could not fulfill particular orders.  Ceredo, 29 Fed.
Cl. at 350-52. It was held that Plaintiff's reasonable ability to
decline offers and Defendant's ability in such cases to hire new
contractors did not extinguish the consideration offered by the
Defendant. Id. at 350 (power of Government to sell to other
contractors actually in the hands of Plaintiff); Accord Franklin,
381 F.2d 416, 418-20; A-Transport, 27 Fed. Cl. 206; but see Media
Press, 215 Ct. Ct. at 986 (contractor's ability to decline offers
as a basis for parties not being "tightly and exclusively

The instant controversy is distinguishable from the one in
Ceredo.  While the D404-M agreement did contain the feature at
issue in Ceredo, it has been illustrated that the D404-M
agreement fails for another reason apart from Defendant's ability
to go to other contractors in the event of Plaintiffs'
declination.12  Pursuant to the instant agreement, before
Defendant had even offered Plaintiffs a print order, Defendant
maintained the discretion to chose another contractor from the
pool of contractors based on the criterion of lowest abstracted
price.  This feature of the D404-M agreement dilutes Defendant's
promise in a manner not contemplated in Ceredo.

As stated earlier, it has been held in circumstances when an
agreement is susceptible of interpretation as either a
requirements contract or as an unenforceable indefinite
quantities without minimum agreement, that the contract should be
upheld as one of the requirements type.  See Goldwasser v. United
States, 163 Ct. Cl. 450, 325 F.2d 722 (1963); Crown Laundry and
Dry Cleaners, Inc. v. United States, 29 Fed. Cl. 506, 516 (1993).
However, in this case, based on the present state of the law, the
D404-M agreement is not susceptible of interpretation as a
requirements contract.  Although Plaintiffs may have intended to
enter into a binding contractual agreement, the instrument which
it signed lacks the consideration necessary to produce this


Based on the foregoing, it is concluded that the decision of the
GPOBCA as to the relief available under the 1989 D404-M agreement
is correct in that it became an enforceable contract only to the
extent performed prior to its termination.

Accordingly, it is ORDERED that:

(1)  Defendant's motion for judgment on the administrative record
is ALLOWED in that, upon final conclusion of this matter,
Plaintiffs' claim for additional convenience termination cost
relief shall be dismissed;

(2)  By separate order, Pretrial Proceedings as to Plaintiffs'''
breach of contract claims are reinstated for scheduled completion
in the event an agreed resolution of this matter cannot be
reached and trial proceedings are then required.

James F. Merow


1  Plaintiffs refer to the agreement at hand as the "404-M"
Program. However, the invitation for bids refers to the
solicitation as the "D404-M" Program. Invitation for Bids (Vol.
1, GPOBCA Docket 15-90, Entry No. 1, App. Exh. 1) ("IFB").

2  Although the IFB for the 1989 D404-M contract refers to GPO
Contract Terms effective December 1, 1987, the IFB was issued and
the contract awarded after September 1988 when the 1988 revisions
to the GPO Contract Terms went into, effect.  In its rulings with
respect to this agreement, the Board assumed that the IFB
referred to the 1987 draft of the 1988 revisions, noting that the
two versions of the regulations were substantively identical.
See GPOBCA Decision and Order of March 6, 1992, (Vol. 1, GPOBCA
Docket 15-90, Entry No. 10).

3  Plaintiffs contend that the GPO issued and ultimately canceled
a second solicitation of Program D283-M, again for having failed
to inform Plaintiffs. Compl. at 6.

4  The record illustrates that Plaintiffs incorporated the GPO's
failure to include Plaintiffs in the D283-M program, within its
1989 D404-M claim before the GPOBCA. See Plaintiffs' Letter to
GPOBCA of July 5, 1990, (Vol. 1, GPOBCA Docket 15-90, Entry No.

5  The practice of conducting appellate review pursuant to the
submission of summary judgment motions emerged following the
decision in United States v. Carlo Bionchi & Co., 373 U.5. 709,
83 S. Ct. 1409, 10 L. Ed. 2d 652 (1963) (restricting judicial
review in contract disputes clause proceedings to the
administrative record).  See Vista Scientific Corp. v. United
States, 808 F.2d 50, 51 (Fed. Cir. 1986); Rules Governing
Wunderlich Act Review, 178 Ct. Cl. XVII -  XXIII (1967). The
practice continues under the current RCFC 56.1.

6  Plaintiffs have argued that Media Press is a non-binding
unpublished opinion. This contention lacks merit.  Although the
full text of this opinion was not printed in the Federal
Reporter, it is available in full, published form in the Court of
Claims Reporter and has been cited repeatedly as authority.  See
e.g.  Modem Systems Technology Corp. v. United States, 919 F.2d
200, 205 (1992); Mason, 615 F.2d at 1346; Rice Lake Contracting
Inc. v. United States, 33 Fed. Cl. 144, 152 (1995).

7  Under this precedent the "divided requirements" contract -- in
which the Government contracts with several outfitters and
promises to distribute work in roughly equal proportions amongst
the contractors -- would likely also be held to preserve
exclusivity.  See John Cibinic, Jr.  and Ralph C. Nash, Jr.,
Formation of Government Contracts, 806 (2d. ed.  1986).

8  Agreements in which the contractor is to perform all
requirements for work which the Government cannot perform in-
house have also not been upheld.  See Ralph, 4 Cl. Ct. 727; David
E. Boelzner, Max & Ralph: Unruly Children of Limited-Form
Requirements Contracts, 23 Pub. Cont. L.J. 277, 279-285 (1994)
(comparing with the administrative boards' willingness to uphold
such arrangements).

9  Commentators have argued for the adoption of reasonableness or
good faith as sufficient consideration on the part of the buyer
in a requirements arrangement, describing the exclusivity
requirement as a "formalistic" and "fictional" yardstick. See
Caroline N. Bruckel, Consideration in Exclusive and Nonexclusive
Open Quantity Contracts Under the U. C. C.: A Proposal for a New
System of Validation, 68 Minn. L. Rev. 117, 210-212 (1983)

10  Consideration in the D404-M framework might have been
preserved if the arrangement had provided an option for
Plaintiffs to match the lower abstracted price at all times.
Requirements contracts in which the buyer retains the right to
decide whether to purchase from a seller based on the seller's
price have been upheld in cases where the seller has retained an
option to match any lower price identified by the buyer.  See 1A
Corbin,  159, at 58-60 (1963), cited in Bruckel, 68 Minn. L.
Rev. at 143.

11  A maximum limit on the seller's production does not
extinguish the consideration offered by the buyer so long as the
seller retains the right of first refusal on all orders in excess
of the maximum.  Donald G. Gavin, Government Requirements
Contracts, 5 Pub. Cont. L.J. 234, 252 (1972).

12  Tempering Plaintiffs' ability to decline any particular order
under D404-M was the requirement that Plaintiffs provide an
alternate date upon which it could satisfy such print order.