dissenting:
With all respect, I find myself unable to concur in the panel opinion, able as its analysis is in many respects.
The reader needs to know that (a) the trial judge did not adopt the plaintiffs contention that it had a requirements type contract obliging defendant to purchase from plaintiff its requirements for JP-4 jet fuel that existed during the contract term at the locations comprehended in the contract, and (b) the plaintiff has abandoned its original position, since before us it did not except to the trial judge’s opinion and findings but rather, urged that we adopt them without change. In the absence of any quantum figures, it is impossible to say how much of a reduction in the claim this concession effected, but it has to be substantial. Defendant, to a large extent, prevailed before the trial judge, but it is unwilling to pay anything to settle for the losses it is alleged to have caused the plaintiff, and, therefore, it was the excepting party.
I would have adopted the opinion of the trial judge and his conclusion of law in toto. It struck me as an able and fair handling of a novel and sticky situation. His theory may be capsuled as follows. Defendant told plaintiff in the IFB that much of the fuel it supplied had to come from domestic refineries for balance of payment reasons. Moreover, defendant did not intend to make its import quota or any part thereof available. Plaintiff knew that large quantities of foreign made fuel would be obtained under other IFB’s for offshore use, and would inevitably be cheaper. Obviously, therefore, the domestic, more costly *542fuel had some kind of special value to defendant since it did not put plaintiff in price competition with the offshore fuel in evaluating bids. Accordingly, in case of cutbacks, plaintiff might reasonably expect they would be applied on a theory consistent with the IFB’s that in ordering the remaining quantities, its prices would be compared with those of other domestic suppliers at the same locations, and subject to the same cost-enhancing restrictions, but not with those of unrestricted suppliers of foreign fuel, thereby dissipating the balance of payment advantages defendant had made so much of in the IFB. This would have been rather obvious except for the $100 minimum commitment which the court regards as all important but the trial judge, rightly I think, dismisses as standard boilerplate.
Under this theory, plaintiff would not recover anything for disproportionate reductions in procurement from it, whenever and to the extent that the remaining requirements were satisfied by other domestic suppliers working under similar restrictions who had bid lower prices.
The narrow literalism of the decision, and its insensitive insistence on deciding whether the contract was for an indefinite quantity or for requirements as established and mutually exclusive categories, will no doubt cause bidders to scrutinize IFB small print with more care, and insist that what they see as implied should be made express. Also, like so much else in Government contract law it says, in every bid you make, scrutinize your cost allowance for unforeseen contingencies. It is probably far too low.
I am attaching, to clarify my views, the trial judge’s analysis of the positions of the parties and of his own intermediate position, which I would adopt.
Wood, Trial Judge: * * *In its main brief, plaintiff broadly contends that the language of plaintiffs contract, the conduct of the parties, and the commercial setting in which the contract was formed, all confirm that defendant was contractually obligated to purchase from plaintiff the requirements for JP-4 jet fuel that existed during the contract term at the locations comprehended in the contract awarded to plaintiff, and that, given such an obligation, defendant plainly breached it. Plaintiff adds, alternatively, that defendant *543also failed to "live up to the high degree of good faith demanded of it,” with the same result.
In equally broad terms, defendant contends that the contract language, defendant’s need for flexibility, and the conduct of the parties require the conclusion that defendant’s only obligation under that contract was to purchase from plaintiff a minimum of $100 worth of JP-4 jet fuel during the contract period; that under plaintiffs contract plaintiff was not to supply all the needs of any of the using activities listed in the IFB;15 and that when (as defendant sees it) defendant’s anticipated needs did not’ materialize, plaintiff was simply supplanted by "lower priced domestic suppliers” who had been "awarded contracts under the same bid items.” (Emphasis supplied.)
In its reply brief, plaintiff alters, and somewhat narrows, its principal line of argument, urging that defendant was contractually obligated to fill all the needs of all the destinations listed in the IFB by purchases of JP-4 jet fuel from plaintiff and other domestic suppliers awarded contracts pursuant to that IFB, and with domestically refined fuel, and that plaintiff had, but was denied, the right to supply such needs of the relevant destinations "as was appropriate under its contract” for the entire contract period.
There are inherent in plaintiffs broad position, or positions, ambiguities and undiscussed problems. For one thing, plaintiff largely ignores serious questions respecting plaintiffs right, vis-a-vis those other domestic suppliers awarded contracts pursuant to the IFB, to supply JP-4 jet fuel to defendant during the contract period. And, while plaintiff alludes to "appropriate adjustments between [domestic] suppliers,” what that phrase means, in connection with this action, is not even hinted at.
Defendant’s arguments present some very real difficulties as well. According to defendant, the "contract cutback” was effectuated simply by repetition, in reverse, of "the contract award evaluation process.” Defendant asserts that *544this was logical, consistent with the purposes of the IFB, and within defendant’s contract rights, and that plaintiffs "real complaint” is that defendant "filled its needs as much as possible * * * from the lower priced domestic suppliers * * *.” (Emphasis supplied.)
Defendant’s view of the case overlooks indisputable facts: that, in the implementation of the cutback necessitated by defendant’s having under contract, some 399,000,000 gallons of JP-4 jet fuel in excess of needs, defendant competitively evaluated both domestic and foreign suppliers on the basis of price alone; that, given the circumstances of this case, the inevitable result of that evaluation was that the reduction would fall entirely upon domestic rather than upon foreign refiners;16 and that, during the period here relevant, foreign-refined JP-4 jet fuel under contract to defendant pursuant to the offshore IFBs was delivered to the Pacific and to Europe (with consequent impact on the applicable Balance of Payments Program), and, by use of DOD’s foreign-refined products import quota, imported into the United States, in lieu of domestically refined JP-4 jet fuel also under contract to defendant as a result of the IFB.
Moreover, the respective arguments of the parties, by their joint failure to recognize either the unitary nature of the IFB and the offshore IFBs, and the multiple contracts defendant awarded to domestic and foreign suppliers as a result of those IFBs, or the significance of the circumstances surrounding the procurements, tend to obscure rather than illuminate.17 In light of the foregoing, the reaching of proper conclusions respecting the rights and obligations created by the contract is far from easy.
In reaching any such conclusions, however, it is appropriate to "look both to the written terms and to the surrounding circumstances, availing ourselves 'of the same light which the parties possessed when the contract was *545made.’ ” Franklin Co. v. United States, 180 Ct. Cl. 666, 669, 381 F.2d 416, 418 (1967); see also ITT Arctic Services, Inc. v. United States, 207 Ct. Cl. 743, 751-52, 759, 524 F.2d 680, 683-84, 688 (1975). In this sort of situation, as in others, "courts have never completely shut their eyes to evidence of the parties’ shared understanding drawn from the transaction’s milieu or working-out.” Franklin Co. v. United States, supra, 180 Ct. Cl. at 669, 381 F.2d at 418. Where, as here, the contractual provisions are indeed anemic, scrutiny of the transaction’s surrounding circumstances is not only peculiarly appropriate, but essential.
Defendant’s worldwide pattern for procurement of JP-4 jet fuel for the period July 1 to December 31, 1969, serves as a proper and useful starting point for purposes of analyzing the nature of plaintiffs contract, and the mutual rights and obligations thereby created. For that contract term, defendant issued a total of six solicitations for JP-4 jet fuel.
One, the IFB, covered defendant’s estimated needs for such fuel during the contract period at more than 300 specified, and separate, using activities (by location) in the United States, Europe, and the Pacific. The "offshore” portion of the IFB was specifically made subject to balance of payments restrictions, with only domestically refined fuel to be acceptable to defendant thereunder. Moreover, the practical meaning and effect of DFSC’s explicit renunciation of use of DOD’s foreign-refined products import quota in the IFB was that the domestic portion of the procurement (representing some 86 percent of the total gallonage of JP-4 jet fuel covered by the IFB) would also be domestically refined fuel, and the parties necessarily so understood.
As a result of the remaining five "offshore” IFBs, defendant contracted to purchase from foreign refiners fuel (not subject to balance of payments restrictions and not domestically refined) which was, by definition, cheaper than domestically refined fuel, for delivery to various specified, and largely if not entirely different, overseas locations.
The IFB itself resulted, and the parties were necessarily cognizant that it would result, in a considerable number of *546separate, incremental contract awards to domestic suppliers, on a least-cost basis to defendant. While, in theory, each gallon of JP-4 jet fuel for which defendant awarded plaintiff a contract was, at the moment of award, destined for a particular terminal, either within or without the United States, defendant’s patent need for flexibility, arising from ullage problems, changes in missions of using activities, increases or decreases in contemplated usage at particular using activities, availability of transportation, and changes in priorities of need, meant that in actuality any fuel defendant purchased from anyone during the contract term might go anywhere, and that too must have been in the minds of the parties.18
In these circumstances, the notion that plaintiff, either alone or in conjunction with others, had an absolute, unconditionally vested contract right to supply JP-4 jet fuel to meet the needs of any particular destination simply ignores reality. Because of the very nature of the procurement (and the product) involved, plaintiffs contract was clearly not such a "requirements” contract, in any customary sense. See Albano Cleaners, Inc. v. United States, 197 Ct. Cl. 450, 455 F.2d 556 (1972); Franklin Co. v. United States, supra; E. H. Sales, Inc. v. United States, 169 Ct. Cl. 269, 340 F.2d 358 (1965); Goldwasser v. United States, 163 Ct. Cl. 450, 325 F.2d 722 (1963).
When plaintiffs contract is scrutinized in light of its terms and defendant’s pattern of procurement under the IFB, however, it is equally clear that the boilerplate "Scope of Contract” clause on which defendant relies in asserting that its maximum obligation to plaintiff was only to purchase $100 worth of JP-4 jet fuel during the contract term, may not properly be so construed. See ITT Arctic Services, Inc. v. United States, supra; Contra Costa County Flood Control and Water Conservation District v. United States, 206 Ct. Cl. 413, 512 F.2d 1094 (1975); Corbino v. United States, 208 Ct. Cl. 1002, 1006 (1976). As this court said in Albano Cleaners, Inc. v. United States, supra, 197 Ct. Cl. at 459, 455 F.2d at 561:
*547* * * Whatever the permissible scope of such an indefinite quantities provision is * * *, such an unusual and unfair interpretation of the clause here involved as defendant proposes could hardly have been in accord with 'the rational intention of the parties’ when they entered into this contract, * * * and the court would not be justified in adopting it. [Citations omitted.]
One relevant consideration is that at least some crude oils essential to the production of JP-4 jet fuel must be contracted for on an advance basis (and in some cases 6 to 12 months ahead of scheduled production time); such crude oils acquired for JP-4 jet fuel production can be used to make other salable end products (and JP-4 jet fuel use in the United States is limited exclusively to military applications, with no private or commercial demand), but only if the purchaser’s refinery has sufficient, specialized facilities to do so. In 1969, plaintiff did not have sufficient facilities so to process the feed stocks which would be produced from its crude oil purchases made with a view to producing JP-4 jet fuel for defendant. These factors militate strongly against a holding that, while plaintiff was contractually committed to supply to defendant some 1,000,000 gallons of JP-4 jet fuel per day over a 6-month period, defendant’s obligation to plaintiff was only to order $100 worth of such fuel during that same period.19 Cf., ITT Arctic Services, Inc. v. United States, supra; Albano Cleaners, Inc. v. United States, supra; Franklin Co. v. United States, supra; Goldwasser v. United States, supra.
That aside, however, the IFB’s (and the contract’s) terms, construed in light of the contractual history and background, point in that same direction. As the court has held in similar circumstances, there was "a shared understanding infused into the anemic words-of the contract * * Franklin v. United States, supra, 180 Ct. Cl. at 673, 381 F.2d at 420.
Defendant did not advise plaintiff and the other successful domestic bidders pursuant to the IFB that any specific needs would exist at any particular destination, or at all of *548them (for the IFB dealt in estimated quantities only, and in plaintiffs prior dealings with defendant underlifts of JP-4 jet fuel of an average magnitude of 10 to 15 percent of contract quantities had been experienced), nor did it say even that a successful domestic bidder, alone or with others, would have the right to supply the actual needs of any particular destination. The IFB did indicate clearly, however, that to the extent defendant did have needs at all the destinations covered by the IFB, those needs would (except in extraordinary circumstances) be filled pursuant to the IFB, and with domestically refined fuel. In turn, defendant also indicated as clearly that, in substance, it had, and would exercise, the right to fill those particular needs by orderings on the same basis on which contract awards pursuant to the IFB would be made in the first place, i.c., at the least possible cost to defendant.
In short, in the circumstances of this case, plaintiffs contract, construed in the light cast by its history and background, gave plaintiff, in general terms, a right to compete with those other domestic suppliers awarded contracts pursuant to the IFB, for whatever requirements for JP-4 jet fuel defendant did have during the contract term at the several destinations covered by the IFB.20
The foregoing does not say, and should not be understood to mean, that under no circumstances could defendant receive fuel ordered under the offshore IFBs at the destinations covered by the IFB. An absolute necessity for diversion of ordered foreign fuel because of ullage problems at a destination covered by the offshore IFBs, because of military necessity, or other good and sufficient reason for delivery of such ordered foreign fuel to a destination covered by the IFB, must have been within the contemplation of the parties when they entered into the contract in suit. Thus, to any extent defendant’s requirements at the destinations covered by the IFB may have been validly reduced, no breach resulted.
*549To the extent, however, that defendant purchased JP-4 jet fuel from foreign refiners under contract to it pursuant to the offshore IFBs to satisfy the needs of the various destinations covered by the IFB on the basis of price alone, a breach of contract occurred. That action was neither so contemplated nor within defendant’s contractual rights. And, while the present record is quite vague as to precisely how defendant met its JP-4 jet fuel needs worldwide during the second half of 1969, the facts surrounding the cutback hereinabove set forth abundantly demonstrate that just such a breach did occur, to plaintiffs detriment. Accordingly, plaintiff is entitled to recover to the extent it has been damaged by that breach. Determination of the amount of such recovery is reserved for further proceedings pursuant to Rule 131(c).
It must be added, however, that to the extent defendant had under contract domestically refined JP-4 jet fuel in excess of needs at the several destinations covered by the IFB, defendant was well within its contractual rights in declining to order such fuel from plaintiff, if it could instead order such fuel for those several destinations covered by the IFB from "lower priced domestic suppliers” who, with plaintiff, had been awarded contracts pursuant to the IFB.
All of the contracts to supply defendant’s estimated needs at the various locations specified in the IFB were awarded as a result of competitive bidding, and on a least-cost basis to defendant. If an excess of domestically refined fuel under contract for such destinations over actual needs at those destinations materialized, defendant was well within its contractual rights in ordering the domestically refined fuel available to it to meet such actual needs (and no more) at the least possible cost.
To the extent, if any, plaintiff here complains that its contract quantities were cut back in consequence of the exercise by defendant of that right, plaintiff is not entitled to recover. On the present record, the effect of that conclusion on the parties cannot really be determined. Since, however, further proceedings to determine the amount of plaintiffs recovery are in any event required, that issue can also be explored in such proceedings.
*550One final matter requires brief note. On July 23, 1970, long after the implementation of the cutback, but prior to the commencement of suit in this court, plaintiff sought a contract amendment without consideration, pursuant to Public Law 85-804, 72 Stat. 972, 50 U.S.C. §§ 1431-1435. In making that request, plaintiff stated, inter alia, that the contract in suit was of the type "referred to as an indefinite quantity contract,” and that defendant’s actions thereunder were "within its literal rights under this unusual type of contract * * *.” Defendant seizes upon these statements as, in effect, a concession by plaintiff that it has no right to recover herein.
As plaintiff properly points out, the statements are, at best, ambiguous and amorphous. They were, moreover, made not prior to the onset of controversy between the parties, as defendant suggests, but as part of a post-controversy endeavor to obtain equitable relief. In all the circumstances, they deserve, and are given, no weight in determining the rights of the parties to this litigation.
CONCLUSION OF LAW
For the foregoing reasons, we find that the contract between Coastal States and the United States is an indefinite quantities, open-end contract; we also find that the United States has in good faith met all obligations which it had to plaintiff under the contract. Accordingly, the trial judge’s findings of fact, opinion, and recommended conclusion of law are modified to accord with the facts and law hereinbefore set forth. Since the court concludes that the defendant is not liable to the plaintiff, the petition is dismissed.
In its reply brief, plaintiff in effect concedes that it was not to supply all the needs of any particular destination listed in the IFB, but asserts that this is immaterial.
[The first 14 footnotes were in omitted portion.]
Plaintiff, and 14 other United States firms, were cut back a total of 397,000,000 gallons,' while no foreign supplier was cut back at all.
Because of the nature of the several procurements here relevant, the nature of the product involved, and the worldwide scope of those procurements, fitting the case neatly within a requirements, or indefinite quantities, contract mold, as the parties’ main briefs do, could be done, if at all, only by considerable forcing.
In fact, considerable amounts of plaintiffs origin delivery JP-4 jet fuel, theoretically designated for overseas use, were delivered to, inter alia, Alaska, Florida, Georgia, and South Carolina.
Plaintiffs contract explicitly stated that each pipeline or tanker delivery would be, minimally, 840,000 gallons. While it is unnecessary so to hold, this provision would be difficult to construe as consistent with defendant’s view of the Scope of Contract clause.
Parenthetically, this construction is confirmed by contract modifications between the parties, both before and after implementation of the cutback, decreasing quantities of items awarded to plaintiff, and adding new items. See E. H. Sales, Inc. v. United States, 169 Ct. Cl. 269, 340 F.2d 358 (1965).