Medart, Inc. v. Richard G. Austin, Adm'r, Gen. Servs. Admin., 967 F.2d 579 (Fed. Cir. 1992). · Go Syfert
Medart, Inc. v. Richard G. Austin, Adm'r, Gen. Servs. Admin., 967 F.2d 579 (Fed. Cir. 1992). Cases Citing This Book View Copy Cite
“the risks associated with variance between actual purchases and estimated quantities are allocated to the contractor”
152 citation events (116 in the last 25 years) across 3 distinct courts.
Strongest positive: Peraton, Inc. (asbca, 2025-07-10)
Treatment trajectory · 1993 → 2026 · click a year to view as-of
1993 2009 2026
Top citers, strongest first. 38 distinct citers. How cited ↗
discussed Cited as authority (verbatim quote) Peraton, Inc.
A.S.B.C.A. · 2025 · signal: see · quote attribution · 1 verbatim quote · confidence high
the risks associated with variance between actual purchases and estimated quantities are allocated to the contractor
examined Cited as authority (verbatim quote) Datalect Computer Services, Ltd. v. United States (4×) also: Cited "see", Cited "see, e.g."
Fed. Cl. · 1997 · signal: see also · quote attribution · 1 verbatim quote · confidence high
pjresumably contractors rely on the proffered estimates in formulating their bids____
discussed Cited as authority (rule) ENNIS v. SECRETARY OF HEALTH AND HUMAN SERVICES
Fed. Cl. · 2026 · confidence medium
Cir. 2011) (“The ascertainment of damages is not an exact science, and where responsibility for damage is clear, it is not essential that the amount thereof be ascertainable with absolute exactness or mathematical precision”); Medart, Inc. v. Austin, 967 F.2d 579, 581-82 (Fed.
discussed Cited as authority (rule) Siemens Government Technologies, Inc. v. United States
Fed. Cl. · 2025 · confidence medium
If the U.S. Navy’s need is fictional, the agency would have violated its requirements “to act in good faith and use reasonable care in computing its estimated needs.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
cited Cited as authority (rule) Sheffield Barbers, LLC
A.S.B.C.A. · 2025 · confidence medium
Cir. 2017) (quoting Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
discussed Cited as authority (rule) Sage Acquisitions LLC v. Hud (2×)
Fed. Cir. · 2024 · confidence medium
Unlike an IDIQ contract, as noted earlier, a requirements contract requires the government to “fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awardee.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
cited Cited as authority (rule) OSC Solutions, Inc.
A.S.B.C.A. · 2023 · confidence medium
Dynamics Ordnance and Tactical Sys., Inc., ASBCA No. 56870 , 11-2 BCA ¶ 34,774 at 171,128 (citing Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
cited Cited as authority (rule) MPG West
A.S.B.C.A. · 2022 · confidence medium
MPG cites Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
discussed Cited as authority (rule) Pond Security Service Gmbh v. United States
Fed. Cl. · 2021 · confidence medium
A requirements contract obligates “the government to fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awardee, who agrees to provide them at the agreed price.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
examined Cited as authority (rule) Agility Defense & Government Services, Inc. v. United States (4×) also: Cited "see"
Fed. Cir. · 2017 · confidence medium
A contractor can recover damages from the government for increased costs it incurred in performing a contract under a negligent estimate theory, which requires the contractor to show by preponderant evidence that the government’s estimates were “inadequately or negligently prepared, not in good faith, or grossly or unreasonably inadequate at the time the estimate was made.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
cited Cited as authority (rule) Certified Construction Co. of Kentucky, LLC v. United States
Fed. Cl. · 2016 · confidence medium
Cir. 2003) (quoting Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
discussed Cited as authority (rule) United Healthcare Partners, Inc.
A.S.B.C.A. · 2016 · confidence medium
The government will be found liable where a contractor can show by a preponderance of evidence that the estimate was prepared in an inadequate or negligent manner, was not done in good faith, or was "grossly or unreasonably inadequate at the time the estimate was made." Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
discussed Cited as authority (rule) Agility Defense & Government Services, Inc. v. United States
Fed. Cl. · 2015 · confidence medium
The Federal Circuit has held that a decision to provide reasonably available historical data instead of generating estimates for a complex contract is reasonable, and the Government need not “search for or create additional information.” Medart, Inc. v. Austin, 967 F.2d 579, 582 (Fed.Cir.1992).
discussed Cited as authority (rule) Philadelphia Authority for Industrial Development v. United States
Fed. Cl. · 2014 · confidence medium
Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992); Clearwater Forest Indus., Inc. v. United States, 650 F.2d 233, 240 (Ct.Cl.1981); Womack v. United States, 389 F.2d 793, 801 (Ct.Cl.1968). “[T]o the extent that a government estimate is inadequately or negligently prepared, its inclusion without correction in a solicitation or contract constitutes a misrepresentation that, whether deliberate or unintentional, amounts to a breaeh of contract.” Rumsfeld v. Applied Cos., 325 F.3d 1328, 1335 (Fed.Cir.2003).
cited Cited as authority (rule) The Ravens Group, Inc. v. United States
Fed. Cl. · 2013 · confidence medium
Corp. v. United States, 53 Fed.Cl. 420, 429 (2002) (citing Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
discussed Cited as authority (rule) Engineered Demolition, Inc. v. United States
Fed. Cl. · 2006 · confidence medium
While the government is generally provided with a measure of flexibility in determining the estimated quantities in its contracts, it nevertheless is bound by “an implied obligation ... to ‘act in good faith and use reasonable care in computing its estimated needs____ Failure to meet that obligation constitutes a breach of the resulting contract.’ ” Rumsfeld v. Applied Cos., Inc., 325 F.3d 1328, 1335 (Fed.Cir.2003) (analyzing the duty of the government in providing estimated quantities in requirements contracts) (quoting Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992)); see al…
cited Cited as authority (rule) Federal Group, Inc. v. United States
Fed. Cl. · 2005 · confidence medium
Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992).
discussed Cited as authority (rule) United Medical Supply Co. v. United States (2×)
Fed. Cl. · 2005 · confidence medium
A requirements contract “calls for the government to fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awardee, who agrees to provide them at the agreed price.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992). 4 Although the hallmark of such contracts is flexibility in the quantity of items ordered, see Technical Assistance Int'l v. United States, 150 F.3d 1369, 1371-72 (Fed.Cir.1998), there are some limitations.
discussed Cited as authority (rule) Hi-Shear Technology Corporation v. United States
Fed. Cir. · 2004 · confidence medium
In that regard, we pointed out that a requirements contract “calls for the government to fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awar-dee, who agrees to provide them at the agreed price.” Id. (quoting Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir. 1992)).
cited Cited as authority (rule) Padilla v. United States
Fed. Cl. · 2003 · confidence medium
Cir.2003) (quoting Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992)).
examined Cited as authority (rule) Donald H. Rumsfeld, Secretary of Defense v. Applied Companies, Inc. (4×)
Fed. Cir. · 2003 · confidence medium
A requirements contract “calls for the government to fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awardee, who agrees to provide them at the agreed price.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992).
examined Cited as authority (rule) Donald H. Rumsfeld, Secretary of Defense v. Applied Companies, Inc. (4×)
Fed. Cir. · 2002 · confidence medium
A requirements contract “calls for the government to fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awardee, who agrees to provide them at the agreed price.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992).
examined Cited as authority (rule) Hi-Shear Technology Corp. v. United States (3×) also: Cited "see"
Fed. Cl. · 2002 · confidence medium
Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992); Clearwater Forest Indus., Inc. v. United States, 227 Ct.Cl. 386, 396-97 , 650 F.2d 233, 240 (1981); see also Womack v. United States, 182 Ct.Cl. 399, 412 , 389 F.2d 793, 802 (1968).
cited Cited as authority (rule) Myers Investigative & Security Services, Inc. v. United States
Fed. Cl. · 2000 · confidence medium
It is well-established that defendant “must act in good faith and use reasonable care in computing its estimated needs ____” Medart v. Austin, 967 F.2d 579, 581 (Fed.Cir. 1992).
examined Cited as authority (rule) Educators Associates, Inc. v. United States (6×) also: Cited "see", Cited "see, e.g."
Fed. Cl. · 1998 · confidence medium
Nonetheless, courts recognize that “contractors rely on the proffered estimates in formulating their bids,” so impose upon the government a duty of “good faith and use [of] reasonable care in computing its estimated needs.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992).
discussed Cited as authority (rule) Ceredo Mortuary Chapel, Inc. v. United States
Fed. Cl. · 1993 · confidence medium
The Federal Circuit recently stated that in contracts subject to the Federal Acquisition Regulations (FAR), “the contracting officer must furnish estimated quantities in a solicitation contemplating a requirements contract.” Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992) (citing FAR, 48 C.F.R. § 16.503 (a)(1)) (emphasis added).
discussed Cited "see" Noblis Msd, LLC v. United States
Fed. Cl. · 2026 · signal: see · confidence high
See Medart, Inc. v. Austin, 967 F.2d 579 , 581–82 (Fed.
cited Cited "see" Short Bros. PLC v. United States
Fed. Cl. · 2005 · signal: see · confidence high
See Medart Inc. v. Austin, 967 F.2d 579 (Fed.Cir.1992); Clearwater Forest Indus, v. United States, 227 Ct.Cl. 386 , 650 F.2d 233 (1981).
discussed Cited "see" J. Cooper & Associates, Inc. v. United States
Fed. Cl. · 2002 · signal: accord · confidence high
Conversely, “[a] requirements contract requires the contracting government entity to fill all of its actual requirements for supplies or services that are specified in the contract, during the contract period, by purchases from the contract awardee.” Id. at 1318-19 (citing 48 C.F.R. § 16.503 (a) (2000)); accord Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992); Mason v. United States, 222 Ct.Cl. at 442 , 615 F.2d at 1346 (stating that a requirements contract obligates a purchaser “ ‘to buy all of its needs of a specified material from a particular supplier, and the supplier agr…
cited Cited "see" D.F.K. Enterprises, Inc. v. United States
Fed. Cl. · 1999 · signal: see · confidence high
See Celeron Gathering Corp. v. United States, 34 Fed.Cl. 745, 752 (1996) (citing Medart v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992) and Womack, 182 Ct.Cl. at 412-13 , 389 F.2d at 801 ).
discussed Cited "see" Earth Burners, Inc. v. United States
Fed. Cl. · 1999 · signal: see · confidence high
See Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992) (stating that “the government must act in good faith and use reasonable care in computing its estimated needs; it is not free to carelessly guess at its needs”). .
cited Cited "see" Celeron Gathering Corp. v. United States
Fed. Cl. · 1996 · signal: see · confidence high
See Medart v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992); Womack v. United States, 182 Ct.Cl. 399, 412-13 , 389 F.2d 793 (1968).
discussed Cited "see" Crown Laundry & Dry Cleaners, Inc. v. United States (2×)
Fed. Cl. · 1993 · signal: see · confidence high
See Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992); Ralph Constr., Inc., 4 Cl.Ct. at 731.
cited Cited "see, e.g." Travel Centre v. David J. Barram, Administrator, General Services Administration, David J. Barram, Administrator, General Services Adminstration v. Travel Centre
Fed. Cir. · 2001 · signal: see also · confidence medium
See also Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.
cited Cited "see, e.g." Travel Centre v. Barram
Fed. Cir. · 2001 · signal: see also · confidence medium
See also Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992).
discussed Cited "see, e.g." Datalect Computer Services, Ltd. v. United States
Fed. Cl. · 1998 · signal: see also · confidence medium
See 48 C.F.R. § 16.503 (a)(1) (1996); see also Medart, Inc. v. Austin, 967 F.2d 579, 582 (Fed.Cir.1992) (in formulating its estimate, the government must take into account information “reasonably available” to it).
discussed Cited "see, e.g." Technical Assistance International, Inc. v. United States
Fed. Cir. · 1998 · signal: see also · confidence medium
See Shader Contractors, Inc. v. United States, 149 Ct.Cl. 535 , 276 F.2d 1, 7 (1960) (“we must assume that any ... risk of loss was considered by the parties, and that the accepted contract price bid reflected a satisfactory resolution of the risk”); see also Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992) (“[In a requirements contract,] the risks associated with variance between actual purchases and estimated quantities are allocated to the contractor.”); Weistart, supra, at 611, 619-20 (citing 3 A. Corbin, Contracts § 569 (1960)).
discussed Cited "see, e.g." Service Technicians, Inc. v. United States
Fed. Cl. · 1997 · signal: see also · confidence medium
So long as the government acts in good faith in promulgating an estimate, “the mere fact that there is a significant variance between the estimates of work set forth in the contract and the actual work encountered in performance does not necessarily give rise to liability on the part of the government for the inaccurate estimates set forth in the contract.” Crown Laundry & Dry Cleaners, Inc. v. United States, 29 Fed.Cl. 506, 519 (1993); see also Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed.Cir.1992) (“[Because actual purchases vary significantly from government estimates does not ordin…
Retrieving the full opinion text from the archive…
MEDART, INC., Appellant,
v.
Richard G. AUSTIN, Administrator, General Services Administration, Appellee
20-1815.
Court of Appeals for the Federal Circuit.
Jun 24, 1992.
967 F.2d 579
Lester F. Smith and Robert L. McArty, Perry, Morrison & Smith, Jackson, Miss., argued, for appellant., Catherine A. Christman, Atty., Commercial Litigation Branch, Dept, of Justice, Washington, D.C., argued, for appellee. With her on the brief were Stuart M. Ger-son, Asst. Atty. Gen., David M. Cohen, Director and Martha H. DeGraff, Asst. Director. Also on the brief was Steven M. Stomski, Asst. General Counsel, Personal Property Div., General Services Admin., of counsel.
Nies, Mayer, Plager.
Cited by 43 opinions  |  Published
MAYER, Circuit Judge.

Medart, Inc. appeals the decision of the General Services Administration Board of Contract Appeals, 91-2 B.C.A. (CCH) 1123,-741, 1991 WL 15456 (1991), rejecting its demand for reimbursement of losses incurred in the performance of a requirements contract because of variance between actual orders and the government’s estimated requirements. We affirm.

Background

The underlying facts are essentially undisputed. On January 30, 1985, the General Services Administration (GSA) issued a solicitation for bids on a requirements contract to supply gray metal storage and wardrobe cabinets to several hundred federal ordering agencies, including military activities having between 100 and 300 ordering locations throughout the world. The solicitation specified a contract period from September 1, 1985, to August 31, 1986, with an option to renew for one additional year. It set out six line items, each one broken down into three delivery zones. The contract was to be awarded on an item-by-item and zone-by-zone basis.

Estimated requirement quantities for each line item in each zone were included in the solicitation. Beginning on November 21, 1984, the estimates were prepared at the contracting officer’s request to GSA's inventory management branch. The GSA supervisory inventory management specialist provided information on the number of units ordered by zone during the previous fiscal year from October 1983 to September 1984, the most current twelve month period available. GSA’s procurement officials used no other method to determine the estimated quantities for the solicitation, and they did not adjust estimates to reflect significant discrepancies between earlier estimates for the contract items and actual orders.

On March 4,1985, Medart submitted bids on five of the six line items in each of the three delivery zones. The contracting officer determined that Medart was low bidder on three of the five items in all zones and, on May 2, 1985, awarded the contract on those items. On June 12, 1985, the contracting officer also accepted Medart’s bid on a fourth line item in all zones.

Over the course of contract performance, the actual orders for the pertinent line items deviated significantly from the government estimates in the solicitation:

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Therefore, Medart filed a claim with the contracting officer alleging that “we have suffered devastating losses as a result of excessive freight and manufacturing costs which have resulted from a drastic imbalance in the mix of actual orders received compared to the estimated quantities provided in the original solicitation for bids.”

The contracting officer denied the claim, stating, “The fact that the quantities ordered for the items awarded differed from the good faith estimates set forth in the original solicitation is not considered a com-[*581] pensable change, since all the Government is obligated to do is order its actual requirements.” On appeal, the board upheld the decision of the contracting officer.

Discussion

A requirements contract calls for the government to fill all its actual requirements for specified supplies or services during the contract period by purchasing from the awardee, who agrees to provide them at the agreed price. 48 C.F.R. § 16.-503(a) (1991); see Shader Contractors, Inc. v. United States, 276 F.2d 1, 4, 149 Ct.Cl. 535 (1960). This arrangement is useful when the government anticipates recurring needs but cannot predetermine the precise quantities or future demands at the time of the award. 48 C.F.R. §§ 16.501(a), 16.-503(b) (1991). The very nature and use of a requirements contract presupposes uncertainty about actual purchases.

Under the Federal Acquisition Regulations the contracting officer must furnish estimated quantities in a solicitation contemplating a requirements contract:

For the information of offerors and contractors, the contracting officer shall state a realistic estimated total quantity in the solicitation and resulting contract. This estimate is not a representation to an offeror or contractor that the estimated quantity will be required or ordered, or that conditions affecting requirements will be stable or normal. The contracting officer may obtain the estimate from records of previous requirements and consumption, or by other means, and should base the estimate on the most current information available.

Id. § 16.503(a)(1). The express terms of this regulation make clear that the risks associated with variance between actual purchases and estimated quantities are allocated to the contractor. Accordingly, estimated quantities are “not guarantees or warranties of quantity.” Shader, 276 F.2d at 7. The Medart contract explicitly reiterates this allocation:

The quantities shown herein as estimated requirements are based upon information made available to the General Services Administration. Since, however, such estimates are being furnished to the bidder solely for general informational purposes, no guarantee is given that any quantities will be purchased, but assurance is accorded that such bona fide needs as may arise will be obtained subject to any provisions elsewhere set forth in this contract.

Therefore, because actual purchases vary significantly from government estimates does not ordinarily give rise to liability on the part of the government. See Clearwater Forest Indus., Inc. v. United States, 650 F.2d 233, 240, 227 Ct.Cl. 386 (1981); see also Womack v. United States, 389 F.2d 793, 802, 182 Ct.Cl. 399 (1968). On the other hand, presumably contractors rely on the proffered estimates in formulating their bids, so the government must act in good faith and use reasonable care in computing its estimated needs; it is not free to carelessly guess at its needs. Where a contractor can show by preponderant evidence that estimates were “inadequately or negligently prepared, not in good faith, or grossly or unreasonably inadequate at the time the estimate was made[,]” the government could be liable for appropriate damages resulting. Clear-water Forest, 650 F.2d at 239. Medart’s suggestion that when actual orders vary significantly from estimates the burden of persuasion should shift to the government to prove the reasonableness of its estimating procedure is not well taken.

Medart argues that taking last year’s orders as next year’s estimated needs is simply an unreasonable procedure. It contends that in determining reasonable estimates, GSA should have, among other things, contacted or polled end-users about their projected needs and budgets, considered the use of statistical formulas such as regression analysis, used more than one year’s ordering history, and checked the effectiveness of its estimating procedure based on past performance. Each of these, and many other approaches, might have improved the accuracy of the government estimates, but their mere existence does[*582] not mean the approach selected was not reasonable.

The controlling regulation explicitly states that “[t]he contracting officer may obtain the estimate from records of previous requirements and consumption, or by other means, and should base the estimate on the most current information available.” 48 C.F.R. § 16.503(a)(1) (1991). This is precisely how the contracting officer formulated the estimates in this case. Medart says that if “other means” produce more realistic estimates than “records of previous requirements and consumption,” then “other means” should be used. For example, Medart suggests that GSA should have polled end-users about their projected needs and budgets. But the scope of this contract was extensive; it was used to supply cabinets to several hundred ordering agencies, including hundreds of military sites throughout the world. The board found that there was no central point to obtain accurate predictions of orders by ordering agencies. The government used information that was reasonably available; it need not search for or create additional information. See Womack, 389 F.2d at 801; accord Chemical Technology, Inc. v. United States, 645 F.2d 934, 946, 227 Ct.Cl. 120 (1981).

The government may go beyond the requirements of the regulations, of course. And it might be well advised to do so if it wants to secure the best prices and avoid contractors raising their bids to cover the uncertainties. But we are in no position to impose such a requirement either in this case or as a general proposition in the face of the regulations promulgated by competent authority. The regulations explicitly say that estimates may be based on the most current information about previous requirements available; Medart knew this, as well as who bore the risks of variances in quantity. It should have factored the risks into its bid, see Shader, 276 F.2d at 7, just as the regulation was factored into the contract.

Medart’s other arguments are equally without merit.

Conclusion

Accordingly, the decision of the General Services Administration Board of Contract Appeals is affirmed.

AFFIRMED.