International Oil Trading Company
Docket: ASBCA 57491, ASBCA 57492
Decision date: 2012-06-22

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of -- ) 
) 
-International Oil Trading Company .) ASBCA Nos. 57491, 57492 
) 
Under Contract Nos. SP0600-07-D-0483 ) 
SP0600-09-D-0515 ) 
APPEARANCES FOR THE APPELLANT: Ronald H. Uscher, Esq. 
Donald A. Tobin, Esq. 
Peckar & Abramson, P.C. 
Washington, DC 
APPEARANCES FOR THE GOVERNMENT: Daniel K. Poling, Esq. 
DLA Chief Trial Attorney 
Howard M.Kaufer, Esq. 
Senior Counsel 
Caroline I. Chien, Esq: 
Assistant Counsel 
DLAEnergy 
Fort Belvoir, VA 
OPINION BY ADMINISTRATIVE JUDGE FREEMAN 
ON APPELLANT'S MOTION FOR PARTIAL SUMMARY JUDGEMENT 
International Oil Trading Company (lOTC) has appealed the denial of its claims 
totaling $74.7 million for fuel delivered to the government under the captioned contracts 
(hereinafter "Contract 0483" and "Contract P515"). It now nloves for partial summary 
judgment on two contract interpretation issues regarding Clause F1.09.100(a)(2)(iv)(A) 
(hereinafter "the Quantity Determination clause") of Contract 0483. The government 
opposes t~e motion on both issues. We grant the motion to the extent indicated below. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. On 3 May 2007, the government awarded IOTC Contract 0483 for delivery of 
fuel to four military installations in Iraq on an as-ordered (indefinite delivery) basis. The 
base period of the contract ran from 1 July 2007 through 30 April 2008. The contract 
specified fixed prices for gallons of fuel delivered to and accepted by the government. 
The total estimated contract value at award was $456,802,652.89. (R4, tab 2 at 1, 3) The 
subsequent exercise of options and contract amendnlents extended the contract 
performance period to 31 August 2009 and the contract value to $1,068,435,275.91 (id. at 
13-14, 24, 32,44). 

2. The Quantity Determination clause of Contract 0483 stated in relevant part: 
iv. 	DELIVERIES BY TANK TRUCKITRUCK AND 
TRAILERIT ANK WAGON. 
(A) On items requiring delivery on a f.o.b. destination 
basis by tank truck, truck andtrailer, or tank wagon, the 
quantity shall be determined on the basis of temperature 
compensating meters, on the receiving system - (or if the 
receiving system meters are inoperative) on the basis of 
(i) Calibrated meter on the conveyance; or 
(ii) Gauging the delivery conveyance ... ; or 
(iii) Providing the receiving activity with the net 
quantity determined at the loading point by a calibrated 
loading rack meter or calibrated scales. This quantity must be 
mechanically imprinted on the loading rack meter ticket that 
is generated by the loading rack meter or scale.) 
(R4, tab 1 at A-29, tab 2 at 1-2)1 
3. The fuel destined for Iraq under Contract 0483 was loaded into IOTC tank 
trucks in a duty-free zone at the port of Aqaba, Kingdom of Jordan (hereinafter Jordan). 
The weight of the fuel loaded in each tank truck was determined by Jordan customs 
officials weighing the truck before and after loading on a calibrated "weighbridge" scale. 
The "weighbridge" scale mechanically printed a ticket recording the weights and the 
difference in the weights as the weight of the loaded fuel for each tank truck. 
4. For each tank truck load of fuel, IOTC prepared by computer a "Fuel Delivery 
and Acceptance Form." This form includedan identification of the truck and driver, the 
convoy date, the.type 'of fuel loaded, the fuel weight taken from the Jordan customs 
weighbridge ticket at Aqaba, and a conversion of that fuel weight to U.S. gallons. The 
bottom of the form was to be completed by the U.S. government rep~esentative at the 
discharge site acknowledging receipt of the fuel. 
Hereinafter, we will refer to subsections (a)(2)(iv)(A)(i), (ii) and (iii) of the Quantity 
'Determination clause as "alternatives" (i), (ii) and (iii). 
2 
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5. The procuring agency2 Quality Representative (QR) at the Aqaba loading site 
reviewed IOTC's preparation of the Fuel Delivery and Acceptance Forms (app. mot., 
ex. 3 at 6). After loading and weighing, the tank trucks moved to an assembly area for. 
convoy to the Jordan/Iraq border (app. mot., ex. 3). At the Karanla border post on the 
Jordan/Iraq border, the tank trucks were again weighed by Jordan customs to assure that 
none of the duty-free fuel in the tanks had been diverted to the Jordan economy while en 
route to the border. After crossing the border into Iraq, the tank trucks proceeded under 
u.s. military escort to their respective discharge sites. ' 
,6. There were four discharge sites in Iraq for the Contract 0483 fuel. These were 
Al Asad (AA), Al Taqaddum (TQ), Korean Village (KV) and Trebil. These discharge 
sites were managed by, and the discharge of the fuel from the tank trucks was performed 
by, u.s. military personnel or U.S. Army contractor employees. Apart from the truck 
drivers, no IOTC personnel were allowed into Iraq to observe the discharge process at the 
sites. It is not disputed that none of the discharge sites had temperature compensating 
meters on their fuel receiving systems. Three of the discharge sites had meters, but the 
temperature compensation had to be computed manually. One site (Trebil) had no meter 
or any other device for measuring received fuel and the government accepted the Aqaba 
weighbridge measurements at that site. It is not disputed that the government never 
directed IOTC to provide calibrated dispensing meters or calibrated tank gauging devices 
on the tank trucks. (CompL,and answer ,-r,-r 47, 48, 49; 51, 52; app. mot., ex. 4 
at 3; gov't opp'n, statement of undisputed material facts at 7 n.l). 
7. Shortly after the start of deliveries under Contract 0483 in July 2007, it became 
apparent that the gallons reported by the. receiving personnel at the discharge sites were 
less than the loaded gallons indicated on the Fuel Delivery and Acceptance Forms and 
invoiced by IOTC (R4, tab 5). The contracting officer instructed IOTC to invoice on the 
basis of the govenlment receiving reports. On 10 August 2007, IOTC responded to this 
instruction by citing the Quantity Determination clause and further stating: 
It is- IOTC's opinion that the conditions on the ground at the 
discharge points neither meet the metering/gauging 
requirements of the clause nor allows us to certify the validity 
of the procedures and the accuracy of the measurenlents. As 
you know we are still unable to send our personnel to the 
bases as required by the Contract and in addition to our 
presence at the locations we consider necessary (as per 
normal international procedures on fuel contracts) to use the 
services of a qualified and reputable independent inspector 
2 The procuring agency at award was the Defense Energy Support Center (DESC). The 
current name of that agency is the Defense Logistics Agency-Energy 
(DLA-Energy). ' 
3 


(contracted 50%/50% by both parties) to certify the quality 
and quantity of the fuel delivered. 
Additionally, we have informed DESC that some of our 
trucks have returned to the border with high quantities of fuel 
which have given IOrC problems with Customs. 
We believe the use of the Government controlled weigh 
bridge at Aqaba (which generates a printed ticket per truck) 
and the additional verification of the quantities of the trucks 
at the weigh bridge at the border (fines are imposed to the 
trucks if the discrepancy between the two measures is greater 
than 500 Kgs) represents a more accurate option under the 
actual conditions to determine our contractual quantities. 
However, as a temporary solution to this issue, IOTC has 
agreed to change our invoices to reflect the discharged figures 
indicated by the bases in order to be able to receive initial 
payment necessary to guarantee the continuation of our 
operations .... 
(R4, tab 7 at 1) 
8. On 21 December 2007, IOTC by counsel requested an interim partial payment 
of$15,000,000 to compensate IOTC for the difference between the loaded quantities at 
Aqaba and the governm,ent reports of the quantities received at the four discharge sites 
(R4, tab 13). Discussions of the quantities and payment issues continued between the 
parties without resolution over the following year, but the requested interim payment was 
not made. There is no evidence in the record on the motion that the government 
considered, at any time over the remaining 20 months of contract performance, resolving 
the dispute by providing the specified temperature compensating meters on the receiving 
systems at the discharge sites. 
9. In June 2008, an internal DESC investigation team was directed to determine, 
among other things, whether the U.S. government and IOTC were compliant with the 
Quantity Determination clause of Contract 0483. In a report dat~d 1 September 2008, the 
team stated its findings on the contract compliance question as'follows: 
Finding lA:The US Government failed to ensure 
Temperature Compensating Meters (TCM) were in use at the 
receiving locations in accordance with CIAW) 
SP0600-07-D-0483, Quantity Determination Clause 
Fl.09.100, paragraph (A). 
4 
,j 

Finding IB: Our investigation found no evidence that the 
U.S. Govenlment notified 10TC that TCMs were not 
available. 
Finding I C: Our investigation found no evidence the U.S. 
Government requested 10TC [to] equip 10TC Tank T[r]ucks 
with calibrated metering devices lAW default option (i). 
Finding ID: Our investigation found no evidence that the 
U.S. Government requested 10TC [to] provide calibrated 
capacity tables to permit gauging of conveyance upon receipt 
lAW default option (ii). 
FindIng IE: Our investigation found that 10TC was,not 
compliant with default option (iii). 10TC provided the 
receiving -activity with a net quantity determined at the 
loading point by calibrated scale. However, the loading 
documents presented upon receipt at all four delivery 
locations are handwritten and not mechanically imprinted. 
Calibration certifications of the weight scales at the Aqaba 
Refinery and the Jordanian Customs borger post at Karama 
provided by 10TC to the investigation team were in order and 
therefore are compliant with default option iii( c). 
(App. mot., ex. 4 at 2-4) 
10. The finding in the DESC investigation team report that "the [IOTC] loading 
documents presented upon receipt at all four delivery locations are handwritten and not 
mechanically imprinted" is contradicted by the 302 Fuel Delivery and Acceptance Forms 
submitted by 10TC as a sample of the 30,000 deliveries over the 26-month term of the 
contract. All of the data provided by 10TC on these forms, including the loaded fuel 
weight at the terminal, is computer printed, not handwritten. The handwritten entries are 
in the acceptance section ofthe forms that is con1pleted by the government representative 
accepting the delivery. Moreover, the computer-printed-Ioaded weight on these forms is 
exactly the same as the machine-printed loaded weight on the loading terminal 
weighbridge ticket for the same vehicle on the same loading date. (App. SUppa R4, tabs I, 
2; app. mot., ex. 3 at 6-7) On this record, there is no genuine issue of material fact that 
the net fuel quantity determined at the loading point by calibrated scales was transcribed 
from the machine-imprinted weighbridge tickets to the Fuel Delivery and Acceptance 
Forms that were provided to the receiving activity at the discharge site. 
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11. By letter to IOTC dated 13 January 2009, the contracting officer effectively 
ended settlement discussions with the following statement: 
This responds to the many discussions between DESC 
and IOTC regarding 10TC's allegations of quantity 
4iscrepancies resulting in underpayments under subject 
contract 
The quantity determination clause in the contract states 
that quantity will be determined using 
temperature-compensating calibrated meters (TCCMs). 
DESC acknowledges that there are no TCCMs at the 
destinations to which 10TC is delivering. Quantity is instead 
determined by calibrated meter with manual temperature 
correction. This inconsistency between the nlethod described 
in the contract and the method used does not by itself entitle 
10TC to compensation unless it resulted in underpayments. 
After a review by a dedicated team of inventory management 
specialists, DESC finds no evidence of underpayment and 
cannot justify additional compensation to 10TC, at this time. 
(R4, tab 31) 
12. On 5 March 2010, 10TC submitted a certified claim in the amount of 
$20,032,140.72 under Contract 0483 for the difference between the quantity of fuel 
measured at Aqaba pursuant to alternative (iii) of the Quantity Determination clause of 
the contract, and the quantity measured by the government at the discharge sites for the 
period July 2007 through February 2008 (R4, tab 33). 
13. On 20 August 2010, 10TC submitted a supplemental certified claim,in the 
amount of$48,783,478 under Contract 0483 for the difference between the quantityof 
fuel measured at Aqaba pursuant to alternative (iii) of the Quantity Determination clause 
of the contract and the quantity measured by the government at the discharge sites for the 
period 1 March 2008 t031 August 2009 (R4, tabs 40, 41).3 
14. By final decision dated 17 November 2010, the contracting officer denied the 
10,TC claims of 5 March and 20 August 2010 entirely (R4, tab 42). The captioned 
3 10TC's claim letter of20 August 2010 also included a claim in the amount of 
$5,917,482 under Contract 0515 on grounds similar to the Contract 0483 claims. 
However, the Quantity ,Determination clause in Contract 0515 is not identical to 
the clause in Contract 0483 and the Contract 0515 claim is not at issue in 
appellant's present motion for partial summary judgment.' 
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appeals followed. The 5 March 2010 claim under Contract 0483 is docketed as ASBCA 
No. 57491. The 20 August 2010 supplemental claim under Cont~act 0483 is docketed as 
ASBCA No. 57492. The 20 August 2010 clainl under Contract 0515 is docketed as 
ASBCA No. 57493. 
DECISION 
IOTC moves for partial summary judgment on· Count I of its c,ompIaint. Count I is 
for judgment in the amounts of $20,032, 141 (ASBCA No. 57491) and $48,783,478 
(ASBCA No. 57492) for the difference in dollars between the determination of delivered 
quantity at the Aqaba loading sites pursuant to alternative (iii) of the Quantity 
Determination clause in Contract 0483 and the determination of delivered quantity using 
non-temperature compensating meters on the receiving systems at three. of the discharge 
sites with manual computation of temperature compensation. 4 Summary judgment is 
requested on two issues. The first issue is whether alternative (iii) of the Quantity 
Determination clause is the applicable measure of delivered quantity. The second issue is 
whether IOTC complied with alternative (iii). (App. mot. at~) Summary judgment may 
be granted if there are no genuine issues of material fact and the moving party is entitled 
to judgment as a matter of law. Mingus Constructors, Inc. v. United States, 812 F.2d 
1387,1390 (Fed. Cir. 1987). 
On the first issue, the Quantity Determination clause bfContract 0483 stated that 
the delivered quantity of fuel "shall be determined on the basis of temperature 
compensating meters on the receiving system - (or if the receiving .system meters are 
inoperative) on the basis of (i) Calibrated meter on the conveyance; or (ii) Gauging the 
delivery conveyance ... or (iii) ... the net quantity determined at the loading point by a 
calibrated loading rack meter or calibrated scales .... " The contract did not specify the use 
of non-temperature compensating meters on the receiving systenls with manual 
computation of temperatur~ compensation as an alternative method of determining 
delivered quantity. (SOF ~ 2) 
The government argues that the phrase "or if the receiving system met~rs are 
inoperative" means that all meters on the receiving systems, whether or not they are 
temperature compensating meters, must be inoperative before the specified alternatives 
apply. We disagree. The cited phrase appears in the same sentence and immediately 
following the specification of "temperature compensating meters on the receiving 
system." In this context, the words "receiving system meters" in the cited phrase refer to 
the immediately preceding "temperature compensating meters on the receiving system." 
The government's interpretation to the contrary is not within the zone of reasonableness 
and we find no ambiguity in the clause. The government cites a Declaration of the 
contracting officerdated 20 August 2011 as evidence that the government's intention 
4 The fourth site, Trebil, is not separately addressed in the complaint (see SOF ~ 6). 
7 


when it awarded the contract on 3 May 3007 was to use meters to determine quantity and 
"not IOTC's weight scales" (gov't opp'n at 6). This extrinsic evidence of the contracting 
officer's unilateral intent cannot be used to vary the unambiguous terms of the written 
contract. See Sundt Construction, Inc., ASBCA No. 57358, 11-1 BCA, 34,772 at 
171,120, aff'd, No. 2011-1603, 2012 U.S. App. LEXIS 11614 (Fed. Cir. 2012). 
The government argues that manual calculation of the temperature compensation 
substantially complied with the contractual requirement to use temperature compensating 
meters (gov't opp'n at 8-12). We do not agree. Manual calculation is inherently more 
. 	prone to error than machine calculation. Moreover, the government's substitute 
inspection method is irrelevant where, as here, the contract specified agreed alternatives 
to the specified primary method and the proffered method was not one of the agreed 
alternatives in the contract. 
. The second issue on the motion is also one of contract interpretation. The only 
non-compliance alleged by the government is that IOTC did not submit the loading-site 
machine-imprinted weighbridge ticket with each Fuel Delivery and Acceptance Form at 
the discharge site (gov't opp'n at 12-16). IOTC admits that it did not submit the 
weighbridge tickets with the Fuel Delivery and Acceptance forms, but denies that the 
contract required it to do so. We agree. We find nothing in the contract requiring the 
weighbridge tickets to be submitted with the Fuel Delivery and Acceptance Forms. The 
contract required that the loaded weight nlechanically-imprinted on the weighbridge 
ticket be provided to the receiving activity, but not the ticket itself. We have found above 
that there is no genuine issue of material fact that the Fuel Delivery and Acceptance 
Forms provided the receiving activity with the relevant loading point weighbridge data. 
(SOF,10) 
The government contends that there are genuine issues of material fact with 
r~spect to weight scale calibration and inconsistent IOTC loading data records at the 
Aqaba loading point (gov't opp'n at 16-17). The cited issues are relevant to the 
determination of the amount of fuel actually loaded ~t Aqaba, but are not relevant to the 
contract interpretation issues on the present motion. 
The government argues that events after loading render the loaded amounts 
"inappropriate" for determining the quantity chargeable to the government. The events 
referred to are for the most part evidence of pilferage by the truck drivers, leaking tanks, 
and failure to completely empty the tanks at the discharge sites. (Gov't opp'n at 17-19) 
The specified primary method and alternatives (i) and (ii) of the Quantity Determination 
clause clearly placed the risk of fuel losses en route from Aqaba to the discharge sites on 
IOTC. However, alternative (iii) of the same clause equally as clearly placed the risk of 
en route fuel losses on the government. If the government thought this.risk was I 
unacceptable, it should not have agreed to alternative (iii) before award. Moreover, at 
any time after award, the government could have avoided entirely any possible risk of 
8 


10TC using alternative (iii) by simply providing the discharge sites with the ten1perature 
compensating meters for their receiving systems as was specified in the contract. The 
government has only itself to blame for failingto do so. (SOF ~ 8) 
The governn1ent argues that the motion for partial summary judgment should be 
denied because Contract 0483 is void for taint of bribery. 5 There is some evidence in 
exhibits 9,-12 of the government's surreply that at sometime after award of Contract 0483, 
in connection with an award protest and the exercise of the first option year, a $9,000,000 
bribe was paid by persons acting for 10TC to a Jordan.official to assure that permits 
required to transport the fuel across Jordan from Aqaba to the Iraq border would be 
limited to 10TC and two other companies. (Gov't opp'n at 19-20; gov't surreply at 9-12) 
We will not consider this allegation in deciding the present motion that is limited to the 
interpretation of the Quantity Determination clause of Contract 0483. However, since 
further proceedings on these appeals will be necessary, the government may assert its 
bribery/void contract allegation by appropriate motion., See Schuepferling GmbH & Co., 
KG, ASBCA No. 45564, 98-1 BCA ~ 29,659. 
Finally, the government argues that the motion for partial summary judgment 
should be denied because 10TC has not provided the information requested by the 
government on discovery "about interpretation of [the Quantity Determination clause], 
theft, incomplete loadings, problems with 10TC trucks, and the private actions against 
10TC and its president ... " (gov't opp'h at 21). We have determined above that the plain 
language of the QuantitY Determi~ation clause was unambiguous. Therefore, discovery 
of information about the interpretation of the clause is discovery of extrinsic evidence 
that is irrelevant. See Sundt Construction, 11-1 BCA ~ 34,772 at 171,120. The other 
information requested by the government may be relevant to other aspects of the appeal, 
such as the validity of the contract and the quantum claimed, but it is not relevant to the 
two contract interpretation issues posed by appellant's motion for part'ial summary 
judgment. 
We have found no genuine issues of material fact on the two contract 
interpretation. issues presented and 10TC is entitled to judgment on those issues as a 
matter of law. On the first issue, since the government failed to provide the specified 
temperature compensating meters and failed to implement either of the first two specified 
alternatives, alternative (iii) was by default the contractually specified method for 
determining quantity of fuel delivered ... On the second issue, the requirement in 
alternative (iii) was for the load data on the weighbridge ticket. That requirement was 
met when the Delivery and Acceptance Form with the transcribed weighbridge ticket 
load data was submitted to the receiving activity at the fuel discharge site. 
5 We"note that this was not asserted as an affirmative defense in the Answer. 
9 

The motion for partial summary judgment is granted on the first issue. The 
motion is granted on the second issue to the extent of our determination that the delivery 
documentation was in compliance with alternative (iii). 
Dated: 22 June 2012 
I concur I concur 
~~~U)T~
/MARKN.STMPLER EUNICE W. THOMAS 
Administrative Judge Administrative Judge 
~cting Chairman Vice Chairman 
Armed Services Board Armed Services Board 
of Contract· Appeals of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA Nos. 57491, 57492, 57493, 
Appeals of International, Oil Trading Company, rendered in conformance 'with the 
Board's Charter. 
Dated: 
CATHERINE A. STANTON 
Recorder, A.rmed Services 
Board of Contract Appeals 
10