ASG Solutions Corp., dba American Systems Group v. United States

Under the landmark decision Schlesinger v. United States, 390 F.2d 702 (Ct. Cl. 1968), the termination for default (“T4D”) of a federal contract is void if the contracting officer abdicates their independent administrative discretion. This core principle was codified in the Federal Acquisition Regulation (FAR) 49.402-3(f) factors adopted in 1984, which mandate that a contracting officer “shall” consider seven performance-related business factors prior to T4D. In a series of decisions culminating in Dep’t of Transp. v. Eagle Peak Rock & Paving, Inc., 69 F.4th 1367 (Fed. Cir. 2023), however, the Federal Circuit has eradicated Schlesinger and the role of the FAR factors, establishing that a contracting officer’s failure to exercise independent judgment is legally irrelevant and T4D is proper as an automatic consequence of a contractor’s technical breach. The questions presented are:

1. Whether the government must prove that a contracting officer exercised independent, contemporaneous discretion prior to T4D, or whether a T4D remains valid when the evidentiary record contains zero evidence that the contracting officer exercised any independent business discretion, so long as an underlying breach occurred.

2. Whether the government may satisfy its burden to prove the contemporaneous exercise of administrative discretion by relying solely on an unauthenticated memorandum that appears fraudulent on its face and is admitted “not for the truth of its contents.”