Endure Industries, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of - )

)

Endure Industries, Inc. ) ASBCA No. 64064

)

Under Contract No. SP0200-22-H-0049 )

APPEARANCE FOR THE APPELLANT: Mr. Manoj Kumar

APPEARANCES FOR THE GOVERNMENT: Song U. Kim, Esq.

Associate General Counsel

Weston E. Borkenhagen, Esq.

Trial Attorney

Defense Health Agency

Falls Church, VA

OPINION BY ADMINISTRATIVE JUDGE HERZFELD

ON THE GOVERNMENT’S MOTION TO DISMISS

Endure Industries, Inc. (Endure), appeals the Defense Health Agency’s

(DHA’s) decision to cancel Endure’s incentive agreement to provide sterilization

packaging supplies. DHA moves to dismiss Endure’s complaint, asserting that

Endure’s incentive agreement was not a contract with the government and, thus,

Endure has failed to state a claim upon which relief may be granted. In its response to

the motion, Endure asserts for the first time that it also has a separate implied-in-fact

contract with the government. For the reasons discussed below, we dismiss Endure’s

appeal.

STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

The Defense Logistics Agency’s Troop Support (DLA Troop Support) is the

Department of Defense’s (DoD) contracting office responsible for supplying

pharmaceuticals, surgical supplies, and medical equipment to DoD’s worldwide

medical treatment facilities. DEFENSE LOGISTICS AGENCY, Working with DLA

Troop Support Medical, https://www.dla.mil/Troop-Support/Medical/Working-with-

Medical/#mpvp (last visited Mar. 19, 2025). DLA Troop Support contracts with

pharmaceutical and medical/surgical distributers – “prime vendors” – that can deliver,

within 24-hours, supplies ordered by DoD’s military treatment facilities at prices

authorized by DLA Troop Support. Id. DLA Troop Support separately enters

distribution and pricing agreements with manufacturers and suppliers of

pharmaceutical and medical/surgical products. Id. The distribution and pricing

agreement provides “fair and reasonable” prices for these products, which the prime

vendors may rely on to purchase and distribute the products to military treatment

facilities. Id.

Endure produces and supplies disposable medical products, including

sterilization packaging supplies such as the peel packs for steam sterilization (at issue

in this appeal) (compl. ¶¶ 1, 3). Endure registered for a distribution and pricing

agreement on DLA Troop Support’s website (R4, tab 7). DLA Troop Support

approved the agreement on September 21, 2022, which the website lists as the

“Contract” effective date under the “Contract Details” part of the website (id. at 1). As

part of the distribution and pricing agreement, Endure agreed to the terms and

conditions provided by DLA Troop Support (id. at 2; R4, tab 6). Notwithstanding the

terminology on the website, the terms and conditions stated: “The government gives

no guarantee that any quantities will be purchased by either Medical Supply Chain or

its [Prime Vendor] awardee(s)” and the “issuance of a [distribution and pricing

agreement] in no way binds the Government or its awardee(s) to purchase any of the

products listed” (R4, tab 6 at 6).

As part of its distribution and pricing agreement with DLA Troop Support,

Endure consented and authorized prime vendors (who, as noted above, hold separate

contracts with the government) to distribute Endure’s products (R4, tab 6 at 2). The

terms and conditions warned that “[i]n order to sell products to the Government under

the Prime Vendor Program it is essential that [distribution and pricing agreement]

holders enter into a distribution agreement with the Prime Vendor” (R4, tab 6 at 3).

The distribution agreement between prime vendor and Endure would separately

“outline the terms and conditions by which the Prime Vendor is authorized to store,

distribute and/or sell” Endure’s products (id.). Those terms and conditions “shall be

consistent with the Prime Vendor’s good, commercial (that is, acceptable industry-

standard) business practices” and the “Prime Vendor is not required to accept” an

“agreement which appears inconsistent with good, commercial business practices”

(id.). As to commercial specifications, the distribution and pricing agreement between

Endure and DLA Troop Support stated, “Packaging, packing and marking shall be in

conformance with all applicable laws and regulations” (id.).

In February 2023, Endure applied to the Defense Health Agency’s Medical

Materiel Enterprise Standardization Offices (DHA) for inclusion on the agency’s

qualified supplier list for sterilization packaging supplies (compl. ¶ 4; app. resp.,

app’x at 16-20). The distribution and pricing agreement’s terms and conditions

specifically identify this program, explaining that DHA selects the “vendor offering

the best prices . . . to supply the enterprise-wide standardized product line” and the

“winning vendor is issued an Incentive Agreement . . . wherein the vendor agrees to

provide the standardized products at discounted prices” (R4, tab 6 at 8). The “vendor”

here is the supplier (Endure) because suppliers enter incentive agreements, not the

“prime vendor” that buys and distributes the qualified products and enters another type

of agreement (R4, tab 6 at 7-8; DEFENSE LOGISTICS AGENCY, Working with DLA

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Troop Support Medical, https://www.dla.mil/Troop-Support/Medical/Working-with-

Medical/#mpvp (last visited Mar. 19, 2025).

Based on Endure’s competitive pricing and complying with DHA’s technical

specifications, DHA entered an incentive agreement with Endure on May 15, 2023

(R4, tab 1; compl. ¶ 6; app. resp., app’x at 23 (“You are the lowest priced vendor of

those on the Qualified Suppliers List (QSL) for the Sterilization Packaging Supplies,

Peel Pack, Steam.”). The incentive agreement stated it was “pursuant to” Endure’s

distribution and pricing agreement with DLA Troop Support and “incorporated by

reference” those terms and conditions (R4, tab 1 at 1). The incentive agreement had a

five-year term with “estimated effective dates from 01 November 2023 through

31 October 2028” (R4, tab 1 at 2; compl. ¶ 8). Consistent with the distribution and

pricing agreement’s statement that Endure would supply its product enterprise-wide,

the incentive agreement stated, “Each facility agrees to purchase the listed products

according to the terms outlined in this agreement” (R4, tab 1 at 1).

In the incentive agreement, Endure agreed “that incentive prices are guaranteed

firm for 3 years” (R4, tab 1 at 2). Based on the incentive pricing and “good faith

volume estimates” provided by Endure in its qualified supplier listing and the

incentive agreement “announcements,” DHA stated it would “work[] towards an

80% purchase goal for this product line throughout the life of this agreement” (id.).

Although DHA stated it “will advertise and promote [incentive agreement] items, the

government has no volume commitment or purchase requirement under this

agreement, and it is possible that actual sales may not meet the 80% estimate” (id.).

The agreement reiterated: “The 80% estimate does not create a commitment for the

government and therefore the vendor should not rely on that estimate” (id.).

As to cancellation, the incentive agreement stated: “This agreement does not

represent a contract and may be canceled by either party in whole or in part without

cause 30 days after receipt of a written notice” (id. at 3). The incentive agreement also

stated: “The parties agree that cancellation of the [incentive agreement] is the only

recourse available if the [incentive agreement] holder ceases to be satisfied with the

level of sales or any other benefit, tangible or intangible, they expected to receive as an

[incentive agreement] holder” (id. at 2).

Endure began manufacturing and stocking its warehouses with the sterilization

pouches made to the government’s specific requirements in the incentive agreement

(compl. ¶ 11). Endure sold $43,281.60 worth of sterilization pouches to various DoD

facilities through a prime vendor (compl. ¶ 10).

Several months into the effective period of the incentive agreement, DHA

informed Endure that some end users had two concerns about using DHA’s products:

(1) Endure’s sterilization products included labelling on the porous side of the product,

which meant there was a risk that the ink from the label might leak into the product;

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and (2) the product expired after six months, which meant an end user would incur

additional costs to track when the product expired (compl. ¶ 11 & nn.i, ii; app. resp.,

app’x at 15). Endure offered to modify its products to comply with these technical

concerns (compl. ¶ 12 & n.ii; app. resp., app’x at 14).

On May 31, 2024, DHA issued Endure a notice cancelling the incentive

agreement effective July 1, 2024 (R4, tab 4). The notice stated: “Under the terms and

conditions of paragraph 5a of the original agreement, which allows the cancellation of

this agreement in whole or in part, without cause, by either party, thirty (30) days after

receipt of a written notice, this [incentive agreement] is hereby cancelled” (id.).

On October 28, 2024, Endure (through its non-attorney representative) filed a

complaint at the U.S. Court of Federal Claims alleging three counts: (1) breach of

contract based on the cancellation of the incentive agreement; (2) breach of the duty of

good faith and fair dealing; and (3) request for declaratory judgment stating that the

cancellation provision of the incentive agreement was invalid. See Complaint, Endure

Indus., Inc. v. United States, No. 24-1774 (Fed. Cl.) (ECF No. 1). On October 31,

2024, the court ordered Endure to retain counsel or show cause why the court should

not dismiss the case. Order to Show Cause, Endure Indus., Inc. v. United States,

No. 24-1774 (Fed. Cl.) (ECF No. 5). On November 12, 2024, Endure moved to

voluntarily dismiss its appeal without prejudice. Motion to Voluntarily Dismiss,

Endure Indus., Inc. v. United States, No. 24-1774 (Fed. Cl.) (ECF No. 7); (app. resp.,

app’x at 4-5). In its motion, Endure stated that government counsel in the case had

informed Endure’s representatives that the government intended to move to dismiss

Endure’s case for failure to file a certified claim with the contracting officer. Id. at 2.

Endure stated it did not file a certified claim because it asserted the government

“contracting officer took the position that the ‘incentive agreement’ with Endure did

not constitute a contract.” Id. On November 19, 2024, the court entered judgment

dismissing Endure’s case without prejudice. Judgment, Endure Indus., Inc. v. United

States, No. 24-1774 (Fed. Cl.) (ECF No. 9).

On November 16, 2024, Endure submitted a certified claim to the DLA Troop

Support contracting officer and DHA’s program manager (the agency official that

signed the incentive agreement) (R4, tab 2; app. resp., app’x at 12). As it did at the

Court of Federal Claims, Endure alleged that (1) DHA breached the contract based on

the cancellation of the incentive agreement, (2) DHA breached the duty of good faith

and fair dealing, and (3) the cancellation provision was “unenforceable as

unconscionable” (R4, tab 2 at 2). Endure sought “approximately $750,000” for unsold

inventory and reinstatement of the incentive agreement (id. at 2-3). Endure made no

allegations seeking any costs from the government based on fees imposed by a prime

vendor under an alleged implied-in-fact contract between the government and Endure

(R4, tab 2).

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On December 17, 2024, DLA Troop Support’s contracting officer responded to

Endure’s claim (R4, tab 3). DLA Troop Support determined “it was not a party to the

Incentive Agreement” and, “[t]herefore, no response on behalf of DLA is required”

(id.).

On February 2, 2025, Endure filed a notice of appeal with the Board and we

acknowledged the notice as Endure’s complaint, which alleged three counts (as it did

at the Court of Federal Claims and in its certified claim): (1) the government had

breached the incentive agreement and the “Incentive Agreement constituted a valid

and binding contract between Endure and the United States, as it included all essential

elements of a contract, including offer, acceptance, consideration, and mutual

obligations;” (2) the government had breached the duty of good faith and fair dealing

by changing the requirements of the agreement; and (3) declaratory judgment that the

termination provision of the incentive agreement was invalid (compl. ¶¶ 20-32).

Again, Endure made no allegations seeking any costs from the government based on

fees imposed by a prime vendor under an alleged implied-in-fact contract between the

government and Endure.

Counsel for DHA (not DLA Troop Support) noticed an appearance in this

appeal. On March 12, 2025, DHA moved to dismiss Endure’s appeal, asserting that

Endure’s incentive agreement was not a contract and, thus, the Board had no

jurisdiction over Endure’s appeal. In Endure’s response, for the first time, Endure

asserted it should receive costs from the government based on fees imposed by a prime

vendor because the prime vendor was enforcing the government’s policies, which

created a separate implied-in-fact contract between Endure and the government (app.

resp. at 1-5, app’x at 7-10). Also, Endure appeared to rely on a court decision that

does not exist and to rely on other court decisions that did not appear to support the

propositions for which they were cited. We issued an order to Endure to show cause

why we should not strike the brief. Endure responded by acknowledging that it used a

generative artificial intelligence program to assist in drafting the brief.

DECISION

I. Endure Has Failed to Plausibly Plead that its Incentive Agreement is a

Contract

A. Standard of Review

DHA has moved to dismiss for lack of jurisdiction, asserting that Endure has

failed to plausibly allege a contract between the government and Endure based on the

incentive agreement (gov’t mot. at 2-7). However, “the determination of whether or

not a contract in fact exists is not jurisdictional; it is a decision on the merits.” Avue

Tech. Corp. v. Sec’y of Health & Human Servs., 96 F.4th 1340, 1344-45 (Fed. Cir.

2024) (quoting, with emphasis added, Engage Learning, Inc. v. Salazar, 660 F.3d

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1346, 1355 (Fed. Cir. 2011)); Robinson, ASBCA Nos. 63727, 63809, 24-1 BCA

¶ 38,633 at 187,805 (same). Parties and “[c]ourts frequently confuse or conflate the

distinction between subject matter jurisdiction and the essential elements of a claim for

relief.” Engage, 660 F.3d at 1353.

To show jurisdiction before the Board, a party need only meet a low bar of non-

frivolously alleging a contract. Avue, 96 F.4th at 1344-45; Boeing Co. v. United

States, 968 F.3d 1371, 1383 (Fed. Cir. 2020) (“Allegations of subject matter

jurisdiction, to suffice, must satisfy a relatively low standard—must exceed a threshold

that ‘has been equated with such concepts as “essentially fictitious,” “wholly

insubstantial,” “obviously frivolous,” and “obviously without merit.’”) (quoting

Shapiro v. McManus, 577 U.S. 39, 45-46 (2015)). However, a challenge to whether a

party can actually prove it has a contract with the government constitutes a merits

question that may be addressed by a motion to dismiss for failure to state a claim.

Avue, 96 F.4th at 1345 (stating that “[t]he obligation to actually prove the existence of

such a contract does not arise until the case proceeds to the merits” (emphasis in

original)); Engage, 660 F.3d at 1353 (“[T]he failure to state a proper cause of action

calls for a judgment on the merits and not for dismissal for want of jurisdiction.”

(quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).

Here, DHA challenges the merits of Endure’s allegations, asserting that Endure

has failed to provide “plausible evidence” that a “contract exists between the parties”

(gov’t mot. at 3-7). For this standard, DHA mainly relies on one of our decisions,

which stated that a party “must present at least some plausible evidence of a contract

to satisfy . . . . the ‘non-frivolous’ allegation standard.” Safeco Ins. Co. of Am.,

ASBCA No. 60952, 17-1 BCA ¶ 36,819 at 179,450; see also Man & Machine, Inc.,

ASBCA No. 61608, 19-1 BCA ¶ 37,401 at 181,811 (same). Recently, however, the

Federal Circuit rejected the contention that a contractor must “produce sufficient

evidence” of a contract to meet the non-frivolous allegation standard. Avue, 96 F.4th

at 1345. Thus, DHA has mislabeled its motion as seeking to dismiss for lack of

jurisdiction rather than for failure to state a claim.

Given DHA’s arguments, we treat its motion as seeking to dismiss Endure’s

complaint for failure to state a claim. In this regard, Endure (to the extent it even

attempted to support its allegations of an express contract) addressed the substantive

legal issues raised by DHA’s brief and will not be prejudiced. Nat’l Air Cargo v.

United States, 117 Fed.Cl. 10, 16 (2015) (treating a “motion to dismiss for lack of

jurisdiction” as one for failure to state a claim where each party addressed the

substantive legal arguments and “neither party would be prejudiced”); see also Nicolas

v. United States, 35 Fed. Cl. 387, 388 n.1 (1996) (“Because both parties have taken

advantage of the opportunity to address the substantive issue of law before the court,

re-classifying defendant’s motion by correcting its title occasions no prejudice to

either party.”).

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Moreover, the Federal Circuit has stated that a trial court can sua sponte dismiss

a complaint for failure to state a claim under FED. R. CIV. P. 12(b)(6) without allowing

a party to respond: “We . . . have never held that a plaintiff is categorically entitled to

an opportunity to oppose a Rule 12(b)(6) motion. To the contrary, we have held that

the Court of Federal Claims ‘may dismiss sua sponte under Rule 12(b)(6), provided

that the pleadings sufficiently evidence a basis for that action.’” M.R. Pittman Grp.

LLC v. United States, 68 F.4th 1275, 1282 (Fed. Cir. 2023) (quoting Anaheim Gardens

v. United States, 444 F.3d 1309, 1315 (Fed. Cir. 2006)). 1 While Endure had an

opportunity to address the substantive legal issues in response to DHA’s motion, this

appeal would nevertheless present a basis for sua sponte consideration of dismissal for

failure to state a claim.

Although the Board’s rules include no equivalent to FED. R. CIV. P. 12(b)(6) or

12(c), “we permit motions to dismiss for failure to state a claim upon which relief may

be granted.” Fluor Intercontinental, Inc., ASBCA No. 62550, 22-1 BCA ¶ 38,105

at 185,095. “To survive a motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 570 (2007)); Kellogg Brown & Root Servs., Inc. v. United States, 728

F.3d 1348, 1365 (Fed. Cir. 2013) (noting that a tribunal “must accept well-pleaded

factual allegations as true and must draw all reasonable inferences in favor of the

claimant”). “We are not limited to the four-corners of the complaint,” and may review

“‘matters incorporated by reference or integral to the claim, items subject to judicial

notice, matters of public record, orders, items appearing in the record of the case, and

exhibits attached to the complaint whose authenticity is unquestioned[.]’” Fluor, 22-1

BCA ¶ 38,105 at 185,096 (quoting 5B CHARLES A. WRIGHT & ARTHUR R. MILLER,

FED. PRAC. & PROC. CIV. §1357 (3d ed.)); Lockheed Martin Integrated Sys., Inc.,

ASBCA Nos. 59508, 59509, 17-1 BCA ¶ 36,597 at 178,281; see also Cotter Corp.,

N.S.L. v. United States, 127 F.4th 1353, 1366 (Fed. Cir. 2025) (“We may also look to

matters incorporated by reference or integral to the claim, items subject to judicial

notice, and matters of public record.” (internal quotations and citations omitted)). For

example, we may look at the terms of the parties’ agreement in assessing whether the

complaint (which relies on the agreement) states a claim. Ute Indian Tribe v. United

States, 99 F.4th 1353, 1364, 1371-74 (Fed. Cir. 2024) (assessing agreement referenced

by, but outside, the pleadings on a motion to dismiss for failure to state a claim); Ace

Elec. Def. Sys., ASBCA No. 63224, 22-1 BCA ¶ 38,213 at 185,568 (“[W]e consider

1

On appeal, the Federal Circuit has sometimes converted a trial court’s jurisdictional

dismissal under 12(b)(1) into a dismissal for failure to state a claim under

12(b)(6). Columbus Rgl. Hosp. v. United States, 990 F.3d 1330, 1342 (Fed. Cir.

2021) (“If we conclude that Columbus’s contract-based allegations fail to state

a cognizable claim, we can convert the court’s Rule 12(b)(1) dismissal into a

Rule 12(b)(6) dismissal.”).

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the contract’s terms in determining whether the complaint asserts a claim upon which

relief may be granted.”).

B. Endure’s Incentive Agreement Was not a Contract

“Not every agreement is a contract.” Trauma Serv. Grp., Ltd. v. United States,

33 Fed. Cl. 426, 429 (1995), aff’d, 104 F.3d 1321 (Fed. Cir. 1997); see also

RESTATEMENT (SECOND) OF CONTRACTS § 3 cmt. a (1981) (“Agreement has in some

respects a wider meaning than contract, bargain or promise. . . . The word ‘agreement’

contains no implication that legal consequences are or are not produced.”). Every

agreement that is a government contract must have (1) mutuality of intent to contract,

(2) lack of ambiguity in offer and acceptance, (3) consideration, and (4) a government

representative with actual authority to bind the United States. Am. Bankers Ass’n v.

United States, 932 F.3d 1375, 1380-81 (Fed. Cir. 2019). Express or implied-in-fact

government contracts must meet these same four requirements. Id. at 1381.

In its complaint, Endure asserts that its incentive agreement with DHA

constituted a binding contract (with an invalid termination provision) that the

government breached by terminating the agreement (compl. ¶¶ 21-22, 32). DHA seeks

dismissal, asserting that the agreement lacks (1) mutuality of intent to contract, (2)

consideration, or (3) an authorized government agent that signed the incentive

agreement. We agree that the incentive agreement is not a contract because it lacks

mutuality of intent to contract and consideration. 2

1. The Incentive Agreement Lacks Mutuality of Intent to Contract

The incentive agreement does not demonstrate a mutuality of intent to contract.

“As a threshold condition of contract formation, there must be an objective

manifestation of voluntary, mutual assent.” Turping v. United States, 913 F.3d 1060,

1065 (Fed. Cir. 2019) (quoting Anderson v. United States, 344 F.3d 1343, 1353 (Fed.

Cir. 2003)); RESTATEMENT (SECOND) OF CONTRACTS § 18 (1981) (“Manifestation of

mutual assent to an exchange requires that each party either make a promise or begin

or render a performance.”). Typically, a party can show mutuality of intent by an offer

and reciprocal acceptance. Turping, 913 F.3d at 1065.

On the other hand, the parties may also show an “absence of mutual

understanding” to contract. Blackhawk Heating & Plumbing Co. v. United States, 622

F.2d 539, 551 (Ct. Cl. 1980). For example, a party may state that it intends its assent

2

DHA has also separately and explicitly moved to dismiss for failure to state a claim,

asserting that even if the incentive agreement was a contract, the agreement

only provided cancellation as a remedy to any breach (gov’t mot. at 8-9).

Because we conclude that the parties did not enter a contract, we need not

address this argument.

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to have no legal consequences. 1 E. ALLAN FARNSWORTH, FARNSWORTH ON

CONTRACTS § 3.7 (3d ed. 2003). This “manifestation of intention that a promise shall

not affect legal relations may prevent the formation of a contract.” RESTATEMENT

(SECOND) OF CONTRACTS § 21 (1981).

Here, the incentive agreement states: “This agreement does not represent a

contract and may be canceled by either party in whole or in part without cause 30 days

after receipt of a written notice” (R4, tab 1 at 3). The statement that the incentive

“agreement does not represent a contract” manifests an objective mutual intent by the

parties not to be bound by contract. Moreover, the incentive agreement also states that

“the government has no volume commitment or purchase requirement under this

agreement” (R4, tab 1 at 2). Similarly, the terms and conditions of the distribution and

pricing agreement (incorporated by reference into the incentive agreement) states that

the agreement “in no way binds the Government or its [vendor] awardee(s) to purchase

any products listed” (R4, tab 6 at 6). While these terms also inform the question of

consideration (discussed below), they indicate a lack of mutual intent to enter a

contract. Indeed, “[t]he easiest way for a party to make clear an intention not to be

legally bound is to say so.” 1 E. ALLAN FARNSWORTH, FARNSWORTH ON CONTRACTS

§ 3.7 (3d ed. 2003). These terms indicate an intent by the parties not to be mutually

bound by contract. The parties objectively did not mutually assent to contract and,

thus, Endure has failed to plausibly plead that it entered a contract with the

government.

2. The Incentive Agreement Lacks Consideration

The incentive agreement also lacks consideration and that serves as an

additional reason to conclude Endure and the government did not enter a contract.

Not every promise constitutes consideration: “To constitute consideration, a

performance or a return promise must be bargained for.” Ridge Runner Forestry v.

Venneman, 287 F.3d 1058, 1061 (Fed. Cir. 2002) (quoting RESTATEMENT (SECOND)

OF CONTRACTS § 71(1)). “A promise or apparent promise is not consideration if by its

terms the promisor or purported promisor reserves a choice of alternative

performances . . . .” Crewzers Fire Crew Transp., Inc. v. United States, 741 F.3d

1380, 1382 (Fed. Cir. 2014) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 77).

This is an illusory promise, which means “words in promissory form that promise

nothing; they do not purport to put any limitation on the freedom of the alleged

promisor, but leave his future action subject to his own future will, just as it would

have been had he said no words at all.” Ridge Runner, 287 F.3d at 1061; see also

1 SAMUEL WILLISTON & RICHARD A. LORD, WILLISTON ON CONTRACTS § 4:34

(4th ed., May 2025 Update) (“Words of promise which by their terms make the

performance entirely optional with the promisor whatever may happen, or whatever

course of conduct in respects the promisor may pursue, do not constitute a promise but

form only an illusory promise. This unlimited choice in effect destroys the promise

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and makes it illusory.”) (footnotes omitted). An illusory promise makes performance

optional and cannot serve as consideration. Lee’s Ford Dock, Inc., ASBCA

No. 59041, 16-1 BCA ¶ 36,298 at 177,013 (stating that “[w]ords of promise which . . .

make performance entirely optional with the ‘promisor’” do not constitute a promise

(quoting RESTATEMENT (SECOND) OF CONTRACTS § 77 cmt. a)), aff’d, 865 F.3d 1361

(Fed. Cir. 2017)). “[A] valid contract cannot be based upon the illusory promise of

one party . . . .” Crewzers, 741 F.3d at 1383 (quoting Ridge Runner, 287 F.3d

at 1062).

In some circumstances, tribunals will find consideration based on a party’s

obligation “to make a good faith effort” in performance. Franklin Co. v. United

States, 381 F.2d 416, 420 (Ct. Cl. 1967); Ingham Reg’l Med. Ctr. v. United States,

163 Fed. Cl. 384, n.10 (2022) (“A promise conditioned upon an event within the

promisor’s control is not illusory if the promisor also ‘impliedly promises to make

reasonable effort to bring the event about or to use good faith and honest judgment in

determining whether or not it has in fact occurred’” (quoting 1 CORBIN ON

CONTRACTS § 1.17 (2022)). In this regard, Endure has invoked the implied covenant

of good faith and fair dealing in its certified claim and complaint (R4, tab 2 at 2;

compl. ¶¶ 23-28). “[A] court will not find a contract to be illusory if the implied

covenant of good faith and fair dealing can be read to impose an obligation on each

party.” Chodos v. West Publishing Co., 292 F.3d 992, 997 (9th Cir. 2002). 3

An implied duty of good faith and fair dealing exists in all contracts, including

government contracts, and applies to both the government and private parties. Agility

Pub. Warehousing Co. KSCP v. Mattis, 852 F.3d 1370, 1383-84 (Fed. Cir. 2017) (“An

implied duty of good faith and fair dealing exists in government contracts and applies

to the government just as it does to private parties.”); Konecranes Nuclear Equip. &

Servs., LLC, ASBCA No. 62797, 24-1 BCA ¶ 38,586 at 187,560. However, the

implied duty cannot “be at odds with the terms of the original bargain, whether by

altering the contract’s discernible allocation of risks and benefits or by conflicting with

a contract provision.” Metcalf Constr. Co. v. United States, 742 F.3d 984, 991 (Fed.

3

This legal principle is distinct from the separate legal principle that the duty of good

faith and fair dealing does not apply to negotiation of a contract prior to award.

See, e.g., Scott Timber Co. v. United States, 692 F.3d 1365, 1372 (Fed. Cir.

2012) (noting that the covenant of good faith and fair dealing does not apply to

“pre-award conduct” because “that duty ‘does not deal with good faith in the

formation of a contract’”) (quoting RESTATEMENT (SECOND) OF CONTRACTS

§ 205 cmt. c)). While the duty does not apply in pre-contractual negotiations, it

does apply in assessing whether an alternative promise in a signed agreement

can be found as valid consideration (and not illusory). RESTATEMENT

(SECOND) OF CONTRACTS § 77, rep. note c (stating that an alternative promise

can be “found good consideration because of the implied duties of good faith

(§ 205) and reasonableness of the obligor’s satisfaction (§ 228)”).

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Cir. 2014); Amatea/Grimberg JV, ASBCA No. 60426 et al., 23-1 BCA ¶ 38,366

at 186,329 (“This duty is not free-floating but is tied to the explicit terms of the

contract.”), aff’d, No. 23-1700, 2025 WL 1752375 (Fed. Cir. June 25, 2025).

Here, the government has made only illusory promises because it made no

promise to buy anything from Endure prior to cancellation of the agreement.

Torncello v. United States, 681 F.2d 756, 769 (Ct. Cl. 1982) (“It is hornbook law . . .

that a route of complete escape vitiates any other consideration furnished and is

incompatible with the existence of a contract.”). In this regard, DHA points to the

incentive agreement’s cancellation provision, which allows cancellation “in whole or

in part without cause 30 days after receipt of a written notice” (R4, tab 1 at 3; gov’t

mot. at 8-9). The DHA incentive agreement “automatically expire[s]” if Endure’s

distribution and pricing agreement with DLA Troop Support “is terminated for any

reason” (R4, tab 1 at 3). The distribution and pricing agreement, in turn, also states

that it “may be canceled in whole or in part, without cause, by either party, 30 days

after receipt of a written notice or sooner as determined by the contracting officer”

(R4, tab 6 at 2). Indeed, without some type of purchase commitment, the open-ended

cancellation provision would render any promise illusory. Torncello, 681 F.2d at 761

(stating that “consideration is furnished” in a requirements contract “by the buyer’s

promise to turn to the seller for all such requirements”); Mason v. United States, 615

F.2d 1343, 1346 n.5 (Ct. Cl. 1980) (stating that, without a buyer’s promise to purchase

a “guaranteed minimum quantity of goods or services” in an indefinite quantity

contract, “the buyer’s promise is illusory”); see also OSC Solutions, Inc., ASBCA

No. 63294, 23-1 BCA ¶ 38,406 at 186,615-16 (concluding a blanket purchasing

agreement, which did not require the government to exclusively purchase from

contractor, lacked consideration), aff’d, No. 2024-1528, 2026 WL 44221 (Fed. Cir.

Jan. 7, 2026).

The incentive agreement included neither a minimum purchase requirement nor

required the government to purchase all of its supplies from Endure. When a “good

faith” undertaking has served as a basis for consideration, usually the agreement

includes a provision requiring an exclusive or semi-exclusive purchase obligation. See

Ace-Fed. Reporters, Inc. v. Barram, 226 F.3d 1329, 1330-32 (Fed. Cir. 2000) (finding

consideration where agreement had standard Federal Acquisition Regulation

Requirements clause and “the government promised that it would purchase only from

the contractors on the schedule”). Here, however, the incentive agreement states that

“the government has no volume commitment or purchase requirement under this

agreement” and “[t]he 80% estimate does not create a commitment for the government

and therefore the vendor should not rely on that estimate” (R4, tab 1 at 2). Similarly,

the distribution and pricing agreement (whose terms and conditions were incorporated

in the incentive agreement) explains that “[t]he government gives no guarantee that

any quantities will be purchased by either Medical Supply Chain or its [Prime Vendor]

awardee(s)” and the “issuance of a [distribution and pricing agreement] in no way

binds the Government or its awardee(s) to purchase any of the products listed” (R4,

11

tab 6 at 6). The distribution and pricing agreement also disclaimed that it was

exclusive, stating that DLA Troop Support “ancitipate[d] issuing multiple agreements

to firms supplying the same generic types of items” (id.). As with other types of

interpretation, we cannot employ a good faith rule to save the agreement “by

interpreting it as a requirements contract when it is not so susceptible” or as an

indefinite quantity contract when “it lacks a minimum quantity term.” Coyle’s Pest

Control, Inc. v. Cuomo, 154 F.3d 1302, 1305, 1306 (Fed. Cir. 1998); see also Flood v.

ClearOne Commc’n, Inc., 618 F.3d 1110, 1121 (10th Cir. 2010) (“None of this is to

say that the implied covenant of good faith and fair dealing is a magic wand that, once

waved about, can always rescue a contractual term from being held illusory. Or that

the covenant may be used as a subtler way to rewrite the parties’ deal and decline to

give effect to express contractual terms.”) (Gorsuch, J.).

Ultimately, the incentive agreement lacks consideration from the government

and served only as Endure’s standing offer providing a “framework and terms for

future orders[.]” Patriot Pride Jewelry, LLC, ASBCA No. 58953, 14-1 BCA

¶ 35,624 at 174,478; see also Zhengxing v. United States, 204 F. App’x 885, 886-87

(Fed. Cir. 2006) (“The BPA, at issue, however, is merely a framework for future

contracts and only creates a contractual obligation with regard to accepted orders.”);

1 E. ALLAN FARNSWORTH, FARNSWORTH ON CONTRACTS § 3.7 (3d ed. 2003) (“Even

if a promise is unenforceable because the promise given in return is illusory . . . . the

seller’s promise may be regarded as a continuing or a ‘standing’ offer, so that a new

contract is formed each time that the buyer accepts by placing an order.”). Thus,

Endure has failed to plausibly plead that it had a contract with the government because

the incentive agreement lacked consideration.

3. It is Unclear Whether an Authorized Government Agent Executed the

Incentive Agreement

DHA also asserts a third reason why the incentive agreement did not constitute

a contract between the government and Endure. DHA asserts that DHA’s program

manager was not a contracting officer and, thus, was not an authorized government

agent to make a contract when she signed the incentive agreement (gov’t mot. at 7).

However, an appellant need only plausibly allege in its complaint that an appropriate

official signed the agreement and has no duty to prove that the government employee

was an authorized agent to contract for the Federal government. Avue, 96 F.4th

at 1344. From the face of the complaint and the incentive agreement, it is unclear

what authority the program manager had. 4 Thus, Endure has plausibly pleaded that an

4

It is unclear whether DLA Troop Support or DHA is the proper agency here, because

a program manager from DHA signed the incentive agreement but a DLA

Troop Support contracting officer responded to Endure’s request for a

contracting officer’s determination, albeit denying that DLA Troop Support had

12

authorized agent executed the contract, and this is not a basis for granting the

government’s motion. Instead, as noted above, we conclude the lack of mutuality of

consent to contract and lack of consideration each demonstrate that Endure has failed

to plausibly plead a contractual relationship between the parties.

II. The Board Lacks Jurisdiction Over Endure’s Implied-in-Fact Contract

Argument

In its response to DHA’s motion to dismiss, Endure now claims for the first

time that it had a separate implied-in-fact contract with the government based on

Endure’s agreement with the prime vendor because the prime vendor was enforcing

the government’s policies (app. resp. at 1-5). We lack jurisdiction over this new claim

because Endure never presented it to a contracting officer.

Endure, as the proponent of the Board’s jurisdiction, bears the burden of

establishing jurisdiction by a preponderance of the evidence. Anthony & Gordon

Constr. Co., ASBCA No. 61916, 21-1 BCA ¶ 37,887 at 184,000; K-Con Bldg. Sys.,

Inc. v. United States, 778 F.3d 1000, 1004 (Fed. Cir. 2015).

Pursuant to the CDA, “[e]ach claim by a contractor against the Federal

Government relating to a contract shall be submitted to the contracting officer for a

decision.” 41 U.S.C. § 7103(a)(1); Lee’s Ford Dock, Inc. v. Sec’y of Army, 865 F.3d

1361, 1369 (Fed. Cir. 2017). The claim submitted to a contracting officer for a final

decision defines the scope of an appeal before the Board. Anthony & Gordon, 21-1

BCA ¶ 37,887 at 184,000. “[O]btaining a final decision on a claim is a jurisdictional

prerequisite to adjudication of that claim” before the Board. Tolliver Grp., Inc. v.

United States, 20 F.4th 771, 776 (Fed. Cir. 2021); 41 U.S.C. §§ 7103(a)(3), 7104(a).

“The purpose of the requirement is ‘to create opportunities for informal dispute

a contract with Endure (compare R4, tab 1 (incentive agreement), with tab 3

(contracting officer’s response)). Endure submitted its certified claim to both

the DHA program manager – its primary contact at DHA, who the government

alleges was not a contracting officer – and the DLA Troop Support contracting

officer (app. resp., app’x at 12). Although DHA never responded (only DLA

Troop Support did), Endure has met the submission requirement under the CDA

even if the DHA program manager was not a contracting officer (as the

government alleges here). 41 U.S.C. § 7103 (a)(1) (“Each claim by a contractor

against the Federal Government relating to a contract shall be submitted to the

contracting officer for a decision.”). “[T]he requirement of submitting a claim

to the [contracting officer] is satisfied if the contractor sends a proper claim to

its primary contact with a request for a [contracting officer’s] decision and a

reasonable expectation that such a request will be honored.” Gardner Zemke

Co., ASBCA No. 51499, 98-2 BCA ¶ 29,997 at 184,355 (citing Neal & Co. v.

United States, 945 F.2d 385, 388-89 (Fed. Cir. 1991)).

13

resolution at the contracting officer level and to provide . . . clear notice as to the’

content of ‘contract claims.’” Tolliver Grp., 20 F.4th at 776 (quoting Raytheon Co. v.

United States, 747 F.3d 1341, 1354 (Fed. Cir. 2014)). Thus, the Board does not

possess jurisdiction over new claims that appellant raises for the first time on appeal

and never previously submitted to the contracting officer for decision. Frazier Inv.,

Inc., ASBCA No. 63001, 23-1 BCA ¶ 38,313 at 186,045.

This Board does not possess jurisdiction to consider an appeal that presents a

“‘materially different factual or legal theory’ of relief” requiring that we “‘focus on a

different or unrelated set of operative facts”’ than was presented to the contracting

officer. Lee’s Ford Dock, 865 F.3d at 1369 (quoting K-Con, 778 F.3d at 1006, and

Placeway Constr. Corp. v. United States, 920 F.2d 903, 907 (Fed. Cir. 1990)).

Conversely, “[n]o new claim arises by introduction of a new legal theory of recovery,

additional facts that do not alter the nature of the original claim, or a dollar increase in

the amount claimed, so long as the theory, facts, or dollar increase rely on the same

operative facts included in the original claim.” Anthony & Gordon, 21-1 BCA

¶ 37,887 at 184,001.

In its claim (and complaint), Endure focuses on the incentive agreement,

seeking “approximately $750,000” for unsold inventory, a determination that the

incentive agreement’s termination provision was “unenforceable as unconscionable,”

and reinstatement of the incentive agreement (R4, tab 2 at 2-3; compl. ¶¶ 19-35). 5

In its response to DHA’s motion to dismiss, Endure now asserts an entirely new

theory it never raised in its certified claim. Endure now asserts that it should receive

costs from the government based on fees imposed by a prime vendor as a government

agent, resulting in an alleged implied-in-fact contract between the government and

Endure (app. resp. at 1-5, app’x at 7-10). Endure entered a separate agreement with

the prime vendor to enable sale of its products (R4, tab 6 at 3). The distribution and

pricing agreement between Endure and DLA Troop Support explained that the terms

and conditions between Endure and the prime vendor “shall be consistent with the

Prime Vendor’s good, commercial (that is, acceptable industry-standard) business

practices” (R4, tab 6 at 3). Endure asserts that the government enabled the prime

5

In the past, using “approximately” to qualify the claim amount would have resulted

in an appeal’s dismissal for lack of jurisdiction due to a lack of a sum certain.

Ford Lumber & Bldg. Supply, Inc., ASBCA No. 61618, 20-1 BCA ¶ 37487

at 182,089-90 (discussing M.J. Hughes Constr., Inc., ASBCA No. 61782, 19-1

BCA ¶ 37,235 at 181,235). More recently, the Federal Circuit has stated that

“the requirement to state a sum certain in submitting a claim under the CDA is

a mandatory, nonjurisdictional requirement subject to forfeiture” that must be

challenged as a failure to state a claim. ECC Int’l Constructors, LLC v. Sec’y of

Army, 79 F.4th 1364, 1380 (Fed. Cir. 2023). Here, the government has not

challenged the sum certain amount.

14

vendor to impose requirements on Endure that resulted in losses (app. resp. at 2-3).

For example, Endure asserts it “was penalized” by the prime vendor for using the

United States Postal Service instead of private carriers (such as United Parcel Service

or Federal Express) and the “fines imposed exceeded the value of the shipment” (app.

resp. at 2 n.2).

Endure’s implied-in-fact contract theory (based on an agency relationship

between the prime vendor and the government) is entirely different from what it

asserted in its certified claim. Endure’s new theory is not based on the same operative

facts as its certified claim, which exclusively referenced the incentive agreement, not

its agreement with the prime vendor. Also, the legal theory is distinct. To prove its

agency theory, Endure would likely have to show that (1) the prime vendor was acting

as the purchasing agent for the government, (2) the agency relationship between the

government and the prime vendor was established by clear contractual consent, and

(3) the contract stated that the government would be directly liable to Endure. See

United States v. Johnson Controls, Inc., 713 F.2d 1541, 1551 (Fed. Cir. 1983)

(involving appeal from this Board); see also Wolf Creek R.R. LLC v. United States,

No. 2024-1873, 2025 WL 3276822 at *5 (Fed. Cir. Nov. 25, 2025); Frontline Support

Solutions, LLC, ASBCA No. 64022, 25-1 BCA ¶ 38,803 at 188,731 (recognizing the

agency theory as one exception to the “privity requirement for subcontractors”).

Again, this legal theory and the operative facts necessary to prove it are distinct from

the legal theory and operative facts that Endure presented in its certified claim.

Endure never gave the government’s contracting officer a chance to respond to

this theory. Tolliver Grp., 20 F.4th at 776 (“The focus is on whether the contracting

officer was given ‘an ample pre-suit opportunity to rule on a request, knowing at least

the relief sought and what substantive issues are raised by the request.’” (quoting K-

Con, 778 F.3d at 1006)). Thus, we lack jurisdiction to hear this newly raised claim.

III. Endure Used Generative Artificial Intelligence to Prepare its Brief, which

Resulted in Hallucinated and Questionable Legal Citations

In its response to DHA’s motion to dismiss, Endure appeared to rely on a court

decision that does not exist and to rely on other court decisions that did not appear to

support the propositions for which they were cited. After DHA noted this in its reply,

we issued an order to Endure to show cause why we should not strike the brief,

requesting that it provide a copy of the decision we could not locate, “BMS, Inc. v.

United States, 12 Cl. Ct. 33 (1987),” noting that another case was reported near the

volume and page citation – Johns-Manville Corp. v. United States, 12 Cl. Ct. 1 (1987).

We also asked Endure to support its assertions regarding three decisions that we could

find: T. Brown Constructors, Inc. v. Pena, 132 F.3d 724 (Fed. Cir. 1997); Russell

Corp. v. United States, 537 F.2d 474 (Ct. Cl. 1976); and PGBA, LLC v. United States,

389 F.3d 1219 (Fed. Cir. 2004). We also inquired whether Endure used generative

artificial intelligence (AI) to assist in preparing the brief.

15

Endure responded by acknowledging that it used a generative AI program to

assist in drafting the brief and acknowledged that one of the court decisions it cited did

not exist: “BMS, Inc. v. United States, 12 Cl. Ct. 33 (1987).” Generative AI programs

– at least in their current state – have a tendency to hallucinate non-existent cases.

Sanders v. United States, 176 Fed. Cl. 163, 169 (2025) (“It is no secret that generative

AI programs are known to ‘hallucinate’ nonexistent cases, and with the advent of AI,

courts have seen a rash of cases in which both counsel and pro se litigants have cited

such fake, hallucinated cases in their briefs.”); Raven Investigations & Sec.

Consulting, LLC, B-423447, 2025 CPD ¶ 81 at 3 (“[T]he use of AI programs to draft

or assist in drafting legal briefs can—and seemingly often does—result in the citation

of non-existent cases.”); see also Ralph Nash, Artificial Intelligence Hallucinations:

Sanctions are Waiting, 39 NASH & CIBINIC REP. ¶ 44 (Aug. 2025) (“[I]t is well known

that so far AI programs tend to hallucinate.”).

The real decision near the hallucinated citation is Johns-Manville Corp. v.

United States, 12 Cl. Ct. 1 (1987). “Fake cases generated by AI often have reporter

citations that lead to cases with different names, in different courts, and about different

subjects.” Sanders, 176 Fed. Cl. at 169 n.8. Endure asserts that the Johns-Manville

decision supports the assertions made in its brief that it originally attributed to the fake

BMS case. And, by luck, Johns-Manville does lay out one of the statements it

attributed to the fake BMS decision – the requirements to demonstrate an implied-in-

fact contract. Johns-Manville, 12 Cl. Ct. at 20. Elsewhere, the case is less on-point.

Relying on the fake BMS decision, Endure’s brief asserts that “[c]ourts have

consistently rejected similar attempts by the government to evade contractual liability

while exercising control over contract obligations” and “undisclosed procurement

obligations were later enforced through financial penalties and operational restrictions,

despite not being set forth in” the incentive agreement (app. resp. at 3-4). Endure

asserts that portions of the Johns-Manville decision support these assertions. But, far

from “consistently” ruling in favor of a contractor, Johns-Manville ruled against the

contractor as to whether an implied-in-fact contract existed. Johns-Manville, 12 Cl.

Ct. at 35-36 (dismissing “claims for express and implied-in-fact contract”). Also, the

allegedly supportive legal statements from the decision Endure quotes in its response

to show cause order (ex. at 1-2), derive from alleged facts from the contractor’s

complaint or proposed findings (not the court’s legal rulings); and the court expressed

skepticism of these statements because they “can be read to set forth elements of a

classic implied-in-law contract that is beyond the jurisdiction of this court to

consider.” Johns-Manville, 12 Cl. Ct. at 18. This Board, like the Court of Federal

Claims, generally has no jurisdiction over contracts implied-in-law. Relyant Global

LLC, ASBCA No. 63024, 22-1 BCA ¶ 38,205 at 185,539.

Other decisions Endure cites do not support its contentions even though the

decisions are “real,” which may be a more concerning issue. See Seither & Cherry

Quad Cities, Inc. v. Oakland Automation, LLC, No. 23-111310 et al., 2025 WL

16

2105286 at *1 (S.D. Mich. July 28, 2025) (“The court also notes that the mere fact that

the cases themselves that counsel cited were not fictitious (rather, only the quotes or

parentheticals) does not help matters; if anything, it highlights the risks of AI usage

and reliance on these tools. When a case cite is ‘real,’ an attorney, or for that matter a

judge, might see a case they recognize and assume the quote or holding has been

accurately represented, where a case that an attorney does not recognize might, at least

at first blush, trigger more exacting scrutiny.”).

In particular, Endure seeks to support the statement that the “government

cannot impose detailed procurement controls, financial penalties, and mandatory

compliance obligations while simultaneously denying the existence of a contractual

relationship,” by citing T. Brown Constructors, Inc. v. Pena, 132 F.3d 724 (Fed. Cir.

1997). Yet, in that case, neither party denied the existence of a contract and, in fact,

had an express contract – the dispute was about the interpretation of the terms of that

express contract. Id. at 730-32.

Endure asserts that the U.S. Court of Claims (predecessor to the Federal

Circuit) “held that when the government directs procurement terms and supplier

obligations, an implied-in-fact contract exists, even if not formally documented” in

Russell Corp. v. United States, 537 F.2d 474 (Ct. Cl. 1976). The Court of Claims did

not “hold” this, 6 but instead found against the alleged contractor and concluded that

“no contract was made and defendant [the government] has no obligation to pay

damages for breach.” Id. at 485.

6

A tribunal’s holding is the legal principle of an opinion, which includes “not only the

result, but also those portions of the opinion necessary to that result by which

we are bound” (such as the ratio decidendi – the reasoning of the decision).

Seminole Tribe v. Fla., 517 U.S. 44, 67 (1996); see also Alexander v. Sandoval,

532 U.S. 275, 282 (2001) (stating that tribunals are “bound by holdings, not

language”). Obiter dicta (or dicta) is language that is unnecessary for the

resolution of a case and is not binding in future cases (although it may be

persuasive). Cohens v. Va., 19 U.S. (6 Wheat.) 264, 399 (1821) (“It is a maxim

not to be disregarded, that general expressions, in every opinion, are to be taken

in connection with the case in which those expressions are used. If they go

beyond the case, they may be respected, but ought not to control the judgment

in a subsequent suit when the very point is presented for decision.”). It is

important to “distinguish an opinion’s holding from its dicta.” U.S. Nat’l Bank

of Ore. v. Independent Ins. Agents of Am., Inc., 508 U.S. 439, 463 n.11 (1993).

Admittedly, one judge’s dicta may be another’s holding. See, e.g., Seminole

Tribe, 517 U.S. at 66-67 (majority and dissenting opinions disagreeing whether

prior language from a ruling was dicta or holding); Burnham v. Superior Ct. of

Cal., 495 U.S. 604, 613 n.2 (1990) (justices debating whether prior language

from a ruling was dicta or holding). Thus, a party should be careful in

describing statements from a prior ruling as the “holding.”

17

Endure also asserts that the “procurement structure itself was deliberately

designed to favor only the incumbent vendor, rendering Endure’s opportunity for

meaningful participation illusory and effectively impossible from the start” by citing

PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir. 2004). PGBA does not support

Endure’s statement in its brief. PGBA is a bid protest decision involving a

disappointed offeror (that happened to be an incumbent) challenging an awarded

contract. Id. at 1222-23. While sometimes legal principles from protest decisions may

overlap with contract disputes, we have been unable to find the relevance of the

holding in PGBA to Endure’s appeal based on the briefing. To the extent Endure seeks

to protest the structure of the agency’s procurement, this Board has no jurisdiction

over bid protests. Siemens Gov’t Tech., Inc., ASBCA No. 62601, 22-1 BCA ¶ 38,136

at 185,245, aff’d, No. 2022-2240, 2024 WL 2043201 (Fed. Cir. May 8, 2024); Spanish

Solutions Language Servs., ASBCA No. 62233, 20-1 BCA ¶ 37,527 at 182,241.

The Board’s rules permit the imposition of sanctions where a “party fails to

obey an order issued by the Board” and “it considers necessary to the just and

expeditious conduct of the appeal.” ASBCA Rule 16. Though our Rule includes no

standard for assessing sanctions, we have looked to FED. R. CIV. P. 11 for guidance in

assessing sanctions (whether it involves violation of an order or not). Huffman

Constr., LLC, ASBCA Nos. 62591, 62783, 25-1 BCA ¶ 38,932 at 189,484 (citing

Globe Constr. Co., ASBCA No. 21365, 78-2 BCA ¶ 13,486 at 66,005, aff’d, 230 Ct.

Cl. 957 (1982)). Among other things, Rule 11 states that representations to the

tribunal in a pleading, written motion, or other paper means “an attorney or

represented party certifies that to the best of the person’s knowledge, information, and

belief, formed after an inquiry reasonable under the circumstances . . . the claims,

defenses and other legal contentions are warranted by existing law or by a

nonfrivolous argument for extending, modifying, or reversing existing law or for

establishing new law.” FED. R. CIV. P. 11(b)(2); see also Huffman, 25-1 BCA

¶ 38,932 at 189,484. This standard imposes “an affirmative duty to conduct a

reasonable inquiry into the facts and the law before filing, and that the applicable

standard is one of reasonableness under the circumstances.” Business Guides, Inc.

v. Chromatic Commc’ns Enters., Inc., 498 U.S. 533, 551 (1991). Rule 11 requires that

“attorneys read, and thereby confirm the existence and validity of, the legal authorities

on which they rely . . . to ensure that the arguments are based on those authorities are

‘warranted by existing law,’ FED. R. CIV. P. 11(b)(2), or otherwise ‘legally tenable.’”

Huffman, 25-1 BCA ¶ 38,932 at 189,484 (quoting Park v. Kim, 91 F.4th 610, 615 (2d

Cir. 2024), and Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990)).

Similarly, parties appearing before this Board have a duty of candor that

includes accurately citing legal and factual sources. Professional rules of conduct

disallow a counsel from knowingly making “a false statement of fact or law to a

tribunal” or failing “to correct a false statement of material fact or law previously

made to the tribunal by the lawyer.” Model Rules of Professional Conduct 3.3(a)(1);

18

Level 3 Commc’ns, LLC v. United States, 724 F. App’x 931, 934 (Fed. Cir. 2018)

(quoting Model Rule 3.3(a)(1)); see also Amstar Corp. v. Envirotech Corp., 730 F.2d

1476, 1486 (Fed. Cir. 1984) (awarding costs based on a parties’ citations that were a

“[d]istortion of the record” and violated duty of candor). Given such a breach of

conduct by counsel, tribunals can refer the matter to the relevant state bar for

discipline, strike the filing, or disqualify counsel from the case. Johnson v. Dunn, 792

F. Supp. 3d 1241, 1267-68 (N.D. Ala. 2025) (disqualifying counsel and referring

matter to state bar); Powhatan County School Bd. v. Skinger, No. 24-cv-874, 2025 WL

1559593 at *10 (E.D. Va. June 2, 2025) (“If a lawyer or law firm engaged in the

conduct in which [pro se] has engaged, the lawyer would be sanctioned, perhaps

monetarily or with an order to pay the opponent’s fees, perhaps by the entry of an

adverse judgment or by removing the lawyer’s privilege to practice law.”).

Endure has chosen to use a non-lawyer company representative to act for the

company pro se as permitted by our rules. ASBCA Rule 15(a). We give some

procedural leniency to pro se litigants. Steffen v. United States, 995 F.3d 1377, 1380

(Fed. Cir. 2021). “But procedural leniency toward a specific class of litigants does not

translate to unfettered deference and dereliction of judicial review.” Steffen, 995 F.3d

at 1380. Being pro se does not relieve a party from assuring the accuracy of citations

that a party learns about while using generative AI. The citation of misleading or fake

sources results in a waste of an opposing party’s and this tribunal’s resources.

Sanders, 176 Fed. Cl. at 169. It undermines our ability to meet the statutory obligation

to “provide informal, expeditious, and inexpensive resolution of disputes.” 41 U.S.C.

§ 7105(g)(1). Indeed, as of July 16, 2025, our website has included a warning to

parties regarding the use of AI:

The Board does not prohibit the parties from using

artificial intelligence (AI) tools to assist in drafting filings

before us. Nevertheless, regardless of the means that a

party uses to draft such filings, the party is responsible to

ensure that they accurately reflect the facts and the law.

We caution the parties that the current generation of AI

tools are known to sometimes create materially false

characterizations of legal precedent, misquote cases, and

even create non-existent case citations. Thus, any party

which uses AI tools to assist in drafting filings before the

Board is expected to take independent steps to ensure the

accuracy of such filings and may be subject to appropriate

sanctions if their filings mischaracterize the law, misquote

cases, or cite to nonexistent cases. 7

7

ARMED SERVICES BOARD OF CONTRACT APPEALS, https://www.asbca.mil/Use-of-AI/

(last visited on November 26, 2025).

19

“A tribunal is afforded considerable discretion in determining whether

sanctions are appropriate, and if so, what particular sanctions are appropriate under the

circumstances of each case.” Gen. Dynamics Ordnance & Tactical Sys., Inc., ASBCA

No. 56870, 12-1 BCA ¶ 34,944 at 171,806. In assessing whether to impose sanctions

and, if so, what type, we look at willfulness, prejudice to the parties, burden and

expense incurred by the parties and this tribunal, bad faith, and callous disregard of

responsibilities. Huffman, 25-1 BCA ¶ 38,932 at 189,485.

“Our power to impose sanctions is broad and may even extend to dismissal of

an appeal.” Envt’l Safety Consultants, Inc., ASBCA No. 58343, 14-1 BCA ¶ 35,786

at 175,050 (quoting Turbomach, ASBCA No. 30799, 87-2 BCA ¶ 19,756 at 99,953-

54); see also Avant Assessment, LLC v. Sec’y of Army, 752 F. App’x 1000, 1003 (Fed.

Cir. 2018) (“[T]he case management authority of the ASBCA’s administrative law

judges is no different from that of federal trial courts which, by virtue of their case

management authority, are given broad discretion to manage the litigation on their

dockets.”) (quoting Metadure Corp. v. United States, 6 Cl. Ct. 61, 67 (1984)). Lesser

sanctions (than dismissal) have prohibited a sanctioned party from introducing

evidence or calling witnesses; or drawn adverse inferences against a party. Envt’l

Safety, 14-1 BCA ¶ 35,786 at 175,050. We may also strike a filing as a sanction.

Huffman, 25-1 BCA ¶ 38,932 at 189,485; Jeffrey C. Stone, Inc., ASBA No. 58372,

15-1 BCA ¶ 36,112 at 176,294 (considering striking a pleading, but denying the

motion when the party mooted the concern by conceding the issue). The Board has

determined that it lacks authority to impose monetary sanctions. Huffman, 25-1 BCA

¶ 38,932 at 189,485.

In our show cause order, we stated that the Board might strike Endure’s brief.

As reflected above in our discussion of the parties’ substantive legal arguments,

Endure’s brief seems to have done more harm than good by advancing the untenable

implied-in-fact contract argument and effectively surrendering to the government’s

argument that, by its terms, the incentive agreement was not a contract. Thus, in the

limited facts before us, with a pro se litigant who did not appear to recognize the risks

it had taken, we have chosen not to strike Endure’s entire brief as a sanction for using

fake and inaccurate legal citations. Instead, we have simply ignored the fake and

inaccurate legal citations in its brief and weighed the remaining arguments that are

supported by accurate citations. No future litigant – pro se or not – should take this to

mean that they, too will avoid greater consequences if they rely on AI to their

detriment: the Board’s advice on the website is just one of many new, strong, and

conspicuous signals putting litigants on notice that AI is imperfect and not a tool that

excuses compliance with our rules. Had Endure’s brief been submitted a few months

later, the negative consequences may well have been different.

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CONCLUSION

We dismiss, with prejudice, Endure’s appeal regarding the incentive agreement

because Endure has failed to state a claim upon which relief may be granted. We

dismiss, without prejudice, Endure’s newly-raised claim of government liability for

Endure’s alleged losses incurred in supplying orders to the prime vendor because

Endure failed to raise this claim before the contracting officer.

Dated: March 23, 2026

DANIEL S. HERZFELD

Administrative Judge

Armed Services Board

of Contract Appeals

I concur I concur

J. REID PROUTY DAVID D’ALESSANDRIS

Administrative Judge Administrative Judge

Acting Chairman Acting 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 No. 64064, Appeal of Endure

Industries, Inc., rendered in conformance with the Board’s Charter.

Dated: March 23, 2026

PAULLA K. GATES-LEWIS

Recorder, Armed Services

Board of Contract Appeals

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