Petition for Writ of Certiorari — Servant Health, LLC, Petitioner v. United States

No. _______

_________________________________________________

IN THE

Supreme Court of the United States

______________

SERVANT HEALTH, LLC,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

______________

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Federal Circuit

______________

PETITION FOR WRIT OF CERTIORARI

______________

ERIC S. MONTALVO*

CAROL A. THOMPSON

FEDERAL PRACTICE GROUP

801 17TH ST. N.W., SUITE 250

WASHINGTON, DC 20006

(202) 862-4360

emontalvo@fedpractice.com

Counsel for Petitioner

*Counsel of Record

_________________________________________________

LEGAL PRINTERS LLC ! Washington, DC ! 202-747-2400 ! legalprinters.com

i

QUESTIONS PRESENTED

Whether an executive agency contracting officer

may eliminate the requirement to exercise discretion

by inserting contract language that nullifies the

Federal Acquisition Regulation’s excusable delay

protections in a commercial items contract.

Whether a contracting officer’s refusal to consider

delivery delays caused by the Suez Canal blockage—

an archetypal common carrier delay—violates FAR

52.212-4(f) and exceeds the officer’s authority under

41 U.S.C. § 3307.

Whether, under Loper Bright Enterprises v.

Raimondo, courts must invalidate agency actions that

amount to unauthorized legislative rulemaking,

including when a contracting officer unilaterally

rewrites procurement obligations established by

Congress.

ii

PARTIES TO THE PROCEEDING

Petitioner (plaintiff-appellant below) is Servant

Health, LLC. Respondent (defendant-appellee below)

is the United States. Servant Health’s case was

consolidated with three other Plaintiff-Appellant’s:

Transcendence, Inc.; Noble Attorney, LLC; and

American Medical Equipment, Inc. Only Servant

Health, individually, submits this Petition.

iii

CORPORATE DISCLOSURE STATEMENT

Petitioner has no parent corporation, and no

publicly held company owns 10% or more of the

corporation’s stock.

iv

STATEMENT OF RELATED PROCEEDINGS

The following proceedings are directly related to

this case within the meaning of Rule 14.1(b)(iii):

• Servant Health et al., v. United States, No. 222193, 22-2194 (Fed. Cir.), judgment entered on

September 30, 2024;

• Servant Health et al., v. United States, No. 211373C, 21-1456C, 21-1472C (Court of Federal

Claims), judgment entered on August 5, 2022;

• American Medical Equipment, Inc., v. United

States, No. 21-1553C (Court of Federal Claims),

judgment entered on June 30, 2022.

v

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................ i

PARTIES TO THE PROCEEDING ........................... ii

CORPORATE DISCLOSURE STATEMENT ........... iii

STATEMENT OF RELATED PROCEEDINGS ....... iv

PETITION FOR WRIT OF CERTIORARI ................ 1

OPINIONS BELOW ................................................... 1

JURISDICTION.......................................................... 1

CONSTITUTIONAL PROVISIONS INVOLVED...... 1

STATUTORY PROVISIONS INVOLVED ................. 1

STATEMENT OF THE CASE .................................... 2

A.

Legal Framework. ............................................ 2

B.

Factual Background. ........................................ 5

C.

Procedural Background. .................................. 9

SUMMARY OF THE ARGUMENT ......................... 12

REASONS FOR GRANTING THE PETITION ....... 13

I. The Federal Circuit’s Decision Conflicts with

Loper Bright and Violates the Separation of

Powers................................................................. 13

II. Executive Officials Lack Authority to Rewrite

Statutorily Mandated FAR Clauses .................. 13

III. The Refusal to Consider Excusable Delay

Violated FAR 52.212-4(f).................................... 14

IV. This Case Is an Ideal Vehicle to Clarify the

Scope of Loper Bright and Resolve Post-Chevron

Uncertainty ........................................................ 15

V. Agency Overreach Undermines Prior

Precedent on Separation of Powers ................... 16

vi

VI. Abuse of Discretion and Preservation of the

Issue Below ......................................................... 17

CONCLUSION.......................................................... 18

APPENDICES

APPENDIX A

Opinion, U.S. Court of Appeals for the

Federal Circuit, Servant Health et al., v.

United States, No. 22-2193, 22-2194

(Sept.30,2024)………………………………….

APPENDIX B

Opinion, U.S. Court of Federal Claims for

Servant Health et al., v. United States, No.

21-1373C, 21-1456C, 21-1472C

(Aug.5,2022)………………………………….…

APPENDIX C

Opinion, U.S. Court of Federal Claims for

American Medical Equipment, Inc., v.

United States, No. 21-1553C

(June 30, 2022)…………………………………

APPENDIX D

Order, U.S. Court of Appeals for the

Federal Circuit, American Medical

Equipment, Inc., Petition for Panel

Rehearing, Servant Health et al., v. United

States, No. 22-2193

(Jan. 17, 2025)……………………………….…

APPENDIX E

Order, U.S. Court of Appeals for the

Federal Circuit, Servant Health et al.,

Petition for Panel Rehearing, Servant

Health et al., v. United States, No. 22-2193

(Dec. 6, 2024)……………………..…………….

App 1

App 22

App 95

App 133

App 135

vii

APPENDIX F

Relevant Statutory Provisions

FAR 12.301 (a), (b)(3)………………….……..

FAR 12.302 …………………………………...

FAR 52.212-4 (f) …………………….………..

41 U.S.C. § 3307 (a), (b), (e)(1-2)…………...

App 137

App 138

App 140

App 141

viii

TABLE OF AUTHORITIES

Cases

City of Arlington v. FCC,

569 U.S. 290 (2013) ............................................... 16

FEC v. Cruz,

596 U.S. 289 (2022) ............................................... 14

Kisor v. Wilkie,

588 U.S. 558 (2019) ......................................... 16, 17

Loper Bright Enterprises v. Raimondo,

603 U.S. 369 (2024) ................................... 13, 15, 18

McDonnell Douglas Corp. v. United States,

182 F.3d 1319 (Fed. Cir. 1999) .............................. 17

Servant Health et al., v. United States,

Nos. 22-2193, 22-2194 (Fed. Cir. Sep. 30, 2024) 5, 9

United States v. Brooks-Callaway Co.,

318 U.S. 120 (1943) ............................................... 14

Statutes

28 U.S.C. § 1254(1) ..................................................... 1

28 U.S.C. § 1291 .......................................................... 1

28 U.S.C. § 2101(c) ...................................................... 1

41 U.S.C. § 3307 ...................................... 1, 2, 3, 12, 15

Pub. L. 111–350, § 3, Jan. 4, 2011,

124 Stat. 3754 .......................................................... 2

Regulations

FAR 1.403 .................................................................. 14

FAR 12.301 .................................................................. 3

FAR 12.302 ............................................................ 4, 14

FAR 52.212-4 ............................................ 3, 12, 14, 15

Constitutional Provisions

Art. II, § 1, cl. 1. .......................................................... 1

1

PETITION FOR WRIT OF CERTIORARI

Servant Health respectfully petitions for a writ of

certiorari following judgment by the United States

Court of Appeals for the Federal Circuit.

OPINIONS BELOW

The Federal Circuit’s opinion is not reported in

Fed. Rptr., 2024 WL 4342872 and reproduced at

App.1. The Court of Federal Claims’ opinion is

reported at 161 Fed.Cl. 210 and reproduced at App.21.

JURISDICTION

The final judgment of the court of appeal was

entered on September 30, 2024. The Federal Circuit

denied Petitioner Servant Health’s (as well as coplaintiff’s Transcendence and Noble Attorney)

Petition for Panel Rehearing on December 6, 2024.

The Federal Circuit denied American Medical

Equipment, Inc.’s Petition for Panel Rehearing on

January 17, 2025. The court of appeal’s jurisdiction

rests on 28 U.S.C. § 1291. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1) and §

2101(c).

CONSTITUTIONAL PROVISIONS INVOLVED

Art. II, § 1, cl. 1.

STATUTORY PROVISIONS INVOLVED

Relevant provisions of 41 U.S.C. § 3307 are

reproduced at App.141. Relevant provisions of FAR

12.301, 12.302, and 52.212-4(f) are reproduced at

App.137-140.

2

STATEMENT OF THE CASE

Petitioner Servant Health was terminated for

cause under a contract with the Department of

Veterans Affairs to procure personal protective

equipment (“PPE”) during the height of the COVID-19

pandemic. During contract performance, Petitioner

timely notified the agency of excusable delays caused

by global shipping disruptions, including the Suez

Canal blockage. Rather than evaluate whether

excusable delay was warranted—as required under

FAR 52.212-4(f)—the contracting officer categorically

refused to consider the request. That refusal was

based on a unilaterally imposed contract term stating

that “no extensions will be granted,” which directly

contradicted governing acquisition regulations.

The contracting officer subsequently used the

threat of default to extract discounts and additional

concessions. When Servant Health declined, the

contracting officer proceeded with a termination for

cause. The Court of Federal Claims upheld the

termination, and the Federal Circuit declined to

address whether the contracting officer’s actions

unlawfully eliminated required regulatory discretion.

A. Legal Framework.

In 2011, Congress enacted statutory requirements

to govern executive agency contracting for commercial

items. Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat.

3754. This framework is codified at 41 U.S.C. § 3307,

titled “Preference for commercial products and

commercial services.” App.141.

3

Section 3307 mandates that “[t]he Federal

Acquisition Regulation shall provide regulations to

implement this section,” and those regulations “shall

contain a list of contract clauses to be included in

contracts for the acquisition of end items that are

commercial products.” 41 U.S.C. § 3307(e)(2)(B);

App.141. Critically, Congress limited the use of

clauses in such contracts by requiring that, “[t]o the

maximum extent practicable, only the contract

clauses listed pursuant to subparagraph (B) may be

used in a contract.” 41 U.S.C. § 3307(e)(2)(D).

To implement these statutory requirements, the

FAR includes two controlling provisions:

•

•

FAR 52.212-4, 1 “Contract Terms and

Conditions—Commercial

Products

and

Commercial Services,” which provides the

standard commercial items clause; and

FAR 12.301, which directs when and how these

clauses must be used in solicitations and

awards. App.137,140.

FAR 12.301(a)(1)–(2) explicitly restates the

statutory limits under § 3307(e)(2)(B)(i)–(ii),

reinforcing that commercial item contracts must

adhere to standard commercial practices or legal

mandates. App.137,141. Among the mandatory

clauses is the Excusable Delays clause, FAR 52.2124(f), which provides:

The FAR is codified in Title 48 of the Code of Federal

Regulations. For ease of reference and to maintain consistency

with the Federal Circuit’s decision, Petitioner refers to the FAR

without the corresponding C.F.R. citations. App.4.

1

4

The Contractor shall be liable for default

unless nonperformance is caused by an

occurrence beyond the reasonable control of

the Contractor and without its fault or

negligence, such as acts of God or the public

enemy, acts of the Government in either its

sovereign or contractual capacity, fires, floods,

epidemics, quarantine restrictions, strikes,

unusually severe weather, and delays of

common carriers. The Contractor shall notify

the Contracting Officer in writing as soon as it

is

reasonably

possible

after

the

commencement of any excusable delay,

setting forth the full particulars in connection

therewith, shall remedy such occurrence with

all reasonable dispatch, and shall promptly

give written notice to the Contracting Officer

of the cessation of such occurrence.

FAR 52.212-4(f); App.140.

FAR 12.302(c) permits limited tailoring of

standard clauses, but only when the alteration is not

“inconsistent with customary commercial practice.” If

a deviation is necessary, the waiver request must:

•

•

•

identify the relevant commercial practice,

justify the need to deviate from it, and

determine that customary practice is

inconsistent with government needs. App.138.

Additionally, any tailored terms must be

incorporated through an “addenda to the solicitation

and contract.” FAR 12.302(d); App.138.

5

B. Factual Background.

At the height of the COVID-19 pandemic, the

Department of Veterans Affairs (“VA” or

“Department”) developed a solicitation project with

the goal of building and maintaining a stockpile of

PPE (nitrile medical gloves). App.3, 23-25. The VA

had no immediate need at any one facility, nor did it

conduct due diligence in determining how much PPE

the VA (or any one of its facilities) actually required or

by what date the stockpile should be created. App.3. 2

Instead, the VA created a multiple-award solicitation

with an arbitrarily set delivery date. 3 App23-25.

Servant Health was one of 15 contractors who

answered the call. App.25. On February 9, 2021,

Servant Health submitted a quote under Solicitation

36C24921Q0115 for 50 million gloves, and the

Department issued a corresponding award on March

11, 2021, via email, with a delivery date of April 26,

2021. App.6, 40-44.

The awarded contract contained FAR 52.212-4 in

its unaltered state, including its excusable delay

clause under paragraph (f). App.4-5, 28. The award

See also Corrected Br. of Pls.-Appellants at 13-14, Servant

Health et al., v. United States, Nos. 22-2193, 22-2194 (Fed. Cir.

Sep. 30, 2024), ECF No. 23.

2

The Department issued two “substantively identical”

solicitations in three rounds. App.24. The first round had a 30day deadline. App.23-24. The Department realized after the fact

that 30-days was not feasible, as it failed to receive bids. App.2324. The Department then arbitrarily increased the deadline to 45

days. App.24, 41.

3

6

also stated, via the solicitation’s statement of work,

that awarded contracts “will have 45 calendar days

from receipt of order (award date) to deliver the

awarded quantities, or the contract will be terminated

for cause.” App.26. The Department contracting

officer representative later affirmed in his deposition

that “[…] [termination for convenience] was never on

the table based on the decisions that were made

probably during the solicitation phase.” Corrected Br.

of Pls.-Appellants, supra note 3, at 41.

In the body of the email delivering the award the

contracting officer warned that “No extensions will be

granted. This includes but is not limited to delays with

the manufacturer, the supplier, shipping delays,

customs, and the pandemic.” App. 6, 43-44.

As could be expected during this time, Servant

Health faced delays caused by both its supplier, and

canal and port congestion. First, Servant Health’s

supplier informed it could no longer supply the

contracted for gloves; Servant Health then used

another supplier to deliver the same contracted for

gloves from the same original equipment

manufacturer used in its bid for award on the

solicitation. App.47, 52-53. Second, as was

experienced by so many other businesses during this

time, Servant Health’s shipments were disrupted by

the blockage of the Suez Canal and California port

congestions. App.46, 49-51.

Servant Health informed the VA that as of April

16, 2021, the shipment was en route, and would

include 50,000 more gloves than required under the

contract, due to the way the boxes of gloves were

7

packed onto pallets for shipping. App.44-45. One week

later, on April 22, 2021, Servant Health requested a

brief extension of approximately one-week based on

excusable delay——as only approximately 33,017,000

gloves of the contracted-for 50 million gloves could be

delivered within the original timeframe. App.46-47.

Servant Health explained that the March 23, 2021,

Suez Canal blockage and the resulting supply

problems (to include the impact on California ports)

had forced Servant to adjust its shipping method from

transoceanic shipping to air freight. App.6-7, 46-49.

However, the more limited airplane capacity meant

that the full 50 million gloves could not be transported

simultaneously. App.48.

The contracting officer summarily rejected any

notion of excusable delay and refused to even consider

the possibility. Corrected Br. of Pls.-Appellants, supra

note 3, at 20-27. Instead, the contracting officer would

only entertain an extension in return for additional

discounts or free product. App.48. Facing no other

choice, Servant Health offered a $0.10 discount per

remaining gloves, which the contracting officer

rejected out of hand, describing it as a “non-starter”

and choosing instead to press Servant Health for a

larger discount.

On April 25, 2021, the contracting officer again

informed Servant Health that they were in default,

stating:

I am deeply concerned about this

contract. From the beginning, it was

stated that the delivery date of 26 April

8

2021 was for 100% quantity of the

awarded gloves, and no extensions would

be granted due to the pandemic, customs,

etc. […] Also, I do not know what date

Servant Health is requesting the

contract to be extended to or what

consideration is being offered in lieu of

receiving a termination for cause.

App.48, 24-25.

The next day, the contracting officer informed

Servant Health that an extension to May 7 would only

be possible in exchange for a $1.00 discount on over 39

million gloves, reducing the price by $391,370.00, and

the promise of future discounted product. App. 25.

Servant Health counteroffered and requested to

bifurcate the remaining deliveries between May 7 and

May 28, 2021, as agreeing to a reduction of such scale

would cause severe financial harm to Servant Health.

Servant Health also followed up with a detailed

explanation of the excusable delay challenges, and a

renewed counteroffer.

On May 5, 2021, the contracting officer terminated

Servant Health for cause, for allegedly failing to

deliver the gloves on time. App.56-57. The

Termination Letter did not acknowledge Servant

Health’s efforts to mitigate the supply problems, nor

did it address a letter from Servant Health’s first

supplier exculpating Servant for the late deliveries.

Instead, Servant Health was summarily considered to

9

be in default, without

circumstances. App.56-57.

consideration

of

its

In summary, the contracting officer refused to

conduct any examination into whether excusable

delay was warranted, and instead used the threat of

automatic termination for cause as means to extort

unfair concessions from Servant Health.

Of the 15 contracts issued under the Department

of Veterans Affairs stockpile project, ten were

terminated. Nine of those terminated contracts,

including Petitioner’s, were for cause. 4 The tenth

termination was for convenience, but in name only,

because that same contractor held two contracts

under the solicitation and had already received the

for-cause termination on the other contract.

C. Procedural Background.

Servant Health and three other contactors (Noble

Attorney, Transcendence, and American Medical

Equipment) filed appeals with the U.S. Court of

Federal Claims, which were ultimately consolidated

into two cases. Servant Health challenged its forcause termination on the grounds of abuse of

discretion “without observance to the procedure

required by law,” breach of the implied duty of good

faith and fair dealing and duty to cooperate, and the

general failure to grant excusable delay. App.63-64.

4 Pls.’ Resp. to Def.’s Mot. for Summ. J. and Cross Mot. for Summ.

J. at 46, Servant Health et al., v. United States, 161 Fed.Cl. 210

(2022)(Nos. 21-1373C, 21-1456C, 21-1472C), ECF No. 44.

10

From the start, Petitioner challenged the

contract’s inclusion of an automatic termination for

default if the gloves were not delivered within 45 days

of award. Specifically, Servant Health argued that it

negated the language of FAR 52.212-4(f), and

prevented the contracting officer from exercising the

required discretion prior to terminating.

The Court of Federal Claims upheld the

contracting officer’s choice to rewrite the language of

the contract and held that the contracting officer was

permitted to nullify the excusable delay provision. See

App.90 (stating “The contracts did not provide that

extensions of time would be granted” and noting that

extensions were “prohibited.”).

In reaching this decision, the Court of Federal

Claims relied on the 45-day deadline in the

solicitation and on the email submitted with the

award which stated that “[n]o extensions will be

granted.” App.89-91 (finding “the express language of

the contracts—fully supported by the parties’ pre- and

post-award communications—required delivery of the

specific PPE plaintiffs proposed (which the VA vetted

and approved) and required delivery within 45

days[,]” and that, “The contracts further noted that no

extensions would be granted and that plaintiffs’

failure to timely deliver would result in a termination

for cause.”). In other words, the Court of Federal

Claims found that through the combination of the 45day deadline and the “no extensions” rule sent with

the award, the solicitation gave the contracting officer

a suitable basis to find Petitioner and the other

contractors in default without having to consider

whether the delay was “excusable.”

11

On appeal before the Federal Circuit, Servant

Health challenged the rationale of the Court of

Federal Claims, arguing that structuring the

solicitation to remove discretion is not permissible.

Servant Health reiterated its points challenging the

purposeful decision to avoid application of the

excusable delay clause and exercising the requisite

discretion.

The Federal Circuit declined to rule on the issue,

stating:

First, the Appellants contend that the

contracting officer abused his discretion

by structuring the solicitation in a way

that effectively removed any instance of

excusable delay. But they failed to raise

this argument before the Court of

Federal Claims. Instead, the Plaintiffs

argued that there were no performancebased reasons for default termination,

but instead that it was pretextual; the

Court of Federal Claims rejected that

argument.

App.18-19 (internal citations omitted). Moreover, the

Federal Circuit found insufficient evidence to find

excusable delay warranted, and accordingly upheld

the lower court’s ruling.

Servant Health, Transcendence, and Noble

Attorney requested a panel rehearing, noting they had

in fact raised and preserved the issue of purposeful

circumvention of a contracting officer’s discretion by

12

adding in requirements that contradicted the FAR.

Nonetheless, Servant Health’s petition for rehearing

was denied on December 6, 2024. App.132-133. On

December 26, 2024, American Medical Equipment

submitted its own rehearing petition, which was

denied by the merit panel on January 17, 2025.

App.130-131. Servant Health alone elected to seek

certiorari and accordingly submits this petition.

SUMMARY OF THE ARGUMENT

This case presents a clear and troubling example

of an executive agency official exceeding statutory

authority by unilaterally eliminating the requirement

to exercise discretion in assessing excusable delay

under a commercial items contract. The contracting

officer’s insertion of a “no extensions” clause

effectively nullified FAR 52.212-4(f)—a regulatory

provision mandated by Congress through 41 U.S.C. §

3307. This unauthorized override constitutes an

executive intrusion into the legislative domain and

undermines the statutory framework governing

federal procurement.

The refusal to consider delays caused by the Suez

Canal blockage—a textbook example of delay by

common

carriers—further

demonstrates

the

contracting officer’s failure to apply binding

regulatory protections. This action not only violated

federal acquisition rules but also harmed both the

contractor and the government by eliminating

flexibility during a global crisis.

In the wake of this Court’s decision in Loper Bright

Enterprises v. Raimondo, agency actions that

13

effectively legislate in contravention of congressional

mandates must be subject to meaningful judicial

review. This case presents an ideal vehicle for

reinforcing the constitutional separation of powers

and ensuring that executive officials remain within

the limits of their delegated authority.

REASONS FOR GRANTING THE PETITION

I. The Federal Circuit’s Decision Conflicts with

Loper Bright and Violates the Separation of

Powers

The Federal Circuit’s decision conflicts with this

Court’s recent holding in Loper Bright Enterprises v.

Raimondo, 603 U.S. 369 (2024), and infringes on the

structural protections of Article II, Section 1, Clause

1. In Loper Bright, the Court reaffirmed that agencies

may not exercise powers not delegated by Congress.

The decision below permits executive branch

contracting officers to override statutory and

regulatory obligations, effectively allowing them to

legislate through contract drafting—a result squarely

at odds with Loper Bright and the Constitution.

II. Executive Officials Lack Authority

Rewrite Statutorily Mandated FAR Clauses

to

Federal law mandates inclusion of the excusable

delay clause in all commercial item contracts. See 41

U.S.C. § 3307; FAR 52.212-4(f). The clause protects

contractors from default when delays are caused by

unforeseeable events, such as the global shipping

crisis triggered by the Suez Canal blockage. As this

Court noted in United States v. Brooks-Callaway Co.,

14

318 U.S. 120, 122 (1943), the excusable delay clause

serves to “remove uncertainty and needless

litigation.”

Congress mandated the inclusion of only a limited

set of clauses in commercial item contracts and

prescribed a narrow process for their modification. 41

U.S.C. § 3307(e); FAR 12.302; FAR 1.403. Tailoring or

deviation must be specifically justified, documented,

and approved. Here, the contracting officer did none of

that. Instead, he inserted the required clause while

simultaneously nullifying it by declaring that “no

extensions will be granted.”

This action was not a valid tailoring under FAR

12.302, nor a permissible deviation under FAR 1.403.

It was an unauthorized and unilateral modification of

statutory and regulatory language by an executive

official acting without legal authority. As this Court

has held, an agency “literally has no power to act ...

unless and until Congress authorizes it to do so by

statute.” FEC v. Cruz, 596 U.S. 289, 301 (2022).

III. The Refusal to Consider Excusable Delay

Violated FAR 52.212-4(f)

The contracting officer not only wrote around the

excusable delay clause, he refused to consider its

application—a clear violation of FAR 52.212-4(f) and

41 U.S.C. § 3307. The Federal Circuit’s approval of

this conduct legitimizes the executive branch’s

circumvention of congressional mandates.

This conduct implicates the core concerns

addressed in Loper Bright: the unauthorized

15

assumption of legislative power by executive agencies.

As the Court stated, the Administrative Procedure

Act 5 was designed “as a check upon administrators

whose zeal might otherwise have carried them to

excesses.” Loper Bright, 603 U.S. at 371 (quoting

Morton Salt, 338 U.S. 632, 644 (1950)).

The VA’s contracting officer exercised judicial,

executive, and legislative power simultaneously. He

nullified federal regulation, refused to exercise

discretion, and then used the resulting default to

pressure Servant Health into concessions. This is not

merely abuse of discretion—it is an unconstitutional

aggregation of power.

IV. This Case Is an Ideal Vehicle to Clarify the

Scope of Loper Bright and Resolve Post-Chevron

Uncertainty

Servant Health presents a clear and contained

example of executive overreach within the framework

of a single statute and regulation: 41 U.S.C. § 3307

and FAR 52.212-4(f). It allows the Court to clarify the

separation of powers boundaries post-Loper Bright,

particularly with respect to legislative intrusions by

administrative agencies.

As Justice Thomas noted in concurrence, Chevron

deference allowed agencies to perform functions

requiring legislative power. Loper Bright, 603 U.S. at

415 (Thomas, J., concurring). The Court should now

5 While Servant Health was decided under the Contract Disputes

Act, and not the Administrative Procedure Act, the same

standard of review—abuse of discretion—applies in both cases.

16

reinforce that agencies may not alter statutory

requirements simply by inserting contradictory

boilerplate into federal contracts.

The FAR is the cornerstone of procurement law,

directly governing the expenditure of public funds.

Congress has defined its structure and application.

The contracting officer’s circumvention of FAR

provisions to impose strict liability in place of

excusable delay obligations strikes at the heart of

Congress’s procurement regime.

This case also offers a necessary opportunity to

provide guidance on the scope of agency authority in

the post-Chevron era. As the Court observed in Loper

Bright, the Chevron framework created pervasive

uncertainty for judges, agencies, and regulated

parties. Loper Bright, 603 U.S. at 405. Servant Health

provides a concrete context for resolving that

uncertainty within a critical area of public law—

federal contracting.

V. Agency Overreach Undermines

Precedent on Separation of Powers

Prior

The decision below cannot be squared with this

Court’s prior rulings in Kisor v. Wilkie, 588 U.S. 558

(2019) and City of Arlington v. FCC, 569 U.S. 290

(2013), both of which acknowledged the functional

overlap of legislative and judicial forms within agency

practice. While Kisor upheld Auer deference and

emphasized that agency actions must still remain

within the scope of delegated executive authority, it

was grounded in the same Chevron-based

jurisprudence that Loper Bright has now overruled.

17

See Kisor, 588 U.S. at 586 (noting that when agencies

act in “legislative” or “judicial” form, they must

remain exercises of executive power). With Chevron no

longer controlling, the assumptions underpinning

Kisor and Arlington deserve reevaluation.

The Court should take this opportunity to reaffirm

that even when agency action mimics other branches,

it must be confined strictly to the execution of laws as

written—not their modification or disregard.

VI. Abuse of Discretion and Preservation of the

Issue Below

The contracting officer’s conduct constitutes

textbook abuse of discretion. As the Federal Circuit

itself recognized in McDonnell Douglas Corp. v.

United States, 182 F.3d 1319, 1327 (Fed. Cir. 1999),

abuse of discretion arises when contracting officers

eliminate rights established by the FAR. Here, the

officer intentionally precluded consideration of

excusable delay, even when Petitioner’s delay resulted

from a textbook example of common carrier

disruption.

Petitioner preserved this issue from the trial court

onward. At summary judgment, Servant Health

expressly argued that the VA never considered an

extension and had predetermined that excusable

delay would not apply. The Court of Federal Claims

upheld the termination on the basis of the VA’s strict

compliance language (that a failure to deliver within

45 days would automatically result in a termination

for cause, and that delay caused by suppliers and

shipping would not be considered). The Federal

18

Circuit declined to reach the abuse of discretion

issue—a decision that warrants correction.

This case presents a clean legal question involving

a defined statutory and regulatory scheme, a

preserved record, and a critical constitutional issue in

the wake of Loper Bright. Certiorari should be

granted.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted. This case presents an

urgent and appropriate opportunity to clarify the

limits of agency discretion, enforce Congress’s

procurement mandates, and reinforce the separation

of powers now sharpened by the Court’s decision in

Loper Bright. Without intervention, the Federal

Circuit’s ruling leaves in place a dangerous precedent:

allowing individual executive actors to unilaterally

negate statutory protections and wield contract terms

as instruments of coercion, all without Congressional

or judicial oversight. Allowing executive officials to

nullify congressional mandates through contractual

boilerplate threatens the very foundation of Article I

legislative authority and undermines Congress’s

exclusive power to prescribe procurement law. This

Court’s review is essential to restore constitutional

balance and prevent further erosion of Congress’s

legislative authority in federal procurement.

19

April 15, 2025

Respectfully submitted,

ERIC S. MONTALVO*

CAROL A. THOMPSON

FEDERAL PRACTICE GROUP

801 17TH ST. N.W., SUITE 250

WASHINGTON, DC 20006

(202) 862-4360

emontalvo@fedpractice.com

Counsel for Petitioner

*Counsel of Record