Servant Health, LLC v. United States

• Court: Court of Appeals for the Federal Circuit
• Decided: September 30, 2024
• Docket: 22-2193
• Status: Unpublished

Opinion

Case: 22-2193 Document: 56 Page: 1 Filed: 09/30/2024

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

SERVANT HEALTH, LLC, TRANSCENDENCE, INC., NOBLE ATTORNEY, LLC, Plaintiffs-Appellants

v.

UNITED STATES, Defendant-Appellee

______________________

2022-2193 ______________________

Appeals from the United States Court of Federal Claims in Nos. 1:21-cv-01373-AOB, 1:21-cv-01456-AOB, 1:21-cv-01472-AOB, Judge Armando O. Bonilla.

-------------------------------------------------

AMERICAN MEDICAL EQUIPMENT, INC., Plaintiff-Appellant

UNITED STATES, Defendant-Appellee ______________________

2022-2194 Case: 22-2193 Document: 56 Page: 2 Filed: 09/30/2024

Appeal from the United States Court of Federal Claims in No. 1:21-cv-01553-AOB, Judge Armando O. Bonilla. ______________________

Decided: September 30, 2024 ______________________

CAROL ANNE THOMPSON, Federal Practice Group, Washington, DC, argued for plaintiffs-appellants.

KELLY GEDDES, Commercial Litigation Branch, Civil Division, United States Department of Justice, argued for defendant-appellee. Also represented by BRIAN M. BOYNTON, PATRICIA M. MCCARTHY. ______________________

Before REYNA, MAYER, and CUNNINGHAM, Circuit Judges. CUNNINGHAM, Circuit Judge. At issue in this appeal are four supply contracts awarded to American Medical Equipment, Inc. (“AME”), Servant Health, LLC (“Servant”), Noble Attorney, LLC (“Noble”), and Transcendence, Inc. (“Transcendence”) (col- lectively, the “Plaintiffs” or “Appellants”) by the U.S. De- partment of Veterans Affairs (“VA”) for nitrile examination gloves during the COVID-19 global pandemic. The VA ter- minated all the contracts for cause or default. The Plain- tiffs challenged the VA’s terminations for default before the Court of Federal Claims, culminating in two actions. See Am. Med. Equip., Inc. v. United States, 160 Fed. Cl. 344, 347 (2022) (“Decision I”); Servant Health, LLC v. United States, 161 Fed. Cl. 210, 214 (2022) (“Decision II”). For the reasons below, we affirm. Case: 22-2193 Document: 56 Page: 3 Filed: 09/30/2024

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I. BACKGROUND A. In late 2020, due to the COVID-19 global pandemic, the VA concluded that it needed to procure “hundreds of mil- lions of nitrile examination gloves” to “maintain a 180-day stock of nitrile examination gloves to ensure the availabil- ity of gloves for the Agency’s healthcare providers.” Deci- sion I at 347; Decision II at 214; J.A. 2605. This appeal relates to two solicitations for the procurement of nitrile examination gloves, Nos. 36C24921Q0088 and 36C24921Q0115. Decision I at 348; Decision II at 214; see also J.A. 150–208; J.A. 1556–618. Both solicitations indicate that they are “request[s] for quantity on hand to be delivered within 45 calendar days from order.” Decision I at 348; Decision II at 215; J.A. 155; J.A. 1561. Both solicitations state that “[c]ontracts that are awarded based on submitted quotes will have 45 calendar days from receipt of order (award date) to deliver the awarded quantities, or the contract will be terminated for cause.” J.A. 155; J.A. 1561. The solicitations also include multiple other provisions emphasizing that delivery must be made within 45 calendar days. See, e.g., J.A. 157 (“De- livery is required within 45 calendar days after receipt of order[.]”); J.A. 1563 (same); J.A. 158 (“B.4 Delivery Sched- ule[:] 45 calendar days after receipt of order.”); J.A. 1564 (same); J.A. 190 (“Delivery Schedule: To be eligible for award, Offerors must be able to deliver within 45 calendar days from the award date.”); J.A. 1595 (same). Both solicitations also incorporate pertinent provisions of the Federal Acquisition Regulation (“FAR”) 1 governing

1 The FAR is codified in Title 48 of the Code of Fed- eral Regulations. For ease of reference, we refer to the FAR without the corresponding C.F.R. citations. Case: 22-2193 Document: 56 Page: 4 Filed: 09/30/2024

commercial item acquisition, including FAR 52.212-4(f), which provides in relevant part: Excusable delays. The Contractor shall be liable for default unless nonperformance is caused by an occurrence beyond the reason- able control of the Contractor and without its fault or negligence such as, acts of God or the public enemy, acts of the Govern- ment in either its sovereign or contractual capacity, fires, floods, epidemics, quaran- tine restrictions, strikes, unusually severe weather, and delays of common carriers. Decision I at 348; Decision II at 215–16; J.A. 159; J.A. 1565. The solicitations also incorporate FAR 52.212-4(m), which provides in relevant part: Termination for cause. The Government may terminate this contract, or any part hereof, for cause in the event of any default by the Contractor, or if the Contractor fails to comply with any contract terms and con- ditions, or fails to provide the Government, upon request, with adequate assurances of future performance. Decision I at 348; Decision II at 216; J.A. 163; J.A. 1569. The gloves are required to meet certain mandatory technical requirements under the solicitations, including that the gloves shall be “Brand Name or Equal To: Bosma Enterprises, Nitrile Textured Exam Glove.” J.A. 155; J.A. 1561. The solicitations further specify that the offeror must provide evidence demonstrating that each proposed product meets or exceeds the mandatory technical require- ments. Decision II at 215; J.A. 155–56; J.A. 1561–62. Fail- ure to provide this evidence renders the quote ineligible for contract award. Decision II at 216; J.A. 155–56, 183; J.A. 1561–62, 1588. The solicitations also include a Case: 22-2193 Document: 56 Page: 5 Filed: 09/30/2024

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questionnaire and spreadsheet, instructing offerors to pro- vide details—such as Original Equipment Manufacturer (“OEM”) name (“glove name - make and line”) and “OEM number (part number)”—for each quoted glove. J.A. 156; J.A. 1562. B. On February 16, 2021, AME submitted an offer to sup- ply 10 million gloves. Decision I at 348–49; J.A. 2006, 2012. On April 16, the VA awarded AME a contract for 10 million gloves, emphasizing that the delivery date was June 7, 2021, for all contracted-for gloves and that “[n]o extensions w[ould] be granted. . . . includ[ing] . . . [for] delays associ- ated with the manufacturer, the supplier, shipping delays, customs, lack of financing and the pandemic.” Decision I at 350 (emphases in original); J.A. 2192. On May 25, 2021, AME informed the VA that a ship- ment containing all the gloves was expected to arrive in New York on June 1 and would be shipped to the delivery site within 3–4 days. Decision I at 352; J.A. 2254. On June 2, however, AME indicated that 75 percent of the shipment was set to arrive in New York on June 9 instead and that the remaining 25 percent of the shipment was expected to arrive on June 22. Decision I at 352; J.A. 2251. On June 8, having received no gloves from AME, the VA informed AME that it had terminated its contract for cause for fail- ing to meet the delivery deadline. Decision I at 352–53; J.A. 2268–70. C. On February 16, 2021, Servant submitted a quote to supply 50 million gloves. Decision II at 220; J.A. 213–15, 220–21. The following month, on March 11, the VA awarded Servant a contract for 50 million nitrile gloves to be delivered by April 26, 2021, emphasizing to Servant that “[n]o extensions w[ould] be granted. . . . includ[ing] . . . [for] delays with the manufacturer, the supplier, shipping Case: 22-2193 Document: 56 Page: 6 Filed: 09/30/2024

delays, customs, and the pandemic.” J.A. 352; see also De- cision II at 221. On April 22, 2021, four days before the delivery dead- line, Servant reported that because of delays at “California ports” due to the “Suez Canal issue,” only partial delivery would arrive the following day, and the remaining portion would ship out within about a week. Decision II at 222; J.A. 417–18. On April 25, Servant provided a schedule up- date, offering two alternative proposals to finish delivering the 50 million gloves by either May 7 or May 28 with a cor- responding discount to the VA depending on the delivery date. Decision II at 223; J.A. 438–41. Servant also cited the “supply-chain crisis” due to the global pandemic as a reason for its alleged “excusable delay.” Decision II at 223; J.A. 439. On the day of the delivery deadline, April 26, 2021, the VA learned that it had received a partial delivery from Servant, but the packaging of the delivered gloves did not match Servant’s submission. Decision II at 223–24; J.A. 521–75. On May 5, 2021, the VA terminated Servant’s con- tract for cause. Decision II at 226; J.A. 830–31. D. On February 9, 2021, Noble submitted a quote to sup- ply 50 million gloves from several brand names. Decision II at 226; J.A. 998, 1004, 1058, 1125. The VA informed No- ble on March 19 that only the mCare gloves by Mercator Medical had passed the technical evaluation. J.A. 1231– 33; Decision II at 226. Noble confirmed that it was able to supply 25 million mCare gloves by Mercator Medical. De- cision II at 226; J.A. 1230–31. Noble also provided the VA with other documentation, including an authorized distrib- utor letter for Mercator Medical mCare products, an OEM verification letter, photographs of the boxes of offered gloves bearing mCare labels, and confirmation that the boxes met FDA labeling guidelines. Decision II at 226; J.A. 1241, 1258–64. Case: 22-2193 Document: 56 Page: 7 Filed: 09/30/2024

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On April 22, the VA indicated that it planned to award Noble a contract for 25 million Mercator Medical mCare gloves, to be delivered by June 10, 2021. Decision II at 226– 27; J.A. 1362. The VA also stated that “[g]love boxes to be delivered shall match the ones submitted in [the] submis- sion,” and that glove substitutions would not be allowed. Decision II at 227; J.A. 1362. The VA finalized the contract award to Noble by April 23. Decision II at 227; J.A. 1373. The VA received shipments from Noble in mid-May. Decision II at 228; J.A. 1407–09. The shipments contained gloves with packaging that was not previously disclosed in Noble’s quote, with some boxes bearing “UniSpace Health” as their brand, and others bearing the mCare brand but having different product numbers than those required by contract. Decision II at 228; J.A. 1420–48. In response to the VA’s inquiry, Noble claimed that “Unispace and Ni- trylex are mCare” and that “Mercator has recently beg[u]n to replace the mCare line to Nitrylex and Unispace.” Deci- sion II at 228; J.A. 1449. Noble also stated that going for- ward, the VA would receive “a mixture of mCare boxes, Nitrylex boxes, and Unispace boxes.” Decision II at 228; J.A. 1456. On May 20, the VA issued a cure notice because of No- ble’s “inability to deliver the awarded nitrile gloves,” noting that Noble had delivered and planned to continue to deliver gloves different from those awarded. Decision II at 228; J.A. 1465–66. On May 25, 2021, the VA terminated Noble’s contract for cause. Decision II at 228–29; J.A. 1487–89. E. On January 12, 2021, Transcendence submitted a quote to supply 50 million gloves from Medivico Health So- lutions. Decision II at 217–18; J.A. 1623–24, 1672–73, 1676–77. On January 22, 2021, the VA awarded Tran- scendence a contract for 50 million Medivico gloves to be delivered by March 8, 2021. Decision II at 218; see also J.A. 1746–53. Case: 22-2193 Document: 56 Page: 8 Filed: 09/30/2024

Four days before the delivery deadline, on March 4, Transcendence informed the VA that there was a delay and offered to supply a substitute glove with a delivery date to be determined. Decision II at 219; J.A. 1811–13; see also J.A. 1815–34. The VA responded that it was “possibly will- ing to grant a short extension” but that “substitutions [we]re not permitted.” Decision II at 219 (citation omitted); J.A. 1835. On March 5, Transcendence updated the VA that Medivico was “unable to fulfill [its] obligation to [Tran- scendence] due to the current state of the PPE market” and offered to substitute with yet another brand of gloves. De- cision II at 219; J.A. 1840–41; see also J.A. 1842–44. The VA ultimately terminated the contract for cause on March 9, 2021. Decision II at 219–20; J.A. 1861–63. F. AME, Servant, Noble, and Transcendence all chal- lenged the VA’s terminations for cause at the Court of Fed- eral Claims, seeking to convert them into terminations for convenience and requesting monetary damages. Decision I at 347; Decision II at 214. The Court of Federal Claims granted the government’s motions for summary judgment and denied the Plaintiffs’ cross-motions for summary judg- ment. Decision I at 347, 360; Decision II at 214, 240. The Appellants timely appeal. We have jurisdiction under 28 U.S.C. § 1295(a)(3). II. STANDARD OF REVIEW “We review a grant of summary judgment by the Court of Federal Claims de novo.” FastShip, LLC v. United States, 892 F.3d 1298, 1302 (Fed. Cir. 2018) (internal quo- tation marks and citation omitted). “Summary judgment is appropriate ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’” Id. (quoting RCFC 56(a)). “Contract interpretation is a question of law, which we Case: 22-2193 Document: 56 Page: 9 Filed: 09/30/2024

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review de novo.” Nova Grp./Tutor-Saliba v. United States, 87 F.4th 1375, 1379 (Fed. Cir. 2023). “The level of discretion that must be exercised by the government before terminating a contract for default is a question of law, which we review de novo.” McDonnell Douglas Corp. v. United States, 182 F.3d 1319, 1325 (Fed. Cir. 1999). “The contracting officer has broad discretion to determine whether to terminate a contract for default and we will only overturn that decision if it is arbitrary, capri- cious or constitutes an abuse of discretion.” Consol. Indus., Inc. v. United States, 195 F.3d 1341, 1343–44 (Fed. Cir. 1999) (internal quotation marks and citation omitted). III. DISCUSSION On appeal, the Appellants argue that the Court of Fed- eral Claims erred by finding that (1) the Appellants did not show that the delays were excusable, see Appellants’ Br. 43–45; (2) the Appellants breached the contracts by deliv- ering or offering to deliver different products from those specified under the contract, see id. at 41–43, 49–54; and (3) the contracting officer did not abuse his discretion or breach the duty of good faith and fair dealing. See id. at 31–40. Regarding AME only, the Appellants also argue that the Court of Federal Claims impermissibly relied on AME’s pre-award characteristics. See id. at 46–49. We ad- dress each argument in turn. A. The Appellants first argue that the Court of Federal Claims should have found that the delays in delivering the gloves by AME, Servant, and Transcendence were excusa- ble because the delays were caused by the pandemic and its effect on common carriers. See Appellants’ Br. 44–45, Case: 22-2193 Document: 56 Page: 10 Filed: 09/30/2024

45 n.19. 2 The Appellants contend that the finding by the Court of Federal Claims to the contrary is based on an in- correct interpretation of United States v. Brooks-Callaway Co., 318 U.S. 120 (1943). Id. at 44–46. We disagree. The Court of Federal Claims found that the VA’s ter- mination decision was based on the failure of AME, Serv- ant, and Transcendence to deliver the contracted-for gloves by the contractual deadlines. Decision I at 355 (AME); De- cision II at 231–32 (Servant and Transcendence). On ap- peal, the Appellants do not challenge these findings. Thus, the government has satisfied its prima facie burden of showing default. Gen. Injectables & Vaccines, Inc. v. Gates, 519 F.3d 1360, 1363 (Fed. Cir. 2008) (“A contractor’s failure to make timely delivery of agreed-upon goods establishes a prima facie case of default.”), opinion supplemented on de- nial of reh’g, 527 F.3d 1375 (Fed. Cir. 2008). The burden thus shifts to the Appellants to show that the failure to timely deliver the gloves was excusable. Id. at 1363. To avail themselves of the excusable delay provision, the Ap- pellants must show that the failure to deliver is “caused by an occurrence beyond the reasonable control of the Con- tractor and without its fault or negligence.” Id.; FAR 52.212–4(f). The Appellants raise various unsupported arguments to allegedly support their excusable delay claims. AME ar- gues that its shipping containers were originally scheduled to arrive in New York on June 1, but the containers were delayed because of “operational reasons” on behalf of the shipping company. J.A. 2251. However, AME identifies no documents in the record to show that the delivery was

2 The excusable delay argument is not applicable to Noble, because the Court of Federal Claims’ findings on ex- cusable delays were limited to AME, Servant, and Tran- scendence, and the Appellants did not argue otherwise. See Decision I at 356–59; Decision II at 234–36. Case: 22-2193 Document: 56 Page: 11 Filed: 09/30/2024

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scheduled to arrive in New York on June 1 in the first place, and AME has not provided any additional documen- tation. J.A. 2260–64; see also Decision I at 358. Similarly, although Servant claims that the delays were due to the “Suez Canal issue . . . and other extenuating global market conditions” related to the pandemic, J.A. 417–18, the ship- ping documents cited by Servant as support appear to be bills of lading including only domestic information, which do not support Servant’s claim of international shipping delays caused by the pandemic. J.A. 420–27; see Decision II at 235–36. Transcendence primarily relies on an email and accompanying letter generally stating that Medivico, its supplier, was “unable [to] fulfill their obligation to [Transcendence] due to the current state of the PPE mar- ket.” J.A. 1840, 1842. Such generalized assertions cannot raise a genuine dispute of material fact. See Akzo Nobel Coatings, Inc. v. Dow Chem. Co., 811 F.3d 1334, 1343 (Fed. Cir. 2016) (“[A]mbiguity and generality cannot create a genuine issue of material fact.”). Therefore, we conclude that the Appellants fail to raise a genuine dispute of mate- rial fact concerning whether the delays were excusable. The Appellants argue that the Court of Federal Claims erred by misapplying Brooks-Callaway. Appellants’ Br. 43–46; see also Decision I at 359; Decision II at 236. They contend that the COVID-19 pandemic was different from the type of pandemic where the Supreme Court in Brooks- Callaway cautioned against applying excusable delays, noting that the logistical challenges brought by the COVID-19 pandemic were unpredictable and unforeseea- ble. Appellants’ Br. 45–46. But this argument misses the mark. Even accepting the Appellants’ argument that the COVID-19-related delays are the type of delays that can be excusable, they still fail to present sufficient evidence to show a genuine dispute of material fact. Therefore, the Court of Federal Claims did not err in finding the delays by AME, Servant, and Transcendence were not excusable. Case: 22-2193 Document: 56 Page: 12 Filed: 09/30/2024

B. The Appellants then argue that the Court of Federal Claims erred in finding that Servant and Noble delivered substitute items, rather than conforming goods. Appel- lants’ Br. 49–51. The Appellants additionally contend that even if Servant and Noble delivered substitute gloves and Transcendence submitted substitute product proposals, they met the criteria for showing permissibility of substi- tution during performance. Id. at 51–53. According to the Appellants, the contracting officer’s rejection of substitu- tion was thus an abuse of discretion. Id. at 53–54. We are not persuaded. At the outset, we need not reach these arguments per- taining to Servant. Even if the government had accepted Servant’s gloves with a different packaging, treating them either as contracted-for gloves or acceptable substitutes, Servant would still have failed to timely deliver the con- tracted-for quantity of gloves. See J.A. 438–41 (Servant proposing to deliver all gloves by May 2021, after the April 26 contract deadline); J.A. 442–43 (same). As discussed above, the government had sufficient basis to terminate for default solely based on Servant’s delay and inability to show that the delay was excusable. We are not persuaded by the Appellants’ argument that Noble provided conforming, rather than substitute goods. Appellants’ Br. 49–51. Noble does not dispute that the delivered gloves bore different brands or different part numbers than those specified in the contract. Decision II at 232; see also Appellants’ Br. 50 (“[T]he only perceived difference was the packaging.”). Compare J.A. 1442–48 (emails and photographs of delivered Noble gloves), with J.A. 1380 (description of contracted-for mCare gloves in- cluding part numbers). Noble provided an email from Mer- cator Medical stating that “the specs are exactly the same,” J.A. 1473, but fails to provide documentation to substanti- ate this conclusory statement. Noble also provides a Case: 22-2193 Document: 56 Page: 13 Filed: 09/30/2024

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screenshot from the FDA website that does not even men- tion Unispace, let alone support Noble’s argument. J.A. 1451. Given the apparent differences in packaging, there is no genuine dispute of material fact concerning whether these gloves were in fact substitutes. The Appellants’ argument that Noble and Transcend- ence met the criteria for showing permissibility of substi- tution is also unpersuasive. Appellants’ Br. 52–54. Specifically, the Appellants point to the “Brand Name or Equal” statement in the mandatory technical requirement part of the solicitations as evidence that substitution should have been allowed. Appellants’ Br. 52–53; see also, e.g., J.A. 155; 1561. We disagree. Although the cited lan- guage in the mandatory technical requirement table sug- gests that the VA was open to accepting quotes offering various brands of products if they met the specified tech- nical requirements at the solicitation stage, it does not in- dicate that substitutions are still allowed once the VA has accepted a quote for a particular product. Indeed, the so- licitations also explain that contracts are “awarded based on submitted quotes,” and that the submitted quote must include a variety of documentation showing that the “the item(s) being quoted meet or exceed the mandatory tech- nical requirements.” J.A. 155–56 (emphasis added); J.A. 1561–62 (emphasis added). Moreover, the solicitations in- clude instructions for offerors to provide “details for each quoted glove” in a spreadsheet. J.A. 156; J.A. 1562. On the signed contracts, the price/costs schedules identify the OEM and part numbers for the contracted-for gloves, not just any brand-name equals. J.A. 1376, 1380 (Noble); J.A. 1672–77 (Transcendence). Taken together, these different parts of the contract support interpreting the “brand name or equal” language to only allow substitution at the solici- tation stage. See NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004) (“When interpreting the contract, the document must be considered as a whole and Case: 22-2193 Document: 56 Page: 14 Filed: 09/30/2024

interpreted so as to harmonize and give reasonable mean- ing to all of its parts.”). The cases cited by Appellants, such as Jack Stone Co. v. United States, 344 F.2d 370 (Ct. Cl. 1965) and Sherwin v. United States, 436 F.2d 992 (Ct. Cl. 1971), are distin- guishable. Appellants’ Br. at 52–53. In both cases, our pre- decessor court held that the government erred by not allowing substitutions when the contracts include provi- sions explicitly authorizing the contractor to make substi- tutions equal to the items specified. Jack Stone, 344 F.2d at 373–74 (contract stating that the contractor “may make substitutions equal to the items specified if approved in ad- vance in writing by the Contracting Officer”); Sherwin, 436 F.2d at 999 (stating that “the Contractor may, at his option, use any equipment, material, article, or process which, in the judgment of the Contracting Officer, is equal to that named”). Here, the Appellants have failed to point us to similar contract language. Even if the contracts allow for substitution, Noble and Transcendence still fail to show that there are genuine dis- putes of material fact. Both contracts state that the con- tractor has the burden to provide documentation to support that the gloves quoted meet or exceed mandatary technical requirements, including an “Authorized Distributor Let- ter” on the OEM’s letterhead stating that the quoter is au- thorized to distribute the specific product(s) proposed or stating generally that “the quoter is an authorized distrib- utor for all the manufacturer’s products.” J.A. 1377 (No- ble); J.A. 1673 (Transcendence). They also require OEM product specifications, OEM product literature with sup- porting certifications and test reports, and clear and read- able photographs of the nitrile glove boxes and gloves being proposed. J.A. 1378 (Noble); J.A. 1667, 1674 (Transcend- ence). As the Court of Federal Claims found, Noble failed to provide any product literature, specifications, or “technical Case: 22-2193 Document: 56 Page: 15 Filed: 09/30/2024

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capabilities” for the delivered gloves other than an asser- tion by Mercator Medical that the “specs are exactly the same.” Decision II at 239; J.A. 1473. Transcendence also failed to provide sufficient documentation for its proposed substitutes. For example, Transcendence’s supplier letters for the proposed substitutes were not from the OEM and fail to clarify its supply chain. J.A. 1833–34 (providing a letter from ATX Capital Management representing itself as “either the Manufacture[r], Authorized Distributor, Au- thorized Sub Distributor or Title Holder” without specify- ing its role (emphasis added)); J.A. 1843–44 (providing a letter from its supplier PharmacyGo without specifying the OEM); see also Decision II at 238–39. Because Noble and Transcendence did not provide ad- equate documentation required by the contracts, the VA did not err in rejecting the substitutes even if substitutions were allowed. Decision II at 239. Therefore, we also reject the Appellants’ argument that the contracting officer abused his discretion by rejecting the proposals for substi- tute by Noble and Transcendence. For the reasons above, the Court of Federal Claims also did not err in finding that Servant and Noble delivered sub- stitute items, rather than conforming goods. The Court of Federal Claims also did not err in upholding the VA’s re- jection of the substitutes by Servant and Noble. C. The Appellants also argue that the Court of Federal Claims should not have relied on AME’s pre-award charac- teristics in upholding the VA’s termination of AME’s con- tract for cause. Appellants’ Br. 46–49. This argument is also unavailing. Although the Court of Federal Claims did include a lengthy fact section outlining AME’s efforts to re- ceive Small Business Administration documentation pre- award, id. at 47 (citing Decision I at 349–50), nothing in the court’s discussion section indicates that it found AME untrustworthy on that basis. Moreover, contrary to the Case: 22-2193 Document: 56 Page: 16 Filed: 09/30/2024

Appellants’ argument, the Court of Federal Claims did not insinuate that AME had misrepresented its initial port de- livery date. See id. at 48 (discussing Decision I at 358–59). Rather, the Court of Federal Claims merely explained that AME failed to provide documentation substantiating its claims of excusable delay. Decision I at 358–59. Therefore, we conclude that the Court of Federal Claims did not err in discussing AME’s pre-award characteristics. D. Lastly, we reject the Appellants’ arguments that the contracting officer intentionally evaded exercising discre- tion and breached the duty of good faith and fair dealing. Appellants’ Br. 30; see also id. at 31–40. First, the Appellants contend that the contracting of- ficer abused his discretion by structuring the solicitation in a way that effectively removed any instance of excusable delay. See id. at 32–33. But they failed to raise this argu- ment before the Court of Federal Claims. See Pl.’s Summ. J. Br. 19–30, Am. Med. Equip., Inc. v. United States, No. 21-1553C (Fed. Cl. Feb. 23, 2022), Dkt. 15; Pls.’ Summ. J. Br. 33–40, Servant Health, LLC v. United States, Nos. 21- 1373C, 21-1456C, 21-1472C (Fed. Cl. Mar. 23, 2022), Dkt. 43. Instead, the Plaintiffs argued that there were no per- formance-based reasons for default termination, but in- stead that it was pretextual; the Court of Federal Claims rejected that argument. Decision I at 354 n.5; Decision II at 230 n.17. The Appellants’ new argument on appeal is therefore forfeited. See Cal. Ridge Wind Energy LLC v. United States, 959 F.3d 1345, 1351 (Fed. Cir. 2020) (“We may deem an argument forfeited when a party raises it for the first time on appeal.”). Because any protest to the strict deadline requirements of the solicitation is forfeited, the Appellants’ argument that the contracting officer did not exercise discretion by not granting extensions cannot suc- ceed. Case: 22-2193 Document: 56 Page: 17 Filed: 09/30/2024

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The cases cited by the Appellants are inapposite. Ap- pellants’ Reply Br. 2–4 (first citing Schlesinger v. United States, 390 F.2d 702 (Ct. Cl. 1968); and then citing Darwin Constr. Co. v. United States, 811 F.2d 593 (Fed. Cir. 1987)). In Schlesinger, the court concluded that the “record affirm- atively shows that nobody . . . . exercised the discretion they possessed.” 390 F.2d at 709 (emphasis added). In Darwin, the court held the termination to be an abuse of discretion because “the default action was taken solely to rid the Navy of having to deal with” the contractor. 811 F.2d at 596. In both cases, the default served only as a useful pretext for the termination of the contract. Id.; Schlesinger, 390 F.2d at 709. Here, there is no evidence, beyond the Appellants’ conclusory statements, that the Ap- pellants’ failures to deliver the requested gloves on time were merely a useful pretext for the terminations. The Appellants also contend that the contracting of- ficer acted in bad faith. Appellants’ Br. 38–40. But the Appellants concede that the contracting officer ensured that “the bidding contractors knew the ramifications of fail- ing to deliver within 45 days.” Appellants’ Br. 38–39 (first citing J.A. 2361; then citing J.A. 1491–95; and then citing J.A. 2364–66). Since the contractors were on notice of the strict deadline, the Appellants’ assertion that the contract- ing official acted in bad faith by “creat[ing] a trap for con- tractors” is without merit. Id. at 39. We also reject the Appellants’ unsupported assertions that the contracting of- ficer “took pleasure in terminating for default,” id., and that the termination was in bad faith because “the govern- ment would have suffered no negative consequences through the allowance of extensions.” Id. at 40. Therefore, we conclude that the Court of Federal Claims did not err in finding that the contracting officer did not abuse his discre- tion and did not act in bad faith. Case: 22-2193 Document: 56 Page: 18 Filed: 09/30/2024

IV. CONCLUSION We have considered the Appellants’ remaining argu- ments and find them unpersuasive. For the foregoing rea- sons, we affirm the judgments of the Court of Federal Claims. AFFIRMED