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Welcome back to our highlight reel of Contract Disputes Act decisions from the first half of 2026, in which we, embracing the World Cup fever that has captured the nation, recap cases from the Boards of Contract Appeals, the Court of Federal Claims, and the Federal Circuit that shaped the Government contracts field of play. Whether offering new lessons or confirming existing rules, these decisions provide important insight for anyone competing in the Government contracts arena. In last week’s edition of THE GOVERNMENT CONTRAC-TOR, the highlights focused on claim formational requirements that each litigant must establish to have a chance at recovery. See 68 GC ¶ 168. In this Part 2 of the First Half 2026 CDA Case Law Replay, we turn to disputes that arise when the Government ends the match (er, contract) early, and in “Stoppage Time” tackle a myriad of topics, such as cost allowability, delays, and a duty to inquire, which further underscore that strategic missteps in the game plan or formation can prove just as costly as a missed opportunity on the field.
Knock-Out Round—Terminations—World Cup games rarely end before the final whistle, but the same cannot be said for Government contracts. Sometimes a contract ends early through no fault of the contrac-tor—the Government simply calls the match, exercising its right to terminate for convenience. Other times, a contractor fails to perform and is shown the “red card”: a termination for default. The following four deci-sions from the first half of 2026 examine when the Government properly ended the match—for convenience or default—and the consequences that followed.
In Capital FM (Pvt.) Ltd. v. Agency for Global Media, CBCA 8601, 2026 WL 972704 (Apr. 8, 2026), the Ci-vilian Board of Contract Appeals addressed the scope of recoverable costs following a commercial-item termination for convenience under Federal Acquisition Regulation 52.212-4(l). Capital FM is a private Zambian radio broadcaster that held a contract to distribute U.S. Government-funded media programming in Zambia in exchange for a fixed amount per month. After receiving a termination for convenience, the contractor, which had hired personnel and committed to media broadcasting slots in order to distribute programming under the contract, sought recovery of both severance costs and the costs of several months of prepaid media slots following the agency’s termination. The Board allowed recovery of the personnel-related severance costs but denied recovery of the media-slot costs extending beyond the contract’s 30-day notice period. Rejecting the contractor’s argument that industry practice prevented it from reselling the unused slots, the Board concluded that awarding those costs would “vitiate the termination clause” permitting termination on 30 days’ notice. The Board further observed that if advance slot commitments required greater protection, “the contract should have provided for a longer notice period.” Once the agreed notice period expired, the proverbial match was over, and the Government was not required to pay for additional costs that the contract never contemplated.
In Wolverine Tube, Inc., ASBCA 63877, 26-1 BCA ¶ 38,982 (Jan. 22, 2026), the Armed Services Board of Contract Appeals held that the Air Force could not leave the game clock running and then fault the contractor for continuing to play. The Air Force awarded Wolverine Tube a requirements contract to manufacture and deliver air cargo pallets. After the incumbent contractor filed a bid protest, the Air Force issued a stop-work order under FAR 52.242-15. The Air Force went on to conduct correc-tive action but did not cancel or extend the stop-work order, terminate Wolverine’s awarded con-tract, or change the first delivery date Wolverine was obligated to meet under the awarded contract. When the 90-day stop-work order expired by its own terms, Wolverine re-commenced performance so as to be able to meet the unchanged first delivery deadline, incurring more than $2 million in mate-rial and equipment costs. Months later, the Air Force completed its corrective action, awarded the contract to the incumbent, terminated Wolverine’s contract for convenience, and denied Wolverine’s claim for those incurred costs. On appeal, the ASBCA disagreed with the Air Force’s arguments that these costs were unallowable as a matter of law: the agency could have issued a stop-work or-der under FAR 52.233-3, Protest After Award, but did not, and per its terms the stop-work order under FAR 52.242-15 expired after 90 days. And, the Board noted, even had the Air Force used the stop-work order clause tailored to bid protests, there is no absolute prohibition on recovery of costs incurred during a work stoppage. Both clauses direct the contractor to “minimize the incurrence of cost … during the period of work stoppage.” How-ever, the costs were also not necessarily allowable; the contractor would have to prove reasonableness and allocability in future proceedings.
Not every ejection from a match is controversial, but often a red card receives a second look through video assistant referee (VAR). The same holds true for default termination. The next two decisions ex-amine whether the Government was right to end the match early over a contractor’s alleged failure to perform.
In Sergent’s Mech. Sys., Inc. v. U.S., 2026 WL 1425220 (Fed. Cir. May 21, 2026), the contractor was unable to persuade the Federal Circuit to overturn the call on the field, which involved the Department of Veterans Affairs defaulting the contractor after the contractor confirmed in re-sponse to a Show Cause Notice that it would not perform the HVAC renovation and asbestos-abatement work at a VA medical center as promised. The Federal Circuit upheld the termina-tion (and affirmed the COFC’s ruling) holding that the contractor had repudiated its contractual obligations when it submitted schedules in re-sponse to the cure notice showing the contractor would not complete performance by the agreed-upon deadline and could not show excusable delay. Contrary to the appellant’s arguments, the contract unambiguously assigned the responsibility for investigating site conditions and determining the actual scope of the required abatement work to the contractor, not the VA. The Court also rejected the contractor’s argument that the VA’s voluntary pro-vision of additional asbestos-related information during performance modified the contractor’s obligations. Nothing in the contract conditioned performance on the VA supplying that information, and the Government’s efforts to assist during per-formance did not rewrite the parties’ bargain.
The contractor in ASG Solutions Corp. v. U.S., 181 Fed. Cl. 84 (May 6, 2026), went beyond request-ing VAR review to instead requesting to replay the entire match. The Court applied issue preclusion to bar the contractor from relitigating its termination for default. The Navy awarded ASG a task order under the SeaPort Next Generation Multiple Award Contract to provide engineering and program management support services, which required a minimum staff of 20 professionals. Yet, halfway through contract performance, ASG had supplied only five of the required personnel, prompting the Navy to terminate the task order for default. ASG challenged the call and lost—the COFC upheld the default termination, the Federal Circuit affirmed,
and the contractor’s request for further review was denied. Rather than accept the final call, ASG filed a second complaint alleging the contracting officer’s memorandum effectuating the termination for default was “of suspect fraudulent origin” because it did not comply with the Navy Correspondence Manual. Id. at 86. The COFC granted the Govern-ment’s motion to dismiss, refusing a third replay of a call that had already been upheld on appeal: in other words, because the legal question—whether ASG has breached its contractual obligations—had already been fully litigated and decided against ASG, issue preclusion barred the do-over. The Court observed that even accepting ASG’s fraud al-legations as true (as it must under the dismissal motion), the memorandum at issue was never what justified the termination in the first place; the underlying facts of ASG’s noncompliance were al-ready established. If ASG believed the Court had been “dupe[d],” its remedy was to seek relief from judgment under Rule 60(b)(3) of the Rules of the Court of Federal Claims, “not to file a new com-plaint,” relitigating the same call. Id. at 92 n.2. And even under that avenue, ASG would have had to clear a high bar: proving fraud by clear and convincing evidence and showing that the fraud actually cost ASG a fair hearing, two elements that ASG could not have shown. The Court concluded: “[T]he issues at stake here are identical to those that were or could have been presented during consideration of the plaintiff’s first complaint, the issues were necessary to the judgment in the first action and were actually litigated, and the plaintiff had a full and fair opportunity to litigate the issues in the prior proceeding.”
Stoppage Time—Referees add stoppage time to ensure the match ends only after every important moment has played out. In the same spirit, before the final whistle, here are a few additional deci-sions from the first half of 2026 that did not fit neatly into the themes above but nevertheless deserve a place on the CDA highlight reel.
No Recovery for Own Goals: In IAP Worldwide Servs., Inc., ASBCA 62638, 63879 (May 6, 2026), the Board held that litigation costs arising from a contractor’s dispute with its local business partner amounted to an unallowable own goal. FAR 31.205-47(f)(5) bars recovery of legal expenses incurred in connection with an “agreement or contract concern-ing a teaming arrangement, a joint venture, or sim-ilar arrangement of shared interest,” and the Board concluded that this prohibition applied to IAP’s dispute with its former Kuwaiti sponsor. To perform Government contracts in Kuwait, IAP entered into a “Joint Venture Contract” with a Kuwaiti business-man who agreed to provide local business, adminis-trative, legal, and logistical support. After IAP terminated that relationship and retained a differ-ent local sponsor, the former sponsor sued in Kuwait, obtained a judgment exceeding $78 mil-lion, and sought recognition of that judgment in Florida. IAP subsequently attempted to recover its legal fees defending lawsuits arising out of the Joint Venture Contract through its incurred cost submissions as allowable G&A expenses. The Board rejected that effort finding the costs expressly unal-lowable under FAR 31.205-47(f)(5), finding the liti-gation between them arising from “[a]n agreement or contract concerning a teaming agreement, a joint venture or similar arrangement of shared interest.” Although IAP argued that no true joint venture existed because the parties had not formed a sepa-rate legal entity, did not expressly share losses, and did not jointly control all aspects of perfor-mance, the Board found that the agreement’s plain language established, at a minimum, a “similar ar-rangement of shared interest” covered by FAR 31.205-47(f)(5) because the agreement created a partnership of shared interest. The Board likewise rejected IAP’s argument that the costs should be allowable because Kuwaiti law required participa-tion by a Kuwaiti national. While the contract required compliance with host-nation law, FAR 52.236-7 requires such compliance “without ad-ditional expense to the Government,” and the Board declined to expand that narrow exception to encom-pass private litigation between business partners. Meaning, when a dispute arises within your own team, a contractor cannot pass the ball—or the legal bills—onto the Government.
Wave Your Flag: In Lockheed Martin Aeronautics Co., ASBCA 63621, 26-1 BCA ¶ 39,024 (Mar. 10, 2026), the ASBCA issued guidance as to the require-ments of FAR 52.247-63, Preference for U.S.-Flag Air Carriers (FAA clause) and Defense FAR Supple-ment 252.247-7023, Transportation of Supplies by Sea (CPA clause), which generally require contrac-tors to use U.S.-flag air and ocean carriers, absent an applicable exception or waiver. Lockheed per-formed Government contracts containing these clauses and included international cargo transpor-tation costs associated with non-U.S. carriers and vessels in indirect cost pools. When the Govern-ment asserted such costs were unallowable as violating the FAA and CPA clauses, Lockheed argued that the clauses did not apply when trans-portation costs were charged indirectly rather than directly. The Board rejected that argument, finding that the clauses impose performance obligations that are independent of a contractor’s accounting treatment of transportation expenses. Neverthe-less, the Board found that the Government had not met its burden to demonstrate that Lockheed actu-ally used foreign carriers in violation of the clause, despite having “access to Lockheed’s records through audit.” The Government carries the burden of proving costs are unallowable, and “conclusory statements in its audit reports that Lockheed did not comply with the clauses” do not satisfy that burden.
New Rules of the Game: In Meltech Corp., Inc., ASBCA 61765, 26-1 BCA ¶ 38,978 (Jan. 6, 2026),
the ASBCA considered whether a contractor could recover costs and delay damages arising from new installation-access procedures implemented at Fort Meade during performance of a design-build task order. The installation announced revised security requirements directing visitors without Depart-ment of Defense identification to obtain passes and comply with new badging procedures before enter-ing the base. The Board held that the policy change qualified as a sovereign act. The new requirements were imposed by the installation rather than the contracting agency, applied generally to all visitors, and were not targeted at the contract at issue. In other words, Fort Meade changed the rules for everyone on the pitch, not just for this contractor. Because the Government was acting in its sovereign capacity rather than as a contracting party, the sovereign acts doctrine shielded it from liability for the contractor’s resulting monetary claim. While the contractor would be entitled to additional time it proved was attributable to the sovereign act, the contractor devoted only five sentences of its post-hearing brief to its delay theory, while the Govern-ment presented evidence that many of the access-related difficulties were self-inflicted (the contractor repeatedly failed to follow the new procedures and often submitted incomplete or last- minute documentation). As a result, the Board found the contractor had not demonstrated entitlement to any “extra time.”
Same Federation, Different Clubs: Discovery disputes rarely make the highlight reel, but Yuan-ming Zhang v. Gen. Servs. Admin., CBCA 8787, 2026 WL 1191900 (Apr. 28, 2026), offers a useful reminder that agencies cannot avoid discovery obligations simply by passing responsibility to a different Government entity. The dispute arose when the purchaser of a vehicle sold through a Gen-eral Services Administration auction sought docu-ments from the vehicle’s original user agency, the Fish and Wildlife Service (FWS). GSA objected, arguing that the FWS was a separate agency be-yond GSA’s control. The CBCA reviewed past pre-cedent holding that counsel for one Government agency does not represent the Government as a whole and recognized that GSA does not “control” the FWS such that GSA could compel the FWS to provide documents over its objection. Nonetheless, the CBCA found that “courts have recognized that a respondent agency within the Executive Branch is typically more likely to be able to convince a sister non-respondent agency to provide documents for production in the respondent agency’s lawsuit than is the private party seeking production.” The Board concluded: “That means that a respondent agency, before we will find that it cannot reason-ably access requested documents from another agency, must do more than provide a ‘naked aver-ment’ of inaccessibility and instead must ‘make rea-sonable, diligent inquires, and, if applicable, demands of other agencies in order to obtain docu-ments within the possession of such other agencies.’ ’’ (quoting Comeau v. Rupp, 810 F. Supp. 1127, 1166 (D. Kan. 1992)). Because GSA had not made any such efforts, the CBCA ordered GSA to do so and, if the FWS does not comply, to provide names of FWS personnel who could accept service of a subpoena, which the CBCA indicated it would issue.
Moving the Goalpost (on Itself): HEALTHeS-TATE, LLC v. U.S., 2026 WL 787163 (Fed. Cir. Mar. 20, 2026): the petitioner (HeS) served as a subcon-tractor to ASM Research, which held a contract to develop a veterinary services program for the Army. ASM proceeded to deliver the source code to the Government with Government Purpose Rights and received a sole-source maintenance contract. HeS asserted ownership over the source code and, in a February 2015 letter, demanded the Government terminate ASM’s award and compensate HeS for the use of its code. When the Government never responded, HeS sued in the COFC. The Court found several problems with HeS’s CDA claim and the Federal Circuit affirmed. First, HeS advanced four different methods of calculating its claim, each yielding a different amount. “HeS’s inability to identify the specific amount of the claim foretells a failure to present a clear and unequivocal sum certain,” id. at *4, rendering its claim inadequate under the CDA as a matter of law. Second, HeS relied on an End-User License Agreement (EULA) embedded in the delivered code, but the undisputed evidence established that the software was config-ured not to display the EULA, so no Government agent with authority to bind the U.S. ever even saw the EULA with the terms that HeS claimed bound the Government. HeS therefore could not es-tablish the existence of any contract that the Government could have breached.
The Scoreboard Controls: In GIP Indianapolis, LLC v. Gen. Servs. Admin., CBCA 8555, 2026 WL562214 (Feb. 19, 2026), GIP leased office space to GSA, which in Lease Amendments 17, 18, and 19 expressly established adjusted operating-cost rent amounts and annual rent figures. After making rent payments pursuant to those amendments, GSA concluded that its personnel had incorrectly calculated the operating-cost adjustments when preparing the amendments, resulting in overpay-ments in rent that GSA began withholding from future rent payments. GIP submitted a CDA claim seeking reimbursement of the withheld amounts, arguing that the executed lease amendments con-trolled the parties’ rights and obligations. The CBCA agreed, holding that the plain language of the bilateral lease amendments controlled and that GSA could not unilaterally recalculate rent or re-cover alleged overpayments based on errors in the methodology it used to prepare those amendments.
No Split Squads: In Gilbane Fed. v. U.S., ——Fed. Cl. ——, 2026 WL 1782606 (June 17, 2026); 68GC ¶ 167, the COFC found that where a contractor had separately appealed claims related to the same contract to the ASBCA and to the Court, the later filed action at the COFC should be transferred to the ASBCA. The first claim related to a dispute the parties partially settled; the contractor appealed the Government’s refusal to pay contract modifica-tion preparation costs to the ASBCA. The second claim requested additional non-compensable days to complete the contract and contract preparation costs; the contractor appealed the Government’s denial of this claim to the COFC. The U.S. moved to transfer the COFC litigation to the ASBCA under 41 USCA § 7107(d), permitting transfer to agency boards for convenience or in the interests of justice. The COFC granted the request, finding it had the discretion to do so and the transfer was warranted given the disputes arose under the same contract and concerned overlapping issues, also referencing that the ASBCA was the contractor’s apparent first forum choice. The Court agreed the similar issues should be resolved in a single forum rather than played simultaneously on different fields.
Ask the Referee for Clarification before Kickoff or Lose the Right to Complain Later: In Arctic Swan Constr. Inc., ASBCA 63510, 64085, 2026 WL 2025026 (June 16, 2026), the contractor argued that certain work—installing washers and dryers—was not covered by its fixed unit price and sought ad-ditional compensation for that work. Following a denial of the certified claim, the contractor ap-pealed to the ASBCA. The Board found the contract language unambiguously covered the work and to the extent any ambiguity existed, it was an obvious conflict that the contractor could have, and should have, asked about prior to taking the field. The contract performance work statement (PWS) spelled out the installation requirements very clearly. Thus, any confusion about whether the fixed price included those requirements was at most a patent ambiguity about which the contractor had a duty to inquire (and resolve) before submitting its bid. Arctic Swan’s failure to inquire about the perceived disconnect between the PWS require-ments and the bid schedule prior to proposal submission “bars its claim for an equitable adjust-ment” and warrants denial of the appeal.
Closing Ceremony—The first half of 2026 delivered no shortage of drama on the CDA pitch. In Part 1, some contractors never qualified, side-lined for lack of privity or a properly sponsored claim. Others found themselves stopped before kickoff, unable to establish the valid contract the CDA demands. Still others tested the boundaries of jurisdiction learning (often the hard way) where the touchline actually falls. In Part 2, the termina-tion decisions demonstrate that the contract’s own terms set the boundaries of recovery and, once the termination call is made and all appeals taken, it is final. And, the Stoppage Time reel shows that success in CDA disputes depends on making the right strategic decisions from the outset. A poor game plan, the wrong formation, or a failure to adjust can quickly lead to defeat. The decisions highlighted in both parts of this replay share the same lesson: CDA recovery requires mastering the fundamentals. Contractors who mind the basics of the game—resolving ambiguities early, securing a valid contract, properly documenting entitlement and quantum in a certified claim, and timely ap-pealing their own or the Government’s claim—best position themselves for recovery. Those who skip a step are often whistled offside, or worse, earn an early exit off the pitch entirely.
Previously published in THE GOVERNMENT CONTRACTOR® Information And Analysis On Legal Aspects Of Procurement JULY 22, 2026 VOLUME 68 ISSUE 27.
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