Asg Solutions Corp., Dba American Systems Group v. United States

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
ASG SOLUTIONS CORP., DBA AMERICAN
SYSTEMS GROUP,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2024-1755
______________________
Appeal from the United States Court of Federal Claims
in No. 1:23-cv-01029-RAH, Judge Richard A. Hertling.
______________________
Decided: December 15, 2025
______________________
D AVID DEMIAN, Finch, Thornton & Baird, LLP, San Di-
ego, CA, argued for plaintiff-appellant.
S HERYL L. FLOYD, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for defendant-appellee. Also represented
by M ARTIN F. H OCKEY, JR ., PATRICIA M. MC CARTHY, BRETT
S HUMATE .
______________________
Case: 24-1755 Document: 59 Page: 1 Filed: 12/15/2025

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ASG SOLUTIONS CORP. v. US 2
Before CHEN, BRYSON, and CUNNINGHAM, Circuit Judges.
PER CURIAM.
This case arises from a contract between a private con-
tractor and the United States Department of the Navy
(“Navy”). The contractor complains that the Navy improp-
erly terminated the contract for default and raises a num-
ber of claims of improper conduct by the Navy that led to
that termination.
The contractor sought review of the termination in the
Court of Federal Claims (“the Claims Court”), which
granted summary judgment for the government in a thor-
ough opinion that addressed each of the claims raised by
the contractor. See ASG Sols. Corp. v. United States, 170
Fed. Cl. 485 (2024). We agree with the Claims Court’s
analysis and accordingly affirm.
I
The contract in this case was an Indefinite Delivery
Indefinite Quantity task order contract under which the
contractor, ASG Solutions Corporation, doing business as
American Systems Group (“ASG”) agreed to provide engi-
neering and program-management services to support de-
sign and construction operations at Naval Air Station
Jacksonville. Id. at 489; J.A. 2957–3022. The government
interpreted the task order as requiring the contractor to
assemble a multi-disciplinary team of at least 20 profes-
sionals who would provide technical support services on de-
mand relating to design and construction work at the
Naval Air Station.
Despite the terms of the agreement, ASG never suc-
ceeded in assembling a team of 20 or more professionals
who met the qualifications set forth in the contract. For
that reason, the Navy terminated the contract for default
halfway through the one-year contract period, over ASG’s
strong objection. J.A. 4556–61.
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ASG SOLUTIONS CORP. v. US 3
In its challenge to the termination, ASG raises a num-
ber of issues, the principal ones of which are (1) that the
Navy misconstrued the contract by interpreting it to re-
quire ASG to assemble and maintain a group of at least 20
professionals even at times when the Navy had no tasks for
the group to perform; (2) that the contract was invalid be-
cause it was an unlawful personal services contract, pro-
hibited by section 37.104 of the Federal Acquisition
Regulation (“FAR”); and (3) that the default termination
was unjustified and was merely a pretext by which the
Navy sought to rid itself of ASG as a contractor.
II
A
The government argues that the plain terms of the con-
tract required ASG to provide the Navy with a team of 20
facilities technical experts to advise and assist on projects
at the Naval Air Station as they arose, and that ASG never
approached having that number of technical experts avail-
able to perform services for the Navy. ASG, on the other
hand, argues that the contract did not require it to have a
certain number of professionals on staff, but only required
it to assemble a qualified team to perform each task after
the Navy assigned it a specific project under the contract.
The Claims Court found the government’s interpreta-
tion of the contract to be more reasonable, as do we. See
ASG, 170 Fed. Cl. at 498–502. Although the contract gave
ASG the right to determine “the precise labor and staffing
mix” among professionals selected to provide the contrac-
tual services, the contract required ASG to provide at least
20 professionals (or the equivalent) throughout the con-
tract period, not simply to make professionals available
when and as needed for the tasks assigned from time to
time under the contract. J.A. 2966. Section A.2 of the so-
licitation states that “[t]he staff of twenty (20) profession-
als is base/minimum level of service,” J.A. 2959; and
section H.8 states that “any time there is a vacancy within
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ASG SOLUTIONS CORP. v. US 4
the Contractor’s team (i.e. all twenty (20) positions are not
filled), the Government will be entitled to immediate re-
placement . . . or to a unit price reduction in payment,” J.A.
2988.
Other evidence in the case is consistent with the re-
quirement that the contractor have an assembled team of
20 professionals at all times. That evidence included ASG’s
bid, which referred to “[o]ur proposed 20 FTE All-Senior
Team” and outlined the backgrounds of the 20 team mem-
bers. J.A. 3027; see also J.A. 2999 (Attachment 2 to section
J of the task order outlining the proposed back grounds of
20 team members). ASG subsequently confirmed that it
understood that it would be bound by the representations
found in its bid. J.A. 3173–74. In addition, section M of
the solicitation provided that for the evaluation of pro-
posals, “[t]he team must be composed of twenty (20) profes-
sionals including two supervisors.” J.A. 3074.
We agree with the Claims Court’s conclusion that the
government’s interpretation of the contract is clearly more
reasonable than ASG’s. For that reason, we reject ASG’s
reliance on the doctrine of contra proferentem, which calls
for construing ambiguous contract terms against the
drafter—here, the government.
B
The Claims Court rejected ASG’s argument that the
contract was an impermissible personal services contract.
ASG, 170 Fed. Cl. at 504–05. While the contract required
ASG to make a number of professionals available to per-
form tasks for the Navy, it clearly left the responsibility for
hiring and supervising those professionals with ASG.
The FAR provision governing personal services con-
tracts defines nonpersonal services contracts as those in
which the personnel rendering the services in question are
not subject “to the supervision and control usually prevail-
ing in relationships between the Government and its
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ASG SOLUTIONS CORP. v. US 5
employees.” 48 C.F.R. § 37.101; see 48 C.F.R. § 37.104. The
contract made clear that the 20 professionals that ASG was
committed to making available to do government work
would be employees of ASG, not of the government; the con-
tract specifically provided that “[t]he contractor supervises
its own team to ensure compliance with this [Performance
Work Statement].” J.A. 2968. While the government had
the right to review resumes and specify the level of exper-
tise required of those employees, it was not responsible for
hiring and firing them or otherwise managing their em-
ployment on a day-to-day basis. See J.A. 2970 (“Contractor
employees performing services under this order will be con-
trolled, directed and supervised at all times by manage-
ment personnel of the contractor.”); see also J.A. 2975,
2979–80, 3031–32. The Claims Court was thus clearly cor-
rect that the contract was not a personal services contract.
C
ASG argues that it provided the services for which the
government contracted because it stood ready to supply
professionals to do whatever tasks the Navy asked it to per-
form, and that the termination for default was therefore
unjustified. The Claims Court rejected that argument on
the ground that it was inconsistent with the obligations im-
posed on ASG by the contract. ASG, 170 Fed. Cl. at 505–
08. In section F.4 of the contract, ASG agreed that within
five days of the contract award it would provide a “[r]esume
for each position proposed” to accomplish the tasks falling
within the scope of the contract. J.A. 2974–75. ASG failed
to deliver those resumes. See ASG, 170 Fed. Cl. at 492–93.
The contract did not contemplate that ASG would arrange
to hire and provide professionals whenever the Navy had a
particular task for ASG to perform.
The summary judgment record showed that through-
out the contract period, ASG never retained as many as 20
qualified professionals, and for most of that period, it had
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ASG SOLUTIONS CORP. v. US 6
far fewer.1 Moreover, on several occasions the Navy noti-
fied ASG that it was not complying with its responsibilities
under the contract, but ASG never brought itself into com-
pliance with the contract’s requirements.2
We agree with the Claims Court that the government
reasonably concluded that ASG had defaulted on the con-
tract, and that the termination for default was not simply
a ruse designed to enable the Navy to escape an improvi-
dent contract. Based on that conclusion, the Claims Court
properly determined that the government had not
breached its covenant of good faith and fair dealing
through its actions and communications with ASG. See
ASG, 170 Fed. Cl. 505, 508.
ASG has raised several other subsidiary issues in its
brief, which the Claims Court addressed in its comprehen-
sive opinion.3 None of those issues, however, affect our
1 The Claims Court held that “ASG materially failed
to perform. It did not provide the required services of as-
sembling a fully staffed team . . . . As of March 2023, half-
way through the contract period, ASG had retained only
four employees who reported to work at NAS Jacksonville.”
ASG, 170 Fed. Cl. at 506.
2 The Claims Court noted that the Navy sent ASG a
“letter of concern” on November 1, 2022; a cure notice on
December 5, 2022; and a notice to show cause on January
20, 2023, “based on ASG’s failure to comply with its obliga-
tions to propose team members meeting the qualifications”
required by the contract. ASG, 170 Fed. Cl. at 493.
3 ASG contends in passing that the memorandum in
which the contracting officer considered seven factors to de-
termine whether to terminate the contract for default (J.A.
4732–44) was inadmissible as hearsay. Appellant’s Br. 50–
53. The memorandum, however, was not considered for the
truth of its contents, but only to show that the contracting
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ASG SOLUTIONS CORP. v. US 7
confidence that the Claims Court’s summary judgment or-
der was correct.
AFFIRMED
officer addressed the factors required by 48 C.F.R.
§ 49.402-3(f) to be considered before terminating a contract
for default. ASG, 170 Fed. Cl. at 507–08 & n.8.
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