GovConDash.aiGovConDash.aiThe Armed Services Board of Contract Appeals (ASBCA) decision in DSME Construction Co., Ltd., ASBCA No. 63878, reinforces a critical principle for government contractors and the counsel who represent them: filing briefs without taking the necessary care in their preparation, including reliance on fictitious opinions or incorrect citations, whether AI-generated or not, risks sanctions. When a contractor's briefs cited a series of cases that do not exist, the Board refused to throw out the appeal, but it struck the offending surreply, denied leave to fix it, and made clear that careless citation practice carries consequences even when the appeal itself survives. The decision resolves no dollar amount. What was at stake was the appeal itself and the credibility of the party's filings, and the Board's message is that generative AI does not dilute a party's duty to verify what it puts before the tribunal.
In the rest of the post, we provide background on the case, summarize the parties' arguments and the Board's holdings, situate the decision among similar ASBCA cases, and close with practical takeaways for contractors.
Read the full decision: DSME Construction Co., Ltd., ASBCA No. 63878 (PDF on asbca.mil).
The underlying appeal challenges the government's default termination of a contract held by DSME Construction Co., Ltd. Contract No. W91QVN-23-D-0038, awarded by the Department of the Army, covered preventative maintenance services at Camps Humphreys and Yongin, in the Republic of Korea. As the Board framed it, "This appeal challenges the government's default termination of a contract for preventative maintenance services at facilities at Camps Humphreys and Yongin, in the Republic of Korea" (p. 1). The Board had earlier found it had jurisdiction over the appeal (DSME Constr. Co., ASBCA No. 63878, 24-1 BCA ΒΆ 38,642). The parties elected to proceed under Board Rule 11, which provides for a decision on the written briefs with no live hearing.
The dispute that produced this decision, however, had nothing to do with the merits of the termination. It concerned the briefs themselves. After the parties filed opening briefs on July 31, 2025, replies on September 29, 2025, and surreplies on December 1, 2025, the government moved on December 19, 2025 to strike the appellant's surreply, asserting that it "contains 27 false or misleading citations . . . including 16 discrete citations to cases that do not appear to exist" (p. 1), which the government characterized as "the hallmarks of generative artificial intelligence (AI) hallucinations" (p. 2).
From there the matter escalated. On December 24, 2025, without addressing whether it had used AI, the appellant moved for leave to file an amended surreply, apologizing for citation errors that it said "resulted from a fundamental breakdown in the appellant's citation-verification and proofreading process" (p. 2). On January 23, 2026, the government asked the Board to deny the motion to amend and to treat its motion to strike as a motion to sanction the appellant by dismissing the appeal with prejudice; it also reported that five citations in the appellant's opening brief "appear to cite to fictitious cases or misrepresent the holdings of cases cited" (p. 2). The appellant replied on January 27, 2026, asking the Board to deny dismissal and permit corrected filings, or, if sanctions were warranted, to impose a lesser sanction such as striking the defective surreply.
The tally of defective citations was itself contested. On February 25, 2026, the government stated that "appellant concedes that four of the eight citations in its Rule 11 Opening Brief were to cases that do not exist" (p. 2) and put the total at 39 non-existent citations across three briefs. On March 5, 2026, the appellant disputed that figure but admitted that it "made references to ten (10) non-existing cases; one (1) in the Opening Brief, one (1) in its January 9, 2026 brief on the vitiation issue, and eight (8) in its Rule 11 Surreply" (p. 3), describing them as "an unintentional lapse in providing inaccurate citation rather than a fraud upon the Board" (p. 3). Notably, as the Board observed, "That brief does not mention AI, or otherwise explain with any specificity how it happened that appellant cited ten cases that do not exist" (p. 3).
DSME urged the Board to deny the government's motion to dismiss and to allow the appeal to continue on corrected filings, reserving at most a lesser sanction. The Board agreed that dismissal was not warranted on this record. It treated dismissal as "the severest sanction the Board can issue" (p. 3) and faulted the government for not carrying the burden that sanction requires: "The government fails even to address whether appellant's behavior is the kind of contumacious or contemptuous conduct sufficient to justify the drastic sanction of dismissal" (p. 3). Applying that standard, drawn from Utility Constr. Co., ASBCA No. 57224, and Sykes Commc'ns, Inc., ASBCA Nos. 53842, 54077, the Board held that "The government's motion to dismiss the appeal with prejudice is denied" (p. 4). The appeal therefore survives to be decided on its merits.
DSME characterized its citation failures as "an unintentional lapse in providing inaccurate citation rather than a fraud upon the Board" (p. 3) and proposed that, if the Board sanctioned it at all, the sanction be limited to striking the defective surreply. The Board accepted the strike but did not stop there. Given the appellant's admission that the surreply cited eight non-existing cases, the Board struck the December 1, 2025 surreply. It then went further and denied leave to file the amended surreply, resting that ruling on the pattern of ten non-existing cases across three briefs and on "appellant's lack of candor regarding how those non-existing cases found their way into its briefing" (p. 4). As the Board put it plainly, "we deny appellant's motion for leave to file an amended surreply" (p. 4), citing its recent decision in Huffman Constr., LLC, ASBCA Nos. 62591, 62873, as the guide for a proportionate response. The lesson embedded in this holding is that owning an error is not enough when the party will not explain how the error occurred: the appellant's refusal to account for the fictitious citations, and its silence on whether AI produced them, cost it the chance to cure its filing.
The government's position hardened over the course of the briefing, moving from a request to strike the surreply to a request that the Board dismiss the appeal with prejudice as a sanction for what it called the appellant's "misuse or careless use of generative artificial intelligence (AI) in providing case citations to the Board" (p. 1). The Board declined to go that far. It anchored its refusal in the demanding standard for dismissal and in Huffman Construction, where it had recently sanctioned a party for comparable conduct by striking an offending brief rather than ending the case. The Board also rejected the government's suggestion, raised as an aside, that it strike the appellant's opening brief as well, declining because the government did not address whether leaving the appellant with only its reply brief "responding to the government's opening brief would unduly prejudice appellant" (p. 4). The net result is a split decision: the government did not obtain the dismissal it sought, but it did secure the removal of the appellant's surreply and the denial of any second chance to amend it.
A corpus vector search surfaces several ASBCA decisions that are semantically and issue-based similar to DSME Construction, meaning they share subject matter and procedural posture rather than serving as precedent the Board relied on. The authority the Board actually applied is Huffman Construction, LLC, ASBCA Nos. 62591, 62873 (Denied / Government Prevailed), which appears in this case's citation network and supplied the template for striking a brief instead of dismissing an appeal.
Among the closest semantic matches, GSC Construction, Inc., ASBCA No. 59402 (Denied / Government Prevailed), turned on a termination for default and resolved with the Board holding that "The motion is denied." Smart Construction & Engineering Co., ASBCA No. 59354 (Dismissed), was dismissed on procedural grounds tied to the appellant's failure to prosecute and lack of an authorized representative, without prejudice to reinstatement. Simon Defense Inc., ASBCA No. 62068 (Dismissed), was dismissed with prejudice under Board Rule 17 for failure to prosecute. Across these three semantically similar decisions, two were dismissed and one was denied, and none produced relief for the appellant, though only one reached a merits determination. That is a very small set, so it is directional context only, not a trend.
For broader base-rate context, and not as a prediction about this or any future appeal, decisions classified under this case's lead issue category that reached a merits determination produced relief for the appellant in roughly 39 percent of instances (67 of 173) across the whole corpus. The through-line among the similar decisions is that procedural and sanctions disputes of this kind tend to resolve against the appellant, whether by dismissal or denial. DSME Construction is the partial exception: the appellant avoided dismissal, but still lost its surreply and its opportunity to amend.
This post is single-case legal-trend intelligence, not legal advice; the underlying analysis is AI-generated and human-reviewed, and the official decision PDF on asbca.mil is the authoritative source.
Topics: Artificial Intelligence in Legal Briefing, Fictitious Case Citations, Litigation Sanctions, Duty of Candor, Default Termination