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ARTICLE · 09 MAY 2025

Contractors And Grant Recipients Beware: False Claims Act Risk In Termination Settlements

Holland & Knight
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A significant number of government contracts and grants have been terminated recently by federal agencies pursuant to the U.S. Department of Government Efficiency's...

United StatesGovernment, Public Sector
Megan Mocho
Megan Mocho
Amy L. Fuentes
Amy L. Fuentes
Laura A. Supple
Laura A. Supple
Roza Sheffield
Roza Sheffield
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A significant number of government contracts and grants have been terminated recently by federal agencies pursuant to the U.S. Department of Government Efficiency's (DOGE) "cost efficiency initiative" and review of "covered contracts and grants" outlined in the executive order (EO) "Implementing the President's 'Department of Government Efficiency' Cost Efficiency Initiative." These terminations have led to a complex landscape for contractors and grant recipients navigating the aftermath and resulted in a substantial increase in settlement proposals and grant closeout packages as contractors and grant recipients seek to recover costs and mitigate losses. However, this process is fraught with potential legal pitfalls, particularly concerning the False Claims Act (FCA or the Act).1

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