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
The FCA imposes liability on individuals and companies that knowingly submit false claims for government funds. In the context of settlement proposals and grant closeout packages following terminations, contractors and recipients face heightened risks of FCA liability. This is due to the stringent requirements for accuracy and transparency in the claims submitted to the government. Misrepresentations, whether intentional or accidental, can lead to severe financial penalties and legal consequences.
As contractors and grant recipients engage in the submission, negotiation and finalization of settlement proposals and cost proposals, it is crucial to understand the implications of the FCA. This blog...
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