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COFC Holds that USAID Contractors Properly Pleaded Breach of Contract by Improper Mass Termination in Bad Faith/Abuse of Discretion

What You Need to Know

  • Key takeaway #1

    A complaint need only allege a plausible claim for relief on its face

  • Key takeaway #2

    The complaint was replete with allegations sufficient to plead bad faith by alleging public statements by various officials

  • Key takeaway #3

    Government’s partial payment of termination costs was not defense to the breach claim where improper termination entitles contractors to termination costs as well as breach damages

Client Alert | 1 min read | 04.17.26

In Danziger et al. v. U.S., No. 25-cv-1241 (Fed. Cl. Apr. 10, 2026) (a Crowell & Moring case), the Court of Federal Claims (COFC) denied the government’s motion to dismiss a complaint seeking breach of contract damages for improper terminations in bad faith and/or abuse of discretion. The case involves hundreds of contractors for the U.S. Agency for International Development (USAID), who were terminated in 2025 in connection with the dismantling of USAID. The government sought to dismiss the case for failure to state a claim, arguing that the complaint failed to sufficiently plead bad faith or abuse of discretion. The court rejected these arguments, noting that the complaint was “replete with allegations implicating bad faith,” and specifically rejected the “peculiar notion” “that governmental misconduct is immunized when a contracting officer acts pursuant to directives from higher-ranking officials.” The court also held that the government’s payment of certain termination costs was no defense to the contractors’ breach claim and confirmed that an improper termination for convenience entitles contractors to termination costs as well as breach damages.

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Client Alert | 4 min read | 08.25.26

DOJ Signals Increased Antitrust Scrutiny of Algorithmic Pricing in Willow Bridge Decision

Algorithmic pricing tools commonly used by businesses to increase efficiency and profits are under increasing antitrust scrutiny. This summer, federal regulators, state attorneys general, and state legislatures grappled with competing businesses providing nonpublic, competitively sensitive data to common algorithmic platforms. The Third Circuit deepened an emerging circuit split with the Ninth Circuit on algorithmic pricing liability, reviving antitrust claims against Atlantic City casino-hotels in a decision with direct implications for any company that uses a common pricing platform. See Crowell’s recent client alert. And New Jersey enacted two landmark laws—the FAIR Act and the Fair Price Protection Act—directly regulating algorithmic rent-setting and surveillance pricing. See Crowell’s recent client alert....