Termination Clause Trumps Cost-Sharing
Client Alert | less than 1 min read | 01.23.06
The Federal Circuit in Jacobs Eng'g Group, Inc. v. U.S. (Jan. 19, 2006) had before it the interesting scenario of the government terminating a contract with an 80/20 cost share and the contractor insisting that it should get "all" its costs under the termination for convenience clause, not just 80% per the cost share. The court agreed, because the cost share had not been specifically incorporated in the termination clause and the termination had deprived the contractor of his compensating benefit for taking the cost share in the first place, patent rights in the finished work.
Insights
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On Friday, April 10, 2026, the U.S. Department of Justice (DOJ) announced that International Business Machines Corporation (IBM) has agreed to pay just over $17 million to resolve allegations that it violated the False Claims Act (FCA) by failing to comply with federal anti-discrimination requirements incorporated into its federal contracts due to allegedly discriminatory diversity, equity, and inclusion (DEI) employment practices. This resolution marks the first FCA settlement secured by the DOJ under its Civil Rights Fraud Initiative, created in May 2025, and announced by then-Deputy Attorney General Todd Blanche as part of the administration’s coordinated efforts to target allegedly unlawful DEI practices. Per the agreement, the settlement is neither an admission of liability by IBM nor a concession by the United States that its claims are not well founded.
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