USAID Contractors Can Proceed With DOGE Terminations Lawsuit

Former US Agency for International Development contractors can continue to allege the Department of Government Efficiency unlawfully pushed the administration to terminate their agreements in 2025, the US Court of Federal Claims said.

Andrea Danziger and other plaintiffs adequately alleged bad faith in their proposed class action by calling attention to various public statements, such as Elon Musk’s assertion that USAID was a “viper’s nest of radical-left” Marxists, Judge David A. Tapp said in an April 10 opinion denying a motion to dismiss.

She adequately alleged USAID breached the termination clause of the plaintiffs’ contracts regardless of whether the agency paid out certain costs under termination of convenience clauses, the court said.

Tapp also said it remains an “open issue” whether DOGE’s involvement in the dismantling of the agency was lawful; the US District Court for the District of Maryland is addressing the matter.

Danziger was a personal services contractor for USAID providing humanitarian assistance officer functions to overseas countries. She alleged the government, at DOGE’s direction, improperly terminated personal service contracts because the government created pretextual and unsupported reasons for the terminations, showing animus and malice toward the contractors

The government’s motion dismiss said the plaintiffs inadequately alleged bad faith, but Tapp disagreed. The complaint said the government, including President Donald Trump, made repeated, unsupported assertions USAID was a corrupt and criminal organization that wasted money and harmed national interests. These statements may suffice when measured against the metrics of bad faith, Tapp said.

The government’s argument that the plaintiffs failed to allege personal animus by the contracting officer that terminated the contracts, or by the agency official under whose policy terminations occurred, also fail at this stage of the litigation, Tapp said.

Crowell & Moring LLP represents the plaintiffs.

The case is Danziger v. United States, Fed. Cl., No. 25-cv-1251, 4/10/26.