Federal contractors facing False Claims Act exposure now have written Justice Department policy saying agency guidance alone cannot carry an enforcement action, while whistleblowers whose suits DOJ declines may face a tougher road. On Sept. 18, 2026, DOJ's Office of Public Affairs announced two Justice Manual revisions (Press Release No. 26-1081) that it says will strengthen its fight against fraud under the False Claims Act "through clearer standards that promote fair and effective enforcement."

Why Can't Guidance Alone Support a False Claims Act Case?

The first revision, on how DOJ uses guidance, reinstates and builds on a 2017 DOJ policy that sub-regulatory guidance cannot impose legal obligations beyond those set by statute or regulation. It appears in Justice Manual section 1-19.000, "Limitations on Issuance and Use of Guidance Documents," marked "Updated September 2026." The press release says the revision applies across Department litigation, not only to False Claims Act cases.

Section 1-19.210 sets the working rule. Criminal and civil enforcement actions must be based on violations of applicable legal requirements, not mere noncompliance with guidance documents, because guidance cannot by itself create binding requirements that do not already exist by statute or regulation. In the section's words, the Department "may not bring actions based solely on allegations of noncompliance with guidance documents."

Associate Attorney General Stanley E. Woodward, Jr. framed the change as a fair-notice principle. "The Department of Justice should enforce the law, not make law through enforcement," he said. "These updates reflect the Department's commitment to fair notice, transparent enforcement, and the rule of law."

The word "solely" carries weight. Sections 1-19.220 through 1-19.260 still let DOJ use guidance in several ways: as evidence that a party had the requisite scienter, notice or knowledge of the law; as evidence of professional or industry standards; and in cases where a party falsely certifies compliance with a guidance document and the certification is material to a payment decision. When a government contract requires compliance with an agency guidance document, section 1-19.250 says, "it is the contract—not the agency guidance itself—that makes the agency guidance pertinent." The manual states that using guidance as evidence does not give it the force of law.

What Happens When DOJ Declines a Qui Tam?

The second revision, on declined qui tam suits, rewrites the process in Justice Manual 4-4.111, "DOJ Dismissal of a Civil Qui Tam Action," also marked "updated September 2026." Under the False Claims Act, a private relator can file suit on the government's behalf, and DOJ decides whether to intervene. When the recommendation is to decline, section 4-4.111 says attorneys "will in each case assess whether the government's interests are served by seeking dismissal pursuant to 31 U.S.C. § 3730(c)(2)(A)."

The manual does not treat dismissal as automatic. It states that dismissal "will not be warranted in every declined case," because the government often investigates only to the point where it concludes declination is warranted, and that conclusion "may not equate to the conclusion that a qui tam is meritless." Where DOJ does not seek dismissal at declination, it "may re-evaluate whether dismissal becomes appropriate as the litigation progresses."

The press release says DOJ will use the authority "judiciously," emphasizing suits that lack legal or factual merit. Assistant Attorney General Brett A. Shumate said the Civil Division "will continue to focus on cases that advance the interests of the United States."

The Seven Dismissal Factors in Section 4-4.111

The manual lists seven non-exhaustive factors that can serve as a basis for dismissal:

  • curbing meritless qui tams;
  • preventing parasitic or opportunistic actions that duplicate a pre-existing government investigation and add no useful information;
  • preventing interference with an agency's policies or the administration of its programs;
  • controlling litigation brought on behalf of the United States, to protect the Department's litigation prerogatives;
  • safeguarding classified information and national security interests;
  • preserving government resources, particularly where costs are likely to exceed any expected gain; and
  • addressing egregious procedural errors that could frustrate a proper government investigation.

If DOJ finds one or more of these factors present, a motion to dismiss "may be warranted." The section also sets process rules. In jointly handled and monitored cases, the prior approval of the Assistant Attorney General is required for a motion to dismiss. In delegated cases, authority generally rests with the U.S. Attorney, whose office should give the assigned Fraud Section attorney at least 10 days' notice before filing. If attorneys believe dismissal may be warranted, they should consult closely with the affected agency and obtain its recommendation in advance of any request to dismiss. Before seeking dismissal, they "should consider advising relators of perceived deficiencies in their case so that relators may consider dismissing the action."

Why DOJ Says Meritless Qui Tams Impose "Unjustified Burdens"

Associate Deputy Attorney General Paul Perkins tied both changes to fraud enforcement. "The False Claims Act is one of the government's most powerful tools for combatting fraud," he said. The revisions, he said, will help DOJ hold "fraudsters accountable for violations of binding legal or contractual obligations while seeking dismissal of meritless qui tam actions that waste taxpayer resources and impose unjustified burdens on businesses." The phrase "binding legal or contractual obligations" marks the line: statutes, regulations and contract terms stay enforceable, while standalone guidance does not.

What It Means for Contractors

Contractors gain a written DOJ position they can cite. If a qui tam complaint rests only on an agency's guidance, defense counsel can point to section 1-19.210 and its bar on actions based solely on noncompliance with guidance.

The shield has edges. Section 1-19.250 preserves cases in which a contract requires compliance with guidance, or where a party falsely certifies compliance. A contract clause that incorporates a guidance document remains binding contract language. Guidance can also come in as evidence of what a contractor knew, so contractors should check which guidance documents their contracts and certifications actually incorporate.

The qui tam change also cuts both ways for contractors. A declined suit can now be examined for dismissal under the seven factors, which may shorten some cases. But the manual also lets DOJ revisit dismissal as litigation progresses, so a declination does not end the risk. Because attorneys are directed to obtain the affected agency's recommendation first, contracting agencies also get a voice in which suits continue.

The revisions govern how DOJ attorneys use their own discretion; courts will still decide scienter and materiality. The press release describes the revisions but does not include the earlier text of section 4-4.111, so this article does not characterize which words changed in that section.

Sources