The U.S. Court of Federal Claims has dismissed a case brought by Telos Corporation against the United States government regarding contract disputes. The court ruled that it lacked jurisdiction due to violations of the Anti-Assignment Act, which governs the assignment of government contracts. This decision affects Telos and its financial stakeholder, Bank Financial, NA (BFNA), as they sought to enforce claims related to a delivery order with the U.S. Air Force.

The case, Telos Corporation v. United States, was filed under docket number 25-2191 on October 23, 2026. The court's ruling has significant implications for government contractors and their ability to assign contract rights, especially in complex financing arrangements.

Background

Telos Corporation is a government contractor that entered into a delivery order with the U.S. Air Force (USAF) for software licenses. The delivery order was awarded on September 29, 2022, and included terms that allowed the government to renew the contract for additional option periods, contingent upon funding. Telos claimed that the USAF had a contractual obligation to exercise these options if Congress appropriated sufficient funds.

Complications arose when Telos executed a Master Purchase Agreement with ePlus Government, Inc., which involved assigning rights to payments from the USAF. Subsequently, ePlus assigned these rights to BFNA. The government moved to dismiss the case, arguing that these assignments violated the Anti-Assignment Act, which prohibits the transfer of government contracts without proper notification and authorization.

The Ruling

Judge Eric G. Bruggink ruled in favor of the government, granting the motion to dismiss the case for lack of subject matter jurisdiction. The court determined that the assignments made by Telos to ePlus and by ePlus to BFNA violated the Anti-Assignment Act, which states that contracts with the federal government cannot be assigned without the government's consent.

The court stated, "Because a purported transfer in violation of 41 U.S.C. § 6305(a) annuls a government contract or order so far as the government is concerned, Telos’s assignment to ePlus and ePlus’s assignment to BFNA annulled Telos’s Delivery Order with the USAF."

As a result, the court concluded that it could not consider the merits of Telos's claims regarding the USAF's failure to exercise the option periods of the contract.

Impact

This ruling has broad implications for government contractors and their financing arrangements. It underscores the importance of adhering to the requirements set forth in the Anti-Assignment Act. Contractors must ensure that any assignment of contract rights is properly executed and that the government is notified in accordance with the law.

The decision may deter contractors from engaging in complex financing structures that involve multiple assignments unless they can ensure compliance with federal regulations. This case serves as a reminder that government contracts are subject to strict legal frameworks that protect the interests of the federal government.

What's Next

Telos Corporation may consider appealing the court's decision. However, the ruling's basis on jurisdictional issues may limit the grounds for an appeal. Details regarding any potential related cases were not available in the court filing.