This is more than a breach of contract case. This is a civil False Claims Act case alleging Armstrong committed a violation of the FCA each time he sought or received payment from the USPS because he did so in knowing violation of his contract by taking and using illegal substances. I have seen FCA cases brought on far less.
The damages can be considerable in a FCA case, typically much more in terms of liability than with a mere breach of contract case. And the knowledge requirement under the civil FCA is less than with common law fraud, requiring only a negligent disregard as opposed to specific intent. Statutory amendments in 2009 have made it easier for qui tam plaintiffs and the Government to bring FCA actions.
The Government can seek and obtain treble damages in a FCA case.
This case arose as a FCA qui tam, or whistleblower case filed by Floyd Landis as a whistleblower. The DoJ filing deadline to "intervene" was set to expire, and the Government had to file before the 60 day intervention deadline passed.
Landis' share of recovery as a qui tam relator, if any, will be reduced by virtue of the fact the Government intervened in the case. This, however, is not bad news for Landis. With the Government involved, odds for recovery typically increase.
Armstrong really has to worry about his financial viability. The prospects of a judgment, the crushing burden of paying lawyers (these can be complex cases) are very significant. Perhaps this is the karma people desire for him.
Sorry for the legal summary - but too much information above was not really accurate.