US Postal Service based on their contractual promise to play fair and abide by the rules -- including the rules against doping," said Ronald Machen, US Attorney for the District of Columbia.
The government filing in federal court to join a lawsuit filed by Floyd Landis, himself an admitted dope cheat who lost the 2006 Tour de France crown because of doping, came after Armstrong and US lawyers could not reach a deal over damages issues.
"Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged," Armstrong attorney Robert Luskin said in a statement.
Landis, a former Armstrong teammate on the now-defunct US Postal team, filed a lawsuit against Armstrong claiming that Armstrong defrauded taxpayers and the government by saying he was not taking performance-enhancing drugs as he won a record seven Tour de France titles from 1999-2005.
Armstrong, 41, confessed last month that he was a dope cheat in a television interview with Oprah Winfrey.
Landis filed his lawsuit under the False Claims Act, which allows citizens to sue for alleged fraud against the government and receive as much as a third of any money recovered.
The law allows for the recovery of treble damages, or in Armstrong's case triple the sum of the US Postal sponsorship, which ran from 1999 through 2004 and was worth about $30 million.
Luskin said that rather than damaged by its relationship with Armstrong and the cycling team, the US Postal Service received major benefits as a result of the sponsorship deal.
"The Postal's Services own studies show that the Service benefited tremendously from its sponsorship -- benefits totaling more than $100 million," Luskin said.
Armstrong was stripped of his Tour de France titles last year after the US Anti-Doping Agency (USADA) uncovered overwhelming evidence, included testimony from 26 witnesses, he was at the heart of a major doping conspiracy.
In addition to the Landis lawsuit, Armstrong was sued on February 7 by a Texas insurance firm seeking $12 million for bonus money paid to the cyclist for the Tour de France triumphs that no longer exist.
The US government move comes two days after Armstrong said he would not cooperate with a USADA probe into dope cheats in cycling but would be willing to help other anti-doping inquiries.
Armstrong's refusal to testify under oath about the details of the scheme and others who might have been involved dims his chances of shortening a life ban from all World Anti-Doping Agency (WADA) sanctioned sports.
USADA chief executive Travis T. Tygart had wanted under-oath details from Armstrong as USADA pursues its probe of former team manager Johan Bruyneel's role in the conspiracy and its report's claims that International Cycling Union (UCI) officials might have helped conceal Armstrong's doping.
Armstrong claimed in his interview with Winfrey that he had stopped doping after the 2005 Tour triumph and was not a ringleader who forced teammates to take banned substances or lose their place on the squad.
Tygart, in a later television interview with CBS, said Armstrong lied to Winfrey because evidence showed he had pressured other riders and that doping tests showed he cheated when he rode in the Tour de France in 2009 and 2010.