Defense/Government Contracting Fraud
The Department of Defense has a $700 billion budget, and it spends a large percentage of that money on the purchase of weapons, equipment, and services. Defense and other government contracts are very lucrative, and some businesses make millions of dollars performing work solely for the government. With so much money sloshing around, some contractors commit fraud to line their pockets.
At Stacey Evans Law, we help whistleblowers bring to light fraudulent schemes which cost our government millions of dollars each year. If you have information about fraud, please contact us to schedule a confidential consultation.
Cost Inflation
Defense contracts are typically either “fixed-price” (where the government pays a set amount for goods or services) or “cost-plus” (in which the government pays a set amount but also a portion of the contractor’s costs). Cost inflation can arise in the cost-plus contracts, where a contractor inflates the cost of their materials or the hours they worked. Contractors often forge records to support the inflated charges.
Cross Charging
Some contractors have both fixed price and cost-plus contracts with the government. They might shift some costs from the fixed price contract to the cost-plus one, since that can inflate the amount they are paid. This type of cross-charging is illegal under the federal False Claims Act, but it is often hard to detect.
Product Substitution
The contract might call for the provision of a particular type of product. The contractor might substitute in a different product, in many cases because the substitute is cheaper. This results in an unfair profit for the contractor and constitutes fraud committed against the government. The inferior products could also compromise the integrity of the military unit that uses it.
Product Defect
The contractor might fail to provide products that meet the government’s specifications. Although the Department of Defense has many requirements regarding testing, some contractors cut corners due to cost overruns and hide that fact.
Misrepresentations in Contracting
The Truth in Negotiations Act requires that defense contractors provide relevant cost information so the government can decide whether it is receiving a fair price. Unfortunately, some contractors make misrepresentations in the contracting process. When these misstatements result in higher prices being paid, then the contractor has violated the False Claims Act.
Civil Penalties for Contracting Fraud
Any contractor who submits a false claim to the government has violated the False Claims Act. This civil statute provides for a range of penalties, including fines and treble damages.
To induce whistleblowers to come forward, the False Claims Act allows them to bring lawsuits to claw back the fraudulent proceeds and keep a portion themselves. The law also provides ample protections against retaliation to induce employees to step forward and share information that they know.
Do You Have Evidence of Defense or Government Contracting Fraud?
The Atlanta whistleblower attorneys at Stacey Evans Law can help you decide whether to report fraud or file a False Claims Act lawsuit yourself. These cases require quality evidence. Let us help you strengthen your claim and walk you through the steps for receiving compensation. Call us today.
