Government Procurement Fraud
The federal government acquires goods and services through a process called “procurement,” which is a fancy term to describe the professional relationship between the government and commercial businesses. When a business seeks to begin working with the government, it must first bid on and win a contract by competing with other companies on the price they will provide the service, the quality of the product, and other factors relevant to the contract at hand. Using tax dollars as revenue, the government will choose a company to complete the contract, then wait until the job is complete before they release the funds. However, there are strict restrictions on how the government can use tax dollars, including various billing codes for specific aspects of work and standards that the product or service must meet to be considered complete.
While we may believe that all businesses will act ethically with their government contracts, the harsh reality is that many companies have, and will continue to, attempt to commit fraud to bolster their profits. The harm goes well beyond stolen funding, as some organizations have tried to submit defective products to military contractors who plan to use the equipment to support troops overseas. If that defective product had ended up in the hands of a soldier, it could potentially cause them harm, yet unethical organizations continue to commit acts of fraud without a thought to who they’re harming.
Unfortunately, most instances of significant fraud are concealed behind closed doors, making it difficult for the government to detect and prosecute these fraudulent organizations. That’s why there is a needs whistleblowers, as they’re often close to the fraud and can gather the necessary evidence for a lawsuit. Any individual who comes forward with information of fraudulent activity is nothing short of a hero, and they could be eligible for a financial reward for their assistance in the matter.
If you have knowledge of fraudulent activity occurring at your workplace or any other organization that does business with the federal government, contact us today for more information on how to use your evidence for the greater good.
Fighting Back Against All Fraud Schemes
Government procurement fraud can occur before awarding a contract or after a vendor is selected. Fraudulent vendors who bid on contracts make it more difficult for the government to find an appropriate vendor for their needs, ultimately slowing down the process and costing more for taxpayers. Additionally, procurement fraud can result in inferior products in the hands of those with critically important occupations, such as construction engineers and soldiers. Each instance of fraud hurts not only the federal government but the American taxpayer who’s unaware that the crime is occurring at all.
Fraud can look different depending on the industry it’s happening within, but here are some of the more common fraud schemes and examples of each:
Fraud In the Inducement
Occurs when an entity misrepresents information that is material to the government’s decision to award the contract to the entity.
Price Fixing
A group of contractors agreeing to raise prices or do away with discounts universally
Bid-Rigging
Two contractors colluding to not bid below government estimates
Fraud During Bidding
A company withdrawing from contention for a contract, then becoming a subcontractor of a higher bidder
False Invoices
An organization submitting falsified documents to win a bid fraudulently.
Defective Pricing
A business listing and charging a high price for a good when it’s lower.
Defective Material
Instead of complying with federal standards, a company chooses to use faulty materials to construct a government procurement good but charges for the price of the standard material.
Kickbacks
A group of contractors offering incentives to vendors in exchange for a lower rate on goods and services
Product Substitution
Instead of complying with federal standards, a company chooses to use non-conforming materials to construct a government procurement good, all while hiding the change from the government
While the fraud schemes mentioned above are common in government contracting, there are many more methods that organizations and individuals will use to steal federal funding. If you’re unsure whether the activity occurring at your workplace is considered fraudulent, contact us today to speak with one of our whistleblower attorneys for more information.
Whistleblowers Can Stop Government Procurement Fraud
The False Claims Act (FCA) allows private citizens, otherwise known as whistleblowers, with evidence of fraud to file a lawsuit against the abuser on behalf of the government. These brave individuals serve as the strongest line of defense against corruption directed towards the federal government. Also, if the government recovers monies because of the whistleblowers’ information, a whistleblower may be eligible for a financial award ranging from between 10% - 30%. Not only that, but the FCA offers legal remedies if the employer engages in retaliatory behavior against a qualified whistleblower.
Our Complex Litigation Group stands with whistleblowers, regardless of the defendant. Our team of experienced qui tam attorneys, former FBI agents, and knowledgeable support staff have handled numerous successful multi-million-dollar settlements across the country. Thus, whether we’re litigating in the courtroom or building a solid foundation for the future of your case, we have what it takes to fight back against fraud and corruption.