Military service member

What Is Defense Contractor Fraud?

The U.S. government spends billions of dollars every year on defense. However, due to the magnitude of the job, it relies on private contractors for assistance. Unfortunately, given the substantial amount of money involved in national defense, the risk of fraud is high. Like other types of fraud against the federal government, defense contractor fraud wastes taxpayer dollars. Unlike other types of fraud, however, defense contractor fraud can actually put our service members’ lives at risk. Due to the seriousness of this issue, the government rewards those who expose defense contractors that participate in fraudulent activity. If you have knowledge about defense contractor fraud, you may be entitled to a substantial amount of money. 

Types of Defense Contractor Fraud

The government enters into contracts with defense contractors via a process called procurement. Procurement is a complex process, and it provides multiple opportunities for defense contractors to commit fraud. Common types of defense contractor fraud that occur during the procurement process include: 

  • Improper substitution – Defense contracts typically require products and materials of a specific quality. Sometimes, however, defense contractors substitute cheaper materials to maximize their profits.
  • Cross-charging – The government may award either a fixed-price contract or a cost-plus contract during the procurement process. Cross-charging occurs when a contractor illegally switches from a fixed-price contract to a cost-plus contract to increase profits.
  • Substandard products or services – The government expects defense contractors to provide goods that perform as required by the contract. However, with the high number of government contracts, it simply isn’t possible for the government to perform a detailed quality check on everything it procures. Contractors sometimes take advantage of this by providing the government with substandard products.  
  • Inflation of costs and charges – Defense contractors sometimes misstate their costs and charges to collect additional money from the government. 
  • Truth-In-Negotiations Act (TINA) violations – When only one defense contractor bids on a particular government contract, TINA requires the contractor to honestly disclose all relevant information about costs to the government. However, companies sometimes violate TINA by inflating costs and expenses when there is no other competition. 

Compensation for Reporting Defense Contractor Fraud

If you report information about defense contractor fraud, you may be entitled to 15% to 30% of the funds recovered by the government. Whistleblower rewards are often substantial, frequently surpassing the $1 million mark. However, in order to ensure that you properly report your information and follow all applicable reporting procedures, you need a defense contractor fraud whistleblower attorney on your side. 

Contact A Defense Contractor Fraud Whistleblower Attorney Today 

If you have information about defense contractor fraud, you need an experienced defense contractor fraud whistleblower attorney on your side. At Newman & Shapiro, we know the ins and outs of defense contractor fraud, and we have a deep understanding of what it takes to succeed in a qui tam lawsuit. When we take you on as a client, we’ll do everything in our power to ensure that you are fully compensated for the information you provide. Please contact our office today for a consultation.