Defense Contractor Fraud can occur in countless ways, and US citizens and the government have to rely upon honest employees to help expose the criminal fraud and corruption that occurs within these systems. Similarly, millions of dollars are wasted each year based upon negligence within the defense agencies themselves as they work with these large defense service organizations, all of which is rewardable through the False Claims Act as well. As defense spending by the United States has reached into the $100's of billions annually, defense contractor fraud has increased proportionally.
Some of the individuals prone to committing some of these fraudulent activities can include sales representatives, quality assurance evaluators, defense contractors, contract writers and government personnel themselves. With the dramatic increase in the volume of dollars being spent in this industry, the ability of the government to test goods and evaluate services sold to the US Department of Defense has dropped significantly. With this sheer volume comes a lack of the type of rigor necessary to ensure fraud is minimized. This enables the unscruplous individuals who may have joined our reputable defense contractor industries to steal millions of dollars from the government while providing poor execution, defective products or intentionally misleading contract agreements.
If you can prove that a defense contractor or related personnel exercised fraudulent behavior either willfully or through negligence, enabling them to take advantage of the government's money or resources, you may be rewarded with 15 to 30% of the money recovered by the government in accordance with the False Claims Act. Hundreds if not thousands of people have earned millions of dollars through this program, established by President Lincoln in the 1860's. As the Federal Government spend escalated its spending on ammunitions, supplies and services to support the Union armies during the civil war, it became a known problem that corrupt defense contractors were cutting corners and intentionally providing poor products and services in an effort to capture monetary gains and take advantage of the government's agressive spending of money. Presendent Lincoln realized it would require insiders who were familiar with corrupt or negligent behavior to help bring these crimes to light and help right these wrongs - so he established the False Claims Act which aligned the incentives of whistleblower with that of United States government. Despite the centuries of existence of the program, it is believed that much the corruption that has occured in these channels often goes upreported, as individuals fear retaliation and risk to their careers should they expose the crimes that they may be familiar with. However, OffRecord has now evolved to assist individuals in better protecting their identities in this process, minimizing the risk to their careers, their reputations and their relationships.
Types of Defense Contractor Fraud
Some types of fraud that the False Claims Act whistleblower may come across include:
- Mistating or Misrepresenting costs of a project
- Contract negotiation fraud - contracts that mislead buyers regarding the capabilities and resources available in order to cost-effectively accomplish a job for the government.
- Underbidding - contractors have purposely come in low on contracts to simply win them - then later on run over on costs while demanding the government pay more in order to obtain the work they desire completed. If a whistleblower can point to evidence that the bidding contractor intentionally underbid their services in an effort to deploy this strategy, he/she will have a strong case on which to be rewarded. Bidding on government contracts in this manner demonstrates a willful intent to mislead and can cost the government significant time and money.
- False Statements - purposely obtaining contracts through false statements. Contractors can do this by claiming they have certain skills, resources, certifications or personnel which it does not maintain, and can be held accountable for misleading the government and wasting taxpayer money and resources.
- Bid rigging - where various players who are thought to be competing on a bid collude together to maximize the dollars from the government in a manner to divide or gain the most money.
- Omitting resources - in otherwords, not disclosing resources that could essentially make a project more cost-effective, and doing so to willfully drive money from the government with an intent to mislead.
- Overcharging and Over-billing
- Undercutting resources after bid won - After winning a contract, replacing the resources which were agreed to be used with inferior products, supplies or lower quality labor. Substituting cheaper goods yet billing for the cost of higher qualilty products.
- Failure to follow contract specifications - willfully or negligently ignoring the requirements of a contract with an intent to capture monies not agreed to or earned. This includes simply failing to complete a project pursuant to government requirements, especially if intent to do so ahead of time can be proven.
Getting Rewarded for Reporting Defense Contractor Fraud
To be rewarded for the case it is important the reporting individual be careful about maintaining confidentiality on the issues and providing all the relevant data they can to OffRecord. Sharing information or your intent to report the violation with others exposes yourself to unnecessary risk, and it could cause the reward to go to someone else if they report it first, as the Department of Justice only rewards the first to file. Confidentially submit your full or short form describing the fraud you believe you have observed along with whatever evidence you have to support your claim, and OffRecord will do its best to assist you in ascertaining if you have a strong case and if we are the right partner to pursue your claim. Keep all documentation (emails, receipts, photographs, voicemails, or other correspondence and evidence) that you legally possess that validate the legitimacy of your claim. Be careful however not to do anything illegal or expose yourself to unnecessary risks by unwisely speaking with others until you are sure you desire to do so. It is possible as you go through this process that you may determine that you simply may have misjudged the circumstances or simply do not have a claim that possesses enough substantial evidence to justify its pursuit; so keeping confidentiality may limit your exposure.
Hunches and suspicions will likely not be enough to prove a case in a court of law. It is critical to save and maintain all evidence that proves the company/contractor were actively aware or intended to mislead. Negligence is also punishable; however, it is more difficult to prove in a court of law. It is worth noting, that individuals who have originally been involved with such activities, and then decided to come clean and stop the activity, may also be rewarded under the False Claims Act. In those circumstances however the judges reserve the right to provide rewards which may be lower than they otherwise would be.
