TYPES OF DEFENSE FRAUD
Cross Charging
Cross Charging is one of the most common types of defense procurement fraud cases. This happens when a company charges the government by the hour for a project that is actually being paid as a fixed rate project.
Failure to Comply with Contract Specifications
The Defense Department requires its contractors to build its weapons systems according to highly specific details. These include the types of materials used and the steps required to insure product quality. The government builds payments for these materials and steps into its contract. The problem arises when a contractor exceeds its budget or falls behind on its schedule and then cuts costs by speeding up the process or omitting required testing, quality procedures, or other production steps. This can result in fraud that falls under the False Claims Act.
Product Substitution
When the government buys products from defense contractors, it normally specifies the grade or quality of the parts it is purchasing. Contractors will sometimes provide alternative or inferior parts. If this is done without the express permission of the government, the contractor is liable under the False Claims Act.
Violation of the Truth in Negotiations Act
When the government buys specialized weapons it normally purchases them from a single company. If this sole provider of the specialized weapons inflates their projected costs to get a higher price, they are liable under the False Claims Act.
If you have been witness to these or any other activities that could be considered illegal under the False Claims Act, contact Halunen & Associates.