TYPES OF DEFENSE FRAUD
Cross Charging
Cross Charging is one of the most common types of defense procurement fraud cases. In these examples, a company will often charge the government for a project it gets paid for by the hour when it’s really working on a fixed rate project.
Failure to Comply with Contract Specifications
The Defense Department requires its contractors to build its weapons systems according to very specific details. These details include the type of materials and the steps to insure the quality of the product. In order to be sure these details are met, the Government will cover the costs as part of the contractor’s payment.
The problem arises when a contractor exceeds its budget or falls behind on its schedule. This is when the contactor might try to speed up its process or cut costs by omitting required testing, quality procedures, or other production steps. This is an example of fraud 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 try to provide substitute and 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.