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Defense Contractor Fraud
Washington, DC Qui Tam Attorneys
During the Civil War, President Lincoln was concerned about fraud among defense contractors and decided to bring back the False Claims Act, and whistleblowers to this day continue to report defense contractor fraud under that law. While the same conditions for false claims and procurement fraud apply to other sectors, there are some specific types of fraud that apply specifically to defense contractors, such as:
- Cross-charging
- Inappropriate product substitution
- Providing substandard products
- Improper cost allocation
- Cost inflation
- TINA violations
Cross-Charging
Most Department of Defense and military contracts are either fixed-price contracts or cost-plus contracts. Fixed-price contracts set a single price for the product or service regardless of the costs incurred by the contractor to provide it. Cost-plus contracts, on the other hand, allow the contractor to recoup a certain percentage of the cost of providing the product or service in addition to the set price.
Cross-charging involves transferring the cost of producing a good or service under a fixed-price contract to another product or service that is under a cost-plus contract. In this way, the contractor is fraudulently reimbursed for costs outside of the fixed-price contract. Cross-charging is usually done either through fraudulent accounting practices or by instructing employees to charge their hours to a cost-plus contract even though they actually put their time into the fixed-price contract.
TINA
The Truth In Negotiations Act, or TINA, mandates full disclosure of all relevant information about the cost of production for single-source suppliers. This allows the government to set appropriate reimbursement rates for suppliers of unique items.
However, single-source suppliers can inflate their cost reports in order to increase their rate of reimbursement. They can do this because they know the government cannot drive down prices by obtaining bids from other contractors because they are the sole supplier of that item.
Experienced Defense Contract Fraud Representation
If you are aware that your company or any defense contractor is illegally profiting from fraudulent or false claims, the qui tam attorneys of Chaikin, Sherman, Cammarata & Siegel, P.C. can help you organize a whistleblower lawsuit on behalf of taxpayers. Blowing the whistle on defense contractor fraud not only helps recover funds stolen from taxpayers, but may also help protect our troops from substandard or unsafe equipment. We will ensure that you receive the full whistleblower protections of the False Claims Act and will work to maximize your whistleblower reward.
If you are aware of any kind of defense contractor fraud or any other false claims against the US government, please contact our qui tam lawyers today. Our attorneys will offer legal consultation without obligation. All communication between you and Chaikin, Sherman, Cammarata & Siegel, P.C. attorneys during the consultation process are completely confidential and are protected by attorney-client privilege.
