A qui tam case can be brought against a government contractor, such as a defense contractor, for violating its contract with the government. Defense contractor fraud is considered one of the most active areas of whistleblower litigation since the government spends billions of dollars on defense contracts with companies around the world.
Some of the more common ways a defense contractor can defraud the government include the following methods.
Cross-Charging or Improper Cost Allocation
One of the most common types of fraud, cross-charging occurs when a defense contractor improperly shifts expenses and costs from one defense contract to another in order to boost profits. For example, the contractor allocates costs from a private business to the government contract.
Improper Product Substitution
A defense contract can be very specific in what the contractor should use the product. In addition, there may be additional requirements such as all parts should be new and they should be made in the US. However, in order to save costs and maximize profits, a contractor may ignore these requirements, which is a violation of the False Claims Act.
Substandard Products or Services
Just like when you buy a product from the store, the government expects the products it is paying for to be as promised in the contract. And although there are times when there are mistakes, there are also times when the contractor decides to cut corners and provide a substandard product. Not only is this illegal, but can be dangerous to the men and women in the military who use the product.
Inflation of Costs and Overcharging
Contractors may try to overcharge or inflate their costs to increase revenue for the company. This can be accomplished through inflated time records, equipment costs, and fake purchase orders.
If you know of a defense contractor committing fraud against the government, our whistleblower attorneys would like to speak with you. Contact Sanford Heisler Sharp, LLP today and we will evaluate your case.