The United States has been contracting with its citizens and the businesses they run for many years. Since the federal government does not have the capability to provide the supplies and services they need on a large scale, they enlist companies with the expertise and production capacity to fill those needs. From airplanes and weapons to vaccines and testing kits, the government relies on contractors to help it function.
Sometimes, contractors may try to take advantage of the government, often to collect a higher paycheck than what is legitimately owed to them. When this happens it is considered fraud and it ultimately hurts American taxpayers. If you have inside knowledge of government contractor fraud, you may be eligible for a financial reward for reporting it. Read on to learn how a Bethesda, Maryland government contractor fraud lawyer can help you.
Government Contractor Fraud and the False Claims Act
The False Claims Act is a federal law that makes it illegal to defraud the government in any way and imposes legal consequences on those who do. Examples of fraud against the government include Medicare fraud, tax fraud, and government contractor fraud, which was the reason behind the passage of the False Claims Act.
During the Civil War, the government dealt with a high rate of defense contractor fraud on both the Confederate and Union sides. The Union Army purchased mules, weapons, ammunition, and more wartime supplies and provisions from contractors, some of whom were dishonest. They knowingly provided the army with sick mules, faulty rifles, and other supplies that were unusable or unsafe. In response to this and in an effort to prevent similar fraud going forward, the False Claims Act was passed in 1863 under Abraham Lincoln.
How Does One Become a Government Contractor?
In order to understand how government contractor fraud happens today, it is important to understand how contractors end up working with the government.
There are several places to find government contracts to work on, but any project over $25,000 in value is required to be posted on SAM.gov. Though this system is run by the federal government, it is not a department or agency. The General Services Agency, or GSA, is the agency that manages government contracts.
In order to contract with the federal government, a business entity must register with the GSA. They then have the option to apply for a Multiple Award Schedule contract, which gives them access to jobs without a definite end date but also has stricter requirements. Once they are approved, they can then respond to solicitations for services or deliverables by the government.
Government contractors place bids for jobs, often competing with many other contractors for the same job. They are required to disclose the project budget, time frame, qualifications, who will be working on the project, and other relevant information so that the government can make an informed decision on who to hire.
Government Contractor Fraud in Bethesda
Some instances of government contractor fraud happen during the bidding process. Contractors may participate in “underbidding,” or deliberately bidding on a contract at a lower cost than the project really requires. Over the course of the project, budget increases and cost adjustments are not necessarily unexpected, but it is different if the contractor knows ahead of time that their bid is too low and keeps it to increase the chances they get the job. Deliberately including false information in bidding documents is also considered fraud.
Once a government contract has been obtained, the contractor must comply with the rules and regulations set out by the government. There are “best pricing” requirements in place to ensure that taxpayer money is spent wisely, along with laws like the Trade Agreements Act. Refusal to comply with these may result in the termination of a contract or legal consequences under the False Claims Act.
How to Spot Fraud Committed By Bethesda Government Contractors
Fraud is most often noticed and exposed by everyday employees who come across something suspicious while simply doing their jobs. If the numbers on bid forms differ from what you have been told the project would cost, this may be cause for concern. Conflicts of interest are also a form of fraud. If you suspect any favoritism or financial interest from an official, take note and gather evidence if possible. Bethesda residents who witness fraud at the expense of the federal government should speak with a government contractor fraud lawyer like those at Tycko & Zavareei LLP.
Look for consistency when working on a project for the federal government. The work being done and the money being spent should always line up closely with what was initially proposed when the business submitted a bid. Budget increases can and do happen, but watch to make sure that your employer is following the correct procedure for such increases.
Recent Government Contract Fraud Settlements
There is a large number of government contractors in and near Bethesda and throughout the state of Maryland. Unfortunately, there have also been a few notable whistleblower lawsuits involving government contractors in the state.
Here are some recent government contract fraud settlements:
- 2020: iNovex, a defense contractor based in Annapolis, agreed to pay nearly $1 million to settle claims that it overbilled the NSA for contract work
- 2021: Information Innovators Inc. agreed to pay $6.05 million to settle claims made against its predecessor, Creative Computing Solutions Inc., that it overbilled the Department of Homeland Security for work performed by underqualified employees.
Why Report Bethesda Government Contractor Fraud?
Becoming a government contractor fraud whistleblower may seem intimidating at first, but whistleblowers do a great service to the government and fellow citizens. Besides the feeling of doing the right thing, whistleblowers may be entitled to a reward if their disclosure leads to a successful qui tam lawsuit on behalf of the United States government. Typically, these rewards are between 15 and 30 percent of what the government receives.
Tycko & Zavareei LLP has worked with whistleblowers near Bethesda and beyond to take down fraud for decades. Our team of experienced national qui tam lawyers is ready to go through the whistleblowing process right beside you. Contact us today to set up a free and confidential consultation.
