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Types of Fraud
Fraud by defense contractors is one of the oldest types of False Claims and was actually the reason the Act was created. President Lincoln knew the importance of giving our troops the best supplies possible and that extends to protecting our government against companies that overcharge or do not deliver what was promised.
While defense contractors often supply highly complicated, multi-billion dollar weapon systems, the fraud they commit can be for items as simple as computers, uniforms, vehicle parts, and office equipment.
Even when the government enters into one main contract with a manufacturer or supplier and that company in turn subcontracts with hundreds of other suppliers for necessary components, all of the companies involved are required to comply with the False Claims Act, even if they didn’t contract directly with the Government.
- overbilling items in government contracts or falsifying the quantity of items in order to illegally inflate the overall contract amount.
- substituting inferior parts or parts from unauthorized sources when contracts call for a parts of a specific quality or from certain types of companies;
- failure to adhere to required specifications, testing or quality control procedures or other steps in the production process which are called for in a contract; and
- purposely allocating overhead costs away from contracts with private customers to government contracts.