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Procurement fraud against government contractors is a serious offense that involves manipulating the procurement process to gain federal contracts or unfair advantages.

There are various examples of government procurement fraud schemes employed to engage in such fraudulent activities. These supplier and vendor fraud schemes such as taking kickbacks from vendors can influence the bidding process, and contract awards, and even occur after the contract has been awarded.

What is Procurement Fraud?

Government procurement fraud is a form of purchase fraud involving manipulating the federal procurement process to gain governmental contracts or other value. It usually involves some bribery, kickbacks, bid-rigging, false invoicing or inflated pricing agreements with vendors to secure a federal government contract. These unfair bidding practices are illegal under federal laws and can result in heavy fines and penalties.

Fraudulent procurement actions by vendors can lead to buyers not receiving the intended products or services at the agreed-upon price. In the case of government contracts, procurement fraud can also undermine fairness for other bidders.

Perpetrators of government procurement fraud may include vendors themselves, government employees, or even colluding vendors and employees. Procurement fraud can occur both before and after the contract is awarded.

At Watson & Associates, LLC, our procurement fraud defense lawyers focus on representing manufacturers, service contractors and construction companies who are criminally charged or civilly investigated for procurement schemes. Our government contracting law firm offers consultation and representation across various jurisdictions in the United States. With law offices in Washington, DC and Denver, Colorado, we are geographically positioned to aggressively defend against Qui Tam Whistleblower lawsuits and criminal charges brought by the Department of Justice (DOJ).

See our government contract fraud lawyers and team that will defend you in the event of an investigation or criminal indictment of government contract law fraud cases.

Watson & Associates, government contract fraud lawyers handle cases nationwide.

To speak with an experienced government contractor purchase frauds lawyer who has dealt with government whistleblower and contractor fraud cases, call us at 1-866-601-5528 or contact us online.

Examples of Pre-Contract Government Procurement Fraud Schemes:

Prior to the awarding of contracts, it is crucial to ensure a fair process where all vendors submit realistic bids, without collusion, and without gaining any unfair advantage. Examples of pre-contract government procurement fraud schemes include:

Price Fixing: Contractors collude to raise prices or eliminate discounts.
Bid Rigging: The winning contractor subcontracts to higher bids.
Defective Pricing: Failure to update lower costs for goods in pricing data.
Fraud in Needs Determination for Goods or Services: Tailoring the determination of the needs to target specific contractors.
Fraud in Development of Work and Specifications: Statement of work written by or coordinated with a preferred contractor.
Fraud During Pre-Solicitation Phase: Falsified statements justifying sole sourcing.
Fraud During Solicitation: The process excludes some qualified contractors.
Fraud During Bidding: Withdrawal of one bidder who becomes a subcontractor to a higher bidder.
Fraud During Bid Evaluation: Selecting evaluation factors designed to favor a preferred contractor.

Procurement fraud is a serious offense that undermines fair competition and trust in the procurement process. However, if you are a government contractor who is unfairly charged or investigated for allegations of government contract fraud, don’t hesitate to contact our defense team at Watson &. Associates, LLC for proper legal representation.

Procurement Fraud: Avoiding Deceptive and Unfair Bidding Practices

In bidding on government contracts and contract evaluation, vendor fraud schemes can occur at various procurement stages, not just during the bidding phase. Awareness of these unfair bidding practices is crucial to combat government procurement fraud effectively. Due to such deceitful activities, governments and taxpayers suffer significant financial losses, amounting to billions annually.

Here are a few different types of post-contract government procurement fraud schemes:

False Invoices: Deliberate creation of misleading invoices to deceive the contracting authority.

Change Order Fraud: Manipulating change orders by replacing an unrealistic low price with a significantly higher one after the contract is awarded.

Cost Mischarging: Concealing actual costs or charging for unallowed costs, material, or labor.

Accounting Fraud: Engaging in fraudulent financial practices to misrepresent income, expenses, or other financial data.

Manufacturing Fraud: Involves the use or production of defective materials, missing volumes of material, or unauthorized transfer of materials.

Certification Fraud: Providing false or misleading certifications regarding product quality or compliance with specifications.

Product Substitution: Unlawfully replacing an ordered product with an inferior, used, or counterfeit item that fails to meet contract requirements.

Witness Tampering: Illegally influencing or intimidating individuals involved in the procurement process to alter or withhold their testimony.

Bribery or Kickbacks: Offering or accepting unauthorized payments or rewards to influence decision-making.

a. Contractor kickbacks: Contractors provide kickbacks to individuals involved in the procurement process.
b. Sub-contractor kickbacks: Sub-contractors offer kickbacks to secure favorable treatment.
c. Vendor kickbacks: Vendors providing kickbacks to gain an unfair advantage.
d. Kickback to purchaser or government employee: Individuals taking kickbacks from vendors in exchange for biased decisions.

It’s imperative to remain vigilant against employee fraud as well. Employees within the purchasing department may exploit their position for personal gain or in collusion with external parties. High-value purchases like computers, tools, and automobiles often become the center of such fraudulent activities.

By understanding these fraudulent practices and implementing robust monitoring and control mechanisms, organizations can protect themselves from the damaging effects of procurement fraud.

Types of Price-Fixing Fraud

Price-fixing in government contracting occurs when bidders collude to manipulate the pricing of goods or services. Vendors or contractors can do this to inflate the federal government’s and taxpayers’ prices for public goods. Here are some examples of price-fixing:

  • Contractors agree to maintain prices at the published price lists.
  • Contractors colluding to remove discounts.
  • Contractors agree to use a shared pricing system based on the type or size of the product.
  • Collusion to raise prices.

Instances of Bid-Rigging in Government Contracting

Bid-rigging is a fraudulent scheme in which parties collude to manipulate the prices of government bids. Here are some examples of bid-rigging:

Collusion to submit identical bids.
Collusion to refrain from bidding below government estimates.
Collusion to remove discounts or increase prices compared to previous bids.
Collusion to eliminate competition by removing bids.
Collusion to submit unrealistically low bids to secure contracts.
Collusion to maintain or increase costs charged above actual costs.

Procurement Fraud Defense Services

Watson & Associates, LLC represent large businesses and small business contractors in procurement fraud cases. Our experienced government procurement fraud attorneys can assist with defending whistleblower claims and providing legal support to companies charged with government contractor fraud. To schedule a consultation, please call 1-866-601-5518 or contact us online for a Free Initial Consultation.