Are There Different Kinds of Procurement Fraud?

Business man crosses his fingers behind his back while shaking another business man’s hands. The False Claims Act punishes individuals and organizations that attempt to defraud the government. Procurement fraud occurs when the government is defrauded during the process of procuring products and services.

As a highly-accomplished procurement fraud attorney, James Shoemaker provides experienced legal counsel in False Claims Act cases to whistleblowers requiring representation. If you are aware of procurement fraud, Mr. Shoemaker can help.

Procurement fraud can occur in a vast number of ways. Some common examples of procurement fraud are detailed below.

Bribes and Kickbacks

Bribes are generally defined as the giving or receiving of a “thing of value” to corruptly influence the actions of someone else. Kickbacks are bribes provided by contractors after an invoice is paid. Bribe and kickback examples can include:

  • Loans
  • Expensive gifts
  • Free Travel
  • Lavish entertainment
  • Overpaying for purchases
  • Fees and commissions
  • Hidden interests

Collusive Bidding

Also known as “bid rigging”, this type of fraud occurs when bidding contractors secretly agree to corrupt the competitive process and divide work. This illegal practice drives up prices in the affected industry.

Overcharging for Goods or Services

There are a number of ways goods and services can be corruptly overcharged. Examples include:

  • Change order abuse: The act of submitting a low bid in order to win a contract, and then increasing the price by submitting a change order request after the contract is awarded.
  • Co-mingling of contracts: This involves the submission of multiple bills on different contracts for expenses incurred or work performed only once.
  • False or inflated invoices: These can be submitted by a contractor acting alone or in collusion with an employee within the purchasing organization.

Providing Inferior Products or Services

A supplier or contractor may use defective, used, or counterfeit parts, or they may substitute products or materials of lesser quality than what is specified in the contract.

False Statements and Claims

A contractor or supplier may give false information about any number of facts, including:

  • Submitting false or defective bonds
  • Charging for higher quality items than are delivered
  • Wrongly invoicing for goods and services that are not delivered
  • Misrepresenting their employee credentials and experience
  • Misrepresenting minority contractor or small business status
  • Misrepresenting the cost or pricing data required by the Truth in Negotiations Act
  • False statements about pricing data to the General Services Administration
  • False Statements of compliance with requirements such as U.S. trade agreements and the Buy American Act

Conflict of Interest

This type of procurement fraud occurs when the individual responsible for purchasing selects a vendor with whom he or she has an undisclosed interest. Examples of conflicts of interest can include:

  • Nepotism: Awarding contracts or favors to relative or close friends
  • Self-dealing: When action is taken for personal gain, rather than for the benefit of the organization
  • Conflicting job: When someone takes a second job that conflicts with the duties of the primary job.
  • Misuse of an official position: When the authority of an official position is used to get something that is not entitled or properly available to others.

Contact Our Procurement Fraud Attorney Today

If you or someone you know has information about fraudulent practices being conducted, Mr. Shoemaker wants to hear your story. Call 888-852-9367 today to schedule a confidential consultation. Located in Newport News, we welcome whistleblowers living in and around the Metro D.C. area.

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