Federal Procurement Fraud Claims Likely to Rise
Published: 2009-09-28 21:51:34
Author: Law Office of Ramon de la Cabada, P.A. | 24-7PressRelease | September 9, 2009
The current willingness in Washington to give out millions of dollars to help spend the US out of recession may end up pushing the country further into debt. Many of the programs aimed at jump-starting the economy and infusing cash into dying market sectors come with little to no government oversight, which may result in a vast increase in the number of government contract procurement fraud cases.
In this type of distressed economic situation, it is more important now than ever before for businesses to ensure they have effective and efficient corporate compliance procedures in place to protect themselves from federal procurement fraud claims.
Federal Procurement Fraud
Each year, the federal government signs contracts worth billions of dollars with private companies and contractors for different types of goods and services. Procurement fraud refers to the practice of using false or deceptive methods in bidding and fulfilling government contracts. The fraud can occur in a number of ways, including:
-Bid fixing
-Cost mischarging
-Defective pricing
-Defective parts
-Labor mischarging
-Price fixing
-Product substitution
Procurement fraud is a federal crime. The crime is punishable under several different federal laws, including the False Claims Act, Sherman Anti-Trust Act, Contract Disputes Act and the Truth in Negotiations Act. In 2006, the federal government recovered over $3 billion from procurement fraud cases.
New Programs Likely to Lead to Increased Fraud
With the current government's emphasis on giving money to state infrastructure projects (like building/repairing bridges and roads) and environmentally sound projects (like "Cash for Clunkers"), the potential for fraud is rising exponentially. In a bad economy, businesses are in dire need of capital and some will use any means available to secure funding - even if these means are illegal.
Some of the areas that may be particularly vulnerable to fraudulent schemes include:
-Green projects seeking government tax breaks or subsidies by claiming to be environmentally friendly
-Projects claiming minority involvement in order to receive government tax breaks or subsidies
-New ambitious infrastructure projects that will take many years to complete (i.e., bridges, tunnels, highways)
Lack of Government Oversight Not New
The government's willingness to pay as well as its need to appear assertive, decisive and ready to take action may be trumping the need to first create proper infrastructure to oversee the projects before handing out tax-payer money. Instead, the federal government is pushing the country trillions of dollars into debt without first ensuring they are getting what they paid for.
Unfortunately this is not a new situation. There are many examples of the federal government willingly handing out tax-payer money without ensuring the money was used for proper purposes. For example, in the 1980s and 1990s, the government began a mass effort to enroll new health care providers into Medicare and Medicaid plans without truly vetting the providers to ensure they were legitimate providers.
Full story
Published: 2009-09-28 21:51:34
Author: Law Office of Ramon de la Cabada, P.A. | 24-7PressRelease | September 9, 2009
The current willingness in Washington to give out millions of dollars to help spend the US out of recession may end up pushing the country further into debt. Many of the programs aimed at jump-starting the economy and infusing cash into dying market sectors come with little to no government oversight, which may result in a vast increase in the number of government contract procurement fraud cases.
In this type of distressed economic situation, it is more important now than ever before for businesses to ensure they have effective and efficient corporate compliance procedures in place to protect themselves from federal procurement fraud claims.
Federal Procurement Fraud
Each year, the federal government signs contracts worth billions of dollars with private companies and contractors for different types of goods and services. Procurement fraud refers to the practice of using false or deceptive methods in bidding and fulfilling government contracts. The fraud can occur in a number of ways, including:
-Bid fixing
-Cost mischarging
-Defective pricing
-Defective parts
-Labor mischarging
-Price fixing
-Product substitution
Procurement fraud is a federal crime. The crime is punishable under several different federal laws, including the False Claims Act, Sherman Anti-Trust Act, Contract Disputes Act and the Truth in Negotiations Act. In 2006, the federal government recovered over $3 billion from procurement fraud cases.
New Programs Likely to Lead to Increased Fraud
With the current government's emphasis on giving money to state infrastructure projects (like building/repairing bridges and roads) and environmentally sound projects (like "Cash for Clunkers"), the potential for fraud is rising exponentially. In a bad economy, businesses are in dire need of capital and some will use any means available to secure funding - even if these means are illegal.
Some of the areas that may be particularly vulnerable to fraudulent schemes include:
-Green projects seeking government tax breaks or subsidies by claiming to be environmentally friendly
-Projects claiming minority involvement in order to receive government tax breaks or subsidies
-New ambitious infrastructure projects that will take many years to complete (i.e., bridges, tunnels, highways)
Lack of Government Oversight Not New
The government's willingness to pay as well as its need to appear assertive, decisive and ready to take action may be trumping the need to first create proper infrastructure to oversee the projects before handing out tax-payer money. Instead, the federal government is pushing the country trillions of dollars into debt without first ensuring they are getting what they paid for.
Unfortunately this is not a new situation. There are many examples of the federal government willingly handing out tax-payer money without ensuring the money was used for proper purposes. For example, in the 1980s and 1990s, the government began a mass effort to enroll new health care providers into Medicare and Medicaid plans without truly vetting the providers to ensure they were legitimate providers.
Full story