State and federal governments usually award private businesses contracts to access specialized expertise and provide opportunities for small businesses. The government sets requirements that companies must meet to be awarded contracts. Unfortunately, some businesses use inappropriate measures to obtain these contracts and when performing under them.
Fraud involving government contracts happens more often than it should. Here are four common examples:
1. Intentionally lying
A company may use false claims to show it meets the requirements for obtaining a contract. For instance, the government may require applicants to meet specific size standards, demonstrate successful completion of previous contracts or show they are financially stable to fulfill the contract terms. A company that wants to defraud the government may misrepresent facts in its application.
2. Kickbacks and bribery
If a business offers kickbacks or bribes to government officials to be treated favorably when making decisions regarding contracts, fraud may have occurred. The officials may inflate contract prices or create unfair competition to favor the bid of the party that offered them favors.
3. Conflict of interest
A conflict of interest can exist if a government official making decisions about the awarding of a contract has a financial stake with any company that’s bidding. This is because they may use their position to unfairly benefit the company in question.
4. Delivering substandard goods
A contractor who intentionally supplies goods that do not meet specified quality standards may be deceiving the government. A business can also be considered to have defrauded the government if it fails to complete required testing and quality assurance measures. Such a business might even go to the extent of submitting falsified test results to show their products comply with quality requirements.
If the company you are working for defrauds the government, you can raise the matter. Obtain more information about whistleblowing to make a plan.