Defense Contractor Fraud: A Growing Concern in Federal Spending

At Wilbanks & Gouinlock, LLP, we actively investigate and litigate defense contractor fraud cases, recognizing it as a rapidly growing issue within federal spending. With billions of taxpayer dollars at stake, fraudulent activity in military procurement and defense contracts poses a significant risk to national security, financial integrity, and public trust.

The Scope of Defense Contractor Fraud

The Department of Defense (DOD) is the largest federal agency, managing an extensive network of contracts to support military operations, weapons systems, technology development, and logistical support. In 2020 alone, the DOD allocated $420 billion in defense contracts, surpassing the combined spending of all other federal agencies. While these contracts are critical for national defense, they have also been identified as a “high-risk area for fraud, waste, and abuse.”

Some of the most common types of defense contractor fraud include:

• Inflated billing and cost misrepresentation – Contractors overcharge the government for goods and services, often misrepresenting labor costs, materials, or hours worked.
• Defective or substandard products – Some companies supply defective or low-quality equipment, technology, or parts that fail to meet military specifications, putting U.S. service members at risk.
• Bid rigging and procurement fraud – Collusive agreements between contractors can artificially inflate contract prices, undermining competitive bidding.
• False certifications and compliance violations – Contractors may falsely claim compliance with government regulations, cybersecurity protocols, or safety standards to qualify for contracts.
• Bribery and kickbacks – Defense contractors may engage in improper financial arrangements to secure lucrative contracts.

The Role of Whistleblowers in Uncovering Defense Contractor Fraud

Over the past decade, whistleblowers have played a pivotal role in exposing defense contractor fraud, accounting for 75% of False Claims Act recoveries in DOD-related fraud cases. Under the False Claims Act (FCA), individuals with insider knowledge of fraudulent activity can file a qui tam lawsuit on behalf of the government and receive a portion of the recovered funds.

Whistleblowers have helped the government recover billions of dollars from contractors who engage in deceptive practices, ensuring that taxpayer money is protected and properly allocated.

Fighting Defense Contractor Fraud

Government agencies, including the Department of Justice (DOJ), the DOD Office of Inspector General (OIG), and the Government Accountability Office (GAO), have ramped up enforcement efforts to combat defense contract fraud. However, whistleblowers remain the most effective tool for detecting and bringing fraudulent contractors to justice.

For more information on efforts to combat fraud, visit Fraud in America, presented by Taxpayers Against Fraud.

Report Defense Contractor Fraud at No Cost

If you have information about fraudulent practices in federal or state defense contracting, contact our office for a free, confidential consultation:

• Fill out our consultation form by clicking here.
• Email us at info@wilbanksgouinlock.com.
• Call (404) 842-1075, ext. 123 or 122.

This article is for informational purposes only and should not be considered legal advice.