Federal, state, and local governments purchase goods and services every day. Unlike private enterprises, for any significant expenditure of taxpayer dollars, those governments must engage in a transparent, public process to select their suppliers and contractors. This process is known as procurement, and it accounts for trillions of dollars in economic activity every year.
With all of that money going out the door from governments nationwide, it is perhaps inevitable that fraud will occur. This includes individuals or agencies who promise to deliver goods or services to the government, only to neglect their duties, lie about their performance, submit false invoices, or disappear into thin air after receiving taxpayer funds.
Governments rely heavily on whistleblowers to combat procurement fraud and pay potentially high rewards to people who do the right thing and step forward with information that exposes wrongdoing.
You could know about procurement fraud happening now
Government operations consume a massive amount of material and human resources. Businesses in nearly every major industry in the United States economy work for or sell goods to the government. For example, according to the U.S. Government Accountability Office (GAO), federal civilian and defense agencies spend tens of billions annually on (among others):
- Professional services (accountants, engineers, etc.)
- Military equipment
- Building maintenance
- Health care services
- Operation of research and development facilities
- Information technology and telecommunications
- Pharmaceuticals and medical supplies
In other words, no matter what sector of the economy you work in, you or your employer may do business with a government entity. That also means that most American workers like you, from nurses to warehouse managers to architects, could learn about ongoing fraud with a government agency or entity.
Blowing the whistle can pay significant rewards
It’s illegal to commit fraud against any government entity, federal, state, or local. Perpetrators face potentially severe criminal sanctions, including imprisonment, hefty fines, and bans on working in their industries.
Governments everywhere are constantly on the lookout for procurement fraud. They identify and pursue fraud by offering financial incentives for people with information to step forward and expose fraudulent schemes.
For instance, a law called the False Claims Act entitles whistleblowers to potentially significant financial rewards for information on procurement-related fraud. Individual states have passed similar laws aimed at state and local government-level procurement fraud.
Under these laws, and with the help of an experienced procurement fraud attorney, individuals who have information can often file a confidential lawsuit. This is called a qui tam action on behalf of the government against the individual or agency committing fraud. The government in question will then receive notice of the complaint. The government can take over the suit or allow the whistleblower to pursue it. Should the lawsuit succeed in demonstrating a fraud, the whistleblower may keep between 15% and 30% of any money recovered.
The takeaway
Procurement fraud costs the government and taxpayers billions of dollars annually. American workers in industries that do business with governments play an important role in combating it. Thanks to the False Claims Act and its state-level equivalents, workers who do the right thing by blowing the whistle on procurement fraud can reap substantial financial benefits.