What is Defense Contractor Fraud?
The U.S. government relies on private companies to deliver on their promises across many sectors, but none is arguably more important than the goods and services provided to the government by defense contractors. These “goods and services” can be anything from combat equipment for soldiers to critical intelligence analysis performed by private technology contractors. Whatever equipment or services they may be, U.S. servicemen and women rely on them to protect American interests abroad and at home.
Each year the U.S. government spends approximately $500 billion on defense and international security. This amounts to about 20% of the Federal budget. As the role of private contractors has expanded within the Department of Defense so have their costs. In 2014, the top 10 defense contractors alone accounted for $110.3 billion in spending. When fraud is committed under these circumstances American taxpayers are left to pick up the tab as their taxes are shifted to overpay for government contracts instead of being reinvested into services and communities that would benefit citizens. A Department of Defense report prepared in the Senate found that since 2011 hundreds of defense contractors who had defrauded the government were awarded $1.1 trillion in contracts.
In order to reduce and discourage defense contractor waste and fraud, the Department of Justice created a whistleblower reward program to find and prosecute corrupt defense contractors. Since 1987, the Department of Defense has recovered $2.6 billion from defense contractors who defrauded the government under the False Claims Act. Due to their part in the government’s recovery of fraudulent funds, whistleblowers have received $455 million for reporting defense contractor fraud.