Whistleblowers play a key role in the federal government’s ongoing fight against procurement fraud. Government procurement fraud is extraordinarily costly; and, despite the government’s vast resources, detecting procurement fraud can be challenging for a variety of reasons. As a result, many of the federal government’s procurement fraud investigations are the direct result of complaints filed by whistleblowers who have inside access to information about contractors’ and subcontractors’ fraudulent practices.
From fraud during the competitive bidding process and during contract negotiations to improper billings after contracts have been awarded, procurement fraud can take many forms. Whistleblowers can report all forms of procurement fraud to the federal government; and, in many cases, those who come forward will be eligible to receive financial rewards.
“Whistleblowers who report procurement fraud to the federal government provide an invaluable service. Not only do whistleblower complaints frequently lead to successful enforcement actions against federal contractors and subcontractors, but they can help prevent future procurement fraud as well.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
Of course, regardless of reward eligibility, reporting government contract fraud is the right thing to do. Federal contracting agencies rely heavily on whistleblowers, and federal statutes provide whistleblowers with strong protections due to this reliance. If you are thinking about blowing the whistle, an experienced federal whistleblower lawyer will be able to help you make an informed decision about whether to come forward; and, if you decide to come forward, your lawyer will be able to guide you step-by-step through the federal whistleblower process.
5 Important Requirements for Submitting a Procurement Fraud Whistleblower Complaint Under the False Claims Act
One of the key factors involved in deciding whether to come forward is whether you have sufficient information in your possession to qualify as a procurement fraud whistleblower. Here are five important requirements for filing a whistleblower complaint under the False Claims Act:
1. Information or Evidence that is Not Publicly Available
To serve as a procurement fraud whistleblower, you must generally be able to provide the federal government with information that is not publicly available. This could be information about any form of government procurement fraud, including, but not limited to:
- Bidding rigging or collusion (including bid rotation and complementary bidding)
- Billing for materials or supplies not used
- Billing for products or services not delivered
- Buy American Act (BAA) and Trade Agreements Act (TAA) violations
- Conflicts of interest (including bribery and kickback schemes)
- Falsely certifying compliance with small business contractor requirements
- Falsely certifying compliance with women-owned or veteran-owned contractor requirements
- Improper billing under a time-and-materials (T&M) contract
- Mischarging costs under federal contracts or misusing federal funds
- Pricing violations (including defective pricing and excessive charging)
If you have access to non-public information—either as a current or former employee of a government contractor, as a current or former federal employee, or through other means—you may be able to qualify as a procurement fraud whistleblower. For now, it will be critical for you to keep this information strictly confidential, and you should not share it with anyone except your legal counsel.
2. Information or Evidence that is Not Already Known to the Federal Government
In addition to not being publicly available, the information or evidence that you have in your possession must not already be known to the federal government. If it appears that you are otherwise eligible to serve as a federal whistleblower, your legal counsel will be able to contact the appropriate authorities to find out if an audit or investigation is already underway. Otherwise, this isn’t something that prospective whistleblowers will generally be able to discern on their own.
3. Allegations that Have, or Will Likely Have, Evidentiary Support
Serving as a procurement fraud whistleblower involves alleging noncompliance with federal law. To serve as a whistleblower, you do not need comprehensive and incontrovertible evidence of procurement fraud. However, you do need to have a legitimate basis for your allegations, whether you are alleging a single act or an ongoing procurement scheme, against the contractor or subcontractor. This generally requires some amount of evidence—whether you have this evidence in your possession already or you know where it is located.
Under the False Claims Act, the threshold for serving as a procurement fraud whistleblower is being able to provide the government with sufficient evidence to demonstrate that further investigation is warranted. The more evidence you can provide with your complaint, the more likely it is that you will meet this threshold. However, there is no specific amount or specific type of evidence that is required—and, here too, an experienced lawyer will be able to help you determine if it makes sense to proceed with filing a complaint.
4. Compliance with the False Claims Act’s Qui Tam Requirements
If you decide to file a complaint, you will need to strictly comply with the False Claims Act’s qui tam requirements. Among other things, this means filing a formal complaint in federal district court that complies with the Federal Rules of Civil Procedure—in addition to meeting the False Claims Act’s substantive requirements for securing federal whistleblower status. When submitting your complaint, you will need to minimally ensure that it meets the statute’s threshold requirements; however, it will likely make sense to include additional information and evidence to facilitate the government’s evaluation of the allegations you are putting forward.
5. Being Prepared to Work with the Federal Government
Although not strictly a requirement for filing a whistleblower complaint, it is important to be prepared to work with the federal government after filing your complaint under the False Claims Act. If federal authorities decide to investigate, they will almost certainly want to speak with you about what you know. Your lawyer will be able to facilitate these discussions and help you decide how involved you are willing to be in the government’s investigative process.
While all False Claims Act whistleblowers are entitled to protection against retaliation, those who provide additional assistance during the government’s procurement fraud investigation are more likely to receive a sizable whistleblower reward (if their complaint leads to a successful enforcement action against the contractor or subcontractor involved). Under the False Claims Act, whistleblower rewards generally range from 10% to 30% of the amount the government recovers, with larger rewards being reserved for those whistleblowers who go above and beyond.
Gathering and Preserving Evidence as a Potential Procurement Fraud Whistleblower
If you have non-public information about government procurement fraud, what steps should you take with regard to gathering or preserving evidence of the fraud? This is a delicate matter that requires caution, so it is critical that you speak with a lawyer to obtain legal advice based on the specific circumstances you are facing. With this in mind, here are some general tips that will be applicable in most circumstances:
- Secure Any Evidence You Already Have in Your Possession – If you already have evidence in your possession, whether electronic files or hardcopy documents, you should keep these in a secure place. Keep copies of electronic files on physical storage media (not in the cloud), and keep hardcopy documents out of reach of children and others.
- Be Cautious About Taking Additional Evidence from Your Employer – If you believe that additional evidence of procurement fraud is available at your employer’s offices or on your employer’s servers, you should be cautious about taking additional evidence at this time. This is one area in particular where it is important to rely on personalized legal advice.
- Take Detailed Notes About the Procurement Fraud – While you need to be cautious about collecting additional evidence from your employer’s facilities or computer systems, you should feel comfortable taking detailed notes about the procurement fraud. Write down as many details as you can remember about the procurement process and suspected fraud, and keep your notes in a safe place to discuss with your lawyer.
- Keep Your Evidence and Notes to Yourself – At this stage, you should only be sharing information with your lawyer. You should not share any information with family members or colleagues or on social media. You also should not talk to reporters. Attempting to expose fraud publicly will not entitle you to federal whistleblower status, and it has the potential to hamper the federal government’s investigation.
- Continue to Document Your Concerns Going Forward – If you become privy to additional inside information within the scope of your employment, you should continue to document your concerns. Take detailed notes about what is happening and who is involved, and follow your lawyer’s advice regarding collecting or making copies of additional evidence to which you have access.
While hiring a lawyer is not legally required when filing a whistleblower complaint under the False Claims Act, we strongly recommend it for several important reasons. Along with assessing your eligibility and preparing your whistleblower complaint, your lawyer will also be able to help you make informed decisions throughout the process. Your lawyer will be able to communicate with federal authorities on your behalf throughout the process as well—including working with federal authorities to negotiate and secure your whistleblower reward if you become eligible to receive one.
