The United States spends more on national defense than China, India, Russia, Saudi Arabia, France, Germany, the United Kingdom, Japan, South Korea, and Brazil – combined.[1] For Fiscal Year 2020, the Department of Defense has a discretionary spending budget of $712.6 billion.[2]
The federal government spends a significant portion of that amount on goods and services provided by defense contractors such as BAE Systems, Alliant Techsystems, Northrup Grumman, and Elbit Systems of America.
Many defense contractors are based in Virginia. Between 2000 and 2012 there were nearly 15,000 active defense contractors in Virginia.[3] During this period, the department of defense awarded Virginia defense contractors 159,193 contracts worth over $42.8 billion.[4]
Perhaps unsurprising given the massive dollar amounts, there is significant waste, fraud, and abuse occurring by defense contractors in Virginia. For example, a whistleblower lawsuit resulted in a former CEO of a defense contractor agreeing to pay $20 million for fraudulent procurement of small business contracts.[5] Another whistleblower suit resulted in a government contractor agreeing to pay $2.6 million for submitting falsified payment claims to the department of defense.[6]
The False Claims Act states that a whistleblower can file a lawsuit on behalf of the United States if they have original information about a company making false claims to defraud the government. Qui tam lawsuits filed by whistleblowers have recovered billions of taxpayer dollars from defense contractors who submitted false claims in order to cheat the government.
What to do if you believe a defense contractor has committed fraud?
If you have information that a government contractor has committed fraud, you may be entitled to a reward. Federal false claims cases often result in large multi-million dollar settlements and, in order to encourage people to come forward with information about fraud, the government offers whistleblower rewards up to 25 percent of the total amount recovered. Furthermore, there are powerful protections at the state and national level, as well as specific provisions for defense contract whistleblowers, that protect whistleblowing employees from retaliation by their employer.
[1] SIPRI Military Expenditure Database. Stockholm International Peace Research Institute. April 2020. Available at https://www.pgpf.org/chart-archive/0053_defense-comparison.
[2] National Defense Budget Estimates for FY 2021. Office of the Under Secretary of Defense. April 2020. Available at https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2021/FY21_Green_Book.pdf
[3] Virginia Defense Sector Profile. Virginia Economic Development Partnership – International Trade. Mar. 24, 2014. Available at http://exportvirginia.org/wp-content/uploads/2012/06/Fast-Facts-Topics-Virginia-Defense.pdf.
[4] Id.
[5] Former CEO of Virginia-Based Defense Contractor Agrees to Pay $20 Million to Settle False Claims Act Allegations. US. Justice Dept. – Office of Public Affairs. Aug. 20, 2019. Available at https://www.justice.gov/opa/pr/former-ceo-virginia-based-defense-contractor-agrees-pay-20-million-settle-false-claims-act.
[6] Government Contractor Pays $2.6M to Settle False Claims Act Suit. US. Justice Dept. – News. Oct. 16, 2017. Available at https://www.justice.gov/usao-edva/pr/government-contractor-pays-26m-settle-false-claims-act-suit.