The U.S. government is conducting a wide-spread and on-going crackdown on contracting fraud. Under the Civil False Claims Act alone, the government clawed back $3.5 billion in 2015. And 2016 is poised to be another banner year.
One of the hot topics in fraud prevention of late is small business contracting fraud. The government is investing heavily in making sure that there are optimum opportunities for small businesses to receive federal contracting dollars (for example, through small business set-aside contracts and socio-economic contracting programs). Inspector General (IG) offices are on alert to make sure that those contracting dollars actually reach small and disadvantaged business owners.
Recently in the news is the latest example of a contractor paying hefty penalties in connection with a small business contracting scam. This time, the government revealed that a small business and a large business colluded to obtain over $70 million in small business set-aside contracts, but (illegally) have the large business perform all of the work on the contracts.
All federal contractors need to be aware of the uptick in fraud investigations – but they should not be lulled to sleep by this latest example. This case was an easy one for the government – what I like to refer to as “old school fraud.” The guilty parties acted intentionally with the hope of beating the system and making an easy dollar for as long as possible.
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