“Whistleblowers are a rare breed, and that’s one of the reasons why they get these big financial rewards.”
One of the biggest settlements in the last year was a $48.5M case where a company posing as a service-disabled veteran owned organization and going after those set-aside contracts, when they in fact were not own by a service-disabled veteran.
The whistleblower in this case was a competing company who was losing out on potential contracts due to the unlevel playing field.
The Security Clearance Careers Podcast focused on whistleblowers this week – their role in government contracting, the different types of fraud companies can commit, and what protections whistleblowers have under the False Claims Act.
Our guest, Jonathan Tycko, is a founding partner at Tycko and Zavareei LLP, a DC law office that represents whistleblowers in government contracting fraud. Their whistleblower practice plays an important role in protecting the public and ensuring that taxpayer dollars are not misused. The different types of fraud under the defense contracting industry include but are not limited to:
- Deceptively providing products or services that don’t match the contract specifications.
- Making falsifications on cost or price in violation of best pricing requirements.
- Submitting false claims for rates.
- Cross charging by moving costs from one contract to another, or misallocating costs.
- Hiding cybersecurity vulnerabilities or concealing a data breach.
- Claiming disadvantaged business status when you in fact aren’t or using sham subcontractors thwart a small business set-aside.
- Obtaining a government contract through bid-rigging or bribery.
Hot areas for whistleblowing
Tycko notes that cybersecurity is a hot area under whistleblowing and says, “The Department of Justice within the last year or so created a whole initiative under the department called the civil cyber fraud initiative.” The Civil Cyber-Fraud Initiative will utilize the False Claims Act to pursue cybersecurity related fraud by government contractors
“Set side contracting is another active area right now.” A lot of money goes to set aside contracting, and Tycko expects that to increase in the next coming years with the surge in infrastructure contracting that we’re seeing right now. This is a big focus of concern for the DOJ.
And there are other areas that are sort just always there that we discussed: bid rigging or lying on proposals are always going to get the government’s attention.
“Contractors that use that trust given by the government and thus by the American people and abuse that trust just to line their own pockets through fraud or dishonest conduct: those people need to be stopped. And whistleblowers are sometimes the first or only defense against that.”