Procurement and contractor fraud are two of the most costly types of government fraud. An example of procurement fraud is a company using bribes to win a contract even when it did not make the lowest or best bid. Other examples of contractor fraud include billing the government for incomplete work, inflating the cost of labor or supplies, and issuing kickbacks.
The continuous outsourcing of goods and services by the government has resulted in fraud within the acquisition lifecycle of a product or service.Government procurement fraud can occur any time the government enters into a contract with a private entity. There is a multitude of ways that procurement fraud can be committed.
The following forms of government procurement fraud are the most typical:
As a result of the overwhelming volume of procurement transactions, and the fact that fraud is often embedded in a contract making it difficult to spot, the False Claims Act has become an increasingly powerful tool in helping to identify fraud, waste and abuse in government contracting.