Examples of GSA fraud
Fraud relating to GSA contracts can arise in many different ways. Here are a few common examples.
The contractor lies about their eligibility for set aside programs
Sometimes, the GSA sets aside contracts only for bidders who meet certain criteria. For example, contracts may be set aside for businesses under a certain size or businesses owned by veterans. If a contractor lies about their eligibility in order to gain access to these restricted contracts, they may face heavy financial penalties. And if you blow the whistle on set aside program fraud, you may be entitled to a large reward.
Multiple contractors conspire to rig bids
The government will generally award a procurement contract to the lowest bidder. Sometimes, a contractor will pay a kickback to a would-be competitor in order to fix bid prices. If two or more contractors conspire to drive up the price and undermine competition, the taxpayers suffer. If you blow the whistle on a company interfering with government procurement activities, you do the right thing for your country by trying to expose those who are cheating taxpayers.
The contractor lies about where their goods are from
A contractor entering a procurement agreement with the GSA must often certify that their goods are from countries that have trade agreements with the United States. A contractor or vendor that lies about their products’ origins can face significant penalties from the government. Unfortunately, without whistleblowers like you, fraud like this can often go undetected.
The contractor does not comply with ‘best pricing’ requirements
Because the GSA is funded by the federal government, companies who do business with the GSA must typically disclose current, accurate, and complete commercial discounts, so that the GSA can get the best prices on behalf of American taxpayers. But that does not always happen.
To highlight one example, CA Inc. agreed to pay $45 million to resolve allegations that it made false statements and claims when negotiating and administering GSA contracts for software licenses and maintenance services. The settlement resolved allegations that CA provided false information to the GSA about the prices it gave to commercial customers and failed to provide government customers with additional discounts when commercial discounts improved.3
In another case, VMware Inc. and Carahsoft Technology Corporation agreed to pay $75.5 million to resolve allegations that they misrepresented their commercial pricing and overcharged the government on VMware software products and services. VMware specializes in virtualization software and Carahsoft distributes IT products to federal, state, and local governments. Both companies allegedly lied to the government about their pricing structures for over five years.3