On January 24, 2023, the United States Attorney’s Office announced that Triumph Actuation Systems, a company that designs and manufacturers mechanical and actuation components for commercial and U.S. military aircraft and military systems agreed to pay $478,586 to resolve allegations that it violated the False Claims Act. The federal government alleged that from April 1, 2014, to March 31, 2020, Triumph inflated the general and administrative rates that it charged to the government. Moreover, Triumph inflated the rates on higher tier contractors on government contracts by including certain labor costs in those rates, when those costs were already charged to and paid by others. This fraudulent scheme allowed Triumph to “double dip” and collect payment twice for the same costs.
Government contract and procurement fraud is one type of fraud commonly prosecuted under the False Claims Act. This type of fraud not only wastes significant taxpayer dollars, but it also tarnishes the integrity of the procurement process. Procurement fraud is especially serious and can be particularly damaging to the United States military as it threatens its ability to achieve its objectives and undermines the various branches safety and readiness. Between fiscal year 2020 and 2021, procurement fraud recoveries increased from $75 million to $119 million. It is expected that recoveries under the False Claims Act will continue to rise.
The False Claims Act suit in this case was brought by a whistleblower under the qui tam provision of the False Claims Act which allows private parties to bring suit on behalf of the government and share in any recovery. The whistleblower in this case will be greatly rewarded for their reporting of this fraudulent scheme. The False Claims Act remains one of the sharpest tools in the government’s as well as in private party’s disposal to report and combat fraud against the government.