Defense procurement

Defense Contracting Fraud: A Persistent Problem

During the five year period from 2013-2017, there were 1,059 criminal cases of defense contracting fraud resulting in the conviction of 1,087 defendants, including 409 businesses, according to a newly released Department of Defense report to Congress. There were another 443 fraud-related civil cases resulting in judgments against 546 defendants.

During that same period, the Department of Defense entered into more than 15 million contracts with contractors who had been indicted, fined, and/or convicted of fraud, or who reached settlement agreements. The value of those contracts exceeded $334 billion, according to the DoD report. See Report on Defense Contracting Fraud, DoD report to Congress, December 2018.

The report was prepared in response to a requirement in the FY2018 defense authorization act at the initiative of Sen. Bernie Sanders. It was released this week under the Freedom of Information Act.

A previous report covering the period of 2001-2010 was produced by the Department of Defense in 2011, also at the request of Senator Sanders. The earlier report likewise found extensive fraud including criminal and civil offensive in defense contracting.

“Simply put, the Pentagon continues to be riddled with waste, fraud and abuse of taxpayer funds to a degree unmatched across the federal government,” Sen. Sanders said in 2017. “It is unacceptable that the Department of Defense continues to lose vast sums of taxpayer money because of fraud perpetrated by major defense contractors. This has got to end.”