Improper Cost-Plus Charging occurs when a government contractor improperly manipulates a cost-plus contract awarded by the government. In the government’s cost-plus contracts it agrees to pay a set price for the product (i.e. an airplane) plus a percentage of the contractor’s costs for producing the product. Since there is no negotiated amount for those costs, there is risk that improper costs will be allocated to the cost-plus contract. This commonly happens in two ways.
The government only agrees to pay a percentage of the costs. A contractor may, therefore, artificially inflate the actual costs on the contract in order to maximize the amount of money reimbursed by the government. This clear-cut fraud is often hard for the government to detect because the contractor may alter its own records and reports to falsely document its higher costs. A contractor may also manipulate a cost-plus contract by cross-charging, improperly allocating costs from another contract to the government’s cost-plus contract. These are not the only ways a contractor may exploit a cost-plus contract. However it happens, it improperly increases the cost of this kind of contract to the government.
If you know of someone, or some entity, engaged in one of these kinds of schemes – or some other scheme to commit defense contractor fraud, and you would like to learn more about or would like to bring a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. These whistleblower lawyers understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.