Construction & Public Works Fraud

What is construction or public works fraud?

Construction or public works fraud is any dishonest scheme by which a contractor (or subcontractor) knowingly induces the Government (federal or State) to pay money that it should not have paid for construction of roads, buildings, or other infrastructure projects.

Qui tam cases are often brought against public works contractors who cheat the government. Federal and state agencies spend billions of taxpayer dollars for the construction of roads, buildings, and other infrastructure projects. Unfortunately, some of these projects fall victim to corruption and fraud. Some common types of public works fraud prosecuted under the False Claims Act are:

Bid-Rigging
Bribes and Kickbacks
Billing For Work Not Performed
Billing at Inflated Rates
Falsifying Material Costs
Using Substandard Materials
Using Unqualified Personnel
Violating Buy American Requirements
Failure to Follow Contract Specifications
Falsifying Test Results and Progress Reports
Falsifying Minority Contractor Status

Whistleblowers have played an important role in the detection and prosecution of such fraud through qui tam False Claims Act lawsuits. For example, in 2008, Bechtel Infrastructure Corporation and PB Americas Inc., the consortium that oversaw the design and construction of Boston’s “Big Dig,” agreed to pay $458 million to settle federal and state claims, including claims in qui tam lawsuits, arising out of the partial collapse of the I-90 connector tunnel.