Defective Products in Government Contracts

Did you know that the False Claims Act can apply when the government pays for defective or substandard products? In fact, the False Claims Act was originally enacted during the Civil War because contractors regularly sold defective supplies to the military. Fighting this type of fraud has been a priority for the government, especially when it involves our safety or national security. Even significant defects can be impossible to perceive, well-hidden, or of a technical nature that an ordinary person wouldn’t notice.

Whistleblowers are Essential to Stopping Fraud

A person who works for the company supplying the defective product can become a whistleblower by identifying potentially dangerous defects. This not only protects the users of these products, but it could also help the government recover funds it shouldn’t have paid. Whistleblowers may be entitled to a share of the money the government recovers if they bring a successful False Claims Act case.

Types of Government Fraud: Defective Products Cases

Defective product cases can arise in many contexts. For instance, in 2018, two companies agreed to pay $66 million to resolve allegations that they defrauded the government into paying for faulty body armor. The federal government alleged that these companies knowingly put the lives of police officers across our nation in danger.

First responders and military personnel wear body armor to protect themselves as they protect us. Unfortunately, these companies allegedly chose to put profit over the safety of our police officers, firefighters, military personnel, and others. According to the government, these companies were allegedly selling body armor with synthetic fibers that tended to degrade quickly, rendering the body armor ineffective.

In another case, 3M Company agreed to pay $9.1 million to resolve allegations that it provided the military with defective earplugs. A defect in the design allegedly caused the earplugs to loosen and fail to protect the hearing of the men and women who bravely defend our nation.

Other Recent Settlements Include:

• A medical device manufacturer paid $33.2 million to resolve allegations of selling unreliable diagnostic testing devices which were paid for by Medicare and Medicaid
• A technology company paid $8.6 million to resolve allegations of selling the government video surveillance technology with major security flaws
• Two companies paid $125 million to resolve allegations of using substandard goods and materials in the construction of a nuclear waste treatment facility
• A medical device manufacturer paid $30 million to resolve allegations of selling defective cardiac defibrillators which were paid for by Medicare and Medicaid
• A manufacturer paid $2.4 million to resolve allegations of supplying defective and dangerous electrical equipment to the military
• A contractor paid $1 million to resolve allegations of using substandard building materials in the Washington, DC Metrorail system

What To Consider

When considering whether to bring a False Claims Act case based on defective products, potential whistleblowers should consider several questions:

1. Is the government getting something worse than what it bargained for?
2. Is the defective product potentially harmful or dangerous?
3. If the government knew it was receiving the defective product, would it refuse to pay?

If the answer to these questions is “yes,” you might have a strong False Claims Act case.

Our Team

With over 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of defective products in government contracts.

Please call (866) 845-2164 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.  Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.”