GW Law Faculty Publications & Other Works

Document Type

Article

Publication Date

2026

Status

Accepted

Abstract

This Briefing Paper examines the evolving procurement fraud enforcement landscape and identifies emerging risk areas that government contractors should monitor. While procurement fraud has long been an enforcement priority across administrations, the current Department of Justice has aggressively expanded its use of the False Claims Act (FCA) and related authorities, embedding fraud enforcement into the contractor compliance infrastructure through new task forces, mandatory contract clauses, Federal Acquisition Regulation deviations, and disclosure obligations aligned with current policy priorities including cybersecurity, anti-discrimination, and trade compliance.

The Paper begins by mapping the federal fraud enforcement taxonomy, distinguishing among criminal fraud provisions under Title 18, the civil False Claims Act, and the Administrative False Claims Act, with attention to how the Supreme Court's 2025 decision in Kousisis v. United States expanded prosecutorial reach by rejecting the economic loss requirement in fraudulent-inducement wire fraud cases.

The Paper then analyzes the expanding reach of certification-based liability under the FCA. Three developments are driving this expansion: the proliferation of certification requirements in substantive areas that did not previously carry them, the government's affirmative incorporation of materiality findings into contract clauses, and the shift toward fixed-price and commercial-type contracting that reduces traditional cost-accounting oversight. The Paper examines how Escobar's materiality framework now anchors both civil FCA and criminal wire fraud analysis post-Kousisis.

The Paper identifies four substantive areas where this enforcement model is being deployed: cybersecurity, where DOJ's Civil Cyber-Fraud Initiative has produced significant civil settlements and a recent criminal indictment; anti-discrimination compliance, where Executive Order 14398 and FAR 52.222-90 build FCA materiality language directly into contracts; trade compliance, where the new DOJ Trade Fraud Task Force has driven settlements including the $54.4 million Ceratizit USA resolution; and AI compliance, which presents both nascent regulatory risk through GSA's draft AI clause and immediate fraud-facilitation risk through cases involving AI-generated fraudulent records.

The Paper then examines the qui tam environment, including DOJ's April 2026 launch of the Fraud Oversight through Careful Use of Statistics (FOCUS) initiative formalizing the relationship with data-miner relators, the constitutional challenge to qui tam practice in United States ex rel. Zafirov v. Florida Medical Associates, and the practical considerations contractors face when potential misconduct surfaces, including the tension between FAR mandatory disclosure requirements and DOJ's new Department-wide Corporate Enforcement Policy. The Paper concludes with fourteen practical guidelines for managing exposure in this evolving environment.

GW Paper Series

2026-42

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