Major Fraud Act and False and Fraud Statement Act
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A contractor receives an un-priced change order on a $500,000 fixed price contract. The contractor incurs $50,000 in additional labor costs in performing the change. In its request for equitable adjustment, the contractor "pads" the claim and requests to be reimbursed for $60,000 in additional labor. To support its claim, the contractor includes records purporting to document the extra $10,000 worth of hours worked, but these extra hours were actually spent on a different contractual effort unrelated to the contract for which an adjustment is sought. What statute has the contractor violated? [Personal note: I think it is between 'B' & 'D', but I seem to favor 'D'...please assist]
A) Sherman Anti-Trust Act
B) Major Fraud Act
C) Bribery of Public Officials
D) Fraud and False Statements Act
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Solution Summary
What is the major fraud act and what is the Fraud and False Statement Act and how to tell when each applies
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The answer is (D) Fraud and False Statements Act
Major Fraud Act only applies when the property or services being questioned is more than $1,000,000 which in the above scenario it is not.
Here is some other helpful information for you:
The Major Fraud Act of 1988 (Pub.L. No. 100-700, § 2, 102 Stat. 4631) created a new offense, 18 U.S.C. § 1031:
1. Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent --
1. to defraud the United States; or
2. to obtain money or property by means of false or fraudulent pretenses, representations, or promises, in any procurement of ...
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