Bass, Berry & Sims is a national law firm with nearly 350 attorneys dedicated to delivering exceptional service to numerous publicly traded companies and Fortune 500 businesses in significant litigation and investigations, complex business transactions, and international regulatory matters. For more than 100 years, our people have served as true partners to clients, working seamlessly across substantive practice disciplines, industries and geographies to deliver highly-effective legal advice and innovative, business-focused solutions. For more information, visit www.bassberry.com.
This comprehensive year-in-review examines procurement fraud trends, enforcement actions, and compliance developments throughout 2025. The analysis explores regulatory changes, investigative techniques, and emerging risks that organizations face in government contracting and procurement processes.
with readers working within the Oil & Gas industries
Bass, Berry & Sims is pleased to present our Procurement Fraud Review, in which we examine significant civil and criminal enforcement developments affecting government contractors, grant recipients and participants in federal programs. This Review highlights key enforcement initiatives, notable case developments, and major settlements involving procurement, grant and loan fraud, all presented in a clear and practical format.
ISSUES TO WATCH
Several developments are expected to shape procurement fraud enforcement in the coming year, including:
Increased scrutiny of cybersecurity compliance obligations in federal contracts and grants
Continued enforcement actions involving defective pricing and cost mischarging in defense contracts
Government investigations into misuse of pandemic relief and federal loan programs
Expanding enforcement related to tariff evasion and customs fraud
Greater coordination among agencies investigating fraud involving federal procurement and trade
NOTEWORTHY SETTLEMENTS
Settlements and judgments under the False Claims Act exceeded $6.8 billion in fiscal year 2025, the highest total in the statute’s history. Since Congress strengthened the FCA in 1986, total recoveries now exceed $85 billion.
Although healthcare matters dominate False Claims Act enforcement, the Department of Justice (DOJ) continues to pursue significant fraud cases involving government procurement. In fiscal year 2025, defense-related settlements and judgments accounted for roughly 9% of total FCA recoveries, or approximately $633 million, reflecting the government’s continued focus on fraud affecting Department of Defense contracts. Since Congress strengthened the False Claims Act in 1986, recoveries in cases involving the Department of Defense as the primary client agency have totaled more than $7.7 billion.
The Department of Justice continued its pursuit of fraud matters involving the purchase of goods and services by the federal government, including fraud in military procurements, violations of cybersecurity requirements in federal contracts, and misconduct involving federal grants and pandemic relief programs.
Notably, none of the procurement-related settlements announced in calendar year 2025 approached the scale of several recent blockbuster procurement fraud cases. For example, in October 2024, Raytheon Company agreed to pay $428 million to resolve allegations that it knowingly provided false cost and pricing data when negotiating defense contracts. It was one of the largest procurement fraud recoveries in the Department of Justice’s history.
By comparison, the largest settlements announced in 2025 were significantly smaller, including a $62 million settlement with L3 Technologies Inc. resolving allegations that the company failed to disclose accurate cost and pricing data when negotiating government contracts for communications equipment and a $54.4 million settlement with CeratizitUSA to resolve allegations that it evaded customs duties by misrepresenting the country of origin of products imported into the United States.
Other notable settlements included:
29.74 million paid by Lockheed Martin Corporation to resolve allegations involving defective pricing on contracts for F-35 military aircraft.
$21 million paid by DynCorp International LLC to resolve allegations that it submitted inflated subcontractor charges under a State Department contract.
$15.9 million paid by Booz Allen Hamilton to resolve allegations involving fraudulent claims submitted in connection with a General Services Administration task order for military training systems.
$15.7 million paid by DRI Relays Inc. to resolve allegations that it supplied parts that did not meet required military specifications.
$14.75 million paid by Hill ASC Inc. to resolve allegations that it falsely represented compliance with cybersecurity requirements in federal contracts.
Together, these and other settlements highlight the government’s continued focus on enforcement actions involving defective pricing, cost mischarging, small-business contracting programs, cybersecurity compliance obligations, and fraud affecting federal funding and telecommunications programs.
The following pages include summaries of several notable settlements announced in 2025 involving procurement fraud, government contracting and federal program funding.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
