Front-end-loaded progress payments and overinflated change order requests are common - if not accepted - practices on private construction projects, but they are also imprudent and can lead to significant liability on public projects. Although fraud and public contracting have long been associated with one another, the number of fraud-related public contracting lawsuits is on the rise. While much of this increase may be attributed to the problems related to war-time contracting, public-private partnerships and increased construction spending at all levels of government have provided more opportunities for corruption. And those opportunities have not always been passed over. Both public agencies and the contractors with whom they do business need to better understand the types of conduct that give rise to fraud liability and how to prevent it. What is a false claim?

Generally, a false claim is any misrepresentation made to a public agency for the purpose of obtaining compensation. In addition, the misrepresentation must be knowing and material. That is, the person making the representation must know that it is false, and the statement must in some way influence the agency's decision to pay. When do false claims arise?

False claims can arise at any point in the public contracting process, from bidding to post-project disputes. Examples of the types of situations that can lead to false claim liability include:

* Bid certifications and representations, such as false representations about good-faith attempts to obtain minority, women, and emerging small business enterprise participation