Government Contract Labor Fraud: Hours, Qualifications and the Work Actually Performed

Government contract labor fraud occurs when contractors use false hours, qualifications or payroll records to obtain government payment. At Hanford, CH2M Hill admitted in the agreed facts supporting its civil settlement and criminal non-prosecution agreement that workers claimed full overtime shifts after going home.

You may know who worked the shift, what the crew actually did or which employees met the contract’s requirements. Another office prepares the invoice. The discrepancy lies between those offices: work disappears from a payroll classification, a qualification appears only in a billing category, or a full shift reaches the government bill after the crew has gone home.

The employee’s paycheck and the government’s purchase tell different parts of the story. One shows what the worker received. The other depends on what the contractor promised to supply and how the contract pays for it.

Where Labor Records and Government Bills Diverge

How the contract pays determines how a false labor record reaches the government bill.

Did someone bill hours after leaving the site? Did an employee lack the qualification attached to the billed category? Did skilled work become lower-paid laborer work on certified payroll? Did a reimbursement request claim a payment to workers that never happened?

For a cost-reimbursement contract, we examine which contract carried the labor expense and what work the person performed for it. For hourly billing, we connect the hours and labor category to the contract rate.

When a Timecard Becomes a Government Charge

A timecard becomes part of a government charge when the contractor uses its hours to support an invoice or reimbursement request. The connection runs through the contract’s payment terms, the company’s approvals and the amount claimed.

Under the federal hourly-payment clause, supporting records include actual timekeeping, qualifying labor categories and evidence of payment. The contract’s loaded rate includes wages, overhead, general and administrative expense, and profit. Payroll supplies the wage component.

That distinction matters to someone who sees a government invoice and knows what the employee earns. We compare the billed rate with the contract rate, then examine the hours and qualifications supporting the charge.

CH2M Hill shows how that chain can carry hours nobody worked. The company agreed to pay $16,550,000 in a civil False Claims Act settlement over timecard fraud at the Department of Energy’s Hanford tank farms. In the agreed statement of facts supporting its civil resolution and criminal non-prosecution agreement, it admitted that workers claimed full eight-hour overtime blocks after finishing their jobs and leaving early.

Managers accepted the practice because securing overtime workers helped the company complete projects tied to performance incentives. The admitted facts also described supervisors avoiding detection by auditors. The government paid the inflated hours while management pursued the fees attached to getting the work done. The timecards and the incentives belonged to the same story.

A Worker Can Do the Work and the Claim Can Still Be Wrong

Labor qualification fraud concerns the qualifications the contract required for the work billed.

Cognosante provides healthcare and IT services to federal agencies. In its November 2020 settlement announcement, the Justice Department alleged that the company charged for labor that failed to meet the qualifications in a General Services Administration contract. Cognosante agreed to pay $18,987,789 to resolve that allegation and separate allegations of overcharging involving its commercial discount disclosures.

The qualification question sits between staffing and billing. What did the contract require, who performed the task, what qualifications did that person have, and what category appeared on the bill? A manager who knows the assigned employee and a billing specialist who knows the category may each hold part of the answer.

What Is a False Certification?

A false certification misrepresents a fact the contractor attests to when seeking payment, such as the work classification or wages shown on certified payroll. Nagan Construction’s case shows how that certification can contradict records made at the jobsite.

Nagan renovated a dining facility at the United States Merchant Marine Academy and the South Bronx Job Corps Center. In its August 2019 settlement, the company admitted paying employees the lower laborer wage for carpentry, bricklaying and other skilled work. It agreed to pay $435,000, with part of the settlement going to underpaid workers.

A whistleblower brought the Nagan case, and the government joined it. The government’s complaint described monthly payment requests accompanied by weekly certified payrolls. Those payrolls represented that each employee’s classification matched the work performed. The supervisors’ daily reports told another story:

United States of America v. Nagan Construction, Inc., complaint-in-intervention, paragraph 34, government allegation

The government’s allegation connected the worksite record to the payment request. Nagan’s admissions included underpaying employees, misclassifying their work and failing to put effective classification checks in place. The workers lost wages for the skilled work they performed. Contractors paying the required wages faced a competitor carrying a lower labor cost.

Prevailing Wage Fraud: Payroll Classification Follows the Work Performed

A payroll classification determines the wage owed for the work an employee performs. A contract labor category identifies the labor the government agreed to buy. Comparing them requires the work assignment, the applicable wage determination and the contract’s billing terms.

The Farfield Company performed track and signal improvements for the Southeastern Pennsylvania Transportation Authority on a project partly funded by the federal government. The court’s opinion describes workers classified and paid as laborers or groundmen who performed higher-paid lineman work, including pulling wire and laying conduit. An electrical workers’ union brought the whistleblower case. The government did not join it, and the court entered a False Claims Act judgment for reckless false payroll certifications.

Farfield’s internal phase codes associated hours with tasks, but its crew reports did not identify which workers performed which tasks within those codes. Employee testimony helped connect the assignments to the work. The false classifications reached 105 certified payrolls.

Service contracts raise a related wage-and-benefit comparison. Under Service Contract Labor Standards, required compensation follows the applicable wage determination or covered collective bargaining agreement.

For covered construction, Davis-Bacon requirements connect pay to the work actually performed, with weekly payroll information and a signed statement of compliance. For service-contract labor, we examine the compensation records and the wage determination incorporated into that contract.

When a Contractor Charges Government Danger Pay That Workers Never Receive

When a contractor charges government danger pay that workers never receive, the reimbursement request and payroll can tell directly contradictory stories about the same expense.

The Sandi Group agreed in 2011 to a $1.01 million settlement of allegations that it sought reimbursement for danger pay it claimed to have paid U.S. expatriate employees but had not paid. The Justice Department’s announcement concerned a civilian State Department police-training program in Iraq.

The alleged false input was the claimed payment to employees. That makes the payroll and reimbursement request useful together: one records the compensation, the other tells the government what expense it is being asked to cover.

DynCorp was the prime contractor, and The Sandi Group was its subcontractor. The prime separately agreed to pay $7.7 million over alleged inflated container-camp construction claims. The subcontractor’s danger-pay allegation concerned compensation it said it had already paid. Those were separate charges under the same police-training contract, rather than a single allegation that all contract labor was fictitious.

Two former Sandi Group employees brought the whistleblower lawsuit, and the Justice Department said they would share in the government’s recovery. State Department investigators and the Special Inspector General for Iraq Reconstruction participated in the investigation. The employee’s view of actual pay and the billing office’s account of reimbursable costs could expose different sides of the same alleged discrepancy.

Labor Mischarging: Hanford Contractors Billed for Work They Failed to Assign

The Hanford idle-time cases concern contractors that admitted billing the government for excessive idle time after failing to assign sufficient work. The work schedule and management’s knowledge explain how the hours reached the bill.

Bechtel and AECOM employed skilled craft workers to build the Hanford Waste Treatment Plant. In their 2020 civil settlement, they agreed to pay $57,750,000 and admitted charging the Department of Energy for unreasonable and unallowable idle time. Managers knew that insufficient assignments left workers idle for hours. Even learning they were under investigation did not stop the companies from billing the idle hours.

Washington River Protection Solutions admitted in its 2025 settlement that it sought and received reimbursement for excessive idle time and failed to schedule sufficient work at the tank farms. Hanford Mission Integration Solutions made similar admissions in its settlement announced in 2026, concerning infrastructure and site services. Both companies received reimbursement for claimed allowable labor costs under Department of Energy contracts.

Across these cases, management controlled the assignments while the government covered labor costs. The missing work could be visible to the employee for an entire shift and disappear into the reimbursement request.

What Proof Do You Need as a Whistleblower?

For government contract labor fraud, useful proof connects the contract requirement, the work performed, the representation made and the payment sought. Daily reports, timecards, qualification records, payroll certifications and invoices answer different parts of that comparison.

Nagan’s daily reports described the skilled tasks. Its certified payroll supplied the lower classification. Farfield’s phase codes and employee testimony connected workers to assignments. At Hanford, the companies’ admissions connected management’s scheduling decisions to reimbursed labor hours. These cases make the value of firsthand knowledge concrete: someone inside the work can explain what the billing description leaves out.

Subcontractors can hold another part of the payment story. The federal construction progress-payment certificate addresses compliant performance and payments already due to subcontractors and suppliers from previous government payments. The prime’s request, the subcontractor’s ledger and the actual payment dates let us examine those representations together.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What Happened on the Shift

If you know why the hours, qualifications or payroll differ from what the government was told, speak with our whistleblower experts about the labor charges. We build the case with you around the work, the payment and the decisions that connected them, and bring in government contract fraud whistleblower lawyers who understand labor billing. We stay beside you from that first comparison through the case.