Government Software False Functionality Claims: Sold as Ready to Work

Government software false functionality claims concern contractors that knowingly misrepresent what a purchased system can do, whether it is ready, or which assessment method it uses. Taxpayers pay for capabilities the contractor promised, while workers and the public depend on the systems it delivers. If you tested the software, implemented it or supported its users, you may know exactly where the promised capability and the delivered product parted company.

The cases reach quite different purchases: an electronic medical records system for Hanford workers, assessments of government websites, and software for Maryland’s health insurance exchange. The government alleged that the contractors misrepresented an identifiable promise: a working system, a specified assessment method or capabilities already available.

What Did the Government Buy?

The statement of work identifies the functions or services the contractor owes. Acceptance records show what the agency accepted, and invoices show what the contractor asked it to pay. For a software purchase, we connect those records to the particular capability the company represented as working.

That capability may be the medical records system itself, the method behind a website satisfaction score, or eligibility software’s ability to handle a change in income. The contract and proposal give a technical employee’s account its commercial meaning: this was the function the customer agreed to buy.

In its 2024 paper Transparency, Accountability, and Integrity of Public Procurement Systems, Transparency International’s Anti-Corruption Helpdesk emphasizes the scope, technical requirements and delivery schedule when assessing a purchase’s complexity. In a software case, they also help us identify precisely what was promised and when it was supposed to be available.

A Medical Record System Billed as Functional

Computer Sciences Corporation agreed to pay $389,355 to resolve allegations that it falsely represented Hanford’s electronic medical records system as functional and able to operate as required. The Justice Department’s October 2018 announcement tied those representations to the company’s occupational health services contract with the Department of Energy.

Between 2005 and 2012, CSC held the prime contract to provide those services to Hanford Site workers. Implementing an electronic system for their medical records was part of the job. The government alleged that CSC submitted false claims and statements saying the system would work as intended and meet both contractual and Department of Energy requirements.

The people depending on those records worked around radioactive and hazardous materials. Accurate health records were part of protecting that workforce.

Two former CSC employees brought the whistleblower case. For an implementation or support employee, the question is concrete: did the system do what the company told the government it could do?

Foresee’s Method Was Part of the Product

Foresee Results and Verint Americas agreed to pay $7 million over allegations that they represented their website assessments as using the American Customer Satisfaction Index methodology while using a different method. The settlement announcement published by the GSA inspector general describes a purchase of a particular way to measure satisfaction.

Interior’s Federal Consulting Group awarded Foresee a five-year contract in 2011. Foresee agreed to measure the public’s satisfaction with government websites and recommend improvements. The government understood that it would receive measurements produced using the named methodology.

The alleged substitution went to what the government bought. An assessment can arrive, contain a score and offer recommendations while still using a different method from the one represented. The method behind the result was part of the bargain.

That makes Foresee useful to someone who works on survey design, analysis or assessment delivery. We compare the promised methodology with the work that produced the delivered assessment.

The case also shows that the whistleblower can be a business with knowledge of the product. CFI Group USA and American Customer Satisfaction Index brought the qui tam case. The government announced a $1.54 million combined whistleblower reward as part of the settlement.

IBM and Cúram’s Government System Readiness Claims

Government system readiness claims about eligibility software concern what it can already do when the buyer is deciding whether to purchase it. IBM and Cúram Software agreed to pay $14.8 million in June 2019 to settle allegations that they misrepresented development status, existing functionality and integration during Maryland’s health insurance exchange procurement.

The Justice Department’s account of the Maryland purchase identifies the capabilities at issue. Cúram participated in a bid presentation illustrating eligibility determinations for health assistance, tax-credit calculations, changes in life events such as income, and integration with another subcontractor’s health plan shopping software.

The buyer needed those functions to work together in one benefits platform. The government alleged that the procurement representations misstated the product’s development status and its existing ability to meet Maryland’s technical requirements.

After repeated problems following the October 2013 launch, Maryland terminated the contract and replaced the website and IT platform, including the Cúram software.

The funding and contract relationships matter. The Maryland Health Benefit Exchange awarded the contract, federal Department of Health and Human Services grants partially funded it, and Cúram-IBM served as a subcontractor. The federal money reached a state software purchase. The representations came from a company below the prime contractor.

For an integration engineer, that last detail matters as much as the launch. We examine the component supplier’s representations alongside the wider system the buyer was promised. The subcontractor’s account of its capabilities can shape the government’s purchase before the platform is assembled.

A Software Supplier’s Information Can Travel Through Another Company

Informatica’s commercial-pricing disclosure settlement illustrates the same route through another seller. The government alleged that Informatica supplied false discount information to resellers, which used it in General Services Administration negotiations, causing inflated prices and purchases.

The pricing case shows the path a supplier’s information can take through another company to the government buyer. We follow that path when the person who knows the product works for a subcontractor or supplier.

What Is a False Certification?

A false certification can tell the government that a required software function works when the contractor knows it does not. We examine what the company said, what it knew and how that statement mattered to the purchase or payment.

The cases show several places that statement can appear. CSC allegedly submitted false claims and statements about its system. Foresee allegedly represented that it used a named assessment method. The Maryland allegations concerned representations during procurement, including existing functionality and integration. The statement the government relied on may have reached it well before the invoice.

What Proof Do You Need as a Whistleblower?

The useful evidence connects the promised function, the company’s representation, the actual performance and the government purchase or payment. We work through those connections with you, including who understood the difference at the time.

An acceptance test, original output or milestone representation may show the gap. We work out with you which records connect that missing function to what the government bought and paid for.

Timing matters. A readiness claim concerns the capability available when the company made its pitch. A claim about a delivered service concerns the work behind that delivery. The Maryland bid presentation and Foresee’s assessments show why we examine both.

Public Procurement Fraud Detection and Artificial Intelligence Techniques: A Literature Review, published in CEUR Workshop Proceedings in 2022, surveys machine learning, text analysis and network approaches to detecting government procurement fraud. It identifies difficulties explaining model results and obtaining reliable historical data.

Those findings put the insider’s contribution in perspective. Procurement data can point investigators toward a transaction. Someone who knows the system can explain which promised function was missing, what the test meant, or why the assessment used a different method. We connect that explanation to the records of the actual purchase.

What a Software Whistleblower Case Can Pay

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The CSC case began with former employees, while the Foresee case came from businesses. Both put knowledge of the purchased service into a whistleblower case.

If your role puts you close to the implementation, the assessment process or the representation sent to the customer, our whistleblower experts can help turn that knowledge into a case.

You Know What the System Could Actually Do

If you know why a government system was sold or billed as working when its promised functions were missing, speak with our whistleblower experts about that discrepancy. We build the case with you around the technical evidence and the government purchase, bring in government procurement whistleblower lawyers who understand software performance claims, and stay beside you through the process.