§4506 Action in Case of Fraud

Summary

If the agency’s fraud coordinator finds strong evidence that a contractor’s request for an advance, partial, or progress payment is based on fraud, that coordinator must recommend the agency cut or stop further payments. The agency head must decide if there is enough evidence, and if they agree they may reduce or suspend payments. Any cut must be reasonable compared with the expected loss to the Federal Government. The agency must write down the reasons for the decision and keep them in its files. Before making the cut, the contractor must be told and given a chance to respond. Remedy coordination official = the person or office that handles criminal, civil, administrative, and contract actions after procurement fraud investigations. Within 180 days after payments are cut or stopped, the fraud coordinator must review the fraud finding and tell the agency head whether the payment action should continue. Each fiscal year the agency must make a report listing those recommendations, what was done, why, and the effects; any Member of Congress can ask for the report. The agency head cannot give these responsibilities to anyone below level IV of the Executive Schedule.