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Government Contract Fraud & Procurement Fraud FAQ 2026 — For CEOs and Contractors

You Got a CID. An Agent Called Your Lawyer. Or You Found Out There’s a Sealed Lawsuit With Your Company’s Name On It. What Happens Next? Watson & Associates, LLC | Former DOJ Prosecutors + Former Federal Contracting Officials | Nationwide Defense | 1.866.601.5518 |  24/7 If You’re Reading This, Something Has Happened or is About to Happen Maybe it was a Civil Investigative Demand — a thick…

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When Speculation Sinks a Small Business Size Protest: Lessons from SBA OHA Joint Venture Size Appeals

A poorly developed size protest can do more than lose a procurement challenge. It can reinforce a competitor’s eligibility, expose weaknesses in the protestor’s legal strategy, and leave the agency record populated with sworn evidence that is difficult to overcome on appeal. That is the central lesson from Size Appeal of DSC-EMI II, LLC, SBA No. SIZ-6387 (2026), where the SBA Office of Hearings…

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What Is a CID Hold When You Are Under Investigation for Fraud?

You did not expect this. A letter arrived — formal, government letterhead, demanding documents, emails, contracts, financial records, and possibly sworn testimony. At the top, it says: Civil Investigative Demand. Now your attorneys are using a phrase you have never heard before: CID hold. If you do not know exactly what that means, and what you are required to do in the next 24 to 72 hours, this…

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Totality of the Circumstances in SBA Size Protests: Lessons from Nisou Enterprises

If you handle federal set-aside work, the Nisou Enterprises decision is worth reading closely. In Size Appeal of Nisou Enterprises, Inc., SBA No. SIZ-6380 (2026), OHA did not say the challenged contractor was definitely small. What OHA did say is just as important: SBA’s Area Office made critical legal and factual mistakes when applying its own affiliation rules, vacated the size determination,…

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Ten Ways Government Contractors Accidentally Make Their Case Worse After Receiving a Civil Investigative Demand (CID)

When a CID Arrives, the Real Risk Often Starts After You Open It For many federal government contractors, the shock is not just that a Civil Investigative Demand (CID) showed up. The bigger shock is how quickly well‑intentioned reactions inside the company can make the situation harder, more expensive, and sometimes more dangerous than it needed to be. A CID from the Department of Justice (DOJ)…

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Hiring Foreign Workers in Government Contracts: Compliance, Fraud Risk, and Defense Strategies

Government contractors operating in the United States can lawfully employ foreign nationals in some circumstances, but the legal risk rises sharply when immigration compliance, labor practices, security restrictions, set-aside rules, billing representations, and procurement certifications do not line up. For executives facing a subpoena, CID, suspension threat, indictment, or federal charges, the…

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HUBZone Fraud Defense: Protecting Your Business When the SBA Challenges Your Eligibility

A HUBZone problem rarely begins with the words “fraud investigation.” It usually starts with something smaller: an SBA program examination, a certification review, a competitor protest, an employee residency question, a principal office challenge, or a request for records that seems simple enough to answer. Then the issue expands. What looked like a paperwork problem begins to threaten contract…

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How to Respond to a Government Investigation Without Making It Worse

A government investigation can become much more dangerous when a company reacts too quickly, destroys or alters records, allows unmanaged employee communications, or tries to “cooperate” without a legal strategy.The right response is disciplined, documented, and directed by counsel so the business can protect its legal position while dealing credibly with investigators. For companies searching…

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Service-Disabled Veteran-Owned Small Business (SDVOSB) Fraud: Criminal Exposure and Defense Strategies

Federal SDVOSB fraud investigations can escalate quickly from an SBA or VA eligibility issue into a parallel criminal and civil enforcement matter involving the Department of Justice, the False Claims Act, and false-statement charges. Companies and veteran owners accused of SDVOSB misconduct need a defense strategy that addresses procurement rules, investigator tactics, suspension and debarment…

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False Claims Act Penalties for Government Contractors in 2026

A False Claims Act investigation is not only a liability event. For a government contractor, it is a financial stress test. Once DOJ starts measuring exposure, the conversation often moves quickly from “what happened” to “how many claims were submitted, what was paid, what can be trebled, and how many statutory penalties can be stacked on top.” That is why False Claims Act penalties for…

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What Happens When a Government Contractor Gets a CID or Subpoena? First 24 Hours

A Civil Investigative Demand (CID) or subpoena served on a government contractor is not a routine records request. It is often the first visible sign that DOJ, DCIS, SBA OIG, or Army CID believes there may be fraud, false claims, false certifications, small business program abuse, defective pricing, billing misconduct, or another federal enforcement issue tied to your contracts. The first mistake…

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Federal Healthcare Fraud Defense: What Physicians and Healthcare Companies Need to Know About DOJ's 2026 Enforcement Priorities

The government is not scaling back its healthcare fraud enforcement in 2026. It is accelerating — with better technology, more funding, and a new organizational structure built specifically to pursue you. In June 2025, DOJ announced the largest National Health Care Fraud Takedown in its history: 324 defendants charged, including 96 licensed medical professionals, for alleged fraud schemes…

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SBA 8(a) Program and HUBZone Program Fraud: What Happens When the Government Accuses You of Misrepresenting Your Status?

Theodore Watson, Esq. You believe that you built your business the right way. You got certified. You competed for contracts following the rules. You performed and even received excellent past performance. Then, one day, an alarming letter arrives from the Department of Justice. Or the SBA Office of Inspector General calls. Or a Civil Investigative Demand lands on your desk demanding years of…

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Civil Investigative Demand (CID) - What CEOs Must Know Right Away

A federal Civil Investigative Demand (CID) is not “just paperwork.” It is the government telling you, as CEO, that your company is now a source of evidence in a potential fraud or CID False Claims Act case—often before you even know what problem they think you have. The real work is not just “responding to the CID,” but diagnosing what business, compliance, or cultural problem triggered it—and…

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HealthCare Fraud Defense After California Hospice Takedown: What the DOJ Arrests Really Mean

More Than $50 Million in Intended HealthCare Fraud Losses at Risk Federal prosecutors in Los Angeles have framed “Operation Never Say Die” as a sweeping healthcare fraud takedown. The underlying DOJ release, however, remains an accusatory document—not proof of guilt—and it leaves substantial room for the defense in each case. What DOJ Says Happened in “Operation Never Say Die” The U.S. Attorney’s…

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SBA SIZE Protest: Size Appeal of Stripes Global, Inc., Non Manufacturer Rule

This appeal involved a protestor’s challenge to the awardee’s small business status under a procurement for manufactured items, where the issues centered on the nonmanufacturer rule, the ostensible subcontractor rule, and the Limitations on Subcontracting. The protestor argued that the awardee did not qualify as a small business nonmanufacturer and was improperly reliant on another firm’s state…

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How the DOJ Decides Whether to Intervene in a Qui Tam Case Against Your Company

When a whistleblower files a sealed case against your company, the most important early question is often not whether the allegations are fair. It is whether the Department of Justice will decide to intervene and take the case over under the False Claims Act. For CEOs, founders, boards, and private equity-backed leadership teams, the decision on intervention can change the trajectory of the…

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