Use and Administration of DOD's Voluntary Disclosure Program
NSIAD-96-21: Published: Feb 6, 1996. Publicly Released: Feb 14, 1996.
Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) Voluntary Disclosure Program, focusing on the: (1) extent to which defense contractors participate in the program; (2) amount of money that has been recovered under the program; (3) time taken to close disclosure cases; (4) most common type of disclosures; and (5) extent of overlap between voluntary disclosures and qui tam actions.
GAO found that: (1) although 48 of the top 100 defense contractors have made voluntary disclosures, the total number of disclosures under the program has been relatively small and dollar recoveries have been modest; (2) from its inception in 1986 through September 1994, DOD reported that, of the thousands of defense contractors, 138 contractors made 325 voluntary disclosures of potential procurement fraud; (3) DOD reported recoveries from these disclosures to be $290 million, about 17 percent of total reported DOD procurement fraud recoveries between fiscal years (FY) 1987 and 1994; (4) GAO's review indicated that DOD's reported recoveries of $290 million were overstated because they included $75 million in premature progress payments and amounts from disclosures made prior to the program; (5) further, DOD accepted some disclosures into the program that the Justice Department believed were triggered by imminent government discovery and thus did not meet the criteria for admission; (6) voluntary disclosure cases took an average of 2.8 years to close, with about 25 percent taking over 4 years; (7) open cases are taking longer; (8) as of September 1994, DOD data showed that open cases averaged 3.5 years, with over half of the cases disclosed in FY 1990 still open; (9) less than full contractor cooperation with the government and low priority given by DOD and other investigative agencies to managing cases expeditiously may be problems in some cases; (10) most disclosures did not result in significant dollar recoveries for the government; (11) of 129 closed cases, 81 cases, or about 63 percent, had reported recoveries of less than $100,000, of which 52 cases, or 40 percent, had no dollar recoveries; (12) forty-eight cases had reported recoveries of $100,000 or more, of which 15 cases had reported recoveries of $2 million or more; (13) there is little overlap between voluntary disclosures and qui tam actions; and (14) of the 129 voluntary disclosure cases closed since the program began, 4 involved qui tam actions.