DOJ Releases False Claims Act Statistics for Fiscal Year 2025 in Government Contracting

The U.S. Department of Justice has reported unprecedented False Claims Act enforcement in fiscal year 2025, with recoveries soaring to a record-breaking $6.8 billion. This figure represents the highest single-year amount in the statute’s history, according to the DOJ’s recently published statistics.

Whistleblower actions reached an all-time high with 1,297 new qui tam suits filed, a dramatic increase from the previous record of 980 suits in FY 2024. These whistleblower-initiated cases yielded more than $5.3 billion in settlements and judgments. The federal government also opened 401 new investigations during the fiscal year, maintaining the upward trend in government-initiated FCA activity.

Healthcare fraud continues to dominate the recovery landscape, but the DOJ report highlights significant enforcement actions in government procurement, particularly related to military contracts and cybersecurity compliance. Pandemic-related fraud prosecutions also produced substantial results, with more than 200 settlements and judgments exceeding $230 million. To date, total civil recoveries for pandemic-related fraud have surpassed $820 million.

The False Claims Act serves as the federal government’s primary legal mechanism for addressing fraud involving government funds and property. The statute imposes significant liability, including treble damages and penalties, on entities that knowingly submit false claims for payment. Since Congress strengthened whistleblower incentives in 1986, total recoveries have exceeded $85 billion.

Defense-related matters saw notable increases this year, largely driven by a single significant recovery related to government contract pricing requirements. In the second-largest procurement fraud case in history, a major defense contractor agreed to pay $428 million to resolve allegations of providing false cost and pricing data and double-billing the government.

Another defense contractor paid $62 million to settle allegations of failing to disclose accurate pricing data for communications equipment, while a third paid $29.74 million related to alleged defective pricing on military aircraft contracts. These settlements follow a $377 million FCA settlement in 2023 associated with alleged cost accounting violations.

The DOJ’s Civil Cyber-Fraud Initiative gained significant momentum, with recoveries exceeding $52 million across nine settlements in FY 2025 alone. A health benefits administrator and its parent paid $11.2 million to resolve claims of falsely certifying compliance with cybersecurity requirements, while a genomics company paid $9.8 million for allegedly selling systems with known vulnerabilities.

Customs fraud enforcement saw the largest-ever resolution under the FCA: a $54.4 million settlement with a distributor of tungsten carbide products for improperly avoiding duties on goods from China. This case highlights the DOJ’s expanding focus on trade and tariff enforcement through its Trade Fraud Task Force.

The role of whistleblowers remains central to FCA enforcement. Relators who file successful lawsuits are entitled to receive between 15 and 30 percent of the government’s recovery, providing a powerful incentive that continues to drive case volume. Notably, FY 2025 saw relators achieve significant success in cases where the government declined to intervene, including two trials resulting in favorable verdicts with judgments of $1.6 billion and $289 million, though both are being challenged on appeal.

These results come amid constitutional challenges to the qui tam provisions. In a 2023 opinion, Supreme Court Justices Thomas, Kavanaugh, and Barrett indicated there were “substantial arguments that the qui tam device is inconsistent with Article II.” Subsequently, a federal district court in Florida held the provisions unconstitutional, a decision currently under appeal to the Eleventh Circuit.

For government contractors, the record-breaking enforcement year creates several clear risk areas. Procurement fraud remains a significant source of liability, with major settlements involving defective pricing, false cost data, and improper billing arrangements. False certifications of cybersecurity compliance now represent a concrete rather than theoretical risk, with the DOJ actively securing multimillion-dollar settlements.

The historic number of qui tam filings underscores the risk posed by internal whistleblowers, suggesting contractors must foster cultures where employees feel comfortable reporting concerns internally. Additionally, prime contractors are increasingly being held accountable for misconduct by their subcontractors and partners.

The unprecedented volume of whistleblower lawsuits signals that aggressive FCA enforcement represents the new baseline rather than a temporary spike. With a robust pipeline of cases, contractors should anticipate increased whistleblower activity targeting cybersecurity and procurement pricing in the years ahead.