Department of Transportation

In recent years there has been a significant increase in funding for road construction, maintenance, and repair thanks to the American Recovery and Reinvestment Act of 2009 (“ARRA”). Unfortunately, along with the increased funding has come a virtual explosion of fraud by deceitful contractors.

Examples of Department of Transportation Fraud


  • Bid-rigging (contractors pretending to submit competing bids when in fact they are working together)
  • Overcharging for materials and time (by either volume or rate)
  • Product substitution
  • Kickbacks


Fraud by highway and road contractors can occur at any stage in the process. At the beginning stages, dishonest companies have been known to overestimate the degree of damage or the scope of work needed. At the end stage, fraud-prone contractors submit reports that inflate their costs, man hours, or materials. Perhaps most egregious are the contractors that use cheaper, lower-quality materials than what is specified, as this is a self perpetuating problem – the faster the roads wear out, the sooner they will need to be replaced so these fraudsters can strike again.


Examples of successful False Claims Act cases involving the Department of Transportation include:
  • In 2011, the City of Palmer, Alaska agreed to pay over $800,000 to resolve allegations that the city made false claims to the Federal Aviation Administration (an agency within the Department of Transportation) in connection with grant applications by attesting that it would collect rent at fair market value for the lease of airport property for non-aeronautical uses, which is required by FAA rules.
  • In 2001, a $30 million civil settlement was reached between the U.S. Government and the defendants Ispat-Inland and Contech Construction Products, Inc. as a result of a False Claims Act suit. The settlement resolved allegations that the company used non-approved pipe to complete Louisiana highway construction projects, including submitting false certifications of compliance and stenciling false information on the exterior of the coated steel to indicate the pipe met required standards.

If you think that you have information relating to fraud against the U.S. Department of Transportation, please contact one of our experienced attorneys at (248) 539-7420. Please note that it is important to act promptly, since many whistleblower protection laws have statutes of limitation. This means that if you wait too long to file a lawsuit, you may lose your ability to do so.