U.S. Attorney Nikolas P. Kerest recently highlighted the severity of fraud by government contractors and subcontractors, emphasizing the importance of upholding the integrity of government procurement programs. These remarks were made in the wake of a recent $2.5 million settlement between the U.S. Department of Justice and a company that provides helmet retention inserts to the military. This False Claims Act settlement serves as an important reminder to defense innovators that prioritizing compliance with supply chain laws is vital.

Whether directly or indirectly contracting with the U.S. Department of Defense, companies must adhere to supply chain requirements, such as those covering the source country of products being delivered to the military. 

It is crucial for companies to understand the flow-down requirements in government contracts and maintain ongoing compliance throughout the duration of the agreement.