Largest False Claims Act and Contract Settlements in Government Contracting (2026)

Research compiled by FPS | Last updated: September 2026

As government contracting continues to grow and develop new regulations, more and more contracting cases involving large legal settlements have come to light as the government cracks down on illegal practices. Many of the top 10 largest False Claims Act and contract settlements have occurred in the past three years, with three of them occurring in 2026 alone. This guide ranks the largest False Claims Act and contract settlements as of 2026, giving a short explanation of each and answering relevant questions.

Largest False Claims Act and Contract Settlements in Government Contracting

1. Raytheon Settlement (2024)

In October 2024, Raytheon, a subsidiary of RTX, settled for over $950 million to resolve parallel DOJ and SEC investigations. The investigations concerned defective pricing on DoD contracts, foreign bribery in Qatar, and export-control violations. The settlement included $428 million to resolve civil False Claims Act allegations. It originated from a qui tam suit filed by former employee Karen Atesoglu.^1,2

• Contract: Sole-source DoD contracts for PATRIOT missile and radar systems
• Control Failure: Lack of independent verification for certified cost/pricing data and failed billing-reconciliation to catch duplicate charges
• Prevention: An independent audit of cost/pricing packages prior to TINA certification, as well as new automated billing-reconciliation controls to flag duplicate invoices

2. Boeing Settlement (2006)

In June 2006, Boeing paid $615 million to settle two intertwined actions. The first was the improper hiring of former Air Force acquisitions official Darleen Druyun, her daughter, and her future son-in-law while Druyun had influence over billions of dollars in Air Force contract decisions. The second was the illegal obtaining and use of proprietary documents from Lockheed Martin, a Boeing competitor. This case was resolved through a criminal-civil global agreement instead of a whistleblower qui tam suit.^3,4

• Contract: The Evolved Expendable Launch Vehicle (EELV) program, as well as certain NASA launch services contracts, plus a proposed multibillion-dollar Air Force tanker lease deal
• Control Failure: Ineffective firewall in Boeing's hiring decisions; improper document-handling controls.
• Prevention: Stricter post-employment screening and recusal protocols; document-security and ethics-compliance audits; mandatory reporting of conflicts of interest

3. Booz Allen Hamilton Settlement (2023)

In July 2023, Booz Allen Hamilton agreed to pay $377.45 million to resolve a qui tam suit alleging improper shifting of commercial and international business costs over to government contracts. This improper shifting occurred for over a decade, and allegedly violated the False Claims Act by improperly billing commercial and international costs to government contracts. The case was brought by a former employee under the FCA's whistleblower provisions.^5,6

• Contract: Booz Allen Hamilton managed a broad portfolio of U.S. government contracts, which were cost-reimbursed under federal cost-accounting and Federal Acquisition Regulation (FAR) rules
• Control Failure: Internal cost-accounting practices lacked proper nexus testing to tie indirect costs to specific contract objectives
• Prevention: Rigorous cost-allocation review under Cost Accounting Standards (CAS); clear documentation linking indirect costs to contract benefits; proactive disclosure of accounting methodology changes; internal auditing

4. Northrop Grumman Settlement (2009)

In April 2009, Northrop Grumman (via its predecessor, TRW) paid $325 million to settle a whistleblower lawsuit over defective satellite components that were sold to the National Reconnaissance Office. The lawsuit found that certain Heterojunction Bipolar Transistors manufactured by TRW from 1992 to 2002 were improperly tested and qualified, with Northrop and TRW allegedly misrepresenting and concealing facts about the defective parts. The case was filed by a scientist who discovered the defect.^7,8

• Contract: Satellite equipment contracts with the National Reconnaissance Office (NRO)
• Control Failure: Engineers who identified failure risks were reportedly instructed not to report the findings, and the whistleblower was allegedly threatened; quality-assurance testing protocols were allegedly inadequate and defect reports were allegedly suppressed
• Prevention: Establishing independent, protected reporting channels for engineers; mandatory escalation of known component-reliability issues; third-party component qualification testing

5. KBR Settlement (2023)

In July 2023, KBR paid $108.75 million to resolve a qui tam suit by several whistleblowers. The suit alleged that KBR engaged in over a decade of unnecessary-materials overcharges on its Army logistics contract. Specifically, whistleblowers alleged that KBR defrauded the Army under the multi-billion-dollar LOGCAP III contract, routinely ordering new materials when KBR warehouses in Iraq already had excess inventory of the ordered items.^9.10

• Contract: The Logistics Civil Augmentation Program III (LOGCAP III) contract
• Control Failure: KBR's inventory-tracking system did not reliably surface existing stock before new purchases; lack of incentive existed due to automatic cost-reimbursement by the Army
• Prevention: Implementing real-time, auditable inventory-visibility systems; independent contract-compliance audits of cost-reimbursement contracts; mandatory cross-leveling verification within ordering workflows

6. Sikorsky/Derco Settlement (2024)

In June 2024, Sikorsky Support Services and Derco Aerospace agreed to pay $70 million to resolve a whistleblower suit. The suit alleged an improper cost-markup arrangement between Sikorsky and Derco on a Navy training-aircraft parts contract. Under the arrangement, Sikorsky allegedly purchased parts from Derco at the going rate plus a 32% markup, but then charged the Navy for the marked-up amounts, which is prohibited in government subcontracting.^11,12

• Contract: A Navy contract for maintenance and repair of aircraft used to train naval aviators
• Control Failure: Undisclosed improper structuring of related-party subcontracting between two sister companies that violated FAR prohibitions
• Prevention: Mandatory FAR-compliance review of any intercompany or related-party subcontract pricing structure; contract-compliance training specifically on prohibited pricing models (CPPC); independent audit of affiliate transactions

7. L3 Technologies Settlement (2025)

In May 2025, L3 Technologies agreed to pay $62 million to resolve a government-initiated investigation. The investigation concerned years of incomplete cost-data disclosures on defense communications equipment contracts. Through its division, Communications System West, L3 allegedly failed to disclose accurate, current, and complete cost or pricing data for communications equipment they sold to the Air Force, Army, Navy, and other government agencies.^13,14

• Contract: DoD sole-source and fixed-price contracts for communications systems including ROVER, VORTEX, and SIR
• Control Failure: Internal cost-estimating processes failed to update or verify pricing disclosures over multiple years
• Prevention: Implementing periodic re-certification of cost and pricing data; internal TINA-compliance audits; DCMA/DCAA-style continuous oversight on long-duration contracts

8. Deloitte Settlement (2026)

In August 2026, Deloitte agreed to pay $21.5 million (plus $2.4 million to Indiana and Florida) under the DOJ's Civil Rights Fraud Initiative. The settlement resolved a qui tam suit which alleged that Deloitte's DEI programs violated federal anti-discrimination certifications tied to its government contracts. The suit alleged that Deloitte engaged in discriminatory race- and sex-based employment practices from 2017 to 2026.^15,16

• Contract: Deloitte's federal consulting and advisory contracts
• Control Failure: Deloitte allegedly certified compliance with federal anti-discrimination requirements despite allegedly operating internal programs that used race and sex as eligibility criteria
• Prevention: Legal and compliance reviews of internal talent programs; removal of protected-class eligibility criteria from professional-development programs tied to federally billable work; internal whistleblower-safe channels to flag certification conflicts

9. IBM Settlement (2026)

In April 2026, IBM paid just over $17 million in resolution of a government-initiated investigation into employment practices tied to federal contract certifications. The government alleged that IBM certified compliance with federal anti-discrimination requirements in its contracts despite maintaining employment practices that improperly considered race or sex, which IBM justified as achieving demographic targets.^17,18

• Contract: IBM's federal technology and services contracts
• Control Failure: IBM's compensation and hiring-process design allegedly incorporated demographic-target metrics into decision criteria
• Prevention: Decoupling compensation and bonus structures from demographic metrics; compliance sign-off on hiring-process design; early self-disclosure and voluntary remediation

10. BAE Systems Settlement (2026)

In August 2026, BAE Systems, Inc. agreed to pay $36 million to resolve an administrative settlement with the U.S. State Department as part of an ITAR/AECA civil-penalty matter. The State Department alleged 104 violations of the Arms Export Control Act and the International Traffic in Arms Regulations. The alleged violations included unauthorized exports of technical data to China, Canada, the UK, and Germany, as well as provision of unauthorized defense services in France, Italy, and Indonesia, an unauthorized defense-article export to Switzerland, and an unauthorized retransfer of technical data to a UK supplier.^19,20

• Contract: Alleged conduct spanned May 2019-March 2025 across multiple export-authorization agreements
• Control Failure: Insufficient export-compliance procedures; inexperienced trade-compliance staff; inadequate management of authorization agreements; insufficient systems to track authorization
• Prevention: Appointing a Special Compliance Officer; strengthening compliance procedures and training; implementing automated export-compliance tracking; jurisdiction review; external audits

Cases by Conduct Type

Enforcement Trends for FY2025

Frequently Asked Questions

What is the largest FCA contracting settlement in history?

The largest FCA contracting settlement in history was Raytheon's $950 million+ settlement in October 2024. The settlement concerned allegations of defective pricing on DoD contracts, foreign bribery in Qatar, and export-control violations.

What is the most common conduct type in FCA contracting cases?

The most common conduct types in federal government contracting cases under the False Claims Act (FCA) are false billing and false certifications. Major false billing settlements include the Raytheon (2024), Booz Allen Hamilton (2023), KBR (2023), Sikorsky/Derco (2024), and L3 Technologies (2025), while major false certifications settlements include the Deloitte (2026) and IBM (2026) settlements.

How does the government prevent FCA violations?

The government primarily prevents FCA violations by imposing large penalties, empowering whistleblowers to expose fraud allegations via qui tam lawsuits, and enforcing strict compliance rules. Violators must often pay treble damages on settled allegations, and whistleblowers often receive protections and payouts to encourage reporting.

What protections exist for FCA whistleblowers?

Whistleblowers who expose fraud against the federal government receive protection under Section 3730(h) of the Federal False Claims Act (FCA). Whistleblowers are typically entitled to anti-retaliation protections, financial rewards, and procedural confidentiality.

References

1. Raytheon Company to pay over $950 million in connection with foreign. (2024, October 16). https://www.justice.gov/usao-edny/pr/raytheon-company-pay-over-950-million-connection-foreign-bribery-export-control-and
2. Volkov, M. (2024, October 28). Raytheon Reaches Comprehensive Settlement with Justice Department and Pays $950 Million to Resolve False Claims Act, FCPA and ITAR Violations (Part I of IV). Corruption, Crime & Compliance. https://blog.volkovlaw.com/2024/10/raytheon-reaches-comprehensive-settlement-with-justice-department-and-pays-950-million-to-resolve-false-claims-act-fcpa-and-itar-violations-part-i-of-iv/
3. #06-412: 06-30-06 Boeing to pay United States record $615 million to resolve fraud allegations. (n.d.). https://www.justice.gov/archive/opa/pr/2006/June/06_civ_412.html
4. Boeing agrees to settle probe for $615 million. (2006, May 16). NBC News. https://www.nbcnews.com/id/wbna12796632
5. Booz Allen agrees to pay $377.45 million to settle false claims Act. (2025, February 6). https://www.justice.gov/archives/opa/pr/booz-allen-agrees-pay-37745-million-settle-false-claims-act-allegations
6. Booz Allen resolves False Claims Act case with $377 million settlement. (n.d.). Miller Shah LLP. https://millershah.com/blog/booz-allen-settles-false-claims-act-lawsuit-for-377-million/
7. Northrop Grumman Corp. settles False Claims ACT case for defective. (2025, February 5). https://www.justice.gov/archives/opa/pr/northrop-grumman-corp-settles-false-claims-act-case-defective-satellite-parts
8. Union-Tribune, S. D. (2016, August 29). Northrop Grumman settles DOJ defective parts suit. San Diego Union-Tribune. https://www.sandiegouniontribune.com/2009/04/03/northrop-grumman-settles-doj-defective-parts-suit/
9. KBR Successfully Settles Legacy Legal Matter. (2023, July 3). KBR. https://www.kbr.com/en/insights-news/press-release/kbr-successfully-settles-legacy-legal-matter
10. Fuson, J. (2025, December 10). Iraq War whistleblowers announce $108.75 million settlement with KBR. Phillips & Cohen. https://www.phillipsandcohen.com/gulf-war-whistleblowers-settlement/
11. Sikorsky Support Services Inc. and Derco Aerospace Inc. Agree to Pay. (2025, February 6). https://www.justice.gov/archives/opa/pr/sikorsky-support-services-inc-and-derco-aerospace-inc-agree-pay-70m-settle-false-claims-act
12. Lockheed Martin subsidiaries reach $70 million settlement for claims they overcharged Navy for parts. (2024, June 21). Associated Press. https://apnews.com/article/lockheed-martin-sikorsky-derco-navy-parts-settlement-e9e1737e5bd10acddc2836bb913a82bc
13. L3 Technologies Inc. agrees to pay $62,000,000 to resolve false claims. (2025, May 22). https://www.justice.gov/opa/pr/l3-technologies-inc-agrees-pay-62000000-resolve-false-claims-act-allegations-arising
14. L3 Technologies to pay $62M to settle FCA claims, DOJ says - Law360. (n.d.). https://www.law360.com/articles/2344016/l3-technologies-to-pay-62m-to-settle-fca-claims-doj-says
15. Deloitte agrees to pay $21.5M to resolve alleged employment. (2026, August 25). https://www.justice.gov/opa/pr/deloitte-agrees-pay-215m-resolve-alleged-employment-discrimination-violations
16. Deloitte settles DEI-Related claims for $21.5M: How to protect your business from similar risks. (2026, September 10). Fisher Phillips. https://www.fisherphillips.com/en/insights/insights/deloitte-settles-dei-related-claims
17. IBM pays $17 million to resolve allegations of discrimination through. (2026, April 16). https://www.justice.gov/opa/pr/ibm-pays-17-million-resolve-allegations-discrimination-through-illegal-dei-practices
18. Beckley, S., Gohlke, M., & Wright, A. (2026, April 24). DOJ announces first DEI False Claims Act settlement with IBM. Investigations and Enforcement Watch. https://investigations.cooley.com/2026/04/24/doj-announces-first-dei-false-claims-act-settlement-with-ibm/
19. Kc, M. L. (2026, August 17). BAE Systems' US subsidiary agrees $36 million ITAR settlement. Global Sanctions. https://globalsanctions.com/2026/08/bae-systems-us-subsidiary-agrees-36-million-itar-settlement/
20. Wearden, G. (2026, August 13). BAE Systems to pay $36m penalty after 104 violations of US arms export rules. The Guardian. https://www.theguardian.com/business/2026/aug/13/bae-systems-inc-to-pay-36m-penalty-104-violations-us-arms-export-regulations