Photo By Adriana De Hoyos | In FY25 alone, successful prosecutions of NCIS procurement fraud investigations...... read more read more
The Department of the Navy has the largest acquisitions budget in the Department of War, primarily to ensure major platforms such as nuclear-powered aircraft carriers and submarines remain lethal, resilient, and ready to fight.
To meet those demands, the DON heavily relies on public-private partnerships, including contractors that provide a wide range of goods and services. When the quality of the delivered product does not match what was promised, the NCIS Economic Crimes Field Office (ECFO) steps in to investigate.
Tony Luckman, the Division Chief of NCIS’ Economic Crimes Program at NCIS Headquarters, says nearly every ECFO investigation ties back to contracts that specify exactly what contractors must deliver to the DON.
“Contract fraud occurs when a party to the contract knowingly misrepresents, deceives, or conceals material facts to defraud the government in the performance of a contract or during the procurement process,” Luckman said.
In defense contracting, the speed at which products and services are delivered makes it critical that appropriate controls remain in place to combat fraud that could compromise safety or mission readiness. One such scheme, known as product substitution, occurs when a contractor replaces products or materials specified in a contract with cheaper, inferior, or counterfeit alternatives to cut costs and increase profits.
Examples of product substitution ECFO has encountered include counterfeit bolts used on fighter jets, fake combat tourniquets, and counterfeit circuit chips.
The consequences of product substitutions can be life-threatening, according to Luckman.
A bolt that isn’t the correct tensile strength to handle the high gravitational forces of a fighter jet could endanger an aviator. Substandard welds on a Navy vessel could cause structural failure. And a counterfeit tourniquet may fail when warfighters need it most.
While NCIS leads investigations into product substitution involving the DON, these schemes often affect other military branches as well. Luckman says it is common for other Defense Criminal Investigative Organizations—the Army Criminal Investigation Division, Air Force Office of Special Investigations, and Defense Criminal Investigative Service—to share case equity when the same contractors supply multiple branches.
According to Luckman, most allegations of product substitution originate as complaints by individuals who recognize a problem with a product or are aware of the alleged substitution. Tips can arise from a variety of sources, such as audits, subcontractors, contractors, or even competitors.
Complaints about suspected product substitution can be submitted through the NCIS Tips web and mobile reporting app, the Navy Inspector General Hotline, the Inspector General of the Marine Corps Hotline, or the Department of War Inspector General Hotline. Luckman says it’s helpful if the tipster provides the contract number and any supporting documentation.
“Telling NCIS where we can find the fraud in action, and identifying people who have witnessed or perpetrated it, is helpful information,” Luckman said. “This information leads to successful prosecutions which regularly result in fraudsters being held accountable and ill-gotten gains being returned to the U.S. Government.”
In FY25 alone, successful prosecutions of NCIS procurement fraud investigations resulted in almost $204 million recovered by the U.S. Government, over $63 million of which was returned directly to the Department of the Navy.
By investigating product substitution crimes, ECFO ensures the DON receives what American taxpayers paid for and protects the lives of Navy and Marine Corps warfighters—enabling them to defend the homeland, deter adversaries, and prevail in war.
For more about ECFO, visit https://www.ncis.navy.mil/About-NCIS/Locations/NCIS-Economic-Crimes-Field-Office/
| Date Taken: | 02.27.2026 |
| Date Posted: | 02.27.2026 11:40 |
| Story ID: | 559087 |
| Location: | US |
| Web Views: | 16 |
| Downloads: | 0 |
This work, Economic Crimes Field Office Battles Product Substitution in DON Acquisitions, by Denise Caskey, identified by DVIDS, must comply with the restrictions shown on https://www.dvidshub.net/about/copyright.
No keywords found.
