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I worked in government contracting (and government, for that matter) for years and that blows my mind. I can't remember the details, but if you even had a bad reviews, much less being found noncompliant, it could disqualify you entirely from some contract vehicles for a matter of years. Wild that there's some agency that somehow lets people get away with fraud.
Also, if that cost the government money, there's a chance you could report that after the fact and make some money.
Might be local government. Me and sales have this argument pretty often
Me: it is in the spec
Sales: no one noticed it except you
Me: thanks?
Sales: no one is going to care
Me: then take it out of the spec and resign everything.
Sales: why are you making a big deal about this?
Me: because it is in the spec that we signed and if we don't honor the spec they can backcharge us.
Sales: that won't happen
Me: you are right because we are going to follow the spec. If you don't want me to please email me, the department head, and the client specifically ordering me not to follow the contract that we signed.
Yeah I’m in Europe and our customers were municipalities buying healthcare related solutions. It happened after our little startup got taken over by a big player and they started getting involved in the contract bids.