GAO Finds Millions in Contract Fraud
The House Committee on Small Business convened a hearing on fraud, waste, abuse and mismanagement of programs under its jurisdiction on Thursday. The House has adopted a requirement for all committees to do so on a quarterly basis.
â€śThese hearings are an important tool for reassuring progress and gathering information. In the past, they have been enormously useful not just for spotting SBAâ€™s problem areas, but also for solving them,â€ť said Rep. Nydia Velazquez (D-New York), who chairs the panel.
Gregory Kutz, speaking on behalf of the Government Accountability Office, submitted a report that found that the Service-Disabled Veteran-Owned Small Business Program (SDVOSB) is vulnerable to fraud and abuse, which could cause veterans to lose contracting opportunities to ineligible firms. The program was created to provide government-wide sole-source contracts to honor the service and sacrifice of veterans with service-related disabilities.
Ten case-study firms that were ineligible to participate in the program received approximately $100 million in contracts through fraud or abuse. The GAOâ€™s investigation also found that the government doesnâ€™t have effective fraud-prevention controls for the program in place.
â€śThe culture of the SBA is that we will not be the agency of fraud, waste, abuse and mismanagement,â€ť said SBA administrator Karen Mills. â€śWe have an aggressive, new attitude towards this; it is explicitly one of our priorities.â€ť
Rep. Sam Graves of Missouri, the committeeâ€™s ranking Republican, said, â€śI am outraged that fraud in this federal program, intended to benefit our brave soldiers, means that fewer opportunities are available to our service-disabled veterans.â€ť He vowed to take â€śaggressive legislative actionâ€ť if the SBA and Veterans Administration donâ€™t move quickly to prevent the abuses.
To view excerpts from the hearing, click here.