The GAO audit discovered the tip of what may be massive fraud going on in the Service-Disabled Veteran-Owned Small Business (SDVOSB) program. Auditors found examples of SDVOSB contracts going to company owners who weren’t service-disabled veterans, or to big companies using veteran-owned businesses as “pass-throughs.” Other cases of fraud involved government employees being “actively involved” in the schemes.

 

It’s no wonder so much fraud is taking place when neither the Small Business Administration nor the Department of Veterans Affairs maintains lists of individuals who are valid service-disabled veterans to check against before awarding contracts.

 

Some lawmakers in Congress were upset upon learning the news from the GAO. “Imagine being a veteran who is injured in Iraq or Afghanistan, yet despite your injuries you still manage to launch your own business. Then imagine finding out that you are losing out on contracts designated for veterans because a big company found out how to get around the rules,” Representative Nydia Velazquez (D-NY) told Government Executive. “What kind of message does that send to veterans in this country? We’ve got to stop it.”

-Noel Brinkerhoff

 

GAO Finds Extensive Fraud in Disabled Veteran-Owned Small Biz Program (by Elizabeth Newell, Government Executive)

Service-Disabled Veteran-Owned Small Business Program: Case Studies Show Fraud and Abuse Allowed Ineligible Firms to Obtain Millions of Dollars in Contracts (Government Accountability Office) (PDF)

The Center for Veterans Enterprise Web Portal (Department of Veteran Affairs)