Archive for July, 2011

SDVOSB Contract Fraud: What The United States Government Accountability Office (GAO) Found

Thursday, July 28th, 2011

What United States Government Accountability Office (GAO) Found

Testimony Before the Subcommittee on Oversight and Investigations, Committee on Veterans’ Affairs, House of Representatives

SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS PROGRAM

Preliminary Information on Actions Taken by Agencies to Address Fraud and Abuse and Remaining Vulnerabilities

Statement of Gregory D. Kutz, Director Forensic Audits and Investigative Service

Click here to view What GAO Found (GAO SDVOSB Fraud Document)


Prior Press Release (7/27/2011):

VA Strengthens Veteran-Owned Small Business Eligibility Process

WASHINGTON – The Department of Veterans Affairs today reaffirmed its ongoing commitment to support legitimate veteran-owned small businesses seeking contracts with the Department of Veterans Affairs after the VA Inspector General (VAIG) released an audit report critical of its small business verification and contract oversight program.

“VA takes the recommendations in this report very seriously. Since October 2010, VA has taken decisive action to strengthen our verification process to ensure that only legitimate Veteran-owned small businesses become eligible to contract with the federal government,” said Tom Leney Executive Director of the VA Office of Small Disadvantaged Business Utilization.

The VAIG report released today audited the VA’s Veteran-Owned and Small and Disadvantaged Business eligibility verification and contract award process from May 2009 to May 2010. The findings pre-date the implementation of strong reforms VA put in place in December 2010 to strengthen the veteran-owned small business verification process. On December 10, 2010, VA sent a letter to over 13,000 firms in its database informing them of new standards for verification of veteran-owned small business status. In the December 10, 2010 letter, VA identified an expanded and extensive set of business-related documents required to be submitted for review as part of the verification process and greatly expanded the number of applications that received the additional scrutiny of an on-site examination.

Since January 1, 2011 VA has processed over 7,500 applications. Nearly 1,500 companies were verified as Veteran-owned small businesses while 1,135 companies were denied verification as a result of the more rigorous review process. An additional 5,000 firms withdrew their applications or were denied for incomplete documentation. Some of the reasons for rejection include the inability to verify that the owner is a Veteran or disabled Veteran, failure to prove a Veteran is the majority owner, and lack of day-to-day operational management of the company by a Veteran.

The Center for Veteran Enterprise (CVE) has also implemented extensive quality controls to ensure those firms verified are in fact eligible to compete as veteran owned firms.

For more information contact: Josh Taylor at 202-461-7216