While the Service-Disabled Veteran-Owned Small Business program, operated by the Small Business Administration and Department of Veterans Affairs, managed to offer $6.5 billion in contract awards in fiscal year 2008, the agency has had its share of problems with fraud, according to a recent report by the Government Accountability Office. The program, which is aimed at providing assistance to disabled veterans who wish to start their own businesses, has proven “vulnerable to fraud and abuse,” according to GAO. For example, the report stated, an entrepreneur who was not a service-disabled veteran managed to secure a contract for maintaining trailers that the government provided to victims of Hurricane Katrina. In another instance, a full-time federal employee at MacDill Air Force Base, Fla., set up a company that passed a $900,000 furniture contract to another company where his wife worked. The report cited eight other similar cases, and stated that the program “does not have effective fraud prevention controls in place.” The report recommended that Congress provide VA with greater authority to ensure the program’s contracts are placed in the right hands.
