Bill Attacks Fraud in SBA Contracting Programs A bipartisan group of senators proposed tough new oversight of SBA’s contracting programs, beginning with stricter certification rules and extending to harsher punishment for fraud. The senators said they acted in response to several Government Accountability Office investigations that found evidence of fraud in the 8(a), HUBZone and service-disabled veterans contracting programs. “We have a situation now where bad actors are snapping up opportunities that would greatly benefit legitimate small businesses,” said Senator Mike Enzi, R-WY. He cosponsored the Small Business Contracting Fraud Prevention Act, S. 633, with Senate Small Business Committee Chair Mary Landrieu, D-LA; the committee’s ranking Republican, Olympia Snowe of Maine; Scott Brown, R-NH; and Jeff Merkley, D-OR. The bill would require 8(a), HUBZone, SDV and woman-owned businesses to file documents supporting their eligibility with the Online Registrations and Certifications database. Misrepresentation of eligibility would be punishable by stiffer criminal penalties as well as suspension and debarment. In addition, the government could recover civil penalties under the False Claims Act equal to three times the amount of the contract that was fraudulently obtained. The bill would also establish penalties for companies that misrepresent the amount of work they farmed out to subcontractors. The legislation would create a new framework for SBA oversight of its contracting programs, one of the deficiencies highlighted by the GAO reports. 8(a) program. SBA is urged to make unannounced site visits to 8(a) firms to confirm that they remain eligible. The agency would also be required to find out how many 8(a) firms remain in business for three years after they leave the program. Service-disabled veteran-owned program. Agencies could award SDV set-aside contracts only to companies that are registered in the Veterans Affairs Department’s VetBiz database and have had their eligibility verified by VA. All agencies would have to use the VetBiz database to determine a company’s eligibility. Currently a company may self-certify before every agency except VA. HUBZone program. SBA would be required to assess whether the program is effective in creating jobs in poor neighborhoods, as Congress intended. SBA has acknowledged that it has done no evaluation of the impact of the program. Taken together, the bill’s provisions are designed to sharpen SBA’s focus on fraud and enforcement. GAO auditors said SBA has traditionally focused on helping small firms grow, rather than on enforcement of its rules. “This legislation gives the SBA and the inspector general the tools necessary to combat fraud,” Sen. Landrieu said in a statement. “We intend for the SBA to hold firms accountable.”