Senators call for probe into veteran-owned contracting

Monday - 11/7/2011, 7:32pm EST

By Jolie Lee
Federal News radio

Three senators are calling for a Government Accountability Office investigation into how the federal government awards contracts to businesses owned by veterans and service-disabled vets.

"These veteran-entrepreneurs continue to face red tape, delays and hurdles as they work to verify their businesses with CVE [VA's Center for Veterans Enterprise]," said Sen. Patty Murray (D-Wash.), chairman of the Senate Veterans' Affairs Committee, in a letter to GAO. The letter was also signed by Sens. Claire McCaskill (D-Mo.) and Maria Cantwell (D-Wash.)

The Small Business Act mandates agencies meet specific goals for veteran-owned and service-disabled veteran-owned small businesses, as well as for small disadvantaged businesses, women-owned businesses and HUBZone businesses.

In 2006, Congress created the Veterans First contracting preference program. VA was responsible for verifying the ownership of these businesses in order to participate in the program.

However, the government relies on contractors to self-certify they are a veteran-owned business. In testimony last month to a House subcommittee, the inspector general of GSA said such self-certification can easily lead to fraud by dishonest contractors.

These dishonest contractors "know that they may not be detected, that the federal government may not be able to make the case against them easily and they may get away with it," said GSA IG Brian Miller.

In fiscal year 2010, VA's inspector general's office found as many as 1,400 contracts awarded to ineligible businesses, according to the senators' letter.

"Indeed, it appears VA may need to better develop the tools, resources and capacity necessary for an effective, timely and efficient verification process," according to a release from the senators.

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