Tweet
Businesses Falsely Claim Head Offices In Poor Areas To Win Huge "HUBZone" Contracts
Comments 26
WASHINGTON, July 17, 2008
(AP) Companies collected millions of dollars in government contracts by claiming to have main offices in poor neighborhoods that were actually empty duplexes, part-time offices and other ineligible locations, congressional investigators charge.
Billions more remain at risk because the Small Business Administration doesn't usually check paperwork, rarely conducts audits and is slow to kick out firms that are no longer eligible for the $8 billion in special contract set-asides for small businesses, the Government Accountability Office said.
A pair of GAO reports, obtained Wednesday by The Associated Press, examined SBA's Historically Underutilized Business Zone, or HUBZone, program, which was created in 1997 to help thousands of small firms in distressed areas.
To be eligible, companies fill out applications affirming that their principal office - where the greatest number of employees work - is in a designated HUBZone and that at least 35 percent of the firm's full-time employees live in that area.
The GAO's review of 125 applications submitted in September 2007 found the SBA asked for supporting evidence of a firm's eligibility claims only one-third of the time; the agency conducted a site visit only once to verify whether an office actually existed.
http://www.cbsnews.com/stories/2008/...r=HOME_4266824
Comments 26
WASHINGTON, July 17, 2008
(AP) Companies collected millions of dollars in government contracts by claiming to have main offices in poor neighborhoods that were actually empty duplexes, part-time offices and other ineligible locations, congressional investigators charge.
Billions more remain at risk because the Small Business Administration doesn't usually check paperwork, rarely conducts audits and is slow to kick out firms that are no longer eligible for the $8 billion in special contract set-asides for small businesses, the Government Accountability Office said.
A pair of GAO reports, obtained Wednesday by The Associated Press, examined SBA's Historically Underutilized Business Zone, or HUBZone, program, which was created in 1997 to help thousands of small firms in distressed areas.
To be eligible, companies fill out applications affirming that their principal office - where the greatest number of employees work - is in a designated HUBZone and that at least 35 percent of the firm's full-time employees live in that area.
The GAO's review of 125 applications submitted in September 2007 found the SBA asked for supporting evidence of a firm's eligibility claims only one-third of the time; the agency conducted a site visit only once to verify whether an office actually existed.
http://www.cbsnews.com/stories/2008/...r=HOME_4266824
Comment