Wednesday, November 25, 2009

government contract fraud is hitting disabled veterans

McClatchy Washington Bureau

Posted on Wed, Nov. 25, 2009

Study shows government contract fraud is hitting disabled veterans

Jim Wyss | The Miami Herald

last updated: November 25, 2009 07:57:29 AM

Millions of dollars worth of government contracts designated for service-disabled veterans are being siphoned off by fraud and abuse, according to a recent government report.

In a case-study of 10 firms, including one Florida company, the Government Accountability Office found ineligible companies had won about $100 million worth of contracts earmarked for service-disabled veteran-owned companies.

The "program is vulnerable to fraud and abuse, which could result in legitimate service-disabled veterans losing contracts to ineligible firms," according to the report, which was presented to Congress last week.

Florida is home to 1,421 service-disabled veteran-owned businesses, according to the government's Central Contractor Registry. And while the government has a mandate to set aside 3 percent of all federal contracts for such firms, it often misses the mark.

During fiscal year 2008 -- the latest data available -- service-disabled small businesses won $3.3 billion worth of federal contracts, or about 1 percent. But the GAO study suggests that even those modest results are overstated.

In one case, the GAO found a full-time Department of Defense contractor, who was disabled and worked at MacDill Air Force Base in Tampa, was passing along a $900,000 contract to manufacture furniture to his wife's company. She, in turn, passed it along to another manufacturer that actually completed the work.

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