Noteboom The Law Firm

New Fraud Bill would Toughen Oversight of SBA Contracting Programs

March 25, 2011 - The Small Business Administration (SBA) runs socioeconomic contracting programs where companies battle to be awarded federal contracts. Those programs, however, could come under much closer examination from Congress and the current administration if a new fraud bill is passed.

The Small Business Contracting Fraud Prevention Act, which is bipartisan legislation, was introduced last week to design and develop a large network of oversight capabilities for the SBA contracting programs. The oversight would cover every part of the process from ensuring that contractors are certified to monitoring the businesses after they are awarded the contracts. If passed, the bill will go after those businesses procuring contracts through fraud with additional criminal penalties.

The bill is designed to keep the award process fair to everyone involved. More than fair, however, the SBA programs also have to be efficient and absolutely accountable. Fair and accurate dealing is a main concern, which is why this bill was introduced. Small businesses owned by service-disabled veterans that either exist in the 8(a) Business Development Program or in a "Historically Underutilized Business Zone" would be given more oversight and would be forced to prove their standing in the Online Representations and Certifications Application database.

Although precautions are taken to prevent against companies committing fraud, it still happens. Those companies would now face harsher criminal and civil penalties for misrepresentation including:

• Reimbursement for money earned;
• Penalties under the False Claims Act; and
• Debarment or suspension from future contracting positions.

Overall, the Small Business Contracting Fraud Prevention Act will give the powers that be more power to cut done on fraud by having all service-disabled veteran-owned small businesses to register with the Department of Veterans Affairs (VA) Vetbiz database and the ability to enforce serious penalties for companies that do commit fraud.