The Department of Veterans Affairs (VA) recently launched an internal audit into their veteran-owned (VOSB) and service-disabled veteran-owned (SDVOSB) small business programs.
The point of the investigation was to ensure those businesses claiming VOSB and SDVOSB status in order to take advantage of benefits like set-aside contract met the requirements for VOSB and SDVOSB eligibility. VOSB and SDVOSB programs create business opportunities for those veteran-owned businesses. The VA directed almost 25% of all their procurement spending in 2010 to these businesses.
Of all the businesses claiming VOSB and SDVOSB status, 76% failed to meet the VA’s eligibility standards to receive funding. This equals out to at least 1,400 businesses defrauding the VA by fraudulently accepting money. Funding those deceptive companies has totaled more than $500 million according to the VA.
Not surprisingly, the lynchpin for eligibility lies in the businesses being owned and operated by veterans. A vast majority of the businesses claiming VOSB and SDVOSB status, however, have non-veterans running their day-to-day operations. When this happens, the owner becomes the “figurehead” and is not eligible to draw VA benefits.
The benefits are available to help veterans launch and grow their businesses, according to VA Sec. Eric Shinseki. To have non-veterans take work earmarked specifically for VOSB and SDVOSB is fraudulent and the VA hopes to implement better controls so as to stop such abuse in the future.
If you are a disabled veteran who has been denied disability compensation or have not yet applied for benefits from the VA, contact Veterans Help Group. You may be entitled to certain programs and benefits so contact our veterans disability rights firm today.