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Unpublished Paper
Preventing Small Business Fraud, including Small Business Contracting Fraud Prevention Act
ExpressO (2012)
  • Jeffrey Fitzgerald Pan
“One bad apple can spoil the whole bunch,” summarizes the fraud and abuse of small business federal contractor misrepresentation of size and other qualifications to achieve eligibility for small business (SB) contracts, including Small Disadvantaged Business (SDB or 8(a)), Historically Underutilized Business Zone (HUBZone), Service Disabled Veteran Owned Small Business (SDVOSB), and Woman Owned Small Business (WOSB). While the vast majority of the small businesses that participate in these programs follow the rules and accurately represent their eligibility, a small minority of the firms misrepresent their eligibility thereby qualify for contracts that they would otherwise be ineligible for, fraud. Such actions allow individuals that commit fraud to be unjustly enriched, and if in coordination with large firm subcontractors, allow large firms to gain an unfair competitive advantage. Such fraud has been the subject to at least three General Accounting Office (GAO) audit reports since 2008 on 8(a), HUBZone, and SDVOSB. These audit reports and suspension of GTSI have likely caused the Senate to pass on September 21, 2011 the “Small Business Contracting Fraud Prevention Act” (SBCFA) and caused the Small Business Administration (SBA) to propose similar changes to small business regulations on October 7, 2011. This paper discusses the proposed legislation and regulation in light of the civil false claims act and other enforcement mechanisms, and provides recommendations for an on line access to recent tax returns of CCR registered small business by Federal acquisition and enforcement officials so that the officials may verify size certifications.
  • Small Business Contracting Fraud Prevention Act
Publication Date
January 13, 2012
Citation Information
Jeffrey Fitzgerald Pan. "Preventing Small Business Fraud, including Small Business Contracting Fraud Prevention Act" ExpressO (2012)
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