The House Small Business Committee said it will examine the SBA's program after a 2008 report raised questions about possible fraud.
The House Small Business Committee intends to examine the role of Alaska Native Corporations in the Small Business Administration’s 8(a) contract set-aside program after allegations of fraud were raised.
The SBA inspector general's auditors found managers of two ANCs were not native Alaskans. However, the managers secured millions of dollars from government contracts set aside for the ANCs, according to the IG's report from last August.
The 8(a) program aims to help small businesses owned by socially and economically disadvantaged people compete in the federal procurement market with set-aside contracts. ANCs are among those eligible for the program. Generally, sole-source 8(a) contracts are capped at $5.5 million. However, ANCs can receive sole-source government contracts of any value.
In the alleged fraud, the IG said two ANCs violated the terms of their agreements with SBA to join the 8(a) program. By doing so, the companies kept SBA officials at bay, preventing them from checking on their companies’ ownership status, the report states.
The committee, chaired by Rep. Nydia Velázquez (D-N.Y.), said Jan. 28 that wants to check on SBA’s oversight of the program to stop further attempts at fraud. The committee said it also plans to follow up on regulations concerning the Historically Underutilized Business Zone program. Last year, the Government Accountability Office revealed alleged scams by companies to gain HUBZone eligibility. GAO then set up several fake HUBZone companies to prove SBA’s lack of oversight.
“The committee will examine the SBA’s contracting and business development to ensure that the agency’s efforts are meeting the needs of small businesses,” according to the committee’s priority list.
The panel also said it wants to examine recent GAO award protest decisions regarding small business set-asides and the effects of various acquisition regulatory changes on small firms.