INVESTIGATION WILL REFER FRAUD, BRIBERY FOR ENFORCEMENT
WASHINGTON – Today, Kelly Loeffler, Administrator of the U.S. Small
Business Administration (SBA), announced that she has directed [6] the
SBA’s Office of General Contracting and Business Development to launch
an immediate and full-scale audit of the agency’s 8(a) Business
Development Program after a U.S. Department of Justice (DOJ)
investigation uncovered [7] a years-long fraud and bribery scheme
involving a former federal contracting officer and two 8(a) contractors.
“In recent years, SBA’s 8(a) Business Development Program has seen
rampant fraud – and increasingly egregious instances of abuse,” said
Loeffler. “Effective immediately, I am launching a full-scale audit of
the program to stop bad actors from making the kind of backroom deals
that have already cost taxpayers hundreds of millions of dollars. We
must hold both contracting officers and 8(a) participants accountable
– and start rewarding merit instead of those who game the system.”
The DOJ investigation revealed [8] that over $550 million in government
contracts were fraudulently steered through bribery and abuse of a U.S.
Agency for International Development (USAID) contracting officer. One
8(a) contractor, despite being officially flagged by USAID as lacking
“honesty or integrity,” went on to receive [9] an additional $800
million in federal contracts to evaluate “issues affecting the root
causes of irregular migration from Central America.”
The audit will be led by the SBA’s Office of General Contracting and
Business Development, beginning with high-dollar and limited-competition
contracts and going back over a period of fifteen years – in
collaboration with various federal agencies that award contracts to 8(a)
participants.
Findings will be referred to the SBA Office of Inspector General and DOJ
for enforcement, and the SBA will pursue all available actions to
recover misused funds. Anyone with information about fraud, waste,
mismanagement, or misconduct may report it to the SBA OIG at
800-767-0385.
