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"SBA's failure to promptly remove firms from the HUBZone program and examine some of the most egregious cases from GAO's July 2008 testimony has resulted in an additional $7.2 million in HUBZone obligations and about $25 million in HUBZone contracts to these firms. For example, a construction firm from the July 2008 testimony admitted that it did not meet HUBZone requirements and was featured in several national publications by name. It has continually represented itself as HUBZone certified and has received $2 million in HUBZone obligations and a $23 million HUBZone setaside contract since the July 2008 testimony."

"Of the 19 firms that did not meet HUBZone eligibility requirements, we found that all of them continued to represent themselves as eligible HUBZone interests to SBA. Because the 19 case examples clearly are not eligible, we consider each firm's continued representation indicative of fraud and/or abuse related to this program."

"To date, other than the firms identified by our prior investigation, the SBA program office has never referred any firms for debarment and/or suspension proceedings based on their findings from their program eligibility reviews. By failing to hold firms accountable, SBA has sent a message to the contracting community that there is no punishment or consequences for committing fraud or abusing the intent of the HUBZone program."

“GAO also found several agencies that did not enter exclusions and others that did not check EPLS prior to making awards. Finally, GAO found that excluded parties were still listed on GSA’s Federal Supply Schedule, which can result in agencies purchasing items from unscrupulous companies.”

"In July 2005, GAO reported that the data in EPLS were insufficient to enable agencies to determine with confidence that a prospective vendor was not currently excluded. In response, GSA agreed to modify EPLS's data requirements to include a mandatory provision that agencies enter a Data Universal Numbering System (DUNS) number to facilitate the identification of excluded contractors. Despite this modification, recent allegations indicate that businesses or individuals that have been excluded for egregious offenses have been able to "resurface" under the same or a different business name or identity in order to continue to receive federal contracts and other funds."

“Resource constraints have limited the ability of SBA staff to carry out core responsibilities…Years of SBA downsizing and budget reductions significantly reduced the resources available for these agency functions, including contracting review and monitoring.”

“Of the 24 agencies rated, half received the lowest rating (for failing to meet at least two contracting goals and other criteria).”

“For fiscal year 2006, the SBA IG reported that CMRs [commercial market representatives] monitored less than half of the 2,200 large prime contractors. These resource constraints reduced assurances that SBA can monitor contracting effectively.”

“However, we found that budget constraints impeded work on this initiative [small business outreach] and could continue to do so. We also found that the agency’s budget requests for transformation were inconsistent and lacked a detailed plan that showed priorities and linked resources to desired results.”

“SBA's workforce has declined significantly since the 1990s. During the restructuring in the 1990s, SBA's workforce decreased from over 3,800 employees to about 3,100 employees - a decrease of about 19 percent. Between 2000 and 2007, when additional restructuring occurred, SBA's workforce decreased further by about 26 percent. As of September 2007, SBA had 2,166 employees.”

"After being admitted into the 8(a) program, APM and Goldbelt did not seek SBA's approval of agreements with companies owned by non-native individuals that purchased ownership in the 8(a) firms and provided management or other services associated with the performance of APM's and Goldbelt's 8(a) contracts. Under these agreements, APM and Goldbelt paid or were obligated to pay more than $23 million of 8(a) revenues to these companies over a 3-year period."

"In making a size determination, SBA's regulations state that the revenues or employees of all of a firm's affiliates must be considered collectively in determining whether the firm meets the applicable size standard…However, because neither APM nor Goldbelt obtained SBA approval of these agreements, the Agency was precluded from considering the impact that these relationships had on the eligibility of the two participants for approximately $833 million in awards."

“. . .significant improvements are needed in SBA's oversight of the program. Without stronger oversight, there is potential for abuse and unintended consequences.”

“The officials noted that the goal of ANCs—economic development for Alaska Natives from a community standpoint—can be in conflict with the primary purpose of the 8(a) program, which is business development for individual small, disadvantaged businesses.”

“Areas where SBA’s oversight has fallen short include: determining whether more than one subsidiary of the same ANC is generating a majority of its revenue in the same primary industry, consistently determining whether awards to 8(a) ANC firms have resulted in other small businesses losing contract opportunities, and ensuring that the partnerships between 8(a) ANC firms and large firms are functioning in the way they were intended.”

“FEMA reported that the contract was awarded to a small business in FPDS - NG even though the contractor appeared to be other than small.”

“There are no checks in CCR to ensure that there is consistency between data concerning a company’s size in the “Corporate Information” and “Small Business Types” sections. Because of this inconsistency, Contracting Officers are more likely to access incorrect information on the size of businesses.”

“. . .contracting officials were using databases that contained outdated and inaccurate information about the size of the companies we reviewed.”

“While these results cannot be projected to all contract actions reported, they raise serious questions about relying on FPDS data to measure federal agencies' effort to meet the government's 23 percent small business goal.”

“Neither SBA nor Procuring Agencies Ensured that 8(a) BD Companies Complied with Applicable Regulations when Completing 8(a) BD Contracts.”

“An SBA employee allegedly used his position to obtain over $20,000 for his personal benefit from an 8(a) contractor who received over $3 million in contracts.”

“After issuing a new Management Challenge during the last reporting period concerning Federal procurement as it relates to small business—“Flaws in the Federal procurement process allow large firms to receive small business awards and agencies to receive small business credit for contracts performed by large firms,”—the OIG conducted additional Federal procurement projects during this reporting period…[which found the] SBA has not taken all the steps needed to be an effective advocate for small business.”

“…contractor-reported data is not useful to DOE in determining its contractors’ actual small business subcontracting achievements or adequately assessing whether small businesses are receiving maximum practicable subcontracting opportunities.”

“DOE has not taken adequate steps to address known problems with the contractor-reported data.”

“…an order placed against a MAC [small business contract] would be reported as a small business award, even if the business was no longer small at the time of the order.”

“…and in that instance, the [large] company made an improper small business self-certification to receive the contract.”

“Recent studies by the Government Accountability Office, SBA’s Office of Inspector General, and SBA’s Office of Advocacy have found that agencies are counting awards made to large firms towards their small business procurement goals.”

“If SBA had put as much effort into verifying whether the company currently met the award's size standard as it put into trying to find ways to earn credit toward its small business goals, then perhaps the contract action would have been awarded to a company that was legitimately small at the time of the award.”

“As a result of this lack of transparency, many awards that should be reserved for small firms . . . go to large firms unchallenged.”

“In fiscal year 2000, the four [large] companies received 1,313 contract actions valued at over $190 million that were reported as small business awards. In fiscal year 2001, these companies received 1,271 contract actions amounting to over $200 million reported as going to small businesses.”