WHAT HEELS: Government Procurement Runs On The Dishonor System
It may be impossible to conceive, but there is actually something even more despicable than stolen valor: Stealing a veteran’s chance to win a federal contract under the “Veterans First” law, which allows the Department of Veterans Affairs to set-aside contracts of up to $5 million for companies owned and operated by veterans, with procurement spending preferentially directed towards service-disabled veterans.
After handing out billions of dollars to companies that falsely claimed to be veteran-owned – vendors were permitted to self-certify their eligibility to compete for contracts – the VA has finally conducted an audit and disqualified at least 18,800 companies from its vendor preference list, The Washington Post reports:
Air Force veteran Chad Gill, whose Plankinton, S.D.-based company supplies ammunition, insecticide and pesticide to federal agencies, said he welcomes the stricter requirements.
“The honor system doesn’t really work in the real world,’’ said Gill, who served at a Merced, Calif., Air Force base and is the chief executive of Phoenix Environmental Design.
Only about 8,200 veteran-owned companies remain in the agency’s “Vendor Information Pages,’’ said Josh Taylor, a VA spokesman. That represents a 70 percent reduction after the introduction of tougher certification measures.
Other federal agencies, which still allow self-certification, spent $8.9 billion last year with companies that said they were owned by service-disabled veterans. …
The VA inspector general found in July that the agency awarded $46.5 million in contracts to 32 companies that weren’t owned or controlled by veterans or were passing most of the work on to non-veteran businesses. The IG estimated that the agency gives out as much as $500 million in contracts a year to ineligible companies.
An October 2009 audit by the Government Accountability Office found 10 ineligible companies received about $100 million in government contracts through fraud or abuse during fiscal 2003 through 2009. Six of the 10 companies had received contracts from Veterans Affairs, according to the report.
Some of the ineligible companies were used as pass-throughs for other non-veteran-owned businesses, including large, multinational corporations, that performed the contracted work. Others weren’t small businesses or weren’t controlled by a service-disabled veteran, according to the report.
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