According to a recent Government Executive article, the Small Business Administration is cracking down on businesses that are abusing the HUB Zone program.
The HUB Zone program helps companies in low-income regions win federal government contracts. The problem seems to be that there is very little documentation of residency required for this certification, and SBA officials rarely, if ever, visited firms to verify their information.
SBA is working to step up their efforts to identify businesses that are fraudulently listing their business address in addresses located in HUB Zones. How? By increasing the number of site visits to participating companies and hiring an outside firm to revamp its certification process. “We need to get this program to a better outcome,” she said. The article cites, “twice in the past year, the Government Accountability Office has discovered widespread fraud and mismanagement of the HUB Zone program”.
SBA has hired a company out of Virginia, Diamond Information Systems, to create a new certification process for entry into the program. Over a period of four months, Diamond Information Systems will focus on improving the recertification and verification process for firms already participating. SBA spokesperson, Jonathan Swain claims, “all of this is aimed at strengthening oversight and our ability to identify any instances or opportunities for fraud.”
