Fraud in Small Business Contracting: Billions in Wrongful Awards Exposed

The federal government allocates at least 23% of contracts to small businesses, aiming to support entrepreneurship and economic growth. However, a significant portion of these funds may be wrongfully awarded to ineligible companies, leading to massive financial losses for taxpayers.

Recent government audits have uncovered widespread fraud in small business contracting programs, raising concerns about oversight and enforcement.

Staggering Fraud in Government Contracting

Two major audits have revealed how fraudulent practices are siphoning billions of dollars from legitimate small businesses and taxpayers:

• A Department of Veterans Affairs (VA) audit found that $500 million per year was awarded to companies falsely claiming to be veteran-owned or service-disabled veteran-owned small businesses. These fraudulent claims prevent genuine veteran-owned businesses from receiving the contracts they rightfully deserve.
• A Department of Defense (DOD) audit, which reviewed just 29 contractors, discovered $827.8 million in wrongful awards to ineligible small businesses. Given the massive scale of DOD contracting, this audit suggests an even larger systemic problem across the federal procurement system.

These findings highlight serious vulnerabilities in government contracting programs, emphasizing the need for stronger enforcement, transparency, and whistleblower protections to prevent fraud.

Fighting Government Contract Fraud

Government fraud diverts taxpayer dollars away from legitimate small businesses and critical public services. The False Claims Act provides whistleblowers with legal protections and financial incentives to report fraud in government contracting.

For more information on efforts to combat fraud, visit Fraud in America, presented by Taxpayers Against Fraud.

Report Fraud at No Cost

If you have knowledge of fraud in federal or state contracting programs, contact our office for a free, confidential consultation:

• Fill out our consultation form by clicking here.
• Email us at info@wilbanksgouinlock.com.
• Call (404) 842-1075, ext. 123 or 122.

This article is for informational purposes only and should not be considered legal advice.