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entitled 'Service-Disabled Veteran-Owned Small Business Program: Fraud 
Prevention Controls Needed to Improve Program Integrity' which was 
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Testimony: 

Before the Subcommittee on Contracting and Technology, Committee on 
Small Business, House of Representatives: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 9:30 a.m. EDT:
Monday, May 24, 2010: 

Service-Disabled Veteran-Owned Small Business Program: 

Fraud Prevention Controls Needed to Improve Program Integrity: 

Statement of Gregory D. Kutz, Managing Director: 
Forensic Audits and Special Investigations: 

GAO-10-740T: 

GAO Highlights: 

Highlights of GAO-10-740T, a testimony to the Subcommittee on 
Contracting and Technology, Small Business Committee, House of 
Representatives. 

Why GAO Did This Study: 

The Service-Disabled Veteran-Owned Small Business (SDVOSB) program is 
intended to provide federal contracting opportunities to qualified 
firms. In fiscal year 2008, the Small Business Administration (SBA) 
reported $6.5 billion in sole-source, set-aside, and other SDVOSB 
contract awards. Testimonies GAO delivered on November 19 and December 
16, 2009 identified millions of dollars in SDVOSB contracts that were 
awarded to ineligible firms, and weaknesses in fraud prevention 
controls at the SBA and VA which allowed ineligible firms to receive 
contracts. 

GAO was asked to testify about the key elements of a fraud prevention 
framework within the SDVOSB program and to provide an update on the 
status of fraud referrals made based on the prior investigation of 
selected SDVOSB firms. 

To address these objectives, GAO reviewed prior findings from audits 
and investigations of the SDVSOB program and contacted investigative 
agency officials concerning the referrals GAO made on prior work. GAO 
also reviewed applicable guidance on internal control standards from 
the Comptroller General’s Standards for Internal Controls in the 
Federal Government. 

What GAO Found: 

GAO found a lack of government-wide prevention controls, a lack of 
validation of information provided by SDVOSB firms used to 
substantiate their eligibility for the program, non-existent 
monitoring of continued compliance with program requirements, and an 
ineffective process for investigating and prosecuting firms found to 
be abusing the program. The results of GAO's investigation serve to 
emphasize the overall lesson that a complete fraud prevention 
framework is necessary in order to minimize fraud, waste, and abuse 
within the SDVOSB program. The most effective and most efficient part 
of the framework involves the institution of rigorous controls at the 
beginning of the process for becoming eligible to bid on SDVOSB 
contracts. Next, active and continual monitoring of contractors 
performing SDVOSB contracts is also essential. Given the examples GAO 
identified of firms owned by a service-disabled veteran who 
subcontracted 100 percent of contract work to non-SDVOSB firms, it is 
essential that federal agencies monitor compliance with program rules 
after contract performance has begun. Finally, as shown in GAO's 
investigation, prevention and monitoring controls are not effective 
unless identified fraud is aggressively prosecuted or companies are 
suspended, debarred or otherwise held accountable. The figure below 
provides an overview of how preventive controls would help screen out 
the ineligible firms, and how monitoring controls and prosecutions can 
help further minimize the extent to which a program is vulnerable to 
fraud. 

Figure: Framework Designed to Minimize Fraud, Waste, and Abuse: 

[Refer to PDF for image: illustration] 

Potential fraud, waste, and abuse: 
Preventive controls applied: Lessons learned influence future use of 
preventive controls; 

Potential fraud, waste, and abuse (smaller amount): 
Detection and monitoring: Lessons learned influence future use of 
preventive controls; 

Potential fraud, waste, and abuse (smaller amount): 
Investigations and prosecutions: Lessons learned influence future use 
of preventive controls. 

Source: GAO. 

[End of figure] 

GAO's prior investigation into allegations of fraud and abuse within 
SDVOSB contracts found 10 firms that were ineligible for the program 
but received approximately $100 million in SDVOSB contracts. Upon 
completion of its investigation, GAO referred all 10 cases to various 
agency officials who had contracts with the firms, and each agency’s 
Inspector General (IG). Based on the referrals, agencies have taken a 
variety of actions including the cancellation of existing contracts, 
termination of future contract options, and opening of civil and 
criminal investigations. IG officials have stated that many of their 
investigations are ongoing, and therefore details cannot be provided 
due to the risk of jeopardizing the investigation. These 10 companies 
have obtained over $5 million in new SDVOSB sole-source and set-aside 
contact obligations since November 2009. 

View [hyperlink, http://www.gao.gov/products/GAO-10-740T] or key 
components. For more information, contact Gregory D. Kutz at (202) 512-
6722 or kutzg@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to discuss fraud prevention within the 
Service-Disabled Veteran-Owned Small Business (SDVOSB) program. The 
federal government's long-standing policy has been to use its buying 
power--the billions of dollars it spends through contracting each 
year--to maximize procurement opportunities for small businesses. The 
SDVOSB program is an extension of this policy. It is also intended to 
honor the extraordinary service rendered to the United States by 
veterans with disabilities incurred or aggravated in the line of duty 
during active service in the armed forces. The Veterans Benefits Act 
of 2003,[Footnote 1] which established the program, permits 
contracting officers to award set-aside and sole-source contracts to 
any small business concern owned and controlled by one or more service-
disabled veterans. Executive Order 13360 also requires federal 
procurement officials and prime contractors to provide opportunities 
for these firms to increase their federal contracting and 
subcontracting. In order to be eligible for a set-aside or sole-source 
SDVOSB contract, a firm must meet certain criteria. It must be 
majority-owned[Footnote 2] by one or more service-disabled veterans 
who manage and control[Footnote 3] daily business operations. A firm 
must also qualify as a small business under the North American 
Industry Classification System (NAICS)[Footnote 4] industry-size 
standards. Currently, in the governmentwide SDVOSB program, firm 
officials are allowed to self-certify themselves as being SDVOSB by 
attesting that they meet the criteria. 

The Small Business Administration (SBA) which, along with federal 
procuring agencies, administers the SDVOSB program, reported in fiscal 
year 2008 that $6.5 billion[Footnote 5] in federal contracts were 
awarded to firms that self-certified themselves as SDVOSBs. Government 
contracts to SDVOSBs accounted for only 1.5 percent of all government 
contract dollars paid in fiscal year 2008. Since the SDVOSB program 
began, the government has not met its annual mandated goal of 3 
percent.[Footnote 6] In addition to SBA's statutory authority over 
administration of the SDVOSB program, several other government 
agencies have separate authority over issues related to the SDVOSB 
program. The Veterans Benefits, Health Care, and Information 
Technology Act[Footnote 7] requires the Department of Veterans Affairs 
(VA) to maintain a database of SDVOSBs and Veteran-Owned Small 
Businesses (VOSB) so a contractor's eligibility can be verified, and 
requires VA to determine the eligibility of firms bidding on VA SDVOSB 
and VOSB contracts. In addition, the Office of Federal Procurement 
Policy (OFPP), within the Office of Management and Budget, provides 
overall direction for governmentwide procurement policies, 
regulations, and procedures to promote economy, efficiency, and 
effectiveness in the acquisition processes. The Procurement Policy 
Office's primary focus is on the Federal Acquisition Regulation (FAR), 
the governmentwide regulation governing agency acquisitions of goods 
and services, including actions on SDVOSB set-aside and sole-source 
contracts. 

Testimonies we presented on November 19 and December 16, 2009, 
[Footnote 8] identified millions of dollars in SDVOSB contracts that 
were awarded to ineligible firms and weaknesses in fraud prevention 
controls at the SBA and VA that allowed ineligible firms to receive 
contracts. Problems highlighted in the testimonies included a lack of 
governmentwide controls, a lack of validation of information provided 
by SDVOSB firms used to substantiate their eligibility for the 
program, non-existent monitoring of continued compliance with program 
requirements, and an ineffective process for investigating and 
prosecuting firms found abusing the program. In addition, our work 
also found that VA's process for validating a firm's eligibility may 
not be effective because two of the firms we identified as ineligible 
were certified as SDVSOB program eligible firms through VA's 
verification process. The various areas of control weaknesses resulted 
in little or no assurance that firms receiving contracts met SDVOSB 
criteria. Based on these findings, we made recommendations to the SBA 
and the VA to explore the feasibility of improving program controls 
and institute consequences for firms that misrepresent their 
eligibility for the program. VA and the SBA generally agreed with our 
recommendations and VA has begun developing a validation process for 
VOSBs and SDVOSBs receiving VA contracts. Yet at the conclusion or our 
prior investigation, SBA had not yet taken action to implement a 
governmentwide comprehensive fraud prevention framework for the SDVOSB 
program. Additionally, we provided a matter for congressional 
consideration that Congress should consider providing VA with the 
authority and resources necessary to expand its SDVOSB eligibility 
verification process to all contractors seeking to bid on SDVOSB 
contracts governmentwide. 

Given the Federal government's emphasis on providing contract dollars 
to SDVOSB firms, the billions of dollars spent annually on SDVOSB 
contracts, and weakness identified by GAO, it is imperative that the 
SBA, VA, and federal-agency contracting offices work together to 
implement comprehensive fraud prevention controls. My testimony today 
will (1) describe the key elements of a fraud prevention framework 
that is needed within the SDVOSB program and (2) provide an update on 
the status of fraud referrals we made based on our prior investigation 
of selected SDVOSB contractors. 

To address our objectives, we reviewed prior findings from GAO audits 
and investigations of the SDVSOB program. We also reviewed applicable 
guidance on internal control standards from the Comptroller General's 
Standards for Internal Controls in the Federal Government.[Footnote 9] 
We contacted SBA to determine changes since the issuance of our 
report. SBA reported conducting meetings with the VA and is setting up 
a task force to address SDVOSB program weaknesses. Due to the short 
time frame on this request we were unable to determine whether SBA's 
actions will adequately address weaknesses previously identified. We 
conducted our audit work in May 2010 in accordance with U.S. generally 
accepted government auditing standards. Those standards require that 
we plan and perform the audit to obtain sufficient, appropriate 
evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our objectives. 

Framework for Fraud Prevention, Detection, and Prosecution: 

The results of our investigation serve to emphasize the overall lesson 
that a complete fraud prevention framework is necessary in order to 
minimize fraud, waste, and abuse within the SDVOSB program. The most 
effective and most efficient part of the framework involves the 
institution of rigorous controls at the beginning of the process for 
becoming eligible to bid on SDVOSB contracts. Specifically, controls 
that validate firms' eligibility, including ownership and control by 
one or more service-disabled veterans, is the first and most important 
control. Next, active and continual monitoring of contractors 
performing SDVOSB contracts is also essential. Given the numerous 
examples we identified of firms owned by a service-disabled veteran 
who subcontracted 100 percent of contract work to non-SDVOSB firms, it 
is essential that program officials monitor compliance with program 
rules after contract performance has begun. Finally, as shown in our 
investigation, preventive and monitoring controls are not effective 
unless identified abusers are aggressively prosecuted and/or face 
other consequences such as suspension, debarment or termination of 
contracts and future contract options. The examples we identified of 
cases where SBA found a firm misrepresented its eligibility for the 
SDVOSB program, but failed to penalize the firm, undermine the 
positive effects of the few controls currently in place. Figure 1 
provides an overview of how preventive controls serve as the first and 
most important part of the frame work because they are designed to 
screen out ineligible firms before they get service-disabled sole 
source or set-aside contracts. Monitoring controls and prosecution or 
other consequences also helps minimize the extent to which a program 
is vulnerable to fraud. 

Figure 1: Framework Designed to Minimize Fraud, Waste, and Abuse: 

[Refer to PDF for image: illustration] 

Potential fraud, waste, and abuse: 
Preventive controls applied: Lessons learned influence future use of 
preventive controls; 

Potential fraud, waste, and abuse (smaller amount): 
Detection and monitoring: Lessons learned influence future use of 
preventive controls; 

Potential fraud, waste, and abuse (smaller amount): 
Investigations and prosecutions: Lessons learned influence future 
use of preventive controls. 

Source: GAO. 

[End of figure] 

Preventive Controls Reduce the Potential for Fraud through Limiting 
Access to SDVOSB Contracts: 

Preventive controls are a key element of an effective fraud prevention 
framework and are also described in the Standards for Internal 
Controls in the Federal Government.[Footnote 10] Preventive controls 
are especially important because they limit access to program 
resources through front-end controls. Our experience shows that once 
contracts are awarded and money disbursed to ineligible SDVOSB 
contractors, it is unlikely that any money will be recovered or even 
that the contract will be terminated. Preventive controls for the 
SDVOSB program should, at a minimum, be designed to verify that a firm 
seeking SDVOSB status is eligible for the program. However, during our 
investigation, we found that there are no governmentwide controls that 
verify whether firms who self-certify as SDVOSBs meet program 
requirements. VA performs some level of validation of contractors 
claiming to be SDVOSBs that bid on VA contracts, but even that process 
was primarily based on a review of self-reported data. The key to the 
validation process within the SDVOSB program must be verifying self-
reported contractor data with independent third-party sources. Key 
data to validate with preventive controls should include whether the 
owner or owners are service-disabled veterans, whether the service-
disabled veteran owner(s) manage and control daily operations, and 
whether the business qualifies as a small business under the primary 
NAICS industry-size standards for the SDVOSB contract awarded. 

Validation of whether a business owner is a service-disabled veteran 
must be the first step in the SDVOSB prevention framework. 
Coordination between VA, SBA, and potentially DOD will be necessary to 
ensure an accurate determination is made. VA already maintains a 
database of service-disabled veterans, and therefore, it appears that 
data necessary for this validation are already available. However, 
during our investigation, we found that 1 of the 10 firms we 
investigated was owned by an individual who was not a service-disabled 
veteran, but received more than $7.5 million dollars in Federal 
Emergency Management Agency (FEMA) contracts. This firm is a prime 
example of why the relatively simple process of validating an 
individual's status as a service-disabled veteran can prevent fraud 
within the SDVOSB program. 

In addition to the validation of firm owners' status as service- 
disabled veterans, preventive controls should also validate whether 
firm owners actually manage and control daily operations. This must be 
accomplished in order to prevent "rent-a-vet" situations where a firm 
finds a willing service-disabled veteran to pose as the "owner" of a 
firm while in reality, other ineligible firm members manage and 
control the daily operations of a business. One case uncovered during 
our investigation found that the service-disabled veteran owner 
actually played no part in business operations related to the primary 
government contracts won by the firm, and worked from home on non-
government related contracts. The alleged owner also did not receive 
any salary from the firm and tax returns showed that he received less 
in Internal Revenue Service (IRS) 1099 distributions than the 10 
percent minority owner. In order to identify these types of 
situations, controls must utilize a variety of tools including a 
review of independent third-party information such as individual and 
company tax returns obtained directly from the IRS. Other processes 
such as performing unannounced site visits to an applicant's place of 
business can provide evidence to indicate management and control of 
daily operations, whether the firm is a shell company operating with a 
mail box as an address or a legitimate firm with employees and assets 
and whether a firm is co-located with another non-SDVOSB firm that 
will likely perform all contract work. In our previous work, we used 
unannounced site visits when conducting our investigations of the 10 
firms that through various fraudulent schemes, obtained $100 million 
in service-disabled sole-source and set-aside contracts. 

Verification of whether a firm meets NAICS's industry-size standards 
is another part of preventive controls that can help minimize fraud 
and abuse within the program. During our investigation, we found that 
one company had violated small business size standards and received 
more than $171 million in federal contracts between fiscal years 2003 
and 2009. We were able to identify the company's information through a 
review of contract obligation information within the Federal 
Procurement Data System-Next Generation (FPDS-NG). FPDS-NG is a 
publicly available database that allows a user to search for federal 
contracts awarded to specific firms. As part of comprehensive 
preventive controls, a review of these types of databases as well as 
company IRS tax returns will provide information to ensure a 
prospective SDVOSB firm is not already a large business. Beyond 
validation of data and checks with independent third parties, it is 
also important that personnel performing the validation of a firm's 
SDVOSB status are well trained and aware of the potential for fraud. 
Fraud awareness training with frontline personnel is crucial to 
stropping fraud before it gains access to the program. Additionally, 
when implementing any new set of controls, it is important that 
agencies field test new controls and provide a safety net to deal with 
firms who feel they were inappropriately rejected from the SDVOSB 
program. Finally, a properly managed and staffed prevention program 
should not create a large backlog of legitimate firms attempting to be 
certified. Unfortunately, as GAO testified at the end of April, 
[Footnote 11] VA's certification program has a large backlog of 
businesses awaiting site visits and some higher-risk businesses have 
been verified months before their site visits occurred or were 
scheduled to occur. Verifying businesses prior to site visits may 
allow ineligible firms to appear as eligible and to receive SDVOSB set-
aside and sole-source contracts. 

Monitoring and Detection Controls Provide Assurance That Firms in the 
SDVOSB Program Continue to Adhere to Eligibility Requirements: 

Even with effective preventive controls, there is substantial residual 
risk that firms that may have appeared to meet SDVOSB program 
requirements initially will violate program rules after being awarded 
SDVOSB contracts. Monitoring and detection are not as efficient or 
effective as prevention because once a contractors are in the program 
and fraudulently receive a SDVOSB sole-source or set-aside contract, 
there are few if any consequences if they are caught. Detection and 
monitoring efforts, which are addressed in the Standards for Internal 
Control in the Federal Government,[Footnote 12] include data-mining of 
transactions and other reviews. Our investigation found cases where 
firms may have initially been able to meet a program's eligibility 
criteria, but subsequently violated subcontracting rules of the 
program after subcontracting 100 percent of the SDVOSB contract work 
to a non-SDVOSB firm. Our findings therefore emphasize why it is 
important for a comprehensive fraud prevention framework to have 
detection and monitoring controls in place to identify violations. For 
the SDVOSB program, there are several areas that require periodic 
review, including monitoring of a firms compliance with industry-size 
standards and monitoring of the performance of required percentage of 
work on SDVOSB contracts. 

In order to confirm that an SDVOSB firm continues to comply with NAICS 
standards, agencies should periodically data-mine FPDS-NG and other 
relevant federal procurement data to determine the number and size of 
contracts awarded and funds obligated to SDVOSB firms. A thorough 
review of this data is important so that all contacts awarded to a 
firm or its joint ventures are identified. During our investigation, 
we found one firm that received more than $171 million in federal 
funds through more than five different joint ventures. This example 
shows why data-mining efforts must be creative and thorough in order 
to effectively prevent fraud. In addition, data mining can also be 
done to review existing contracts with company information to 
determine whether a company could reasonably perform contracts given 
its area of expertise. For example, through data mining we found one 
firm during our investigation that initially listed its area of 
expertise as construction. However, the firm had recently been 
performing multiple janitorial service contracts across the country. 
While this was not a definite indicator of fraud, subsequent on-site 
unannounced site visits found that the firm was subcontracting 100 
percent of the contract work to an international firm with more than 
$12 billion in annual revenues. 

Monitoring of the firms active participation in contracts is another 
way to ensure SDVOSB program requirements are being met. During our 
work, we identified cases where firms, which may have initially 
appeared legitimate on paper, that actually functioning as pass- 
throughs and subcontracting 100 percent of the work to non-SDVOSB 
firms. Controls to help identify these situations would include 
conducting unannounced site visits to contract performance locations 
and contacting local contracting officers to determine with whom they 
interact during the contract performance period. In addition, a 
periodic review of the types of contracts awarded to a firm compared 
with company information can help identify firms requiring further 
review. Finally, when fraudulent activity is identified through data 
mining and monitoring controls, agencies should also use that 
information to help improve future preventive controls when 
appropriate. 

Investigations and Prosecutions Serve as a Deterrent for Potential 
Future Abuse: 

The final element of a comprehensive fraud prevention framework is the 
aggressive investigation and prosecution of firms that abuse the 
SDVOSB program or other consequences such as suspension, debarment, 
and termination of contracts and cancellation of contract options. 
These back-end controls are often the most costly and least effective 
means of reducing fraud in a program. However, the deterrent value of 
prosecuting those who commit fraud sends the message that the 
government will not tolerate firms that falsely represent themselves 
as SDVOSB firms. Our investigation found that while the SBA has 
successfully identified multiple firms that falsely certified 
themselves as SDVOSB firms, in October of 2009 when we issued our 
report, SBA had not attempted to suspend or debar the problem firms. 
In addition, during our investigation, we could not find any examples 
of referrals for prosecution of these firms to the Department of 
Justice by the VA or SBA Inspectors General for fraud within the 
SDVOSB program. In order for the SBA and VA to ensure the highest 
level of compliance with SDVOSB program requirements, there must be 
consequences for those firms that chose to fraudulently misrepresent 
themselves as SDVOSB firms. Agencies have tools available such as 
suspension, debarment, and removal from the program, termination of 
contracts and cancellation of future contract options. Finally, as 
with fraud found through monitoring controls, lessons learned from 
investigations and prosecutions should be utilized to strengthen 
controls earlier in the process and improve the overall fraud 
prevention framework. 

Referrals from GAO's Investigation Have Resulted in Action from Agency 
Inspector General Offices: 

Our prior investigation into allegations of fraud and abuse within 
SDVOSB contracts found 10 firms that were ineligible for the program 
but received approximately $100 million in SDVOSB contracts. Upon 
completion of our investigation, we referred all 10 cases to various 
agency officials who had contracts with the firms and to each agency's 
IG. Based on our referrals, agencies have taken a variety of actions 
including the termination of existing contracts, the decision not to 
extend contract performance by exercising future contract options, and 
the opening of civil and criminal investigations. IG officials have 
stated that most of their investigations are ongoing and that 
therefore, details cannot be provided because of the risk of 
jeopardizing the investigation. However, in at least one case, the 
future contract options under a janitorial services contract were not 
exercised and, the firm was not allowed to perform work beyond the 
initial contract performance period. In addition, this firm's 
subcontractor, which performed 100 percent of the contact work, 
initiated its own investigation. The subcontractor's investigation 
determined one of its employees helped to perpetrate the fraud by 
creating fictitious documents at the request of the SDVOSB firm's 
owner. In another case, the SDVOSB firm was found to be intentionally 
overcharging a federal agency by inflating the hourly labor rate of 
unapproved subcontracted employees from a temporary employment agency. 
Finally, in one case, multiple federal investigative agencies have an 
ongoing criminal investigation and are working together on a grand 
jury indictment. Additionally, these 10 case-study firms have received 
more than $5 million in new contract obligations[Footnote 13] on 
SDVOSB sole-source and set-aside contacts and more than $10 million in 
other new contract obligations since November 2009. 

Conclusions: 

Our investigation of the SDVOSB program shows that existing controls 
are ineffective at minimizing the risk for fraud and abuse. Our 10 
cases alone show that approximately $100 million in SDVOSB contracts 
have gone to ineligible firms. With billions of dollars being spent 
annually on SDVOSB contracts, agency officials should use lessons 
learned to implement a comprehensive fraud prevention framework. 
Controls at each point in the process are the key to minimizing the 
government's risk. With a comprehensive framework in place, the 
government can be more confident that the billions of dollars meant to 
help provide opportunities to our nation's service-disabled veterans 
actually make it to the intended beneficiaries. 

Mr. Chairman and Members of the Subcommittee, this concludes my 
statement. I would be pleased to answer any questions that you or 
Members of the Subcommittee have at this time. 

Contacts and Acknowledgments: 

For additional information about this testimony, please contact 
Gregory D. Kutz at (202) 512-6722 or kutzg@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this statement. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 108-183, § 308, 117 Stat. 2651, 2662 (2003). 

[2] If the business is publicly owned, at least 51 percent of the 
stock must be held by one or more service-disabled veterans. 

[3] In the case of a veteran with a permanent and severe disability, 
the spouse or permanent caregiver of such veteran may control the 
business. 

[4] The North American Industry Classification System is the standard 
used by federal statistical agencies in classifying business 
establishment for the purpose of collecting, analyzing, and publishing 
statistical data related to the U.S. business economy. 

[5] SBA calculates its SDVOSB total by including all dollars awarded 
to SDVOSBs, not just those received through set-aside or sole-source 
contracts. 

[6] SBA's Small Business Procurement Scorecards report the annual 
percentage share of SDVOSB awards. 

[7] Veterans Benefits, Heath Care, and Information Act of 2006, Pub. 
L. No. 109-461, 120 Stat. 3433 (2006). 

[8] GAO, Service-Disabled Veteran-Owned Small Business Program: Case 
Studies Show Fraud and Abuse Allowed Ineligible Firms to Obtain 
Millions of Dollars in Contracts, [hyperlink, 
http://www.gao.gov/products/GAO-10-255T] (Washington, D.C.: Nov. 19, 
2009); and Service-Disabled Veteran-Owned Small Business Program: Case 
Studies Show Fraud and Abuse Allowed Ineligible Firms to Obtain 
Millions of Dollars in Contracts, [hyperlink, 
http://www.gao.gov/products/GAO-10-306T] (Washington, D.C.: Dec. 16, 
2009). 

[9] The Federal Managers' Financial Integrity Act of 1982 (FMFIA) 
required that GAO issue standards for internal controls in government 
resulting in the issuance of Internal Control: Standards for Internal 
Control in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-98-21.3.1] (Washington, D.C.: 
November. 1999). 

[10] [hyperlink, http://www.gao.gov/products/GAO/AIMD-98-21.3.1]. 

[11] GAO, Department of Veterans Affairs: Preliminary Observations on 
Issues Related to Contracting Opportunities for Veteran-Owned Small 
Businesses, [hyperlink, http://www.gao.gov/products/GAO-10-673T] 
(Washington, D.C.: Apr. 29, 2010). 

[12] [hyperlink, http://www.gao.gov/products/GAO/AIMD-98-21.3.1]. 

[13] Obligations made by federal agencies for new SDVOSB sole-source 
and set-aside contracts signed between November 20, 2009 and May 1, 
2010 by the 10 case-study firms. 

[End of section] 

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441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, youngc1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: