Government Contracts Abused

time.com — Companies collected tens of millions of dollars in government contracts by claiming to have main offices in poor neighborhoods that were actually empty duplexes, part-time offices and other ineligible locations, congressional investigators charge. Billions more remain at risk because the Small Business Administration doesn't usually check paperwork, rarely conducts audits and is slow to kick out firms that are no longer eligible for the $8 billion in special contract set-asides for small businesses, the Government Accountability Office said. The GAO's review of 125 applications submitted in September 2007 found the SBA asked for supporting evidence of a firm's eligibility claims only one-third of the time; the agency conducted a site visit only once to verify whether an office actually existed.

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