1. Home
  2. |Insights
  3. |OIG Audit Finds Nearly $900 Million in SDVOSB Set-Aside Contracts Awarded to Ineligible Contractors

OIG Audit Finds Nearly $900 Million in SDVOSB Set-Aside Contracts Awarded to Ineligible Contractors

Client Alert | 1 min read | 02.25.20

In its February 18, 2020 Report, the Inspector General for the U.S. Department of Defense (DoD) concluded that $876.8 million in service-disabled veteran-owned small-business (SDVOSB) contracts were improperly awarded due to a lack of verification by contracting officials. The audit, which was conducted to determine whether DoD awarded contracts to businesses that actually qualified under the SDVOSB regulations, reviewed awards for 29 self-certified SDVOSBs. Of those 29 contractors, DoD found that 16 had misrepresented their status and wrongfully received a total of 27 SDVOSB set-aside awards valued at $827.8 million in fiscal years 2017 and 2018 alone. Additionally, three other contractors received SDVOSB deals notwithstanding the fact that the Small Business Administration (SBA) had previously found them ineligible for award in response to size protests.

DoD currently relies on businesses’ self-representations of SDVOSB status in the System for Award Management (SAM) when awarding contracts. The Report warns that until additional controls are established, “DoD contracting activities will continue to award SDVOSB contracts to ineligible contractors.” The Report recommends that the DoD Office of Small Business Programs take several steps to remediate the problem, including requiring the submission of documentation establishing SDVOSB status prior to award, and taking action against the contractors determined to have misrepresented their status.

Given this Report, SDVOSBs, large businesses doing business with them, and their service providers (e.g., surety firms) are well advised to pay close attention to eligibility issues.

Insights

Client Alert | 3 min read | 03.28.24

UK Government Seeks to Loosen Third Party Litigation Funding Regulation

On 19 March 2024, the Government followed through on a promise from the Ministry of Justice to introduce draft legislation to reverse the effect of  R (on the application of PACCAR Inc & Ors) v Competition Appeal Tribunal & Ors [2023] UKSC 28.  The effect of this ruling was discussed in our prior alert and follow on commentary discussing its effect on group competition litigation and initial government reform proposals. Should the bill pass, agreements to provide third party funding to litigation or advocacy services in England will no longer be required to comply with the Damages-Based Agreements Regulations 2013 (“DBA Regulations”) to be enforceable....