Pentagon awarded veteran-owned contracts to illegitimate firms

The Defense Department awarded millions of dollars in veteran-owned contracts to ineligible firms and made coding errors affecting billions of dollars more, according to an inspector general report.

The report, dated Feb. 29 and recently made public, said the department awarded six contracts for service-disabled veteran-owned small businesses, valued at about $1.9 million, to ineligible companies. In addition, the report said, Defense awarded 27 contracts, valued at about $340.3 million, to contractors that “potentially misstated their SDVOSB status.”

Finally, the department made coding errors when it entered these contracts into the federal procurement database. These errors, in turn, affected 137 contracts valued at about $1.3 billion, according to the report, which was picked up Monday by Federal News Radio.

Defense made two key errors that contributed to awarding ineligible contracts, Devon Hewitt, a partner at Protorae Law and a member of the American Legion's Small Business Task Force, told Federal News Radio. The first was the department failed to check the Central Contractor Registration database, which catalogs the eligibility of federal contractors prior to awarding the contracts.

Second, and according to Hewitt more significant, Defense relied heavily on its own self-verification process for contractors. The department’s inspector general recommended Defense adopt a new verification process similar to the Veterans Affairs Department, which has a separate authentication process for veteran-owned contractors -- and is, according to Federal News Radio, the only government agency that does not rely on self-verification.

Veterans Affairs’ verification process, however, has itself been hampered by complaints of delays, inconsistencies and a lack of thoroughness, according to Federal News Radio.