Who Woke the Sleeping SBA?


According to a recent Wall Street Journal article, the Small Business Administration is now on the hunt to ferret out bad actors that wrongly take advantage of government programs under its direction. The SBA is notorious for sitting on its hands when it comes to enforcing compliance by companies that claim to qualify under its contract programs. Inaction and lack of oversight have been so bad that the head of the House SBA committee considered shutting down the SBA’s HUBZone program. (See our earlier blog post on this situation.)

And suddenly there was movement. The SBA conducted some 1000 on-site visits in fiscal year 2010 to government contractors participating in the HUBZone program. The number of visits is up more than 40% from the year prior and up significantly more from 2008 and earlier, when the SBA rarely conducted any such visits. The purpose of the visits is to ensure that the companies are in fact operating out of designated economically distressed communities – one of the two major requirements of the HUBZone program, which was implemented to promote commerce in such struggling communities.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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