The U.S. regularly spends $500 billion each year on federal contracts, much of it going to small businesses, and it’s easy to see with such large sums of money why fraud is common. Unfortunately, the government is taking a major step in transferring some responsibility for discovering fraud to sureties, and that could end up hurting the small businesses that the government is trying to help.
In 2014, federal prosecutors brought a lawsuit against two federal contractors initiated by whistleblower Andrew Scollick, who worked as a jobsite supervisor. They accused the company owners of fraud related to their eligibility for work under SBA programs. The complaint alleges that the company owners fraudulently obtained HUB Zone, 8(a) and disabled veteran status. The allegation is common in False Claim Act lawsuits.