SDVOB: Why Fraud Makes Good Business Sense


Amidst the discoveries of fraud in the government procurement program for disabled vets, we ask ourselves…why? Why do companies lie about their qualifications to gain government contracts?

When there are no penalties for defrauding the American public, it makes sense to pretend your company deserves the SDVOB set-asides.

Here’s the thinking:

IF we win the contract (and we have as good a chance if not better than deserving SDVOB), we proceed as normal with the contract terms. IF we submit false credentials and our  lies are somehow uncovered, there are NO consequences! – and we can:

(1) keep the contract we scalped from SDVOB. We know that government procurement is a busy, frantic process. Under deadline pressure, contracting officers want bids and awards to go smoothly — so contracting officers would rather do it quickly than fully investigate bidders.

(2) we can still bid on future government contracts.

(3) we can still bid on set-asides we really aren’t eligible for.

What’s the deal here? Businesses that win SDVOB contracts through fraud are doing the right thing for their business. Let’s face it. Business involves risk.

Calculated risk, and safe risk is good risk.

So why not falsify? Why not say you were injured in the military?  It gives an edge—the battleaxe of business is the edge you have—or the edge you can get. It’s pure Machiavellian – “the end justifies the means.” Or the Vince Lombardi axiom: “Winning isn’t everything, it’s the only thing.”

Not a bad thing, eh? The government won’t find out unless a protest is filed. And struggling SDVOB don’t have time to protest—they’re gunning for other contracts. And if it couldn’t get any better for those who lie—it does…no one gets charged with anything—no perjury, no nothing. The absolute ONLY way fraud is discovered is if the contract award is protested, ..and that ain’t gonna happen. Not bad for scamming businesses, eh?”

The only punishment for doing this involves CVE—the office within the VA that certifies SDVOB. But CVE only applies to businesses that do business with the VA.  CVE will ‘debar’ a company that is caught falsifying credentials. This means CVE will take the fraudulent business out of the VA’s database of SDVOB. That’s the beauty of self-certification. So what if a company is ‘debarred from as an SVDOB within the VA? They can still bid on other government contracts, and they probably will get consideration for SDVOB set-aside awards.

A shady company is smart to bid with false credentials because self-certification is toothless. There are simply no consequences for lying.

In the SDVOB set-aside self-certification program, there is never a fine—ever.  

It’s a wise business risk to falsify, not so much for SDVOB.~~


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Hardy Stone is the editor/publisher of VetLikeMe, the nation's only publication devoted to service disabled veteran owned business.