Opening Statement for Hearing on
Oversight of the Small Business Administration and its Programs
Sam Graves
Ranking Member
Committee on Small Business
United States House of Representatives
Washington, DC 
November 19, 2009

I would like to thank the Chairwoman for holding this important hearing today on Oversight of the Small Business Administration and its programs.  I look forward to hearing the insight of all the witnesses about these programs, especially the Service-Disabled Veterans Small Business Contracting Program. 

The Small Business Administration oversees a variety of programs, including procurement initiatives, designed to increase growth of small businesses.  This Committee has responsibility to ensure that these programs operate to the benefit of small businesses, including the ones directed at specific groups, such as service-disabled veterans. 

The Small Business Act requires that small businesses receive their fair share of opportunities to provide goods and services in the 434 billion dollar federal contracting marketplace.  Congress then decided that within the segment of small businesses, those owned by service-disabled veterans deserve extra assistance for the sacrifices that they have made to defend the country.  No one can deny that this assistance is deserved. 

It is then troubling to find out that the program is subject to fraud.  The investigation that will be discussed at this hearing reveals that some firms are not performing the contracts; instead they are having the goods or services supplied by large businesses.  In other cases, businesses are not owned by service-disabled veterans.  The underlying problem, as it was with the HUBZone program, is the ability of a small business to self-certify eligibility for the program without any independent checks by the SBA. 

By itself, the fraud would be problematic.  However, it is more troubling that firms ineligible for the program then deny firms that are eligible for contracts.  The firms denied contracts are those owned by individuals who made a significant sacrifice in defending our country.  And that is simply unacceptable.

I look forward to hearing testimony of our witnesses today and learning about the steps they are taking to address the problems of fraud.  If those actions do not prove successful in ensuring that service-disabled veteran small business owners benefit from the program, I will take aggressive legislative action to do so. 

Again I thank the Chairwoman for holding this important hearing and look forward to suggestions on how to rid the program of fraud and abuse.