Government Auditors Validate AGC Concerns Over HUBZone Program
The Government Accountability Office (GAO) Thursday released a study which found that the Historically Underutilized Business Zone (HUBZone) program is highly susceptible to fraud and “widespread abuse.”
AGC has long expressed concerns about the effectiveness and fairness of the HUBZone program as it is applied to the construction industry and has advocated that significant improvements be enacted to reform the program. The program does not realize its goal of increasing employment and reinvesting in economically disadvantaged areas. It does not require the SBA to measure the successes and failures of the program and it does not fairly reward firms in a manner consistent with the intent of the program. Consequently, this undermines not only the intent of the program, but hurts small businesses, HUBZones communities and costs the American taxpayers billions of dollars.
AGC has communicated its concerns over the HUBZone program for several years and House Small Business Committee Chairwoman Nydia Velazquez (D-N.Y.) has worked to bring these critical issues to light, passing several AGC-recommended changes to improve the HUBZone program, including: limiting the program to construction projects in or near a HUBZone; requiring HUBZone contractors to ensure that HUBZone residents receive at least 30% of the payroll needed to perform the HUBZone contract; requiring annual reports on employment and income in the nation’s HUBZones; requiring SBA to routinely investigate alleged abuses of the program; and allowing all contractors who stand ready, willing, and able to build, to protest.
AGC looks forward to continue working with Congressional leaders to address these serious concerns.
For more information, contact Marco Giamberardino at (703) 837-5325 or firstname.lastname@example.org.
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