A freshman Congressman fighting to improve entrepreneurial opportunities for veterans received a recognition award Tuesday from The American Legion's Small Business Task Force.
Rep. Glenn Nye, D-Va., who serves on both the House Veterans' Affairs and Armed Services Committees, has reacted strongly since a Government Accountability Office investigation last fall revealed that unscrupulous companies had defrauded legitimate veteran-owned businesses of some $100 million in federal contracts.
Nye introduced a bill in November to impose criminal penalties against companies that falsely claim to be owned by disabled veterans in order to obtain federal contracts. By law, 3 percent of U.S. government contracts must be awarded to companies owned by service-disabled veterans. The American Legion has frequently criticized the government's failure to live up to the law as the actual percentage hovers at about 1.5 percent.
"I believe there are two key problems," Nye told participants attending an American Legion Business Workshop during the 50th Washington Conference. "One, there really has been no accountability in the system. If someone had taken the time to look at these contracts, they would have quickly seen there was fraud involved. Second, there has been no recourse - no penalties in place. When red flags have been waved, there have been no consequences, thus the money and the contracts remain in the hands of the fraudulent business owners."
Nye, who represents the military-and-veteran-concentrated second district of Virginia, said the revelation of fraud should not affect the government's obligation to close the gap and provide more contracts to legitimate disabled-veteran-owned businesses. "While the economy has been struggling over the past several years, we know that the federal marketplace has actually grown by 9 percent, which is why it is more important now than ever that our veteran-owned businesses are able to access that marketplace."
The 3-percent requirement, Nye said, "has to be more than an empty promise."
Nye also introduced legislation in the first session of the 111th Congress to fund a system of Veterans Business Centers under the Small Business Administration and to make available more capital for veteran-owned businesses.
Nye told the group - primarily veterans working on business plans of their own - that he is aware of numerous entrepreneurial success stories built on veteran-to-veteran networking, particularly in the complicated world of federal contract procurement. "They all received support from other veteran business owners who showed them the ropes," Nye said.
The lawmaker also told the group about congressional efforts to reduce veteran homelessness, reverse the VA claims backlog and improve the GI Bill benefit delivery process.