Much like the Community Redevelopment Act (CRA) for housing, the HUBZone Empowerment Contracting Program was designed to encourage economic development in historically underutilized business zones and, like the CRA, it looked remarkably good on paper. The problem happened when it was put into practice. The story on usnews.com describes that problem like this:
According to a Government Accountability Office (GAO) report dated July 17, 2008, 10 of the 17 firms the GAO investigated in the Washington, DC, metro area weren't eligible for HUBZone certification but had been awarded obligations from federal agencies amounting to more than $105 million since 2006. As part of its investigation, the GAO created four fictitious firms. Using fabricated leases and other documentation, agents skated around the HUBZone requirements—in some cases, using a Starbucks address or le...
By Charles M Cooper ยท November 25 2008
small business, sba, aig, hubzone
