SmallBusinessNewz

Small businesses in low-income communities have been unfairly deprived of federal contracts, according to a new report.  The Government Accountability Office found that the Small Business Administration's Historically Underutilized Business Zone program has sent money to unqualified (and dishonest) companies time and time again.

Matt Kelley explains in a USA Today article, "The HUBZone program began in 1997 as a way to encourage economic development in blighted areas by directing some government contracts to businesses based in low-income neighborhoods that draw at least 35% of their workers from those areas."

But some recipient firms didn't maintain the right geographic split of employees.  Others used mailing addresses in low-income areas while keeping their main offices elsewhere.  And even a few previously disqualified companies won contracts.

The end result was this: The GAO looked over an unknown percentage of HUBZone dealings, and discovered that about $30 million went to 19 undeserving companies.

Legislators including Representative Nydia Velazquez are pushing the Small Business Administration to reform its program.  It's possible the thing will get shut down, too, as either a temporary step until problems can be corrected or a more permanent measure to halt all of the waste.