Commerce Committee Investigation Prompted IG Probe
U.S. Senator John D. (Jay) Rockefeller IV (D-WV), Chairman of
the U.S. Senate Committee on Commerce, Science, and Transportation,
and Senator Olympia Snowe (R-ME), Ranking Republican on the U.S.
Senate Committee on Small Business and Entrepreneurship, responded
Wednesday to the NASA Inspector General’s audit of its Small
Business Innovation Research (SBIR) program. The audit found that
NASA is wasting more than $2 million a year in SBIR funds because
it does not have adequate financial controls in place to safeguard
taxpayer dollars.
Senator Rockefeller
“Government-supported scientific research and innovation
is one of the keys to our country’s future economic growth.
We can’t afford to lose any of our precious research and
development dollars to waste, fraud or abuse,” Chairman
Rockefeller said. “I congratulate the NASA Inspector General
for taking a clear, hard look at the way NASA awards, administers
and tracks SBIR funds. I urge NASA to quickly implement the
Inspector General’s recommendations and put an end to the
problems the IG has identified.”
“I commend NASA’s Office of Inspector General for
performing this thorough audit, and for recommending substantive
suggestions that can help eliminate waste, fraud, and abuse at the
agency,” said Senator Snowe. “Today’s report
highlights the need for Congress to pass comprehensive legislation
reauthorizing the SBIR program and providing agencies with the
necessary tools to improve their oversight efforts, which the
Senate passed unanimously last month. I look forward to working
with my colleagues in the Senate and House to ensure that this
legislation passes both chambers.”
The Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) programs were created to strengthen the
role of the small, innovative firms in federally funded research
and development. In 2009, the Senate Commerce Committee conducted
an investigation which uncovered the various ways dishonest
applicants have been able to defraud these programs, including
“duplicative funding,” in which awardees receive
multiple payments from different SBIR-awarding agencies for the
same project.
Senator Snowe
Following the investigation, Senators Rockefeller and Snowe
added language to the SBIR/STTR Reauthorization Act of 2010 to
strengthen the programs’ anti-fraud provisions and fight
waste and abuse. The legislation passed the Senate, but did not
come up for a vote in the U.S. House of Representatives before the
last congressional session ended. Additional information on the
legislation can be found here.
The NASA IG audit found that:
- In 25% of its 2008 SBIR awards, NASA made improper payments to
award recipients for undocumented and ineligible expenses.
- NASA’s payments for undocumented and ineligible expenses
totaled $2.7 million in 2008.
- Data mining techniques can be applied to existing government
databases in order to detect and prevent cases of
“duplicative funding” across SBIR agencies. For
example, a search of NASA and SBA databases for summaries with
“lithium batteries” identified 31 firms with 98
contracts valued at $26.8 million that are potentially duplicative.
The reauthorization language Senators Rockefeller and Snowe crafted
strengthens the existing databases to make fraud detection
easier.
“This audit is especially timely since Congress is in the
process of reauthorizing the SBIR and STTR programs,”
Chairman Rockefeller said. “While this report focuses on just
one federal agency, the Committee’s 2009 investigation found
that SBIR and STTR programs administered by other federal agencies
are also vulnerable to waste, fraud and abuse. Senator Snowe and I
worked hard to include strong anti-fraud language in the SBIR/STTR
Reauthorization Act of 2010 because we cannot – and will not
– tolerate wasteful government spending. I will fight to pass
this legislation as soon as possible in the 112th
Congress.”