USHCC Expresses Dismay and Disappointment at SBA Award

The United States Hispanic Chamber of Commerce (USHCC), the national representative of more than 2.5 million Hispanic business owners, today expressed its deep concern regarding recent revelations contained in a report by the Inspector General of the Small Business Administration concluding that the agency inappropriately awarded a $1.2 million contract to VBP Group of Scottsdale, Arizona, for technical assistance and training of small and disadvantaged businesses.

“Ninety percent of the agency’s training budget designated for advice and training of small disadvantaged businesses was given to one single contractor who falsified documents, handed a majority of the work to unapproved subcontractors, and spent most of the funding on salaries,” said David C. Liz�rraga, USHCC Chairman. “This no-bid, Halliburton-style contract was given to an outgoing Administration employee rather than to companies and organizations with extensive track records of working with the small and disadvantaged business community.”

The Inspector General’s report found that the contractor VBP Group of Scottsdale and its principal, Mr. Vernon Parker, a former Assistant Secretary for Civil Rights at the United States Department of Agriculture, were inappropriately given an 8(a) certification after only being in business 11 days prior to filing for certification. Furthermore, it is not entirely clear who used an SBA supervisor’s password to enter the SBA’s electronic systems, reverse a denial of certification, and then recommend and approve the certification.

In addition, VBP Group received a sole-source no-bid contract from SBA to provide training services, which had previously been delivered by another contractor who was selected through the traditional competitive bid process. The Inspector General’s office found that the SBA’s Office of Management and Technical Assistance intended to openly compete the contract. However, the SBA’s Procurement Office did not process the procurement, and required that the contract be awarded on a sole-source basis. The VBP Group of Scottsdale was awarded the $1.2 million contract to manage a national training program for small businesses in September 2007.

“We credit Representative Nydia Velazquez, Chairwoman of the House Committee on Small Business, for bringing this issue to light to former SBA Administrator Preston and getting the ball rolling on this investigation,” said Augustine Martinez, USHCC President & CEO. “As an organization that has received contracts and grants to provide technical assistance to small and disadvantaged businesses, and especially as the representative for the intended recipients of those critical services, we are truly disappointed that the SBA channeled this contract to a former Administration official with no experience in this field, and virtually no knowledge of the technical assistance needs of our business community.”

The agency has confirmed that it had revoked the contract when it saw the Inspector General’s report concluding that the VBP Group had not met the agency’s requirements for the 8(a) contracting program and that the VBP Group’s approval was “based on documents submitted by VBP that were false or of questionable authenticity.”

Chairman Liz�rraga concluded, “We thank SBA Acting Administrator Jovita Carranza for taking action quickly on this issue, but are extremely concerned that funds meant to educate our members, small and minority businesses, were lost to fraud, graft and wholesale mismanagement.”

About the United States Hispanic Chamber of Commerce
Founded in 1979, the USHCC actively promotes the economic growth and development of Hispanic entrepreneurs and represents the interests of more than 2.5 million Hispanic-owned businesses in the United States that generate more than $388 billion annually. It also serves as the umbrella organization for 200 local Hispanic chambers in the United States, Puerto Rico, Canada, Mexico, Bolivia and Uruguay. “

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