subcontracting goals | The Contracting Education Academy

July 6, 2020 By cs

GAO: Oversight of contractor compliance with subcontracting plans needs improvement

Half of the contracts recently examined by the Government Accountability Office (GAO) didn’t contain evidence of compliance with small business subcontracting requirements.

The subcontracting report submission system is web-based. *Photo credit: GAO file photo*

Federal agencies are supposed to notify Small Business Administration (SBA) representatives about proposed contracts that contain small business subcontracting plans for possible review. But for about half of the 26 contracts we examined, agencies couldn’t show whether that happened.

Agencies also didn’t ensure that contractors submitted subcontracting reports, or that the reports were accurate.

Certain federal contracts that go to large businesses must have small business subcontracting plans. Under these plans, contractors have to make a good-faith effort to offer subcontracting opportunities to small businesses.

GAO Report Details

GAO, in its report publicly released on June 29, 2020, found that selected agencies did not consistently follow all required procedures for oversight of small business subcontracting plans, both before and after contracts were awarded. GAO reviewed 26 contracts with a subcontracting plan at four agencies — Defense Logistics Agency (DLA), General Services Administration (GSA), National Aeronautics and Space Administration (NASA), and the Department of the Navy (Navy).

For about half of the 26 contracts, agencies could not demonstrate that procedures for Procurement Center Representative (PCR) reviews were followed. These SBA representatives may review small business subcontracting plans and provide recommendations for improving small business participation. When an agency is awarding a contract that includes a subcontracting plan, contracting officers are required to notify these representatives of the opportunity to review the proposed contract. Without taking steps to ensure these opportunities are provided, agencies may not receive and benefit from suggestions for increasing small business participation.

For 14 of the 26 contracts, contracting officers did not ensure contractors submitted required subcontracting reports. After a contract is awarded, contracting officers must review reports contractors submit that describe their progress towards meeting approved small business subcontracting goals. In some cases, contracting officers accepted reports with subcontracting goals different from those in the approved subcontracting plans, with no documentation explaining the difference. Without complete and accurate information about a contractor’s subcontracting goals, an agency cannot adequately assess a contractor’s performance in meeting its subcontracting plan responsibilities.

The SBA encourages agency compliance with small business subcontracting plan requirements by providing training to contracting officers and contractors, and by conducting reviews. For instance, SBA Commercial Market Representatives conduct compliance reviews to evaluate a large prime contractor’s compliance with subcontracting program procedures and goal achievement. However, SBA could not provide documentation or information on almost all compliance reviews conducted in fiscal years 2016–2018. SBA has developed new procedures for conducting compliance reviews, but as of mid-March 2020, had yet to fully implement them. SBA has conducted fiscal year 2019 compliance reviews that reflect a first phase of their new procedures. SBA has draft guidance on the new compliance review process, including some specific information regarding what Commercial Market Representatives are to record as part of the compliance review. SBA has begun to conduct compliance reviews in accordance with the guidance, but does not have clearly documented and maintained records for the first phase of these reviews. Without consistent, clear documentation and records that will be maintained going forward, SBA’s ability to track contractor compliance and agency oversight efforts will be limited.

Why GAO Did the Review

Certain federal contracts must have a small business subcontracting plan if subcontracting opportunities exist. But recent Department of Defense Inspector General reports raised concerns about agency oversight of subcontracting requirements. GAO was asked to review oversight of subcontracting plans. Among its objectives, GAO’s report discusses: 1) the extent to which selected agencies (DLA, GSA, NASA, and Navy) oversee small business subcontracting plans, and 2) how SBA encourages agency compliance with subcontracting plan requirements.

GAO reviewed data and documentation for a non-generalizable sample of 32 federal contracts (including 26 contracts with a subcontracting plan) at four agencies, selected to include contracts over $1.5 million at both civilian and military agencies awarded in fiscal years 2016–2018. GAO also reviewed the Federal Acquisition Regulation, SBA and selected agency documentation, and interviewed agency officials.

What GAO Recommends

GAO made 10 recommendations to strengthen oversight of these plans. GAO’s recommendations address ensuring that procedures for PCR reviews are followed, contractor subcontracting reports are monitored and reviewed for accuracy, and SBA compliance reviews are clearly documented and maintained. DLA, GSA, NASA, and Navy concurred with all of GAO’s recommendations. SBA partially concurred with the recommendation pertaining to that agency’s operation, although GAO maintains that its recommendation is warranted.

View GAO’s full report at: https://www.gao.gov/assets/710/707231.pdf.

April 17, 2017 By AMK

Pentagon headed to court against small business advocate

A small-business advocate has won a day in court with Pentagon attorneys to argue whether the Defense Department should release shielded internal documents that the plaintiff argues will reveal a government bias against small defense contractors.

Lloyd Chapman, founder of the Petaluma, Calif.-based American Small Business League, for years has sought to expose the workings of the 28-year-old Comprehensive Subcontracting Plan Test Program designed to “determine if comprehensive subcontracting plans on a corporate, division or plant-wide basis [instead of for individual contracts] would lead to increased opportunities for small businesses.”

Chapman argues the program covers up ways in which large contractors get work intended for eligible small businesses, and even the Pentagon has expressed a desire for Congress to terminate the program as not effective in organizing contact awards.

On April 12, the small business league announced a new stage in its ongoing suit against the helicopter maker Sikorsky Aircraft Corp. (acquired by Lockheed Martin in 2015) and the DOD. U.S. District Court Judge William Alsup of the Northern District of California, last week set December as the time for a full trial that will include discovery and as many as 10 depositions from the Defense Department on the mysterious program. “The ASBL believes the release of the information will prove the Pentagon has defrauded small businesses out of over two trillion dollars in subcontracts since the program was established in 1989,” the league said.

Keep reading this article at: http://www.govexec.com/contracting/2017/04/pentagon-headed-court-against-small-business-advocate/136980

May 12, 2015 By AMK

Advocacy group accuses SBA of misapplying law on small business set-asides

As it celebrates National Small Business Week, the Small Business Administration is facing renewed accusations that its efforts to reserve work for small contractors have been distorted by accounting tricks and misapplication of the law that permits large companies to win the awards.

Public Citizen, the nonprofit that pushes an anti-corporate view of trade, the environment, campaign finance and product regulation issues, released a report on Wednesday saying SBA “may be flouting the law,” perhaps for political reasons.

The study of controversies over the SBA-coordinated program to help federal agencies meet the goal of 23 percent of purchases from small businesses draws on the work of the Petaluma, Calif.,-based American Small Business League, which has long battled SBA and the Defense Department over the definition of a small business. But the league, Government Executive has learned, does not think Public Citizen’s conclusions go far enough.

The SBA’s claims “that the government has met or nearly met a requirement to make 23 percent of its purchases from small businesses are misleading and rely on methodologies that conflict with federal law and regulations,” argued the report by Taylor Lincoln, research director for Public Citizen’s Congress Watch division.

Keep reading this article at: http://www.govexec.com/contracting/2015/05/advocacy-group-accuses-sba-misapplying-law-small-business-set-asides/112240

January 13, 2015 By AMK

Georgia Tech hosts matchmaking event to aid multiple SE federal agencies in small business outreach

On Thursday, Jan. 22, 2015, Georgia Tech will play host to six federal agencies holding an industry day forum for small businesses in the southeast region of the United States.

NOTE: As of Jan. 16, 2015, this event is booked to capacity, and no further registrations are being accepted.

The event is being sponsored by the Atlanta chapter of the National Contract Management Association (NCMA) and the regional office of the U.S. Small Business Administration (SBA), and is being sponsored on the campus of the Georgia Institute of Technology by the Georgia Tech Procurement Assistance Center (GTPAC).

The event, billed as “Building Partnerships and Collaborating for Success, a Small Business Industry Day and Matchmaking Event,” is open to all businesses in the region who wish to learn more about doing business with the Centers for Disease Control and Prevention (CDC), the Environmental Protection Agency (EPA), the General Services Administration (GSA), the U.S. Army Corps of Engineers, and the Department of Veterans Affairs (VA).

In addition to federal agencies, representatives of major prime contractors also are expected to be present, including Northrop Grumman, Lockheed Martin, ICF International, RTI International, WYLE, Westat, Deloitte, and DB Consulting Group, Inc.

Businesses interested in participating in this event must preregister at: http://gtpac.ecenterdirect.com/ConferenceDetail.action?ID=7954.

December 10, 2014 By AMK

Pentagon may be forced to release aircraft manufacturer’s contract data

A little-known unit at the Defense Department may have to release data considered proprietary by a major contractor under a Nov. 23 district court ruling favoring a small business advocacy group.

The Petaluma, Calif.-based American Small Business League on Wednesday announced its legal victory. A northern California district judge agreed that the Pentagon should honor the league’s request under the Freedom of Information Act for data Sikorsky submitted to the Comprehensive Subcontracting Plan Test Program.

That program since 1990 has authorized negotiation, administration and reporting of subcontracting plans on a plant, division or company-wide basis to “determine whether comprehensive subcontracting plans will result in increased subcontracting opportunities for small business while reducing the administrative burden on contractors,” according to the Pentagon website.

Keep reading this article at: http://www.govexec.com/contracting/2014/12/pentagon-may-be-forced-release-aircraft-manufacturers-contract-data/100175/