SBA's Progress in Implementing the Public Law 95-507 Subcontracting and Surety Bond Waiver Provisions Has Been Limited

CED-81-151: Published: Sep 18, 1981. Publicly Released: Sep 18, 1981.

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GAO reviewed actions taken by the Small Business Administration (SBA) and the Presidential Advisory Committee to promote subcontracting as a means of developing small and small minority businesses and the SBA implementation of the surety bond waiver provision of Public Law 95-507.

SBA and the Presidential Advisory Committee have not fully implemented the subcontracting provision of Public Law 95-507, the purpose of which is to encourage large, private businesses to place subcontracts with small and small minority firms. The Advisory Committee has focused on federal, rather than required private sector, subcontracting, while the SBA efforts, which have been limited primarily to agreements with four corporations, have resulted in only two subcontracts for small businesses. Few, if any, additional subcontracting opportunities are likely to result from these two agreements. SBA needs to emphasize that agreements are to be made with corporations that are not heavily engaged in federal contracting according to the intent of the law. Also, the Advisory Committee has not studied or proposed any incentives or assistance for the private sector to help train, develop, and upgrade small businesses, as the executive order which established the committee directed. SBA has not implemented the surety bond waiver provision established by P.L. 95-507, which authorized the SBA Administrator to waive any amount of any bond required by a government procurement officer for, and in connection with, certain contracts provided to SBA. Detailed procedures for identifying and processing these waivers had not been finalized as of September 8, 1981. As a result, no bond waivers have been granted. Thus, extending the provision's expiration date would be reasonable.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should consider extending the surety bond waiver provision for 2 years, to September 30, 1983, and require SBA to report to Congress on the provision's effectiveness before the revised expiration date.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The SBA Administrator, together with the new Presidential Advisory Committee, should develop a specific plan for promoting contracts and subcontracts for small and small minority businesses from the private sector, outside of federal procurements. The plan should include the functional responsibilities of both SBA and the Presidential Advisory Committee, short-range goals, and a procedure for monitoring and evaluating progress.

    Agency Affected: Small Business Administration

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The SBA Administrator, together with the Presidential Advisory Committee, pursuant to the Small Business Act and Executive Order 12190, should study and propose any incentives and assistance the private sector needs to help train, develop, and upgrade small and small minority businesses.

    Agency Affected: Small Business Administration

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The SBA Administrator should require that, in obtaining future agreements to promote subcontracting, priority be given to corporations that are not heavily engaged in supplying goods and services to the Federal Government and, therefore, not already required by law to use small businesses as subcontractors.

    Agency Affected: Small Business Administration

 

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