Business Regulation and Consumer Protection:

The 8(a) Pilot Program for Disadvantaged Small Businesses Has Not Been Effective

CED-81-22: Published: Jan 23, 1981. Publicly Released: Jan 23, 1981.

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The implementation of the 8(a) pilot contracting program of the Small Business Administration (SBA) is discussed. SBA awards procurement contracts under this program to socially and economically disadvantaged small businesses for the purpose of helping them become competitive. When SBA uses the pilot program, it has the exclusive authority to designate procurement requirements. The Department of the Army was selected as the pilot agency in 1979; however, the Army and SBA disagree over the manner in which this program can be most effective. In 1980, the President designated three other agencies to participate in the pilot program. GAO sees no basis for these designations.

The stated objective of the pilot program was to seek procurement opportunities which were not currently offered by the Army under the regular 8(a) program. The pilot program has not met this objective. The three initial contracts awarded under the pilot program could have been handled under the regular 8(a) program, and GAO questioned the contribution the contracts would make for the firms that received them. In an attempt to upgrade the quality of procurements available to participants in the program, SBA issued criteria that firms must meet before they can be selected for the 8(a) program. It also issued criteria for contracts selected for the pilot program. Better program controls are needed in order for SBA to properly assess and match 8(a) firms' capabilities with procurement opportunities. Additional program testing is necessary in an agency that has not yet demonstrated its complete support for the 8(a) program. The Army has had a history of fully supporting the program.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: The Congress should amend the authorizing legislation to allow for the further testing of the pilot program in an additional Federal agency that has yet to demonstrate its complete support for the 8(a) program.

    Status: Closed

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

    Recommendations for Executive Action

    Recommendation: The Administrator of SBA should direct program officials to make sure that procurement center representatives have enough information on 8(a) firms' capabilities so that this data can be used to match qualified firms to procurements.

    Agency Affected: Small Business Administration

    Status: Closed

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

    Recommendation: The Administrator of SBA should ask the Office of the Inspector General to conduct reviews of the three initial pilot contracts to find out how effectively the contractors performed.

    Agency Affected: Small Business Administration

    Status: Closed

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

    Recommendation: The Administrator of SBA should direct program officials to make sure that 8(a) firms selected for the pilot program have the capability to successfully do the job.

    Agency Affected: Small Business Administration

    Status: Closed

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

    Recommendation: The Administrator of SBA should direct program officials to diligently enforce the objective of the pilot program by demanding contracts only when the Army is reluctant to offer them under the regular 8(a) program.

    Agency Affected: Small Business Administration

    Status: Closed

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

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