Contract Management:

Benefits of the DOD Mentor-Protege Program Are Not Conclusive

GAO-01-767: Published: Jul 19, 2001. Publicly Released: Jul 19, 2001.

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Congress authorized the Pilot Mentor Protege Program to boost the participation of small disadvantaged businesses as subcontractors and suppliers under Department of Defense (DOD) contracts. The program provides incentives for major defense contractors (mentors) to assist small disadvantaged businesses (proteges) in strengthening their ability to compete for work. However, DOD has been criticized for not establishing compelling evidence about the program's overall effectiveness. This report reviews (1) the relationship between the results of the Mentor-Protege Program and the statutory goal of awarding five percent of the total dollar amount contracted by DOD and subcontracted by DOD prime contractors to small disadvantaged businesses; (2) whether the Mentor-Protege Program enhanced the business competitiveness, financial independence, and business development of protege firms; and (3) whether program funds had been used as an effective incentive for mentor firms to participate in the program. GAO found that DOD lacks data integral to assessing the success of the Mentor-Protege Program. DOD lacks enough information to determine the relationship between the program and the goal of awarding five percent of the total dollar amount contracted to small disadvantaged businesses. Although DOD has consistently achieved this goal since 1992, the program's overall contribution to this goal is unknown. DOD also lacks sufficient information to assess whether the program enhanced the business competitiveness, financial independence, and business development of protege firms. Although there are small disadvantaged business program participants that have become more successful, data is not available to attribute their success to the program. Program funds have been used to encourage major defense contractors to provide developmental assistance for small disadvantaged businesses. However, data is not available to determine whether program funds are needed to continue to encourage major defense contractors to establish business relationships with small disadvantaged businesses.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The National Defense Authorization Act for fiscal year 2002, extended the program for 3 more years instead of making the program permanent. The Senate report accompanying the Act stated that the Department must continue to work to strengthen the Mentor-Protege program by improving compliance with tracking and reporting requirements, and enforcing the required linkages between performance and funding.

    Matter: Before extending the Pilot Mentor-Protege Program, Congress may wish to consider directing DOD to conduct a more inclusive assessment of the Program's impact and its contributions.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: According to DOD officials, requiring proteges to identify how the program has resulted in additional protege contracting and subcontracting would impose an additional reporting burden on small firms that are not being reimbursed for participation in the program. Additionally, according to DOD, the data would be subjective and subject to the same criticism applied to the program on past GAO reviews. DOD officials believe that determining if mentor-protege agreements have been met is an established ongoing process. Defense Contract Management Agency and the program managers meet monthly to review progress and identify any impediments to process improvement. DOD has established procedures to ensure that only completed semi-annual reports are accepted. According to DOD officials, when a deficient semi-annual report is received, the mentor firm is advised of the deficiency and requested to resubmit with complete data. The complete data is then entered in the automated system.

    Recommendation: DOD should (1) gather more complete information by asking proteges how the Mentor-Protege Program has resulted in additional protege contracting and subcontracting and (2) determine if mentor-protege agreements have been met. DOD should also not accept incomplete mentor-reported data.

    Agency Affected: Department of Defense

 

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