Business Regulation and Consumer Protection:
Improvements Needed to Help Ensure Reliability of SBA's Performance Data on Procurement Center Representatives
GAO-11-549R: Published: Jun 15, 2011. Publicly Released: Jun 15, 2011.
This letter responds to the mandate contained in Section 1312(c) of the Small Business Jobs Act of 2010, for GAO to conduct a study of the Small Business Administration's (SBA) Procurement Center Representatives (PCR) and Commercial Market Representatives (CMR), including ways to improve their effectiveness. To fulfill this mandate, we provided congressional staff a briefing on the results of this work in meetings with them on March 22, 23, and 24, 2011. Each year, the federal government awards hundreds of billions of dollars in contracts for goods and services--more than $500 billion in fiscal year 2010 alone. It uses this buying power to maximize procurement opportunities for small businesses through long-standing policies such as set-asides and requiring large contractors to set goals for using small business subcontractors. SBA's PCRs and CMRs play an important role in helping ensure that small businesses gain access to contracting and subcontracting opportunities. In particular, a PCR's key responsibilities include reviewing proposed agency contract events--such as potentially bundled or consolidated contracts--and making set-aside recommendations to agency contracting officers (through informal and formal means), reviewing agency small business programs (surveillance reviews), and counseling small businesses. In addition, PCRs can appeal a contracting officer's rejection of their formal set-aside recommendation. PCRs also review the proposed subcontracting plans of large prime contractors and provide advice and recommendations on them to contracting officers. A CMR's key responsibilities include counseling small businesses on obtaining subcontracts and performing "matchmaking" activities to link large prime contractors with small businesses. CMRs also conduct reviews of large prime contractors with subcontracting plans, including Subcontracting Orientation and Assistance Reviews, performance reviews, and compliance reviews. We and SBA's Office of the Inspector General (OIG) previously reported on resource constraints that limited the ability of PCRs and CMRs to effectively perform their functions. In May 2005, SBA's OIG reported that SBA had not reviewed the majority of potentially bundled contracts reported by procurement agencies because of limited staff and a weak tracking system. In September 2007, the SBA OIG reported that CMRs monitored less than half of the 2,200 large prime contractors in fiscal year 2006. In November 2008, we reported that years of SBA downsizing and budget reductions reduced staff resources and resulted in most PCRs covering multiple agencies and "buying activities" within agencies. We also reported that CMRs with whom we spoke had large portfolios (ranging from approximately 90 to 200 prime contractors), which diminished their ability to monitor prime contractors through compliance reviews. We recommended that SBA assess the resources allocated to PCRs and CMRs and develop a plan to better ensure that these staff could carry out their responsibilities. SBA agreed with this recommendation and stated it was assessing statutory requirements and resources for PCRs and CMRs to develop such a plan. In September 2010, SBA contracted with a consulting firm to conduct a study to define the optimal environment in which a PCR's efforts would have the maximum impact on directing contracts to qualified and capable small businesses. As of the date of this letter, SBA officials told us that they were reviewing the study results. In accordance with the mandate and discussions with committee offices, we identified (1) measures SBA uses to determine the effectiveness of PCRs and CMRs in carrying out their responsibilities; (2) key challenges PCRs and CMRs cited related to carrying out their responsibilities; and (3) options PCRs, CMRs, and other key stakeholders cite to increase the effectiveness of PCRs and CMRs, including advantages and disadvantages.
SBA's Office of Government Contracting has performance goals and measures related to key PCR and CMR activities: (1) influence $6.7 billion of procurements for small business programs (by making formal and informal recommendations through Form 70s on specific contracts), (2) conduct 42 surveillance and follow-up reviews, (3) conduct 1,220 subcontracting reviews, and (4) conduct 40 training sessions for federal agencies (contracting staff). According to SBA, PCRs and CMRs generally exceeded these goals in fiscal year 2010. PCRs and CMRs we interviewed identified seven key challenges to effectively performing their duties. (1) PCRs and CMRs said conducting size determinations and issuing certificates of competency took priority over and reduced time for PCR and CMR duties. (2) CMRs told us that the CMR function increasingly has become part-time. (3) PCRs and CMRs told us that the lack of in-person interaction with the buying activities and prime contractors limited their ability to influence procurements and subcontracting opportunities. PCRs working at buying activities said their access to procurement planning discussions helped influence procurements. (4) PCRs told us that contracting officers may not understand the small business contracting provisions in the Federal Acquisition Regulation, and some did not know how to conduct market research to identify qualified small businesses during acquisition planning. A few PCRs said turnover at certain buying activities explained these gaps. (5) Many PCRs (13 of 22) told us that some agencies would not send procurements to them for review, although the Federal Acquisition Regulation requires agencies to provide certain procurements to SBA for review prior to award. (6) Some PCRs (5 of 22) told us because purchases made using the Federal Supply Schedule were excluded from set-aside requirements, their ability to influence these purchases was limited. Yet, federal contracting data indicate that in fiscal year 2009, $9 billion (or 40 percent) of schedule purchases went to small businesses. (7) PCRs and CMRs cited a lack of authority to influence subcontracting opportunities. PCRs told us that they had no means to dispute agency procurements if contracting officers did not use their recommendations on subcontracting plans. From interviews with PCRs, CMRs, and other stakeholders, five options emerged for increasing PCR and CMR effectiveness: (1) increase the PCR and CMR workforce; (2) remove size determination and certificate of competency duties from staff with PCR and CMR responsibilities; (3) increase opportunities for PCRs and CMRs to have inperson interactions with buying activities and large prime contractors; (4) increase SBA's server capacity; (5) increase small business training that PCRs conducted for agency contracting officers; and (6) allow PCRs to dispute a procurement if their recommendations on a subcontracting plan were not implemented. Possible advantages of these options include increasing the number of procurements reviewed or compliance reviews conducted, and improving PCR and CMR influence. Possible advantages include increasing the number of procurements reviewed or compliance reviews conducted, and improving PCR and CMR influence. Possible disadvantages include the need for increased resources and a change in statute for some options. To help ensure that GCAR data are accurate and that SBA reliably can use the data to monitor PCR and CMR performance and determine whether established goals have been achieved, we recommend that SBA's Director of Government Contracting take the following two steps: (1) provide clear and complete guidance to PCRs and CMRs on accurately recording and maintaining the appropriate backup documentation for accomplishments reported in the GCAR monthly report, and (2) require that monthly GCAR data are verified and that documentation for PCR and CMR records are periodically reviewed for quality and completeness.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: In October 2013, SBA issued guidance that included instructions that the Procurement Center Representative (PCR) should follow to complete the Government Contracting Activity Report (GCAR). This guidance emphasized the need for the PCR to (1) include narrative statements that detail the circumstance and outcomes of numbers reported in the GCAR and (2) retain documentation that demonstrates how the PCR helped to influence contract actions.
Recommendation: To help ensure that Government Contracting Area Report (GCAR) data are accurate and that SBA reliably can use the data to monitor PCR and CMR performance and determine whether established goals have been achieved, the SBA's Director of Government Contracting should provide clear and complete guidance to PCRs and CMRs on accurately recording and maintaining the appropriate backup documentation for accomplishments reported in the Government Contracting Area Report (GCAR) monthly report.
Agency Affected: Small Business Administration: Office of Government Contracting
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To help ensure that GCAR data are accurate and that SBA reliably can use the data to monitor PCR and CMR performance and determine whether established goals have been achieved, the SBA's Director of Government Contracting should require that monthly GCAR data are verified and that documentation for PCR and CMR records are periodically reviewed for quality and completeness.
Agency Affected: Small Business Administration: Office of Government Contracting