GSA Procurement:

Public Utilities' Plans for Small and Small Disadvantaged Subcontractors

GGD-93-44: Published: Jan 29, 1993. Publicly Released: Mar 2, 1993.

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Pursuant to a congressional request, GAO reviewed the relations between the General Services Administration (GSA) and utilities that provide it service, focusing on the number of utilities that: (1) have signed contracts with GSA; (2) are required to submit contracting plans maximizing practicable use of small and small disadvantaged contractors; and (3) have submitted updated subcontracting plans.

GAO found that: (1) about 1,000 utilities provide services to GSA; (2) 365 of the utilities provide services costing more than $25,000 annually, and thus are required to enter into written contracts with GSA for such services; (3) as of November 1992, 119 of the 365 utilities had not signed written contracts with GSA, some declining because they believe that federal regulations do not apply to them since they are state and locally regulated; (4) 146 of the 1,000 utilities are required to set goals for subcontracting with small and small disadvantaged businesses, since their contracts cost over $500,000; (5) as of November 1992, only 55 percent had complied with the subcontracting plans requirement; (6) 31 utilities failed to update their subcontracting plans annually, complaining that GSA procedural changes are too burdensome; (7) 39 of 119 utilities that did not sign written contracts were required to submit subcontracting plans, but only 4 had done so; (8) GSA made substantial efforts to have utilities sign contracts and submit subcontracting plans and is considering administrative enforcement; (9) GSA may have difficulty collecting damages for noncompliance with subcontracting goals or refusal to submit subcontracting plans, since GSA cannot objectively estimate the subcontracting goals; and (10) GSA has not sought court injunctions to direct unsigned utilities to comply with contracting regulations because it must prove it has exhausted all administrative remedies first.

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