Defense Contracting:

Interim Report on Mentor-Protege Program for Small Disadvantaged Firms

NSIAD-92-135: Published: Mar 30, 1992. Publicly Released: Mar 30, 1992.

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Pursuant to a legislative requirement, GAO provided an interim report on the Department of Defense's (DOD) Mentor-Protege Pilot Program, focusing on: (1) the regulatory implementation of the program; (2) the initial participation of eligible mentor and protege firms; and (3) deficiencies in the statutory and regulatory framework of the program that could impair success.

GAO found that: (1) DOD program policy and procurement regulations are consistent with the legislative requirements and congressional intent for the Mentor-Protege Pilot Program; (2) as a result of comments on proposed regulations that characterized some provisions as restrictive or burdensome, DOD incorporated changes into the final regulations; (3) the program was not fully implemented in October 1991, as intended, because Congress did not provide specific funds for cash reimbursement until December 1991; (4) DOD did not adopt an aggressive implementation strategy because of uncertainty about the amount and timing of program funds; (5) the President has proposed that fiscal year 1992 funds be rescinded as part of a budget-cutting effort; (6) with participation limited to mentors seeking credit toward subcontracting goals, the Office of Small and Disadvantaged Business Utilization (OSADBU) had approved 8 agreements and had 12 applications in process as of March 1992; (7) the program's full implementation delay of about 1 year could affect Congress's reauthorization and extension decision scheduled for 1994; (8) DOD has not established internal controls for reviewing and approving applications or monitoring the program, which could serve to protect the integrity of the program; (9) existing measures do not quantify specific program accomplishment or rates of progress; and (10) existing incentives may not be sufficient inducement for significant participation by prime contractors.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD awarded a contract in spring 1994 for assistance in managing the Mentor-Protege Program. This assistance includes tracking the progress made under each mentor-protege agreement.

    Recommendation: The Secretary of Defense should direct OSADBU to develop and implement adequate internal controls in the application and approval process and in the oversight of protege development.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: DOD is in constant contact with congressional staff on what will be considered in determining the success of this program. DOD will follow criteria that Congress may legislate to measure the success of this program.

    Recommendation: The Secretary of Defense should direct OSADBU to work with congressional representatives to develop evaluation criteria that, to the extent feasible, quantify desired program accomplishments.

    Agency Affected: Department of Defense

  3. Status: Closed - Not Implemented

    Comments: This program has been subsequently reviewed and another report issued with broader recommendations. See NSIAD-98-92.

    Recommendation: The Secretary of Defense should direct OSADBU to compile and analyze available data on subcontract goals and the use of incentives and penalties to achieve those goals, and consider ways to enhance Mentor-Protege Pilot Program incentives for prime contractor participation.

    Agency Affected: Department of Defense

 

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