The Office of Minority Business Enterprise Could Do More to Start and Maintain Minority Businesses

CED-77-136: Published: Nov 10, 1977. Publicly Released: Nov 10, 1977.

Additional Materials:


Office of Public Affairs
(202) 512-4800

The Office of Minority Business Enterprise (OMBE) was established to be the focus of Federal efforts to help establish and expand minority businesses. However, the OMBE management assistance program provided few benefits to the 344 minority and prospective minority businesses sampled. Only 25 percent of the 169 prospective businesses got enough help to start, and about 37 percent of the existing businesses helped were out of business or could not be located.

The Office has emphasized quantity rather than quality assistance, causing such deficiencies as: business plans not being prepared for about two-thirds of the cases, management assistance not being given to about one-third of the cases, and cases receiving assistance getting only portions of the comprehensive program. Contractors generally do not provide assistance according to OMBE criteria and have not followed their clients' progress after initial assistance.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: The Secretary of Commerce should require the Director of OMBE to: redirect the management assistance program to encourage contractors to provide a comprehensive assistance program to only as many clients as the contractors can assist over a long-term period; require contractors to obtain periodic financial statements from their clients; require that each serious client's business weaknesses and needs be analyzed in a formal business plan; assure that contractors provide clients sufficient management assistance to meet their needs; assure that contractors follow their clients' progress frequently to evaluate growth and identify problems; restructure the time-phase plan so that primary emphasis in the OMBE evaluation process is placed on meeting program objectives and secondary emphasis placed on activity levels; direct contractors to stop abandoning clients at the first indication that clients cannot qualify for financial assistance; direct contractors to exhaust all alternatives in helping clients locate equity and other resources needed to finance businesses; and study the possibility of freeing regional program officers from their heavy contract-administration workload.

    Agency Affected:


Explore the full database of GAO's Open Recommendations »

Jan 31, 2018

Jan 4, 2018

Dec 19, 2017

Oct 25, 2017

Sep 25, 2017

Jun 30, 2017

Jun 29, 2017

Jun 15, 2017

May 31, 2017

Looking for more? Browse all our products here