Small Business Administration:

Status, Operations, and Views of the Certificate of Competency Program

RCED-86-120BR: Published: Apr 14, 1986. Publicly Released: May 15, 1986.

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Pursuant to a congressional request, GAO reviewed the Small Business Administration's (SBA) Certificate of Competency (COC) Program, focusing on: (1) the development of overall program statistics; (2) the procedures used to determine the capabilities of COC applicants; (3) the basis for SBA COC decisions; (4) SBA procedures for monitoring COC contractor performance; (5) comparisons of contractor performance on COC and non-COC contracts; and (6) contracting officers' views of the program.

The COC program is intended to ensure that small businesses, especially new entrants into the federal procurement market, are afforded a fair opportunity to receive government contracts. A responsive small business that has been denied a contract may apply to SBA for a review of its ability to perform the contract. If SBA certifies that the firm is competent, the firm receives the contract and SBA monitors the contract until completion. GAO found that: (1) the annual number of applications increased from 880 to 1,652, with an approval rate of between 50 and 56 percent; (2) SBA procedures for determining a prospective contractor's capabilities are consistent with Federal Acquisition Regulation standards; (3) 83 percent of the certificates issued involved changes in circumstances or information that differed from that available during the contracting agency's review; (4) although no statutory or regulatory criteria exist to guide SBA in evaluating prior performance, and SBA has no established written criteria to make COC determinations, there have been no instances of SBA failure to consider a requirement critical to the referral; (5) SBA has not always performed its monitoring activities in accordance with procedures because of the need for more staff to review the increased number of referrals; and (6) contracting officers stated that, although COC contractors performed as well as non-COC contractors, SBA monitoring activities were not adequate and the program benefited small businesses but not the government.

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