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Highlights

GAO reviewed the use of contracts under Section 8(a) of the Small Business Act by various federal agencies as a means of acquiring automatic data processing (ADP) equipment. GAO sought to determine whether government computer acquisition opportunities are being made available to as many small and disadvantaged businesses as possible under the 8(a) program and if federal procurement policies and regulations are being violated by the Small Business Administration (SBA), federal agencies, or contractors when ADP equipment is acquired under Section 8(a) contracts.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Small Business Administration When the government acquires supplies and equipment, the Administrator, SBA, should issue a directive requiring compliance with all appropriate procurement laws and regulations, as well as small and minority business regulations and procedures. Specific emphasis should be placed on the requirements of the Walsh-Healey Act, the Brooks Act, the Federal Procurement and Defense Acquisition Regulations, and SBA requirements for 8(a) firms to perform substantial portions of contracts with their own workers.
Closed - Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Small Business Administration The Administrator, SBA, should review all existing 8(a) contracts for electronic data processing equipment to identify those in which the 8(a) firm is acting as a broker, and those in which it is in the best interest of the government to initiate contract termination proceedings, or take other action to eliminate the brokerage situation.
Closed - Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Small Business Administration The Administrator, SBA, should direct SBA program officials to select 8(a) subcontractors through an equitable selection process which encourages technical competition among 8(a) firms and gives due consideration to the firm's capabilities and development needs.
Closed - Implemented
Congress passed three related competition and small business acts, which will now require technical competition and public notice on small and minority business contract opportunities. It is impossible to directly connect savings with the acts and the report.
General Services Administration The Administrator of General Services, with the advice of the Director of the Office of Management and Budget (OMB) under the general commission of the Paperwork Reduction Act and the Brooks Act, as well as other authorities, should place in subpart 1-4.11 of title 41 of the Federal Procurement Regulations, and other appropriate places, guidance on the size of electronic data processing and data communication contracts appropriate for award to small business and 8(a) firms.
Closed - Implemented
GSA proposed the regulation which was turned down by OMB upon objections of SBA and changed enforcement of size standards by SBA recommended by another GAO report.

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