Small and Disadvantaged Businesses: Some Agencies' Advocates Do Not Report to the Required Management Level

GAO-03-863 Published: Sep 04, 2003. Publicly Released: Oct 14, 2003.
Jump To:
Skip to Highlights
Highlights

Section 15(k) of the Small Business Act requires that all federal agencies with procurement powers establish an Office of Small and Disadvantaged Business Utilization (OSDBU). This law is one of many designed to enhance the participation of small and disadvantaged businesses in federal procurement. Section 15(k)(3) of the act requires that OSDBU directors, who are intended to be advocates for small and disadvantaged businesses, be responsible only to and report directly to agency heads or deputy agency heads. GAO was asked to determine compliance with section 15(k)(3) across the government, review to whom the OSDBU director at the Office of the Secretary of Defense has reported since the office was exempted from that provision, and determine whether section 15(k) applies to the Office of Administration (OA), which is the central procurement arm of the Executive Office of the President (EOP).

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Justice The Attorney General should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
On June 9, 2005, the audit liaison advised that the agency does not plan to implement the regulation.
Social Security Administration The Commissioner of the Social Security Administration should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
On June 8, 2005, the audit liaison advised that the agency will not implement the recommendation. The agency closed out the recommendation in 2004.
Environmental Protection Agency The EPA Administrator should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Implemented
On September 14, 2004, EPA's OSDBU director stated to GAO staff that she currently reports to the Deputy Administrator. The OSDBU director stated that she meets frequently with the Deputy Administrator to discuss EPA small business programs. Moreover, the OSDBU director the Deputy Administrator conducted her recent mid-year performance evaluation.
Department of Agriculture The Secretary of Agriculture should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
On July 6, 2005, the audit liaison advised me that USDA believes that the response submitted on October 21, 2003, still reflects its position. USDA believes that our organization is in compliance with section 15(k)(3) of the Small Business Act. According to the audit liaison officer, the organizational structure used at USDA has been highly successful in meeting the goals of the program and it is in compliance with the need to hold the Assistant Secretary for Administration directly responsible and accountable to the Secretary of Agriculture for these duties.
Department of Commerce The Secretary of Commerce should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
On July 13, 2005, the liaison officer advised me that the Department continues to believe that the reporting line for the OSDBU director is in compliance with the statute. The Department believes that the organizational structure is efficient and effective. For these reasons, the reporting relationship of the OSDBU Director has not been changed since the issuance of the final GAO report. The liaison officer suggested that GAO close out this recommendation.
Department of Education The Secretary of Education should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
On June 17, 2005, I talked with the GAO Liaison officer and she told me that the Department believes that it is in compliance with Section 15(k)(3) of the Small Business Act. On January 6, 2004, the Department sent a letter to GAO stating this fact. According to the audit liaison officer, the OSDBU director reporting relationship has not changed since the 2003 report and the department does not plan to make any changes to the reporting relationship since it believes it is in compliance.
Department of Health and Human Services The Secretary of Health and Human Services should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Implemented
On 9/25/07, an Oversight Analyst in the Office of the Assistant Secretary for Legislation at HHS informed us that the Office of Small and Disadvantaged Business Utilization was re-organized and the Director is reporting to the Deputy Secretary.
Department of State The Secretary of State should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
On 2/26/07, the Assistant Secretary of Administration advised us that the agency did not concur with the recommendation at the time of report issuance and continue to disagree with the recommendation. They will not be implementing the recommendation.
Department of the Interior The Secretary of the Interior should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
I have made several attempts to contact the liasion official at the Department of Interior inquiring whether the agency had implemented the recommendation. The official has not returned any of my phone calls. I last contacted the liaison official on 7/9/07 and left a message advising the official that if we did not hear from the agency within in the next week the recommendation would be closed, but not implemented. We have not heard back from the agency as 7/26/07.
Department of the Treasury The Secretary of the Treasury should take steps as necessary to comply with the requirement in section 15(k)(3) of the Small Business Act that the Office of Small and Disadvantaged Business Utilization director be responsible only to and report directly to the head or deputy head of the agency.
Closed – Not Implemented
We were advised on 2/26/07 that Treasury would not be implementing the recommendation.

Full Report