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Highlights

In response to Hurricane Katrina, the Departments of Homeland Security (DHS) and Defense (DOD), the General Services Administration (GSA), and the U.S. Army Corps of Engineers (Corps) were responsible for 94 percent of the federal funds awarded for relief efforts via contracting as of May 2006. This report, which GAO conducted under the Comptroller General's Authority, describes (1) the amounts that small businesses received from prime contracts with these agencies, (2) the extent of subcontracting, (3) and the extent to which Disadvantaged Business Enterprises (DBEs) received Department of Transportation funds for Katrina-related projects. In conducting this study, GAO analyzed agency contract data, reviewed federal acquisition regulations, and interviewed agency procurement officials.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Homeland Security To ensure compliance with federal contracting regulations and to more transparently disclose the extent to which subcontracting opportunities are available to small businesses, the Secretaries of Homeland Security and Defense and the Administrator of General Services should consider asking their respective Inspectors General to conduct a review at an appropriate future date to ensure that this guidance and related requirements are being followed.
Closed - Implemented

Recommendation status is Closed - Implemented.

In July 2017, DHS provided training to DHS acquisition personnel on subcontracting and the reporting of subcontracting data. In November 2017, DHS developed guidance for acquisitions staff describing (1) the roles and responsibilities of government personnel and contractors for monitoring and oversight of subcontracting, (2) status codes related to the review of subcontracting data, and (3) guidance for reviewing subcontracting reports. Additionally, in December 2017, DHS provided GAO with documentation of the performance expectations for DHS staff with responsibility for managing subcontracting data. Together, these actions demonstrate that DHS has taken various steps to help ensure that DHS staff follow subcontracting data reporting requirements.
Department of Defense To ensure compliance with federal contracting regulations and to more transparently disclose the extent to which subcontracting opportunities are available to small businesses, the Secretaries of Homeland Security and Defense and the Administrator of General Services should issue guidance to the appropriate procurement offices and personnel reinforcing (1) the reasons for subcontracting plan requirements and the importance of complying with them; (2) the necessity for documenting in publicly available sources the agencies' decisions, particularly in instances when they determine not to require subcontracting plans; and (3) where subcontracting plans are in place, the need to adhere to the requirement for all prime contractors to report on their small business subcontracting accomplishments.
Closed - Implemented

Recommendation status is Closed - Implemented.

DOD issued a policy memorandum on November 7, 2007. The guidance was issued to DOD's contracting and procurement workforce to ensure that they complied with small business subcontracting plan requirements. The guidance reinforced the reasons for subcontracting plan requirements, the importance of documenting decisions related to these requirements, and the need for prime contractors to report their small business subcontracting accomplishments.
General Services Administration To ensure compliance with federal contracting regulations and to more transparently disclose the extent to which subcontracting opportunities are available to small businesses, the Secretaries of Homeland Security and Defense and the Administrator of General Services should issue guidance to the appropriate procurement offices and personnel reinforcing (1) the reasons for subcontracting plan requirements and the importance of complying with them; (2) the necessity for documenting in publicly available sources the agencies' decisions, particularly in instances when they determine not to require subcontracting plans; and (3) where subcontracting plans are in place, the need to adhere to the requirement for all prime contractors to report on their small business subcontracting accomplishments.
Closed - Implemented

Recommendation status is Closed - Implemented.

The agency issued two Acquisition Alerts to its contracting officers in March of 2007. These alerts reinforced the reasons for subcontracting plan requirements, the importance of documenting decisions related to these requirements, and the need for prime contractors to report their small business subcontracting accomplishments. The agency issued an additional memorandum in 2009 requiring contracting officers to monitor prime contractors' subcontracting plan achievements. This monitoring includes: (1) checking to determine if the contractors' are reporting subcontracting plan achievements in accordance with the due dates, (2) following up on those contractors that have not reported in accordance to the due date requirements, (3) reviewing the subcontracting achievements to determine if the contractors are making their best efforts to achieve the subcontracting goals as laid out in the subcontracting plans, and (4) contacting those contractors whose achievements are low when compared to the goals to find out why.
Department of Defense To ensure compliance with federal contracting regulations and to more transparently disclose the extent to which subcontracting opportunities are available to small businesses, the Secretaries of Homeland Security and Defense and the Administrator of General Services should consider asking their respective Inspectors General to conduct a review at an appropriate future date to ensure that this guidance and related requirements are being followed.
Closed - Implemented

Recommendation status is Closed - Implemented.

DOD issued a policy memorandum in January 2008 that stated that all future Procurement Management Reviews or any other relevant internal oversight reviews should include subcontracting plan compliance as a special interest item. At an unspecified time in the future, DOD's Defense Procurement and Acquisition Policy office will request a review of the adequacy of the Military Departments and Defense Agencies oversight and management review processes and whether respective processes include small business subcontracting plan compliance as a review item.
General Services Administration To ensure compliance with federal contracting regulations and to more transparently disclose the extent to which subcontracting opportunities are available to small businesses, the Secretaries of Homeland Security and Defense and the Administrator of General Services should consider asking their respective Inspectors General to conduct a review at an appropriate future date to ensure that this guidance and related requirements are being followed.
Closed - Implemented

Recommendation status is Closed - Implemented.

GSA sent a letter to Senator John Kerry in May 2007 stating that the agency will seek the assistance of its IG when it conducts Procurement Management Reviews of its acquisition activities. Also, in a March 2007 Acquisition Alert to GSA contracting officers the agency stated that annual and special Procurement Management Reviews will include a review of compliance with subcontract plan requirements. GSA issued detailed guidance to its contractors on reporting requirements for subcontracts in a December 2009 Acquisition Letter.
Department of Homeland Security To ensure compliance with federal contracting regulations and to more transparently disclose the extent to which subcontracting opportunities are available to small businesses, the Secretaries of Homeland Security and Defense and the Administrator of General Services should issue guidance to the appropriate procurement offices and personnel reinforcing (1) the reasons for subcontracting plan requirements and the importance of complying with them; (2) the necessity for documenting in publicly available sources the agencies' decisions, particularly in instances when they determine not to require subcontracting plans; and (3) where subcontracting plans are in place, the need to adhere to the requirement for all prime contractors to report on their small business subcontracting accomplishments.
Closed - Implemented

Recommendation status is Closed - Implemented.

DHS issued a revised Acquisition Manual (HSAM) in October 2009 that reinforced the reasons for subcontracting plan requirements; outlined the steps that should be taken to document decisions related to the need for a subcontracting plan; and documented the requirements for prime contractors to report their small business subcontracting accomplishments. DHS also issued a subcontracting plan review checklist for contracting officers to use to ensure that prime contractors have satisfactorily addressed the 11 elements of FAR 19.704 and demonstrates a good faith effort in utilizing small businesses as subcontractors.

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