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Highlights

The Small Business Administration (SBA) helps small businesses gain access to federal contracting opportunities and helps socially and economically disadvantaged small businesses, known as 8(a) firms, by providing management and contracting assistance. SBA negotiates agency-specific goals to ensure that the federal government meets the statutory goal of awarding 23 percent of contract dollars to small businesses. GAO was asked to (1) describe how SBA sets small business contracting goals and the extent to which federal agencies met these goals; (2) examine the role of SBA staff in supporting small business contracting at selected federal agencies; and (3) examine SBA's overall administration of the 8(a) program. To address these objectives, GAO reviewed SBA guidance and SBA Inspector General (IG) reports, interviewed SBA and other federal officials, and conducted site visits and file reviews at four SBA locations.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Small Business Administration 1. To improve its administration of the prime contracting, subcontracting, and 8(a) business development programs, the Administrator of SBA should assess resources allocated for procurement center representative and commercial market representative functions and develop a plan to better ensure that these staff can carry out their responsibilities.
Closed - Implemented
According to the Small Business Administration (SBA), in 2010, the agency had contracted with a consulting firm to conduct a study to define the optimal environment in which a procurement center representative's (PCR) efforts would have the maximum impact on directing contracts to qualified and capable small businesses. SBA received the final report in December 2010. As of April 2013, SBA had realigned PCRs to contract activities with the highest small business opportunities, revised PCR performance measures, and provided tools, such as ePCR, to gain additional oversight of buying activities procurement activities to ensure maximum practicable opportunities for small business. Officials explained that CMR assignments was not incorporated in the PCR assessment. However, they stated resource allocation decisions are based on workload and needs assessments made by the individual Area Directors and coordinated with SBA headquarters staff.
Small Business Administration 2. To improve its administration of the prime contracting, subcontracting, and 8(a) business development programs, and to better educate prospective applicants for the 8(a) program and maximize limited SBA resources during program tenure of participants, the Administrator of SBA should take additional steps to ensure that firms applying for the program understand its requirements, and have realistic expectations for participation. Such steps could include an education requirement, such as a seminar or assessment tool.
Closed - Implemented
In September 2012, the Small Business Administration (SBA) updated the training available to prospective 8(a) participants. The training series consists of online courses, supplemental workbooks and other educational materials, including a module called Pre 8(a) Business Development Module-Setting Expectations. According to SBA, previously the agency provided similar training, but the purpose of a comprehensive online library of materials is to familiarize small business owners with all aspects of the federal procurement process and to assist them with the growth and development of their firms. Although firms are not required to take the courses, it is highly recommended to ensure that the firms fully understand the opportunities that exist and how to prepared the potential 8(a) firms to fully participate in the program.
Small Business Administration 3. To improve its administration of the prime contracting, subcontracting, and 8(a) business development programs, and in acknowledgment of the competing demands for business development specialists to complete required annual reviews of 8(a) firms and support the mission of the 8(a) program--that is, develop and prepare small disadvantaged firms for procurement and other business opportunities-- the Administrator of SBA should (1) assess the workload of business development specialists to ensure they can carry out their responsibilities. As part of such an assessment, SBA could review the size of the 8(a) portfolio for all business development specialists and determine what mechanisms can be used to prioritize or redistribute their workload; (2) in a timely manner, develop and implement its proposed plan for creating tools that would assist in the provision of business development assistance for 8(a) firms; and (3) develop a timetable for planned changes to the termination process to ensure that staff monitoring 8(a) participants can carry out terminations from the program in a timely manner.
Closed - Implemented
According to the Small Business Administration (SBA), the Office of Field operations conducted an assessment of the workload of business development specialists, now called business opportunity specialists. In 2011 and 2012, the district director working group established the optimum number of firms to be assigned each BOS, revised position descriptions to clarify expectations, and developed new performance standards. In addition, SBA is in the process of developing a new automated information management system, One Track CMS, designed to capture and monitor data regarding business development assistance provided to 8a participants. The system is planned to be deployed in early FY 2014. Regarding the termination process, as of September 2009, SBA revised its 8(a) program procedures to shorten the termination process and improve internal controls. The procedural change shortens the termination process by 30 days to 135 days. While this falls short of the 75-day reduction SBA officials planned at the time of our November 2008 report, it may succeed in removing more ineligible firms from the program.
Small Business Administration 4. To improve its administration of the prime contracting, subcontracting, and 8(a) business development programs, and to increase the usefulness of surveillance reviews for the 8(a) program, the Administrator of SBA should update its guidance to incorporate regular reviews of 8(a) contracting in the scope of the reviews.
Closed - Implemented
In November 2008, we reported that SBA had not updated its guidance in a timely manner to incorporate the 8(a) program into surveillance reviews. Further, SBA did not have procedures to monitor, and had not been monitoring regularly, how agencies with which it had partnership agreements ensure compliance with 8(a) program requirements. Therefore, we recommended that SBA increase the usefulness of surveillance reviews by updating its guidance to incorporate regular reviews of 8(a) contracting. SBA updated its guidance on surveillance reviews in October 2013 to include a review of 8(a) contracts. For example, the guidance was updated to include sites that had 8(a) contracts in the selection criteria for surveillance reviews. By updating its guidance, SBA can improve its oversight of contracting activity in the 8(a) program and overall small business contracting.

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