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Hurricanes Katrina and Rita wreaked havoc on small businesses in the Gulf Coast, and much federal assistance has been provided to help these businesses. GAO was asked to describe (1) the amount of assistance provided to Gulf Coast small businesses through the Small Business Administration's (SBA) disaster and Gulf Opportunity (GO) loans, state-administered business assistance programs funded by the Department of Housing and Urban Development's (HUD) Community Development Block Grants (CDBG), and the Economic Development Administration's (EDA) Revolving Loan Fund (RLF) program; (2) the extent to which Gulf Coast small businesses received federal contract funds; and (3) the current state of and improvements in the region's economy. GAO analyzed data on SBA and EDA loans and states' use of supplemental CDBG appropriations, data on prime and subcontracts awarded for hurricane recovery activities, and economic indicators both before and after the hurricanes.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. For contracts awarded by the Corps and other DOD departments, the Secretary of Defense should take steps to ensure that contracting officials consistently comply with requirements to monitor the extent to which contractors are meeting subcontracting plan goals, including requirements for contractors with subcontracting plans to submit subcontracting accomplishment reports. Once these reports are submitted, contracting officials should maintain and regularly review them to determine whether contractors are following their subcontracting plans. To ensure consistent compliance, DOD and the Corps small business offices should monitor such actions by contracting officials, as deemed appropriate.
Closed - Implemented
In an April 2011 memo, DOD stated that the DOD Business Transformation Agency, Defense Procurement and Acquisition Policy, and the Office of Small Business Programs all provide training for DOD users of the Electronic Subcontracting Reporting System (eSRS). DOD also provided a list of 12 training courses that had been held for various DOD agencies after issuance of GAO's July 2010 report. Further, the Corps noted in September 2011 that its Office of Internal Review had undertaken a comprehensive review of the Corps subcontracting program to validate compliance with program objectives and to determine if the Corps holds prime contractors accountable for meeting subcontracting goals. In addition, the Corps noted that it submits a semi-annual eSRS status report to the Department of the Army's headquarters outlining the results of all subcontracting plan reporting activities by contractors and contracting officers for the proceeding six month reporting period.

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