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What GAO Found

Why GAO Did This Study

The conference report accompanying the National Defense Authorization Act (NDAA) for Fiscal Year 2012 directed GAO to assess the Department of Defense's (DOD) implementation of a new requirement for written justifications of sole-source contracts over $20 million awarded under the Small Business Administration's 8(a) program. The 8(a) program is one of the federal government’s primary means for developing small businesses owned by socially and economically disadvantaged individuals. Contract awards under this program may be competed among eligible 8(a) firms or awarded on a sole-source basis to 8(a) firms in certain instances.

Section 811 of the NDAA for Fiscal Year 2010, enacted on October 28, 2009, required the Federal Acquisition Regulation (FAR) to be amended to include a new requirement for a written justification of sole-source 8(a) awards over $20 million. The requirement was implemented in the FAR on March 16, 2011. Previously, no justification was required for sole-source 8(a) awards of any amount. Section 811 of the NDAA for Fiscal Year 2010 did not require agencies to implement the new justification requirement until it was implemented in the FAR. The 8(a) program is one of the federal government's primary means for developing small businesses owned by socially and economically disadvantaged individuals. Contract awards under this program may be competed among eligible 8(a) firms or awarded on a sole-source basis to 8(a) firms in certain instances. For example, DOD may award 8(a) sole source contracts to firms owned by Alaska Native Corporations and Indian tribes.

GAO's assessment of DOD's implementation of the justification requirement was to be provided no later than 90 days after DOD submitted a March 1, 2012, report to Congress on the subject. DOD did not meet the March date, issuing the report on November 12, 2012. In December 2012, we issued a report that reviewed government-wide implementation of this new justification requirement, including DOD's implementation activities. As agreed, this report addresses (1) the number of sole source 8(a) contracts over $20 million DOD has awarded in the period since the justification requirement was enacted in October 2009, and (2) the extent to which DOD has implemented the new justification requirement since it was incorporated into the FAR in March 2011.

In our December 2012 report, we made recommendations to the Administrator of the Office of Federal Procurement Policy to promulgate guidance to clarify the circumstances in which an 8(a) justification is required to help mitigate future confusion. We are not making any additional recommendations to DOD.

For more information, contact Michele Mackin at (202) 512-4841 or mackinm@gao.gov.

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