DOD Minority Contracting

Pursuant to a congressional request, GAO provided data on Department of Defense (DOD) minority contracting and the price premiums paid to small disadvantaged business (SDB) contractors. GAO noted that: (1) DOD obligates a large portion of SDB contract dollars to a small number of companies; (2) DOD contracting officers are required to make SDB offers more competitive by increasing other offers by 10 percent; (3) DOD reported price premiums of about $32.5 million for fiscal years (FY) 1990 through 1992; (4) 13 companies received premiums of at least $100,000 between FY 1990 and 1992, and 7 of these companies received premiums of over $1 million; and (5) the premiums paid to SDB contractors are based on orders and deliveries under their contracts.