Establishing Goals for and Subcontracting With Small and Disadvantaged Businesses Under Public Law 95-507

Highlights

In response to a congressional request, GAO reviewed the small and disadvantaged business subcontracting program under Public Law 95-507, which essentially requires that all government contracts in excess of $500,000, or $1 million for construction contracts, contain a contractor's plan for subcontracting with small and disadvantaged businesses. In addition, GAO reviewed agency procedures for establishing small business prime contracting and subcontracting goals.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	The Administrator of OFPP and the Secretary of Defense should resolve the differences between OFPP policy and DAR on whether contractors can be exempted from submitting plans when they have longstanding contractual relationships with their suppliers.	Closed – Implemented According to the new FAR, the wording has been changed, but the intent remains the same. OFPP, DOD, and SBA officials are still negotiating over the DOD position on the DOD/contractor relationship.
Office of Federal Procurement Policy	The Administrator of OFPP and the Secretary of Defense should resolve the differences between OFPP policy and DAR on whether contractors can be exempted from submitting plans when they have longstanding contractual relationships with their suppliers.	Closed – Implemented According to the new FAR, the wording has been changed, but the intent remains the same. OFPP, DOD, and SBA officials are still negotiating over the DOD position on the DOD/contractor relationship.
Department of Defense	The Administrator of OFPP and the Secretary of Defense should resolve the differences between OFPP policy and DAR on prime contractors' responsibilities when subcontractors are required to submit plans for contracting with small and disadvantaged businesses.	Closed – Implemented Please call 202/512-6100 for information.
Office of Federal Procurement Policy	The Administrator of OFPP and the Secretary of Defense should resolve the differences between OFPP policy and DAR on prime contractors' responsibilities when subcontractors are required to submit plans for contracting with small and disadvantaged businesses.	Closed – Implemented Please call 202/512-6100 for information.
Small Business Administration	The Administrator, SBA, should make certain that final noncompliance reports are sent to contract administration officers.	Closed – Implemented Please call 202/512-6100 for information.
Small Business Administration	The Administrator, SBA, should clarify guidelines on the dollar value of prime contracts that should be included in establishing small and disadvantaged business subcontracting goals.	Closed – Implemented Please call 202/512-6100 for information.

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Government Operations

PlanningProcurementSmall business assistanceSmall business contractsSmall business set-asidesSubcontractsSubcontractingSmall businessRegulatory noncomplianceContracting officers