Department of Defense Minority Business Enterprise Program

The Minority Business Enterprise (MBE) Subcontracting Program of the Department of Defense (DOD) is an outgrowth of a national commitment and Executive Orders to increase minority involvement in federal procurement programs. After a review, GAO concluded that DOD implementation of the program was inadequate in three respects: (1) the contract clause to be included in selected prime contracts overlooked certain key aspects and requirements necessary to ensure the probability of program success; (2) the program was not being adequately monitored and had inadequate standards for judging the prime contractors' effectiveness; and (3) DOD contracting officers were not given guidance on inclusion of the MBE subcontract clause. Minority firms interviewed by GAO reported efforts to solicit business and to seek aid from the Small Business Administration and other organizations, but they experienced difficulty breaking into established markets. Minority businessmen made recommendations for program improvements, some found to be feasible, but some going beyond the intent of the Executive Order by implying a quota system. GAO recommended that DOD should revise the current contract clause to provide contractors with more specific direction on increasing minority involvement by: (1) including objectives for prime contractors; (2) defining the role of corporate officials; (3) requiring contractors' records on solicitations and awards; (4) providing guidance for determining contractors required to implement the program; and (5) providing for more effective monitoring.