Minority Contracting

This report examines the Defense Department's (DOD) implementation of 10 U.S.C. 2323, which recommends the award of five percent of DOD contract dollars to minority small businesses, historically black colleges and universities, and minority institutions. These contracts could involve procurement; military construction; operation and maintenance; and research, development, test, and evaluation. GAO discusses DOD's (1) progress toward the five-percent program goal, (2) use of certain contracting procedures authorized to achieve the section 2323 goal, and (3) progress in boosting participation by minority small business concerns.

GAO found that: (1) DOD reports on minority contracting for fiscal years 1990 and 1991 did not clearly show DOD progress toward meeting the 5-percent goal because DOD reported separately on prime contracts with small disadvantaged businesses (SDB), HBCU, and MI; (2) in the aggregate, DOD exceeded the 5-percent goal in fiscal year (FY) 1992; (3) DOD set separate 5-percent goals for the three minority contracting areas to enhance visibility in each area, accommodate prior management practices, and achieve consistency with other federal minority contracting programs; (4) although DOD used small business set-asides and preferential pricing for some contracts, it would have achieved the 5-percent goal in FY 1992 without preferential contracting procedures; (5) DOD did not report the number of minority small businesses receiving contract obligations or the distribution of obligations among those firms, although it did increase SDB participation; and (6) DOD obligated significant portions of contract dollars to a small number of minority firms.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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