Defense Contracting

To increase the participation of small disadvantaged businesses in military subcontracting, Congress mandated the Pilot Mentor-Protege Program in 1990. This program encourages mentoring relationships between major prime contractors and subcontractors. Because program implementation has been slow, not enough information is available to determine whether the program's goals can be achieved or whether reauthorization and extension is warranted. Pentagon officials said that all fiscal year 1992 and 1993 appropriated funds for the pilot program have been committed. As of September 1993, however, the Defense Department (DOD) had neither (1) complied with its own regulation to assess programs and accomplishments realized under any of the agreements nor (2) compiled the required data on the eight measures that it planned to used to evaluate program success. DOD obtained some initial participation on a "credit-only" basis and limited participation through a mix of credit and cost reimbursement through the mentor's overhead cost pool. DOD's direct reimbursement of mentors' cost has exceeded $1 million in support of each protege during a three-year period. Unless additional nonmonetary incentives are developed to encourage mentor participation, it is unlikely that the program will reach the number of proteges envisioned by Congress or significantly increase the total number of subcontracts awarded to small disadvantaged businesses.

GAO found that: (1) DOD does not have sufficient information to determine whether the pilot program will be successful or reauthorization and extension of the program is warranted because implementation of the pilot program has been slow; (2) by the end of 1993, 124 proteges were receiving assistance from mentors and 76 proteges had entered the pilot program; (3) all of the 1992 and 1993 appropriated funds for the pilot program have been committed; (4) DOD obligated $47.3 million by the end of 1993 for the pilot program; (5) DOD has obtained some initial participation on a "credit-only" basis and limited participation through the mentor's overhead cost pool; (6) the DOD average reimbursement cost to mentors in support of each protege exceeds $1 million; (7) the DOD Office of Small and Disadvantaged Business Utilization (OSADBU) has not provided adequate management oversight of the pilot program because of a lack of resources; and (8) there will not be any significant increases in the total number of subcontracts awarded to small disadvantaged businesses (SDB) unless additional nonmonetary incentives are developed to encourage mentor participation.

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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