Review of SBA Certificate of Competency Program

GAO reviewed the Certificate of Competency (COC) Program of the Small Business Administration (SBA). SBA is authorized to issue COC's for small businesses whose bids or proposals have been rejected by Government contracting officers because of lack of responsibility for any reason. A COC is a written instrument, issued to a Government contracting officer or officer engaged in the sale or disposal of Federal property, certifying that the small company named therein possesses the capability to perform a specific Government contract. The Government officer is required to accept such certification as conclusive and must award the contract to the firm in question without requiring it to meet any other requirement of responsibility or eligibility. GAO compared the performance of small businesses on contracts awarded by the General Services Administration (GSA) after COC's were issued with the performance of small businesses on contracts awarded by GSA without the issuance of COC's.

The GAO review indicated that: (1) COC cases were processed in a timely manner and the decisions were adequately documented; (2) operating procedures for processing COC cases were comprehensive and were being complied with; (3) small businesses that were issued COC's performed as well as small businesses without COC's; and (4) GSA and Department of Defense officials generally viewed the COC program favorably. A potential weakness exists in the reporting by SBA on the status of contractor performance. Procedures require the regional offices to follow up and report monthly on the performance and financial status of active COC cases. In at least two instances, a review of the monthly reports on these cases showed that contracts were not progressing on schedule, but the contracts were classified as on schedule because the contractors were determined not to be responsible for the delays. SBA needs to accurately report the status of all active contracts that were awarded after the issuance of COC's. The Contract Progress Report does not now provide a category for classifying contracts that were delinquent when the delinquency was caused by the Government or for other excusable reasons. The report should be revised to include a category or categories for classifying such contracts.