Procurement

Pursuant to a congressional request, GAO reviewed the General Services Administration's (GSA), the Department of Energy's (DOE), and the Navy's compliance with certain statutory requirements for subcontracting with small and small disadvantaged businesses to determine: (1) if they included subcontracting plans in contracts when required; (2) what goals they set for small and small disadvantaged business participation and whether they met these goals; and (3) the extent to which they used techniques such as incentive clauses and remedial actions to promote the use of such businesses.

GAO found that: (1) about 11 percent of the contracts and contract modifications it examined that did not have subcontracting plans should have had them; (2) DOE and GSA attributed most of the instances of missing required plans to regulation misinterpretation, while the Navy attributed all of its instances to faulty oversight; (3) the agencies generally met most of their subcontracting goals; (4) the agencies did not take remedial action when they failed to achieve subcontracting goals; and (5) GSA never used incentive clauses, DOE rarely used them, and the Navy used them infrequently.