SBA's Progress in Implementing the Public Law 95-507 Subcontracting and Surety Bond Waiver Provisions Has Been Limited

GAO reviewed actions taken by the Small Business Administration (SBA) and the Presidential Advisory Committee to promote subcontracting as a means of developing small and small minority businesses and the SBA implementation of the surety bond waiver provision of Public Law 95-507.

SBA and the Presidential Advisory Committee have not fully implemented the subcontracting provision of Public Law 95-507, the purpose of which is to encourage large, private businesses to place subcontracts with small and small minority firms. The Advisory Committee has focused on federal, rather than required private sector, subcontracting, while the SBA efforts, which have been limited primarily to agreements with four corporations, have resulted in only two subcontracts for small businesses. Few, if any, additional subcontracting opportunities are likely to result from these two agreements. SBA needs to emphasize that agreements are to be made with corporations that are not heavily engaged in federal contracting according to the intent of the law. Also, the Advisory Committee has not studied or proposed any incentives or assistance for the private sector to help train, develop, and upgrade small businesses, as the executive order which established the committee directed. SBA has not implemented the surety bond waiver provision established by P.L. 95-507, which authorized the SBA Administrator to waive any amount of any bond required by a government procurement officer for, and in connection with, certain contracts provided to SBA. Detailed procedures for identifying and processing these waivers had not been finalized as of September 8, 1981. As a result, no bond waivers have been granted. Thus, extending the provision's expiration date would be reasonable.

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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