Improvements Needed to Help Ensure Reliability of SBA's Performance Data on Procurement Center Representatives
Gao ID: GAO-11-549R June 15, 2011
This letter responds to the mandate contained in Section 1312(c) of the Small Business Jobs Act of 2010, for GAO to conduct a study of the Small Business Administration's (SBA) Procurement Center Representatives (PCR) and Commercial Market Representatives (CMR), including ways to improve their effectiveness. To fulfill this mandate, we provided congressional staff a briefing on the results of this work in meetings with them on March 22, 23, and 24, 2011. Each year, the federal government awards hundreds of billions of dollars in contracts for goods and services--more than $500 billion in fiscal year 2010 alone. It uses this buying power to maximize procurement opportunities for small businesses through long-standing policies such as set-asides and requiring large contractors to set goals for using small business subcontractors. SBA's PCRs and CMRs play an important role in helping ensure that small businesses gain access to contracting and subcontracting opportunities. In particular, a PCR's key responsibilities include reviewing proposed agency contract events--such as potentially bundled or consolidated contracts--and making set-aside recommendations to agency contracting officers (through informal and formal means), reviewing agency small business programs (surveillance reviews), and counseling small businesses. In addition, PCRs can appeal a contracting officer's rejection of their formal set-aside recommendation. PCRs also review the proposed subcontracting plans of large prime contractors and provide advice and recommendations on them to contracting officers. A CMR's key responsibilities include counseling small businesses on obtaining subcontracts and performing "matchmaking" activities to link large prime contractors with small businesses. CMRs also conduct reviews of large prime contractors with subcontracting plans, including Subcontracting Orientation and Assistance Reviews, performance reviews, and compliance reviews. We and SBA's Office of the Inspector General (OIG) previously reported on resource constraints that limited the ability of PCRs and CMRs to effectively perform their functions. In May 2005, SBA's OIG reported that SBA had not reviewed the majority of potentially bundled contracts reported by procurement agencies because of limited staff and a weak tracking system. In September 2007, the SBA OIG reported that CMRs monitored less than half of the 2,200 large prime contractors in fiscal year 2006. In November 2008, we reported that years of SBA downsizing and budget reductions reduced staff resources and resulted in most PCRs covering multiple agencies and "buying activities" within agencies. We also reported that CMRs with whom we spoke had large portfolios (ranging from approximately 90 to 200 prime contractors), which diminished their ability to monitor prime contractors through compliance reviews. We recommended that SBA assess the resources allocated to PCRs and CMRs and develop a plan to better ensure that these staff could carry out their responsibilities. SBA agreed with this recommendation and stated it was assessing statutory requirements and resources for PCRs and CMRs to develop such a plan. In September 2010, SBA contracted with a consulting firm to conduct a study to define the optimal environment in which a PCR's efforts would have the maximum impact on directing contracts to qualified and capable small businesses. As of the date of this letter, SBA officials told us that they were reviewing the study results. In accordance with the mandate and discussions with committee offices, we identified (1) measures SBA uses to determine the effectiveness of PCRs and CMRs in carrying out their responsibilities; (2) key challenges PCRs and CMRs cited related to carrying out their responsibilities; and (3) options PCRs, CMRs, and other key stakeholders cite to increase the effectiveness of PCRs and CMRs, including advantages and disadvantages.
SBA's Office of Government Contracting has performance goals and measures related to key PCR and CMR activities: (1) influence $6.7 billion of procurements for small business programs (by making formal and informal recommendations through Form 70s on specific contracts), (2) conduct 42 surveillance and follow-up reviews, (3) conduct 1,220 subcontracting reviews, and (4) conduct 40 training sessions for federal agencies (contracting staff). According to SBA, PCRs and CMRs generally exceeded these goals in fiscal year 2010. PCRs and CMRs we interviewed identified seven key challenges to effectively performing their duties. (1) PCRs and CMRs said conducting size determinations and issuing certificates of competency took priority over and reduced time for PCR and CMR duties. (2) CMRs told us that the CMR function increasingly has become part-time. (3) PCRs and CMRs told us that the lack of in-person interaction with the buying activities and prime contractors limited their ability to influence procurements and subcontracting opportunities. PCRs working at buying activities said their access to procurement planning discussions helped influence procurements. (4) PCRs told us that contracting officers may not understand the small business contracting provisions in the Federal Acquisition Regulation, and some did not know how to conduct market research to identify qualified small businesses during acquisition planning. A few PCRs said turnover at certain buying activities explained these gaps. (5) Many PCRs (13 of 22) told us that some agencies would not send procurements to them for review, although the Federal Acquisition Regulation requires agencies to provide certain procurements to SBA for review prior to award. (6) Some PCRs (5 of 22) told us because purchases made using the Federal Supply Schedule were excluded from set-aside requirements, their ability to influence these purchases was limited. Yet, federal contracting data indicate that in fiscal year 2009, $9 billion (or 40 percent) of schedule purchases went to small businesses. (7) PCRs and CMRs cited a lack of authority to influence subcontracting opportunities. PCRs told us that they had no means to dispute agency procurements if contracting officers did not use their recommendations on subcontracting plans. From interviews with PCRs, CMRs, and other stakeholders, five options emerged for increasing PCR and CMR effectiveness: (1) increase the PCR and CMR workforce; (2) remove size determination and certificate of competency duties from staff with PCR and CMR responsibilities; (3) increase opportunities for PCRs and CMRs to have inperson interactions with buying activities and large prime contractors; (4) increase SBA's server capacity; (5) increase small business training that PCRs conducted for agency contracting officers; and (6) allow PCRs to dispute a procurement if their recommendations on a subcontracting plan were not implemented. Possible advantages of these options include increasing the number of procurements reviewed or compliance reviews conducted, and improving PCR and CMR influence. Possible advantages include increasing the number of procurements reviewed or compliance reviews conducted, and improving PCR and CMR influence. Possible disadvantages include the need for increased resources and a change in statute for some options. To help ensure that GCAR data are accurate and that SBA reliably can use the data to monitor PCR and CMR performance and determine whether established goals have been achieved, we recommend that SBA's Director of Government Contracting take the following two steps: (1) provide clear and complete guidance to PCRs and CMRs on accurately recording and maintaining the appropriate backup documentation for accomplishments reported in the GCAR monthly report, and (2) require that monthly GCAR data are verified and that documentation for PCR and CMR records are periodically reviewed for quality and completeness.
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.
Director:
William B. Shear
Team:
Government Accountability Office: Financial Markets and Community Investment
Phone:
(202) 512-4325
GAO-11-549R, Improvements Needed to Help Ensure Reliability of SBA's Performance Data on Procurement Center Representatives
This is the accessible text file for GAO report number GAO-11-549R
entitled 'Improvements Needed to Help Ensure Reliability of SBA's
Performance Data on Procurement Center Representatives' which was
released on June 15, 2011.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as
part of a longer term project to improve GAO products' accessibility.
Every attempt has been made to maintain the structural and data
integrity of the original printed product. Accessibility features,
such as text descriptions of tables, consecutively numbered footnotes
placed at the end of the file, and the text of agency comment letters,
are provided but may not exactly duplicate the presentation or format
of the printed version. The portable document format (PDF) file is an
exact electronic replica of the printed version. We welcome your
feedback. Please E-mail your comments regarding the contents or
accessibility features of this document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
GAO-11-549R:
United States Government Accountability Office:
Washington, DC 20548:
June 15, 2011:
The Honorable Mary L. Landrieu:
Chair:
The Honorable Olympia J. Snowe:
Ranking Member:
Committee on Small Business and Entrepreneurship:
United States Senate:
The Honorable Sam Graves:
Chairman:
The Honorable Nydia M. Velázquez:
Ranking Member:
Committee on Small Business:
House of Representatives:
Subject: Improvements Needed to Help Ensure Reliability of SBA's
Performance Data on Procurement Center Representatives:
This letter formally transmits the attached briefing slides (see
enclosure I) in response to the mandate contained in Section 1312(c)
of the Small Business Jobs Act of 2010, for GAO to conduct a study of
the Small Business Administration's (SBA) Procurement Center
Representatives (PCR) and Commercial Market Representatives (CMR),
including ways to improve their effectiveness.[Footnote 1] To fulfill
this mandate, we provided your staff a briefing on the results of this
work in meetings with them on March 22, 23, and 24, 2011.
Each year, the federal government awards hundreds of billions of
dollars in contracts for goods and services--more than $500 billion in
fiscal year 2010 alone. It uses this buying power to maximize
procurement opportunities for small businesses through long-standing
policies such as set-asides and requiring large contractors to set
goals for using small business subcontractors. SBA's PCRs and CMRs
play an important role in helping ensure that small businesses gain
access to contracting and subcontracting opportunities. In particular,
a PCR's key responsibilities include reviewing proposed agency
contract events--such as potentially bundled or consolidated
contracts--and making set-aside recommendations to agency contracting
officers (through informal and formal means), reviewing agency small
business programs (surveillance reviews), and counseling small
businesses.[Footnote 2] In addition, PCRs can appeal a contracting
officer's rejection of their formal set-aside recommendation.[Footnote
3] PCRs also review the proposed subcontracting plans of large prime
contractors and provide advice and recommendations on them to
contracting officers.[Footnote 4] A CMR's key responsibilities include
counseling small businesses on obtaining subcontracts and performing
"matchmaking" activities to link large prime contractors with small
businesses. CMRs also conduct reviews of large prime contractors with
subcontracting plans, including Subcontracting Orientation and
Assistance Reviews, performance reviews, and compliance reviews.
[Footnote 5]
We and SBA's Office of the Inspector General (OIG) previously reported
on resource constraints that limited the ability of PCRs and CMRs to
effectively perform their functions. In May 2005, SBA's OIG reported
that SBA had not reviewed the majority of potentially bundled
contracts reported by procurement agencies because of limited staff
and a weak tracking system.[Footnote 6] In September 2007, the SBA OIG
reported that CMRs monitored less than half of the 2,200 large prime
contractors in fiscal year 2006.[Footnote 7] In November 2008, we
reported that years of SBA downsizing and budget reductions reduced
staff resources and resulted in most PCRs covering multiple agencies
and "buying activities" within agencies.[Footnote 8] We also reported
that CMRs with whom we spoke had large portfolios (ranging from
approximately 90 to 200 prime contractors), which diminished their
ability to monitor prime contractors through compliance reviews. We
recommended that SBA assess the resources allocated to PCRs and CMRs
and develop a plan to better ensure that these staff could carry out
their responsibilities.[Footnote 9] SBA agreed with this
recommendation and stated it was assessing statutory requirements and
resources for PCRs and CMRs to develop such a plan. In September 2010,
SBA contracted with a consulting firm to conduct a study to define the
optimal environment in which a PCR's efforts would have the maximum
impact on directing contracts to qualified and capable small
businesses. As of the date of this letter, SBA officials told us that
they were reviewing the study results.
In accordance with the mandate and discussions with committee offices,
we identified (1) measures SBA uses to determine the effectiveness of
PCRs and CMRs in carrying out their responsibilities; (2) key
challenges PCRs and CMRs cited related to carrying out their
responsibilities; and (3) options PCRs, CMRs, and other key
stakeholders cite to increase the effectiveness of PCRs and CMRs,
including advantages and disadvantages.
To help address the objectives, we reviewed SBA data on PCR and CMR
performance as reported in the agency's monthly Government Contracting
Area Report (GCAR) for fiscal years 2006 to 2007 and 2009 to 2010.
[Footnote 10] We talked with agency officials and staff about data
quality control procedures and reviewed relevant documentation. We
reviewed and analyzed relevant laws and regulations, SBA position
descriptions, staff guidance for SBA's Prime Contracts and
Subcontracting Assistance Programs, and SBA's Office of Government
Contracting staffing directories from August 2008 and August 2010. We
interviewed (1) SBA officials who manage PCRs and CMRs, including five
of six area directors; (2) a random sample of 27 of 77 SBA staff with
PCR or CMR responsibilities (stratified to represent each SBA area
office); (3) contracting staff from six major buying activities at
three federal agencies with assigned PCRs--the Department of Defense
(DOD), General Services Administration (GSA), and Department of
Veterans Affairs (VA); and (4) five national small business
stakeholders and a regional group representing large prime contractors
with active subcontracting plans. As agreed with your offices, we
focused on the policies, procedures, and performance measures SBA has
for PCRs and CMRs but did not independently evaluate the effectiveness
of PCRs and CMRs.
In our March 2011 briefing, we reported information on measures SBA
uses to assess PCR and CMR effectiveness. We also stated that we would
conduct additional work to further assess the reliability of the data
SBA reports for these measures. Following our March 2011 briefing, we
compared the data that three SBA area offices reported on the GCAR in
July and August 2010 with documentation maintained by PCRs and CMRs
for five measures--formal Form 70s issued to initiate small business
set-asides, informal Form 70s issued to initiate small business set-
asides, surveillance reviews conducted, subcontracting reviews, and
training for federal agencies. We identified several instances where
the GCAR data did not match the documentation or could not be verified
based on the documentation provided. On the basis of these results, we
do not believe that the data SBA reports in the GCAR for these five
measures provide reliable information on PCRs' and CMRs' actual
accomplishments. We provide additional details on the results of our
assessment of SBA's GCAR data later in this letter.
We conducted our work from October 2010 through June 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
PCRs and CMRs are the primary staff who implement SBA's prime
contracts and subcontracting assistance programs, which are intended
to increase contracting opportunities for small businesses and help
ensure that small businesses receive a fair and equitable opportunity
to participate in federal prime contracts and subcontracts. SBA's
Office of Government Contracting administers the prime contracts and
subcontracting assistance programs through SBA headquarters and six
area offices located across the country.[Footnote 11] Area office
directors are responsible for supervising these programs in the field,
including the PCR and CMR staff. According to SBA, its 57 PCRs are
assigned to approximately 868 buying activities (divisions that
purchase goods and services) within 21 federal agencies and
departments.[Footnote 12] Forty-one PCRs are colocated at a buying
activity; other staff with PCR responsibilities are located at SBA
offices. SBA assigns its 33 CMRs to prime contractors based on the
CMR's location and other considerations.
As previously stated, a PCR's key responsibilities include making
recommendations to agency contracting officers that proposed contracts
be set aside for eligible small businesses--through informal and
formal means. A PCR generally will issue an informal Form 70 after
discussing and reaching an agreement with a contracting officer to
accept a recommended set-aside. If the PCR and contracting officer do
not reach an agreement, the PCR can submit a formal Form 70 to the
contracting officer, which effectively stops the contract action,
pending further consideration. If the contracting officer refuses to
accept the recommended set-aside addressed in the Form 70,SBA can
appeal the rejection to the head of the contracting activity, then to
the agency head (known as a secretarial appeal).[Footnote 13]
PCRs and CMRs also may be required to conduct additional duties,
including size determinations and certificates of competency. SBA
conducts size determinations of businesses against which a protest has
been filed (because they are believed to be other than small). SBA
must complete these determinations within 15 business days of
receiving a protest, if possible. Size cases are assigned to the SBA
area office in the area where the business concern is located.
Contracting officers may withhold award of a contract to a small
business otherwise in line for award if they determine the firm is
"nonresponsible."[Footnote 14] Such determinations must be referred to
SBA which must, if requested by the small business, complete a
certificate of competency review within 15 business days to determine
whether the small business is responsible. If SBA issues a certificate
of competency, the agency must generally award the contract to the
firm. Of the 27 PCRs and CMRs we interviewed, 17 had responsibilities
to conduct size determinations or certificates of competency.
SBA's GCAR provides information on various PCR and CMR activities.
PCRs and CMRs are required to enter details on their activities into
the spreadsheet-based report on a monthly basis. According to SBA
standard operating procedures, a program manager consolidates the
information by area office and forwards the report to the Associate
Administrator for Government Contracting.
Although SBA Performance Goals and Measures Provide Some Information
on Key PCR and CMR Activities, Data Reliability Issues May Limit the
Usefulness of These Data:
SBA's Office of Government Contracting has performance goals and
measures related to key PCR and CMR activities. For example, for
fiscal year 2010, PCRs and CMRs were expected to (1) influence $6.7
billion of procurements for small business programs (by making formal
and informal recommendations through Form 70s on specific contracts),
(2) conduct 42 surveillance and follow-up reviews, (3) conduct 1,220
subcontracting reviews, and (4) conduct 40 training sessions for
federal agencies (contracting staff). According to SBA, PCRs and CMRs
generally exceeded these goals in fiscal year 2010. However, our
review of SBA's GCAR data showed that data reliability issues may
limit the usefulness of these measures for monitoring PCR and CMR
performance and actual accomplishments. Our comparison of selected
GCAR data reported by three SBA area offices in July and August 2010
against documentation maintained by PCRs and CMRs showed that GCAR
data often did not match the documentation or could not be verified
based on the documentation. Specifically,
* Formal Form 70s issued to initiate small business set-asides: We
reviewed $32.1 million reported on the GCAR in July 2010 for four
formal recommendations that PCRs made. For formal Form 70s, SBA
guidance requires PCRs to report the base year value for multiyear
contracts or the total value for a one-time or 1-year award. For one
recommendation, we found that the GCAR lists an amount of $4.5
million, but the documentation appeared to support an amount of
$800,000. The GCAR lists $10 million for another recommendation;
however, the documentation appeared to support an amount of $7
million. For the remaining two recommendations, we could not verify
the amount reported on the GCAR because the supporting documentation
lacked sufficient detail.
* Informal Form 70s issued to initiate small business set-asides: We
reviewed $68.5 million reported on the GCAR in July 2010 for 36
informal recommendations PCRs made. For informal Form 70s, SBA
guidance requires PCRs to report the base year value for multiyear
contracts or the total value for a one-time or 1-year award. We found
that seven informal recommendations lacked supporting documentation
with sufficient detail to determine the base year value or one-time or
1-year award value of the contract.
* Surveillance reviews conducted: We reviewed seven surveillance
reviews reported on the GCAR for August 2010. We could not verify the
date for one review because the supporting documentation lacked
sufficient detail. SBA officials told us that a second review was
conducted in June 2010 but was incorrectly reported in August 2010.
* Subcontracting reviews: We reviewed documentation for the 67
subcontracting reviews reported on the GCAR for July 2010. SBA
provided documentation for 41 of these reviews. SBA officials told us
they could not locate documentation for 26 reviews that they said were
conducted by a staff person who had recently retired. In addition, we
could not verify the date for 13 of the 41 reviews because the
supporting documentation lacked sufficient detail. One review appeared
to have been conducted in September 2010 based on the supporting
documentation but was reported in July 2010.
* Other training-federal agencies (contracting activities): We
reviewed documentation for the 133 federal agency training events
reported on the GCAR for July 2010. SBA officials told us that one
area office reported the number of attendees (123) rather than the
number of events (8), resulting in an overstatement of 115 training
events reported for the month. In addition, we could not verify the
date or the purpose for three events because the supporting
documentation lacked sufficient detail. Four training events also
appeared to have taken place in August 2010 based on the supporting
documentation but were reported in July 2010.
According to our internal control standards, for an agency to run and
control its operations, it must have relevant, reliable information
relating to internal events.[Footnote 15] This information should be
recorded and communicated to management and others within the agency
who need it to carry out their responsibilities. SBA's standard
operating procedures require PCRs and CMRs to submit a productivity
report and other information to their area director each month and
maintain backup documentation in their office for 3 years. These
procedures also require area directors to review the records that PCRs
submit to them and conduct an on-site review of the PCRs' records
every other year (as other duties and travel funds permit), prepare a
report of their review, and submit a copy to SBA headquarters.
[Footnote 16] However, SBA has not communicated standards or
consistently applied internal control procedures. More specifically,
it has not provided clear and complete guidance for PCRs and CMRs for
accurately recording and maintaining the appropriate backup
documentation for accomplishments reported in the GCAR. For example,
some PCRs we interviewed told us that their area directors relied on a
system of trust and did not review the documentation supporting their
accomplishments or conduct on-site reviews of their records; other
PCRs told us that their area director selectively asked for supporting
documentation. In addition, only one of the five area directors we
interviewed told us that he reviewed PCRs' records to fully ensure
they were maintaining the appropriate documentation supporting their
reported accomplishments. Two other area directors told us that they
spot-checked the data PCRs report in the GCAR by asking for supporting
e-mail correspondence with agency officials or by comparing the
reported data with e-mails on which they were "copied" addressees.
SBA's ability to monitor the performance of PCRs and CMRs and
determine whether established goals have been achieved is compromised
when GCAR data are inaccurate. SBA officials told us that the Office
of Government Contracting is planning to update the standard operating
procedures for PCRs and CMRs by December 2011, including the
requirements related to the documentation of data reported into the
GCAR.
PCRs and CMRs Cited Various Challenges Related to Carrying Out Their
Responsibilities:
* PCRs and CMRs we interviewed identified seven key challenges to
effectively performing their duties.
* PCRs and CMRs said conducting size determinations and issuing
certificates of competency took priority over and reduced time for PCR
and CMR duties. SBA officials told us staff reductions required them
to cross-train most PCRs and CMRs on size determinations and
certificates of competency.
* CMRs told us that the CMR function increasingly has become part-
time. According to SBA, more than half the staff with CMR functions
spent 25 percent or less of their time on CMR duties as of November 1,
2010.
* PCRs and CMRs told us that the lack of in-person interaction with
the buying activities and prime contractors limited their ability to
influence procurements and subcontracting opportunities. PCRs working
at buying activities said their access to procurement planning
discussions helped influence procurements.
* PCRs told us that contracting officers may not understand the small
business contracting provisions in the Federal Acquisition Regulation,
and some did not know how to conduct market research to identify
qualified small businesses during acquisition planning. A few PCRs
said turnover at certain buying activities explained these gaps.
* Many PCRs (13 of 22) told us that some agencies would not send
procurements to them for review, although the Federal Acquisition
Regulation requires agencies to provide certain procurements to SBA
for review prior to award.[Footnote 17] SBA officials told us they
were meeting with officials from three agencies to resolve this issue.
* Some PCRs (5 of 22) told us because purchases made using the Federal
Supply Schedule were excluded from set-aside requirements, their
ability to influence these purchases was limited. Yet, federal
contracting data indicate that in fiscal year 2009, $9 billion (or 40
percent) of schedule purchases went to small businesses.
* PCRs and CMRs cited a lack of authority to influence subcontracting
opportunities. PCRs told us that they had no means to dispute agency
procurements if contracting officers did not use their recommendations
on subcontracting plans. PCRs and CMRs also said it was difficult to
enforce prime contractor performance under subcontracting plans
because determining that a contractor was not acting in good faith was
difficult.
Anecdotal evidence from agency procurement staff and others provides
additional insight into PCR and CMR effectiveness. Officials
representing six major buying activities had mixed views of PCR
effectiveness. Some said PCRs were useful in training contracting
staff, discussing procurement strategies to include small businesses,
and generally augmenting the resources of the agency small business
office. Several others said working with PCRs slowed the procurement
process, citing a lack of interaction between agency staff and PCRs.
They cited other limitations on PCR effectiveness, including PCRs'
lack of technical knowledge of agencies' specific contracting
requirements, and limitations in SBA's server capacity that required
some agencies to fax procurement materials to PCRs for review.
Conversely, representatives of a group representing large prime
contractors told us CMRs effectively helped them understand
contracting regulations and provided information on legislative
updates.
Several Options Could Increase PCR and CMR Effectiveness:
From interviews with PCRs, CMRs, and other stakeholders, five options
emerged for increasing PCR and CMR effectiveness: (1) increase the PCR
and CMR workforce; (2) remove size determination and certificate of
competency duties from staff with PCR and CMR responsibilities; (3)
increase opportunities for PCRs and CMRs to have in-person
interactions with buying activities and large prime contractors; (4)
increase SBA's server capacity; (5) increase small business training
that PCRs conducted for agency contracting officers; and (6) allow
PCRs to dispute a procurement if their recommendations on a
subcontracting plan were not implemented. Possible advantages of these
options include increasing the number of procurements reviewed or
compliance reviews conducted, and improving PCR and CMR influence.
Possible disadvantages include the need for increased resources and a
change in statute for some options. These options are discussed in
greater detail in enclosure I.
Conclusions:
SBA plays an important role in helping ensure that small businesses
gain access to federal contracting opportunities. Among its staff,
PCRs and CMRs play important roles in advocating for and advancing
prime and subcontracting opportunities for small businesses. Thus,
they are in key positions to help SBA achieve the goal of helping
ensure such opportunities. However, our review of SBA's GCAR data
indicated that SBA may not have accurate information, which is needed
to determine how well staff have performed or that intended goals are
being achieved. By better communicating standards and consistently
applying internal control procedures, SBA could help ensure the
accuracy and reliability of its GCAR data. More specifically, without
clear and complete guidance for PCRs and CMRs to accurately record and
maintain the appropriate backup documentation for accomplishments
reported in the GCAR, SBA risks ongoing issues with the quality of its
data. Similarly, until SBA takes steps to ensure the verification of
data PCRs and CMRs submit monthly and completes periodic reviews of
PCR and CMR records, it will lack the controls needed to better ensure
the reliability of GCAR data. As a result, the usefulness of the GCAR
data SBA uses to evaluate PCR and CMR performance will be limited.
Recommendations for Executive Action:
To help ensure that GCAR data are accurate and that SBA reliably can
use the data to monitor PCR and CMR performance and determine whether
established goals have been achieved, we recommend that SBA's Director
of Government Contracting take the following two steps:
* provide clear and complete guidance to PCRs and CMRs on accurately
recording and maintaining the appropriate backup documentation for
accomplishments reported in the GCAR monthly report, and:
* require that monthly GCAR data are verified and that documentation
for PCR and CMR records are periodically reviewed for quality and
completeness.
Agency Comments and Our Evaluation:
We provided a draft of this letter and the attached briefing slides to
SBA, DOD, GSA, and VA for review and comment. SBA's Acting Director
for the Office of Government Contracting provided written comments
that are presented in enclosure II. In addition, VA provided technical
comments, which we incorporated where appropriate. DOD and GSA stated
that they had no comments on our draft letter.
In his letter, SBA's Acting Director for the Office of Government
Contracting agreed with our recommendations and stated that SBA has
begun to address them. To address the recommendation on enhancing
guidance for recording and maintaining documentation, he stated that
SBA has been updating the standard operating procedures for the PCR
and CMR programs, and that the updates will provide clear instructions
on what PCRs and CMRs should report for the GCAR monthly report, how
the data should be reported, and how to maintain appropriate backup
documentation for verification purposes. To address the recommendation
on data verification and PCR and CMR record review, he stated that SBA
will develop and implement a verification method that area directors
and SBA headquarters staff will use to insure that data in the GCAR
are accurate and reliable.
We are sending copies of this report to the appropriate congressional
committees, and the Administrator of the Small Business Administration
and other interested parties. In addition, this report will be
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-8678 or shearw@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Major contributors to this report were
Marshall Hamlett (Assistant Director), William R. Chatlos, David Reed,
Barbara Roesmann, and Kathryn Supinski.
Signed by:
William B. Shear:
Director, Financial Markets and Community Investment:
Enclosures:
[End of section]
Enclosure I: Briefing slides:
The Role of SBA Procurement Center Representatives and Options for
Increasing Their Effectiveness:
Briefing for the Senate Committee on Small Business and
Entrepreneurship and the House Committee on Small Business:
March 2011:
Introduction:
The Small Business Jobs Act of 2010 (P.L. 111-240) includes a
requirement for GAO to conduct a study on the Small Business
Administration's (SBA) Procurement Center Representatives (PCR) and
Commercial Market Representatives (CMR), including ways to improve
their effectiveness.
SBA's PCRs and CMRs work to increase business opportunities for small
businesses and help ensure they receive a fair and equitable
opportunity to participate in federal prime contracts and
subcontracts. Preliminary data from fiscal year 2010 indicate the
federal government awarded about $112 billion in contracts to small
businesses.
We and the SBA Inspector General previously have reported that
resource constraints have limited the ability of PCRs and CMRs to
advocate, review, and monitor small business contracting at federal
agencies.[Footnote 18] Moreover, questions have been raised regarding
the effectiveness of PCRs in breaking up bundled or consolidated
federal contracts.
Topics to Be Covered:
The briefing will cover the following topics:
* Objectives;
* Scope and Methodology;
* Summary of Findings;
* Background;
* Discussion by Objective.
Objectives:
In accordance with the mandate and discussions with committee offices,
our study addressed the following key questions:
* Measures SBA uses to determine the effectiveness of PCRs and CMRs in
carrying out their responsibilities;
* Key challenges PCRs and CMRs cite related to carrying out their
responsibilities; and;
* Options PCRs, CMRs, and other key stakeholders cite to increase the
effectiveness of PCRs and CMRs, including the likely advantages and
disadvantages of different options.
Scope and Methodology:
To help address our objectives, we took the following actions:
* We reviewed SBA's Office of Government Contracting data on PCR and
CMR performance for fiscal years 2006-2007 and 2009-2010. We talked
with agency officials and staff about data quality control procedures
and reviewed relevant documentation. Although we are still conducting
audit work at the PCR/CMR level for the final report, we believe the
data included in this briefing to be sufficiently reliable for the
purposes of this report. We did not include data for fiscal year 2008
because SBA did not retain such data during a transition to a new
reporting system.
* We reviewed and analyzed relevant laws and regulations, SBA position
descriptions, standard operating procedures for SBA's Prime Contracts
and Subcontracting Assistance Programs, and SBA's Office of Government
Contracting staffing directories from August 2008 and August 2010.
* We interviewed SBA officials in charge of managing PCRs and CMRs,
including five of six Area Directors. We also interviewed a random
sample of 27 SBA staff with PCR or CMR responsibilities that we
selected from a population of 77 SBA staff, stratified to include PCR
and CMR representation from each of SBA's six area offices. The final
sample included 22 staff with PCR responsibilities, 14 with CMR
responsibilities, and 9 of the 27 had both. Although the sample was
selected randomly with representation, it does not generalize to the
total PCR/CMR population.
* We interviewed contracting staff from six major buying activities
(divisions that purchase goods and services) at three federal agencies
where SBA has assigned PCRs”Department of Defense (DOD), General
Services Administration (GSA), and the Department of Veterans Affairs
(VA).
* We interviewed five national small business stakeholders and a
regional group representing large prime contractors with active
subcontracting plans.
* As agreed with your offices, we focused on the policies and
procedures SBA has in place for PCRs and CMRs and measures of their
performance but did not undertake audit work to independently evaluate
the effectiveness of PCRs and CMRs.
* We conducted our work from October 2010 through March 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Summary of Findings:
SBA has performance goals and measures that provide some information
on key PCR and CMR activities. For example, PCRs reported influencing
$11.1 billion in procurements awarded to small business in fiscal year
2010 by recommending specific contracts for set-aside, compared with
the agency's goal of $6.7 billion. However, SBA does not have goals
and measures for three key responsibilities, including reviewing
proposed bundled contracts and making recommendations to enhance small
business participation.
PCRs and CMRs cited various challenges that they believe limit their
effectiveness. For example, several PCRs and CMRs who are required to
conduct additional duties told us that the time constraints and
complexity associated with these additional duties leaves them with
less time to complete their core PCR and CMR functions.
PCRs, CMRs, and other stakeholders cited several options that could
help PCRs and CMRs further increase small business contracting
opportunities, such as reducing the number of noncore functions that
PCRs and CMRs perform and increasing in-person interactions with
agency contracting staff and prime contractors.
Background:
PCRs and CMRs are the primary staff who implement SBA's Prime
Contracts and Subcontracting Assistance Programs, which are intended
to increase contracting opportunities for small businesses and help
ensure that small businesses receive a fair and equitable opportunity
to participate in federal prime contracts and subcontracts. SBA's
Office of Government Contracting oversees the agency's PCR and CMR
staff.
According to SBA, its 57 PCRs are assigned to approximately 868
contracting offices (divisions that purchase goods and services)
within 21 federal agencies and departments.[Footnote 19] Forty-one
PCRs are colocated at a buying activity; other staff with PCR
responsibilities are located at SBA offices. SBA assigns CMRs to prime
contractors based on the CMR's location and other considerations.
Figure: Background: Overview of PCR and CMR Responsibilities:
[Refer to PDF for image: illustration]
Procurement Center Representative (PCR):
* Counsel and train small businesses on how to obtain federal
contracts;
* Review federal agency acquisitions, including proposed bundled
acquisitions;
* Recommend small business set-asides and strategies to enhance small
business participation as prime contractors and subcontractors (with
Federal agency contracting office);
* Conduct surveillance reviews to monitor small business contracting
at federal agencies (with Office of Small and Disadvantaged Business
Utilization).
Commercial Market Representative (CMR):
* What contractors can I match together?
- Small business subcontractors: Large prime contractors.
* Counsel small businesses on marketing themselves to large prime
contractors;
* Counsel large prime contractors on their responsibilities to
maximize subcontracting opportunities for small businesses;
* Instruct on how to identify small businesses;
* Maintain a portfolio of large prime contractors and conduct reviews
(e.g., Subcontracting Orientation and Assistance Reviews, compliance,
and performance reviews (desk audits)).
Sources: GAO; Art Explosion.
[End of figure]
PCRs and CMRs also may be required to conduct additional duties,
including size determinations and certificates of competency.
* Size determinations: SBA conducts size determinations of businesses
against which a protest has been filed (because they are believed to
be other than small). SBA must complete these determinations within 15
business days of receiving a protest, if possible. Size cases are
assigned to the SBA area office in the area where the business concern
is located.
* Certificates of Competency: Contracting officers may withhold award
of a contract to a small business otherwise in line for award if they
determine the firm is "nonresponsible."[Footnote 20] Such
determinations must be referred to SBA, which must, if requested by
the small business, complete a certificate of competency review within
15 business days to determine whether the small business is
responsible. If SBA issues a certificate of competency, the agency
must generally award the contract to the firm.
* Of the 27 PCRs and CMRs we interviewed, 17 had responsibilities to
conduct size determinations or certificates of competency.
SBA Performance Goals and Measures Provide Some Information on Key PCR
and CMR Activities:
SBA's Office of Government Contracting has performance goals and
measures that provide some information about the key activities PCRs
and CMRs conduct”including making set-aside recommendations through
informal and formal means, conducting surveillance reviews, conducting
subcontracting reviews, and providing training. SBA data show that
PCRs and CMRs generally exceeded goals for these activities in fiscal
years 2009 and 2010. (See slide 13.)
Figure: SBA Performance Goals and Measures Provide Some Information on
Key PCR and CMR Activities:
[Refer to PDF for image: 4 vertical bar graphs]
Values are approximated from the graphs.
Procurements influenced for Small business:
Goal, 2009: $5.3 billion;
Actual performance, 2009: $9.1 billion;
Goal, 2010: $6.7 billion;
Actual performance, 2010: $11.1 billion.
Surveillance reviews:
Goal, 2009: 32;
Actual performance, 2009: 31;
Goal, 2010: 42;
Actual performance, 2010: 41.
Subcontracting reviews:
Goal, 2009: 1,109;
Actual performance, 2009: 1,679;
Goal, 2010: 1,220;
Actual performance, 2010: 1,812.
Federal agency trainings[A]:
Goal, 2009: 30;
Actual performance, 2009: 1,633;
Goal, 2010: 40;
Actual performance, 2010: 752.
Source: GAO analysis.
Note: The value of procurements influenced is the sum of appeal
actions (Form 70) issued formally and informally.
Subcontracting reviews includes data reported on the number of
Subcontracting Orientation and Assistance Reviews, performance reviews
(desk audits), and compliance reviews.
[A] SBA does not report training data separately for PCRs and CMRs,
but for all staff in the Office of Government Contracting, including
Size Specialists and others.
[End of figure]
SBA does not have a separate goal and measure related to one key PCR
activity”reviewing proposed bundled contracts and making
recommendations to enhance small business participation. SBA officials
acknowledged that the agency could improve data related to this
activity. SBA officials added that the agency had reported more data
on this activity in the past but had streamlined the amount of data
reported to reduce administrative costs.
SBA also does not have goals or measures related to two key CMR
responsibilities”to facilitate the matching of large prime contractors
with small businesses and instruct large prime contractors on
identifying small businesses through the use of various tools.
PCRs and CMRs Continue to Operate Under Resource Constraints:
PCRs and CMRs continue to operate under resource constraints. We
previously reported that overall agency downsizing and budget
reductions contributed to a reduced PCR and CMR workforce, which
limited their ability to carry out some core responsibilities.
[Footnote 21] As of August 2008, SBA had 59 PCRs-16 of whom also had
CMR responsibilities”and 31 CMRs-16 of whom had additional functions
such as PCR duties, size determinations, and issuing certificates of
competency. As of November 2010, SBA had 57 PCRs and 34 CMRs-31 of the
CMRs had additional responsibilities.
We recommended in our November 2008 report that SBA assess resources
allocated for PCR and CMR functions and develop a plan to better
ensure that these staff could carry out their responsibilities.
[Footnote 22] SBA agreed with our recommendation and stated that it
was assessing statutory requirements and resources for PCRs and CMRs
to develop such a plan. In September 2010, SBA contracted with a
consulting firm to conduct a study to define the optimal environment
in which a PCR's efforts would have the maximum impact on directing
contracts to qualified and capable small businesses. At the time of
this briefing, SBA officials told us that they were reviewing the
study results.
Summary of Views on PCR Effectiveness:
PCRs we interviewed generally rated themselves as highly effective in
their ability to influence agency contracting decisions to include
small business opportunities. PCRs most often cited their authority to
dispute a procurement and the strength of a cooperative relationship
with agency staff as factors enabling them to influence agency
contracting decisions.
In addition, officials from buying activities with whom we met said
that their assigned PCR was useful in training contracting staff,
discussing procurement strategies to involve small businesses, and
augmenting the resources and supporting the decisions of agency small
business offices.
However, officials from four buying activities told us that a lack of
interaction with their assigned PCR or their assigned PCR's lack of
technical knowledge about agency procurements slowed the procurement
process. According to SBA officials, PCRs are expected to be
knowledgeable about federal acquisition regulations applicable to all
federal buying activities rather than the technical specifications of
individual contract requirements.
Officials from buying activities also told us that SBA's limited
server capacity slowed the procurement process, as contracting
officers had to fax coordination records to SBA instead of
transmitting the records via e-mail.
SBA officials added that qualitative aspects of PCR work (such as the
relationships built with the contracting officials at buying
activities) were difficult to quantify but contributed to the
effectiveness of these staff.
Summary Views on CMR Effectiveness:
CMRs we interviewed generally rated their ability to influence
subcontracting opportunities for small businesses as moderately
effective. CMRs said their influence generally stemmed from prime
contractors being concerned about the impression they make with
contracting officers (who may consider a contractor's past performance
in fulfilling their subcontracting plan as criteria for awarding
future contracts).
Representatives of one group representing large prime contractors told
us CMRs provided valuable information and assistance. They said CMRs
provided interpretations of the Federal Acquisition Regulation and
information on legislative updates on a regular basis. CMRs also
provided them with information on how to report data in SBA's
subcontracting reporting system.[Footnote 23]
The representatives noted that the CMR role became more important
about 5 years ago when the number of DOD regional councils declined
and the Defense Contract Management Agency reduced resources to assist
large prime contractors on small business subcontracting.
PCRs and CMRs Cited Various Challenges Related to Carrying Out Their
Responsibilities:
Size and Certificate of Competency cases take priority over core PCR
and CMR responsibilities:
* According to SBA officials, most of its PCRs and CMRs are cross-
trained in conducting size and certificate of competency
determinations because of staff reductions in other positions.
* However, 13 of the 17 PCRs and CMRs we interviewed with size and/or
certificate of competency duties told us that the time constraints and
complexities associated with completing these cases leave them with
less time to review proposed procurement actions, recommend small
business set-asides, and conduct compliance reviews of prime
contractors.
* SBA data show that the number of size determinations requested
increased 44 percent in one year (from 488 in fiscal year 2009 to 705
in 2010), while the number of certificate of competency referrals
received increased from 294 to 300 over the same time frame.
* The number of SBA staff performing the CMR function on a part-time
basis continues to increase.
* As of August 2008 SBA had 31 CMRs, 16 of whom had additional job
functions such as PCR duties, size determinations, and certificate of
competency referrals, and these additional roles often took higher
priority and reduced the amount of time CMRs spent on subcontracting
assistance activities.[Footnote 24]
* As of November 2010, SBA had 33 staff performing the CMR function,
30 of whom had additional duties, and 17 of the staff spent 25 percent
or less of their time on CMR duties.
Interactions with buying activities and prime contractors:
* According to13 of the 22 PCRs we interviewed, the lack of in-person
interaction at buying activities limits their ability to influence
procurements for small businesses.
* These PCRs also told us that being co-located at a buying activity
enhances their ability to influence procurements for small businesses
because it provides them with an opportunity to develop cooperative
relationships with contracting staff and attend acquisition planning
meetings.
* Six CMRs told us that a lack of time and travel funds has limited
their ability to meet in-person with prime contractors, which they
said is a highly effective way to improve a contractor's small
business subcontracting efforts. However, SBA officials told us there
has not been a limit on travel funds in FY 2010 and FY 2011.
Contracting officers may not fully understand Federal Acquisition
Regulation (FAR) requirements:
* Eleven of those we interviewed told us that contracting officers at
buying activities may not fully understand the small business
requirements contained in the FAR. In addition, some contracting
officers did not know how to conduct market research to identify
qualified small businesses or develop small business subcontracting
goals. Three of them noted that this might be due to the turnover of
contracting officers at certain buying activities.
Buying activities do not submit proposed procurement actions to SBA
for review:
* The FAR requires that contracting officers provide certain proposed
procurement actions to PCRs for review. However, 13 of the 22 PCRs we
interviewed described instances in which buying activities did not
submit actions to PCRs as required.
Federal Supply Schedule (FSS) purchases not subject to small business
set-aside requirements:
* According to 5 of the 22 PCRs we interviewed, small businesses lose
contracting opportunities when federal agencies make purchases using
the FSS.
* Regulations implementing the Small Business Act and FSS program
exclude FSS purchases from small business set-aside requirements;
however, federal agencies still may consider small businesses when
making purchases using the FSS.
* In fiscal year 2009, $9 billion (or 40 percent) of federal agency
purchases made through the FSS went to small businesses.
Difficulty enforcing prime contractor performance under subcontracting
plans and ensuring subcontracting plan recommendations are implemented:
* Large prime contractors are required to make a "good faith effort"
to achieve the goals in their subcontracting plans.
* However, 7 of the 27 PCRs and CMRs told us that determining that a
contractor is not acting in good faith is difficult.
* In addition, PCRs generally review the proposed subcontracting plans
of large prime contractors prior to contract award and can make
recommendations, but PCRs told us that they do not have any means of
disputing the procurement if the contractors do not implement their
recommendations.
Options That Could Increase PCR and CMR Effectiveness:
Through interviews with SBA Office of Government Contracting
officials, PCRs and CMRs, officials from buying activities, and groups
that represent small business interests and large prime contractors,
we identified several options”and their associated advantages and
disadvantages”that could increase the effectiveness of PCRs and CMRs.
These options are not intended to be exhaustive.
Table: Options That Could Increase PCR and CMR Effectiveness:
Option: Increase the size of the PCR and CMR workforce;
Advantages:
* An increased PCR workforce could cover more buying activities and
review more procurement actions;
* An increased CMR workforce could conduct more compliance reviews and
provide more outreach to prime contractors. implications for other SBA
programs;
Disadvantages:
* These changes would require additional resources or a re-allocation
of resources, which could have negative
Option: Remove size determination and certificate of competency duties
from staff who have PCR and CMR responsibilities;
Advantages:
* With the additional time, PCR and CMR staff told us they could
review more procurements, cover more agencies, conduct more compliance
reviews, and train more prime contractors and agency staff;
Disadvantages:
* Determining where the size determination and certificate of
competency responsibilities would shift is unclear.
Option: Increase opportunities for PCRs and CMRs to have in-person
interactions and increase SBA's server capacity;
Advantages:
* PCRs and CMRs said increasing the in-person interactions with agency
staff and prime contractors could increase their influence over
procurements and subcontracting;
* Increasing server capacity would result in more efficient
procurement coordination;
Disadvantages:
* These changes would require additional resources or a re-allocation
of resources, which could have negative implications for other SBA
programs. Any additional travel could take time away from other PCR or
CMR duties.
Option: Increase small business training for agency contracting
officers conducted by PCRs;
Advantages:
* PCRs informed us that training would be an effective method for
maximizing small business participation as it makes contracting
officers aware of the small business requirements and improves
coordination with the PCR.
Disadvantages:
* It could be more effective to require an agency's small business
office to train contracting officers because the small business staff
is already on-site and a PCR would not have to travel to the agency.
Option: Allow PCRs to dispute a procurement if recommendations related
to its subcontracting plan are not implemented;
Advantages:
* With the potential for this action, the contracting officer would
have incentives to more closely assess PCR advisory comments, which
would lead to more meaningful subcontracting goals and increase the
integrity of the subcontracting program;
Disadvantages:
* Agency officials did not think that PCRs had enough information
about the overall contract and the prime contractor to accurately
assess the subcontracting plan;
* This option would require a change in the statute.
[End of table]
GAO on the Web:
Web site: [hyperlink, http://www.gao.gov/]
Contact:
Chuck Young, Managing Director, Public Affairs, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
Copyright:
This is a work of the U.S. government and is not subject to copyright
protection in the United States. The published product may be
reproduced and distributed in its entirety without further permission
from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary
if you wish to reproduce this material separately.
[End of briefing slides]
Enclosure II: Agency comments:
U.S. Small Business Administration:
Washington, DC 20416:
June 8, 2011:
William B. Shear:
Director, Financial Markets and Community Investment:
U S. Government Accountability Office:
441 G Street NW:
Washington, D C 20548:
Dear Mt. Shear:
The U.S. Small Business Administration (SBA) Office of Government
Contacting (GC) has reviewed the GAO draft report entitled
"Improvements Needed to Ensure Reliability of SBA's Performance Data
on Procurement Center Representatives" The report responded to a
statutory mandate for GAO to study the effectiveness of SBA's
Procurement Center Representatives (PCRs) and Commercial Marketing
Representatives (CMRs) We appreciate the time spent by GAO staff to
review CMR and PCR functions, interview SBA's GC staff including PCRs
and CMRs, interview and consult with the small business staff at other
Federal agencies and prime contractors, and develop two resulting
recommendations We were pleased to see that officials at major buying
activities found SBA PCRs to be helpful resources for developing small
business procurement strategies and for training. Furthermore, SBA
CMRs were recognized by large prime contracting as resources for
interpreting contracting regulations and as knowledgeable on
legislative changes.
GAO's two recommendations both concern the data quality of SBA's
Government Contacting Area Report (GCAR) The GCAR is an internal
report used by GC management officials to measure the contribution of
each of SBA's six government contracting Area Offices toward. SBA's
overall government contracting-related goals. Data for the GCAR is
compiled from the reports of individual GC employees, as submitted to
SBA's GC Area Directors, GAO found that the data showed reliability
issues that limit its usefulness for monitoring performance and
accomplishments. SBA recognizes GAO's concerns and welcomes GAO's two
recommendations: that SBA provide clear and complete guidance to PCRs
and CMRs on accurately recording and maintaining the appropriate
backup documentation for accomplishments reported in the GCAR, and
that SBA require the GCAR data be verified with documentation
periodically reviewed for quality and completeness.
SBA will implement these recommendations during SBA's update of the
Standard Operation Procedure (SOP) for the PCR and CMR programs The
SOP contains internal policies and procedures for accomplishing PCR
and CMR functions. As noted in GAO's report, the process of updating
the SOP is currently ongoing. In the updated SOP, SBA will provide
clear instructions on what PCRs and CMRs should report for the GCAR
and how data should be reported SBA will address how to maintain
appropriate backup documentation for data verification Finally, SBA
will develop and implement a verification method that Area Directors
and SBA headquarters staff will use to insure that data in the GCAR is
accurate and reliable.
Thank you for this opportunity to comment on the rely, draft report.
Sincerely,
Signed by:
John W. Klein:
Acting Director:
Office of Government Contracting:
[End of section]
Footnotes:
[1] Pub. L. No. 111-240, § 1312(c), 124 Stat. 2504, 2537 (2010).
[2] Section 412 of the Small Business Administration Reauthorization
Act of 1997 defines the bundling of contract requirements as the
consolidation of two or more procurement requirements for goods or
services previously provided or performed under separate smaller
contracts into a solicitation of offers for a single contract that is
likely to be unsuitable for award to a small business concern for
various reasons.
[3] The PCR may appeal a contracting officer's rejection of a set-
aside recommendation to the head of the contracting activity within 2
business days after receipt of notice of the rejection. If the head of
the contracting activity agrees that the contracting officer's
rejection was appropriate, the PCR may ask the contracting officer to
suspend action on the acquisition until the SBA Administrator appeals
to the agency head. FAR § 19.505(b).
[4] Large prime contractors must submit subcontracting plans that
contain explicit goals for subcontracting to small businesses for
contracts exceeding $650,000, or $1.5 million for construction
projects, and that have subcontracting possibilities. FAR § 19.702(a).
[5] Subcontracting Orientation and Assistance Reviews focus on large
prime contractors newly assigned to a CMR or that hired a new Small
Business Liaison Officer. A CMR may discuss the contractor's
subcontracting reports and train the contractor on new small business
program issues. The performance review focuses on a contractor's
subcontracting achievements, as reported in the Electronic
Subcontracting Reporting System. SBA guidance instructs CMRs to
conduct at least one performance review annually on each large
contractor in their portfolio. Compliance reviews are the key focus of
CMR activities and the vehicle by which CMRs validate a contractor's
subcontracting activity.
[6] SBA, Office of the Inspector General, Audit of the Contract
Bundling Process, Audit Report No. 5-20 (Washington, D.C.: May 20,
2005).
[7] SBA, Office of the Inspector General, Review of SBA's
Subcontracting Assistance Program, Audit Report No. 7-33 (Washington,
D.C.: Sept. 28, 2007).
[8] GAO, Small Business Administration: Agency Should Assess Resources
Devoted to Contracting and Improve Several Processes in the 8(a)
Program, [hyperlink, http://www.gao.gov/products/GAO-09-16]
(Washington, D.C.: Nov. 21, 2008).
[9] [hyperlink, http://www.gao.gov/products/GAO-09-16].
[10] We did not review data for fiscal year 2008 because SBA did not
retain such data during a transition to a new reporting system.
[11] SBA's Office of Government Contracting developed policies and
procedures implementing the prime contracts and subcontracting
assistance programs and incorporated them into its standard operating
procedures in 2004 and 2006, respectively.
[12] In fiscal year 2010, there were 3,415 buying activities with
procurement activity.
[13] If the contracting officer rejects a recommendation of the PCR,
written notice shall be furnished within 5 working days of the
contracting officer's receipt of the recommendation. FAR § 19.505(a).
[14] Responsibility concerns such factors as whether a prospective
contractor is able to comply with the required or proposed delivery or
performance schedule, and whether it has the necessary organization,
experience, and technical skills (or the ability to obtain them). FAR
§ 9.104-1.
[15] GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999); Internal Control
Management and Evaluation Tool, [hyperlink,
http://www.gao.gov/products/GAO-01-1008G] (Washington, D.C.: August
2001).
[16] If an on-site review is not feasible, SBA standard operating
procedures note that the area director should request that PCRs
provide them with records (for example, subcontracting plan review
checklists or counseling logs) and then verify the method the PCRs
used for obtaining socioeconomic reporting information, the proper
documentation of activities that were attended at the contracting
activity, and method of recording other reporting information required
by the monthly PCR Productivity Report.
[17] FAR 19.202-1(e)(1).
[18] GAO, Small Business Administration: Agency Should Assess
Resources Devoted to Contracting and Improve Several Processes in the
8(a) Program, [hyperlink, http://www.gao.gov/products/GAO-09-16]
(Washington, D.C.: Nov. 21, 2008); SBA, Review of SBA's Subcontracting
Assistance Program, Audit Report No. 7-33 (Washington, D.C., Sept. 28,
2007); and SBA, Audit of the Contract Bundling Process, Audit Report
No. 5-20 (Washington, D.C., May 20, 2005).
[19] In fiscal year 2010, there were 3,415 contracting offices with
procurement activity.
[20] Responsibility concerns such factors as whether a prospective
contractor is able to comply with the required or proposed delivery or
performance schedule, and whether it has the necessary organization,
experience, and technical skills (or the ability to obtain them). FAR
§ 9.104-1.
[21] [hyperlink, http://www.gao.gov/products/GAO-09-16].
[22] [hyperlink, http://www.gao.gov/products/GA0-09-16].
[23] Prime contractors self-report subcontracting activities into the
electronic Subcontracting Reporting System, which SBA and GSA jointly
administer and maintain.
[24] See [hyperlink, http://www.gao.gov/products/GAO-09-16].
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Phone:
The price of each GAO publication reflects GAO‘s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO‘s Web site,
[hyperlink, http://www.gao.gov/ordering.htm].
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional
information.
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548: