Deficiencies in Small Business Subcontracting Goal Oversight

The Federal Government does a pretty good job of meeting its small and disadvantaged subcontracting goals. (See, for example, Proposed Legislation to Increase Small/Minority/Disadvantaged Subcontracting Goals). Prime contractors have not been doing as well and some of the blame has been pinned on Government contracting officers for inattention to what their prime contractors are doing.

In March 2018, the DoD Office of Inspector General (DoD-IG) issued an audit report on its review to determine whether contracting officers were taking appropriate actions to ensure that prime contractors met their small business subcontracting goals. The review focused on two Army contracting centers, Redstone and Warren and covered 50 contracts worth $1.6 billion.

The results were woeful. The DoD-IG found that, in general, contracting officers were not ensuring that its prime contractors were providing adequate subcontracting opportunities to small businesses.

The DoD-IG made a series of recommendations, largely related to the need for additional training.

These challenges existed because training and guidance provided to contracting officials were not adequate, and administering subcontracting plans was often not a high priority. Shortfalls also commonly existed with high turnover rates among contracting personnel negatively impacting transferring duties to administer subcontracting plans from one contracting official to another.

Contracting officers also did not consistently enter data correctly into the Federal procurement system databases that allowed contracting officials to monitor compliance with small business subcontracting plans or enable contractors to submit individual subcontracting reports in the Electronic Subcontracting Reporting System.

 One of the recurring problems pointed out in the report had to do with the disconnect between subcontracting plans and actual performance. Prime contractors dutifully developed their plans and submitted them to contracting officers but that became almost perfunctory with no subsequent oversight to determine whether contractors were fulfilling those plans or at least attempting to comply with those plans.