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House Members Want Review of DOD Subcontracting

Five Congressional Democrats have asked the Government Accountability Office to investigate whether a Defense Department subcontracting program is achieving its purpose of increasing business opportunities for small firms.

The Comprehensive Subcontracting Plan Test Program allows 14 of the largest prime contractors to create corporate-wide small business subcontracting plans rather than submitting individual plans for each contract. Since it began in 1990, “the test program has never been evaluated to determine if the goals of the program have been met,” the House members wrote in a letter to GAO.

They said Congress intended the program to test whether using companywide, division-wide or plant-wide subcontracting plans would give increased opportunities to small businesses, but federal contracting data “calls into question” whether the participating prime contractors are meeting their subcontracting goals.

“Until the program is evaluated and audited there is no way of knowing whether these small businesses actually received their due contracts, or whether the money went to other large contractors,” Rep. Yvette Clarke, D-NY, said in a statement.

She said the 14 participating primes received $47 billion in DOD contracts in fiscal 2009, or one out of every six dollars awarded.

Lloyd Chapman, president of the American Small Business League, said, “Clearly this program wasn’t designed to help small businesses, it was designed to help prime contractors avoid paying liquidated damages for non-compliance with their small business subcontracting goals.”

DOD said it is conducting an evaluation of the program that should be completed in about a year.

Others signing the letter were Reps. Bennie Thompson of Mississippi, Carolyn Maloney of New York, Lynn Woolsey of California and Chellie Pingree of Maine.


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