In 2019, Congress directed the Department of Defense (DOD) to develop a strategy to better engage with small businesses and coordinate small business programs across the department.
Government Accountability Office (GAO) analysis shows that from FY 2011 to 2020, DOD spending on contracts with small businesses increased. However, the number of small businesses contracting with DOD declined. These trends were also true for larger businesses.
In fiscal year 2020, DOD recorded more than $80 billion in contract obligations to small businesses for goods and services.
In October 2019, DOD published its Small Business Strategy, as directed in the National Defense Authorization Act for Fiscal Year 2019, to facilitate contracting opportunities for small businesses. DOD engages in many efforts across the department to leverage small businesses to meet its acquisition needs and leverage technological innovation. Such efforts are carried out by many different offices in the department and include a variety of outreach initiatives, such as vendor events, training, and other activities to contact and educate small businesses on working with DOD.
The 2019 Small Business Strategy describes these efforts and other initiatives to improve the effectiveness of DOD’s small business programs. However, GAO found that DOD lacked key mechanisms to implement the strategy and better monitor and coordinate its small business contracting efforts.
The government watchdog found that DOD has not developed the strategy’s implementation plan, which is required by law. Nor has it created a policy to guide the implementation of a unified management structure. In addition, GAO found that DOD does not have a formal process for monitoring and reporting on the implementation of its Small Business Strategy.
GAO therefore recommends that DOD’s Office of Small Business Programs develop and submit an implementation plan for DOD’s Small Business Strategy; develop a policy to guide the implementation of a unified management structure as part of the Small Business Strategy; and establish a formal process for monitoring and reporting on DOD’s progress in implementing its Small Business Strategy. DOD concurs with all three recommendations.