GAO Raps Small Business Administration Over Record-Keeping

A new report from the Government Accountability Office (GAO) says the Small Business Administration (SBA) does not maintain complete records on representatives’ activities—which could be used to assess how well they’ve carried out their jobs. GAO also found that SBA has not submitted required activity reports to Congress.

The Small Business Act seeks to help small businesses win federal contracts. For example, it requires large contractors to set goals for using small businesses as subcontractors. The SBA uses procurement center representatives (PCR) to advocate for small businesses when agencies are procuring goods and services.

SBA area offices generate a monthly report that summarizes data on PCRs’ activities and accomplishments, and SBA procedures require PCRs to maintain these reports and the supporting documentation. But GAO found that they do not consistently do either. According to SBA officials, in some cases the supporting documentation, which PCRs store on their individual computers or in their offices, either was destroyed or was not maintained after PCRs left their positions. 

Officials told GAO that SBA recently implemented a new database and established a policy requiring the monthly reports to be maintained in the database. SBA has not however established a centralized means of maintaining the supporting documentation, which GAO says would provide greater assurance that the documentation is maintained as required and help SBA verify the accuracy of the data PCRs report on their activities. GAO therefore recommends that it do so. SBA concurred and told GAO that it has begun maintaining documentation as per the new Government Contracting Activity Report guidelines.

SBA assigns PCRs to buying activities, divisions in federal agencies that purchase goods and services based on geographic coverage and other factors. Specifically, PCRs are assigned within one of six regional areas to ensure geographic coverage,at specific federal agencies, and at buying activities that have significant opportunities for small business contracting.

GAO’s review discovered that SBA has not submitted the required reports to Congress on its rationale for assigning PCRs to cover buying activities. The Small Business Act requires that SBA submit a report identifying each area for which SBA has assigned a PCR, explaining why SBA selected the areas for assignment, and describing the activities performed by PCRs. SBA was required to submit the first report to Congress by December 26, 2010, and subsequent reports every three years thereafter. In response, SBA officials told GAO they were not aware of the reporting requirement. Congress consequently lacks the information these reports were intended to provide, information that could be useful for its oversight of PCRs.

GAO’s second recommendation unsurprisingly addressed this shortcoming and SBA responded that it would submit the required report to Congress by December 26, 2020 and every three years thereafter.

The review also uncovered some challenges faced by PCRs and other SBA officials. These include lack of travel funding, difficulties accessing agency contracting systems because many agencies use different systems, and contracting initiatives that result in fewer contracts. According to PCRs, initiatives such as category management and the use of large contracting vehicles have decreased the numbers of total contract awards and small businesses that receive them. SBA officials stated that buying activities have been submitting fewer proposed procurements to PCRs for review because the overall trends in federal contracting are toward fewer contracts and bigger contracts. This trend has not decreased PCR workload because consolidated contracts are more complex and take longer to review than smaller, individual ones.

Read the full report at GAO

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Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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