prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: Election administration attracted significant attention in 2000, when issues with the vote count delayed the results of the presidential race  Administrative issues have also been reported in subsequent election cycles  For example, issues with voter registration were reported in multiple states in 2016 and 2018  Some responses to such reports focus on the rules of elections  The Help America Vote Act of 2002 (HAVA; P L  107-252 ; 116 Stat  1666), for example, requires states to establish a uniform standard of what counts as a vote for each voting system they use (52 U S C  §21081(a)(6)), and bills have been introduced in recent Congresses to change how voter registration is handled  Other responses focus on the systems that apply election rules  In the United States, that typically means state and local systems  The administration of elections in the United States is highly decentralized  Elections are primarily administered by thousands of state and local systems rather than a single, unified national system  Understanding how those state and local systems work may be relevant to Congress for at least two reasons  First, the way state and local election systems work can affect how well federal action on election administration serves its intended purposes  Most federal action on election administration is carried out by state and local election systems  Interactions between the workings of those systems and federal actions can help determine how effective the federal actions are at achieving their objectives  Second, Congress can require or encourage changes to the way state and local election systems work  Congress has a number of tools for influencing election administration policy  The use of these tools can—either intentionally or unintentionally—affect the workings of the state and local systems that administer federal elections  This report is intended to help Congress understand how state and local election systems work and how their workings might relate to federal activity on election administration  It starts by describing the distribution of election administration duties at the state and local levels and the structures of the state and local systems that conduct elections  It then uses examples from past federal action on election administration to illustrate some of the ways the duties and structures of state and local election systems interact with federal activity  It closes by introducing some considerations that may be relevant to Members interested in election administration  This report focuses on the administration of federal elections in the states by executive and legislative branches of state and local government  Much of the discussion applies to nonfederal as well as federal elections, but the report is intended explicitly to address only federal elections  The report also does not cover the federal role in administering federal elections, election administration in the U S  territories, the role of law enforcement and the courts in election administration, or issues of constitutional or legal interpretation  The typical federal election process has three main parts: voter registration, vote casting, and vote counting  This report focuses on those three parts of the process rather than on other aspects of campaigns and elections, such as campaign finance and redistricting  Finally, the way federal elections are administered varies between and within states  A full accounting of the variations is beyond the scope of this report  Instead, the report describes general patterns and illustrates them with examples  Examples appear in text boxes like the box below, which describes the role the text boxes play in the report in more detail  Election administration involves making decisions about the rules of elections, such as whether voters should be able to register online, whether they should be required to show photo identification at the polls, and whether election results should be audited  It also involves conducting elections in accordance with those decisions and paying for the activities and resources required to conduct them  These three election administration duties can be described as policymaking, implementation, and funding  This section describes some common patterns in the distribution of these duties at the state and local levels  In the U S  system, states generally play the primary decisionmaking role in election administration  State legislatures, with input from their governors, can make state laws about the administration of elections and make or initiate election administration amendments to their state constitutions  State laws and constitutions can also delegate or defer responsibility for decisions about the administration of elections to other state or local officials and to voters  The U S  Constitution also provides for a federal role with respect to decisionmaking about elections, and Congress has exercised such powers in a number of instances  For more information about federal laws governing the state and local conduct of federal elections, see the Appendix   Box 1 uses examples from voter registration to illustrate a number of these approaches to policymaking  It starts with a discussion of a registration policy enacted by the federal government and then describes an adjustment to the policy made, respectively, by a state legislature on the recommendation of a state executive branch official, by state executive branch officials, and by voters  State and local officials may be granted decisionmaking authority explicitly by a variety of constitutional provisions, laws, charters, ordinances, and regulations at multiple levels of government  They may also be left discretion over policy details that are not specified in legislative or regulatory text  For example, states may set out general guidelines for voting technology and ballot design but leave decisions about exactly which machines to buy or how to lay out ballots to local officials  Voters have a say in election administration measures that are referred to the ballot by their state legislatures  Some states also offer citizen initiatives or popular referendums, which voters can use to propose their own state election administration statutes or state constitutional amendments or to repeal or affirm election administration laws adopted by their state legislatures  Table 1 lists the citizen initiative and popular referendum options available to voters in states that offer such mechanisms, as presented by the Initiative & Referendum Institute at the University of Southern California in January 2019  Box 2 uses examples from the November 2018 election to illustrate how states and voters have used ballot measures to make election administration policy  It describes a statewide proposal to enact automatic voter registration in Nevada that was initiated by citizens, and a statewide proposal to enact a voter ID requirement in North Carolina that was referred to the ballot by the state legislature  Early U S  elections were conducted almost entirely locally  Some states have departed from that tradition  For example, in Alaska, the state conducts elections above the borough level, and, in Delaware, all elections are conducted by the state  Congress has also shifted some responsibility for conducting elections to the state level  For example, the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA; P L  99-410 ; 100 Stat  924) requires states to designate a single state office to provide absent uniformed services and overseas voters with information about voter registration and absentee voting (52 U S C  §20302(b))  The NVRA requires states to designate a chief state election official to coordinate state responsibilities under the act (52 U S C  §20509), and HAVA requires chief state election officials to implement statewide voter registration lists and oversee development of plans for use of federal election administration funding (52 U S C  §21083(a)(1)(A); 52 U S C  §21005(a))  However, the day-to-day implementation of election administration policy is still mostly handled by localities  For example, localities typically add eligible voters to the voter rolls; design and print ballots; recruit and train poll workers; select and prepare polling places; store and transport voting equipment; and count, canvass, and report election results  The level of locality primarily responsible for conducting elections is typically the county, but there are some exceptions  The New England states, which have a strong tradition of township government, tend to assign primary responsibility to municipalities  Some states also split implementation duties between counties and municipalities  Responsibility for implementing election administration policy may also be divided between offices or agencies at the same level of local government  For example, according to one scholarly source, as of 2015, localities in about one-third of states split responsibility for conducting elections between two or more offices or agencies  Table 2 lists the states identified by those scholars  Election administration involves both intermittent and ongoing costs  Intermittent costs include irregular expenses like the costs of acquiring voting equipment  Ongoing costs include expenses that are linked to and recur with each individual election, such as the costs of printing ballots, paying poll workers, and transporting voting equipment to polling places, as well as expenses that are incurred whether or not there is an election, such as the costs of training election officials, maintaining voter registration lists, and providing IT support for online voter registration systems  The federal government does not supply ongoing funding to states and localities to conduct elections  To date, Congress has authorized significant federal funding for state and local election administration in one bill: HAVA  HAVA authorized $3 65 billion for three main types of formula-based payments to states as well as additional funding for a number of smaller grant and payment programs (52 U S C  §§20901-20906; 52 U S C  §§21001-21072)  Congress appropriated most of the $3 65 billion for the three types of formula-based payments between FY2003 and FY2010 and appropriated an additional $380 million in March 2018  That means states and localities are responsible for most of the costs of conducting federal elections  Localities typically assume primary responsibility for those costs, with states contributing to varying degrees  All states have supplied or committed to supplying matching funds as required to receive federal HAVA funds (52 U S C  §21003(b)(5)(a))  All states but North Dakota, which does not have voter registration, have also contributed to establishing and maintaining the statewide voter registration lists required by HAVA (52 U S C  §21083(a))  State contributions to other costs vary  Many states used HAVA funding to help replace or update voting technology, and some have put additional money from state coffers toward those expenses  Table 3 lists state contributions to the costs of acquiring voting equipment, as reported by the U


Report 2: S  Government Accountability Office (GAO) in 2018  Table 4 provides information from the same report about states' contributions to the costs of maintaining and operating voting equipment  As GAO uses the terms in the survey, operation costs "include things such as poll worker labor to set up equipment, postage for mailing absentee or vote-by-mail ballots, paper and printing supplies for paper ballots or voter-verified paper trails, and electricity to operate equipment during elections " Maintenance costs "include things such as labor to conduct maintenance between elections of any equipment hardware and software as well as any required parts " Some states cover or contribute to the costs of training local election officials, and some share election-specific costs, such as printing ballots and transporting voting equipment  Box 3 uses five examples of cost-sharing arrangements for election-specific costs of federal elections to illustrate the range of approaches states have taken to such arrangements  The structures of the state and local systems that conduct federal elections vary both between and within states  Common variations include differences related to the leadership of the election system; relationship between local election officials and the state; and population size and density of the jurisdiction served by the system  This section describes these structural variations  The state and local election systems that conduct federal elections may be led by an individual, such as the state secretary of state or a town or county clerk; a group, such as a state elections commission or a county board of elections; or a combination of individuals or groups, such as a state secretary of state and state board of elections, or a city clerk and city registrar of voters  Election system leadership may be chosen by voters or appointed by an authority such as the governor or state legislature  The selection method—and the leaders themselves—may be partisan, bipartisan, or nonpartisan  Federal law requires states to designate a chief election official to carry out certain tasks  Table 5 lists the titles of chief state election officials, as reported to CRS by the EAC, and the methods of selecting them, as listed by the National Association of Secretaries of State (NASS) and the National Association of State Legislatures (NCSL)  The leadership types and selection methods of local election systems may vary within a state  Box 4 uses examples from Florida and Wisconsin to illustrate such variations  It describes the different causes of variation in the two states and a recent change in Florida to a more uniform selection process  The leadership structures of both state and local systems can also change over time  Box 5 uses the two states from Box 4 to illustrate the types of changes states might make, how they might make them, and how frequently they might make them  It describes one change that was approved by voters as a ballot measure and a number of others that were enacted legislatively  Another way in which the structures of election systems can vary is in the relationship between local election officials and the state  Some local election officials operate largely independently, whereas others rely on state officials or resources for some, most, or all basic functions  For example, as noted in " Funding ," states may provide some or all of the training for local election officials  As described in more detail in " Jurisdiction Size and Density ," local election officials who serve smaller or more rural jurisdictions may also depend on their states to provide specialized expertise, such as legal or technical know-how  States also have varying types and degrees of influence over local election officials  Choices about other structural features, such as the method used to select the leadership of local election systems, can shape this aspect of the state-local relationship  For example, in some states, state officials appoint and can remove local election officials  State officials in other states may have other options for influencing local officials  For example, state officials may have the power to initiate legal action against local officials, to provide or withhold funding for local election administration, or to certify and decertify voting systems  However, they tend to have less control over how local officials perform their election administration duties than state officials with appointment and removal authority  As described in more detail in " Compliance with Federal Requirements ," this dynamic may be especially pronounced for local officials who are popularly elected  Such officials are accountable primarily to voters rather than to the state  Other structural variations between election systems derive from differences in the population size and density of the jurisdictions they serve  Some election jurisdictions reported serving fewer than 100 eligible registered voters in the 2016 election, for example, whereas Los Angeles County reported serving 6 8 million  The eligible registered voters in that county alone reportedly outnumbered the eligible registrants in each of 40 other states  Election jurisdictions also differ in population density  For example, Los Angeles County is an urban center, and many small jurisdictions are rural  Jurisdictions with different population sizes and densities have different election administration advantages and face different administrative challenges  For example, voter registration list maintenance is typically more straightforward in small jurisdictions because their lists are shorter and election officials are more likely to know registrants personally  Meanwhile, large jurisdictions tend to have larger tax bases and more resources  Those differences between jurisdictions may be reflected in the internal structures of the election systems that serve them  One example of such a structural difference is the size and specialization of the system's staff  Larger jurisdictions, which typically have more personnel, may have much of the specialized expertise they need in-house  Smaller jurisdictions, which may have only one part-time employee dedicated to election administration, are more likely to rely on outside expertise  For example, according to law professors Steven F  Huefner, Daniel P  Tokaji, and Edward B  Foley, smaller jurisdictions in Illinois have looked to state attorneys for election law expertise and to voting equipment vendors for technical support  Another type of difference related to jurisdiction size and density is variation in the allocation of system resources  A study prepared for the U S  Election Assistance Commission in 2013 found that election officials in rural jurisdictions were more likely than their urban counterparts to use paid print advertising for voter outreach  Election officials in urban jurisdictions were more likely to use websites and social media  Small jurisdictions may also allocate a larger share of their resources to meeting state and federal requirements than larger jurisdictions because there are often fixed start-up costs to required changes, and smaller jurisdictions may be less equipped to capitalize on economies of scale  For example, political scientists Heather M  Creek and Kimberly A  Karnes report, "There is a minimum cost to the acquisition and maintenance of voting technology that applies whether the district is purchasing 5 or 500 machines " The duties and structures of state and local election systems can affect the implementation of federal election administration laws  Perhaps as a result, Congress has specified how states and localities should distribute certain election administration duties and structure certain elements of their election systems  Changes to the duties and structures of state and local election systems have sometimes also been side effects of other federal activity on election administration  This section provides examples of ways in which the distribution of election administration duties at the state and local levels and the structures of state and local election systems can affect the implementation of federal election administration law  These examples include federal efforts to affect the administration of elections through (1) requirements, (2) funding, and (3) information sharing  Congress can use requirements to regulate how states and localities administer certain aspects of federal elections  How well such requirements serve their intended purposes depends in part on how closely states and localities comply with them  How closely states and localities comply with federal requirements may, in turn, be affected by the duties and structures of the state and local election systems that implement them  For example, UOCAVA assigns responsibility for complying with some of its requirements to the states (52 U S C  §20302), but the tasks required for compliance are often handled by local officials  One scholar, law professor Justin Weinstein-Tull, indicates that this means that the officials who are held liable for compliance with UOCAVA requirements may differ from the officials who take or fail to take the actions needed to comply  Box 6 provides an illustration of this phenomenon as reported by state officials in Alabama  The federal government can provide funding for state and local election administration, which may be conditional on the adoption of certain election administration policies or practices  How well such funding serves its intended purposes may depend in part on how timely it is and how well-tailored it is to its objectives  Duties and structures of state and local election systems may affect how quickly federal funding is claimed and used and how well the uses to which it is put serve federal objectives  For example, HAVA has authorized payments to states to meet its requirements (52 U S C  §21007)  It has directed those payments to be disbursed to states (52 U S C  §21001(a)) and charged chief state election officials with overseeing decisions about how to spend them (52 U S C  §21005(a))  State election officials run federal elections in some states, but those states are the exception  As noted in " Implementation " and " Funding ," most states assign election administration implementation and funding duties to local officials  That means that the officials who receive HAVA funding and are charged with overseeing decisions about how to use it often differ from the officials who conduct and pay for the activities and resources it is intended to fund  That has had at least two reported consequences  First, in some cases, it has reportedly delayed access to or use of some HAVA funds  Directing HAVA funding to states introduces opportunities for state-level delays, such as decisions by state officials to wait to claim the funds or requirements in state law to obtain approval to do so  Second, some local officials have stated the view that their states' shares of HAVA funding were not put to what they considered the areas of greatest need  Box 7 provides examples of such consequences as described by state and local officials in Nevada, Minnesota, and Virginia  Congress can require or facilitate information sharing with states and localities by federal agencies  As with funding, the effectiveness of federal information sharing may depend in part on how timely it is  How quickly federal agencies share information with the appropriate state and local officials may be affected by the distribution of election administration duties at the state and federal levels  Box 8 provides an example of such an effect reported by NASS  Past federal action has resulted in both intentional and unintentional changes to state and local election systems  Some federal laws include provisions that are specifically designed to establish certain responsibilities for election administration at the state level  For example, the NVRA requires states to designate chief state election officials to coordinate state responsibilities under the act (52 U S C  §20509), and HAVA charges chief state election officials with implementing a statewide voter registration system (52 U S C  §21083(a)(1)(A))  Federal regulation has reportedly also had the side effect of shifting the distribution of other election administration duties  For example, the agency-based registration requirements in the NVRA divide voter registration responsibilities between traditional election offices and offices that had not historically been involved in election administration, such as motor vehicle and public assistance agencies (52 U S C  §20504; 52 U S C  §20506)  According to Hale, Montjoy, and Brown, "the need to pass implementing legislation and the complexity of legal and technical requirements" in federal laws such as HAVA and the NVRA has also "led many states to grant new or additional rule-making power" to their chief state election officials  Congress has considered legislation—some of which has been enacted and some of which has not—that would change election rules or the state and local systems that implement them  The interactions between the duties and structures of state and local election systems and past federal actions suggest some considerations that may be relevant to future congressional consideration of proposals that would affect the administration of federal elections  The following questions may be of interest to Members as they consider making changes to election administration or maintaining current rules and structures: How would any proposed change interact with the duties and structures of state and local election systems? Would the duties and structures of state and local election systems make a proposed change difficult to implement? Would the design of a proposed change need to be adjusted to accommodate variations between or within states? Which of the policy tools available to Congress is best suited to achieving the purpose of a proposed change? For example, would it be more effective to advance a proposed change with a federal requirement, or incentivize it via federal funding? How might the nature of the state and local system inform a proposed change? For example, if it is a federal requirement, who is charged with compliance; who is responsible for the tasks required for compliance; and what is the relationship between the two? If it is federal funding, to whom should it be distributed, and who should be involved in making decisions about how to use it? Would a proposed change have the effect, either intentionally or unintentionally, of altering the duties or structures of state or local election systems? If so, what are the advantages and disadvantages of such changes? Are there complications with a proposed change that are not specifically related to election administration? For example, could there be federalism-related issues with intervening in the relationships between states and their political subdivisions? 

ground_truth: Congress has broad authority to impose requirements upon the federal procurement process, that is, the process whereby agencies obtain goods and services from the private sector. One way in which Congress has exercised this authority is by adopting measures to promote contracting and subcontracting between "small businesses" and federal agencies. These measures, among other things, declare a congressional policy of ensuring that a "fair proportion" of federal contract and subcontract dollars is awarded to small businesses; establish government-wide and agency-specific goals for the percentage of federal contract and subcontract dollars awarded to small businesses; establish an annual Small Business Goaling Report to measure progress in meeting these goals; generally require federal agencies, under specified circumstances, to reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000), but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses; authorize federal agencies, under specified circumstances, to set aside contracts that have an anticipated value greater than the simplified acquisition threshold exclusively for small businesses; authorize federal agencies to make sole source awards to small businesses when the award could not otherwise be made (e.g., only a single source is available, under urgent and compelling circumstances); authorize federal agencies to set aside contracts for, or grant other contracting preference to, specific types of small businesses (e.g., 8(a) small businesses, HUBZone small businesses, women-owned small businesses (WOSBs) and service-disabled veteran-owned small businesses (SDVOSBs)); and task the Small Business Administration (SBA) and other federal procurement officers with reviewing and restructuring proposed procurements to maximize opportunities for small business participation. Small business contracting programs generally have strong bipartisan support. However, that does not mean that these programs face no opposition, or that issues have not been raised concerning the impact and operations of specific programs. For example, small business advocates note that implementing regulations in the Federal Acquisition Regulation (FAR) narrow the reach (and impact) of some small business contracting preferences by excluding specific types of contracts, such as those listed in the Federal Supply Schedules, from FAR requirements pertaining to small business contracting. Advocates want the federal government to enact policies that reduce or eliminate such exclusions. Critics have questioned some of these programs' effectiveness, in terms of both promoting small business opportunities to win federal contracts and promoting a more diversified, robust economy. Many observers judge the relative success or failure of federal efforts to enhance small business contracting opportunities by whether federal government and individual federal agencies meet the predetermined procurement goals in the annual Small Business Goaling Report. In recent years, the federal government has generally succeeded in meeting the government-wide goals of awarding 23% of the total value of all small business eligible prime contract awards to small businesses, 5% to small disadvantaged businesses (SDBs), and 3% to SDVOSBs. It has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses. The Small Business Goaling Report is the most convenient measure available to compare federal small business contracting performance over time, but it has limitations. For example, the SBA excludes some contracts from the report in its determination of what is "small business eligible" and some federal procurement activities are not included because they are not recorded in the Federal Procurement Data System—Next Generation. It also does not evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: During World War II and then again after the outbreak of fighting in Korea, Congress found that the existence of thousands of small business concerns was being threatened by war-induced shortages of materials coupled with an inability to obtain defense contracts or financial assistance  Concerned that many small businesses might fail without government assistance, in 1953, Congress passed and President Dwight Eisenhower signed into law the Small Business Act (P L  83-163), which authorized the Small Business Administration (SBA)  The act specifies that it is the declared policy of Congress to promote the interests of small businesses to "preserve free competitive enterprise " Congress specified that one of the ways to preserve free competitive enterprise was to insure that small businesses received a "fair proportion" of federal contracts and subcontracts: It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation  Congress indicated that its intent in supporting small businesses was not to "favor small business at the expense of its larger competitors  Our only purpose in supporting the creation and effective operation of the SBA is to equalize the scales when necessary to guarantee the continued vigor of our competitive free enterprise system " More recently, a House committee report indicated that the primary rationale for small business contracting programs is the positive economic benefits they provide, as well as assisting small businesses overcome the complexities of the system  The economic benefits of these programs can be seen in two primary areas—market competition and local economic development  First, [these] programs … are designed to increase and diversify small contractors with the intent of expanding the federal supplier base  This leads to increased competition, which results in higher quality, greater product variety, and lower prices  Second, these contracting initiatives lower barriers to entry in a wide range of markets for small businesses  This provides greater market access for small firms' goods and services  From an economic perspective, such access is critical to generating positive macroeconomic benefits, including higher job creation, wage growth, and greater income distribution  Over the years, Congress has approved legislation to support small business in various ways  For example, the SBA administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion  In recent years, congressional interest in these programs has increased, primarily because assisting small businesses is viewed as a means to stimulate economic activity and create jobs  This report describes the various federal programs, requirements, procurement officers, and procurement offices involved in promoting federal contracting and subcontracting with small businesses, small disadvantaged businesses (SDBs), SDBs participating the SBA's "8(a) Program," Historically Underutilized Business Zone (HUBZone) small businesses, women-owned small businesses (WOSBs), and service-disabled veteran-owned small businesses (SDVOSBs)  The SBA administers many, but not all, of these programs  It examines the following federal requirements and authorities in promoting contracting and subcontracting with small businesses: 1  The requirement that federal agencies generally reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000) but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses unless the contracting officer is unable to obtain offers from two or more small businesses that are competitive with market prices and the quality and delivery of the goods or services being purchased  2  The establishment of small business procurement goals, both government-wide and agency specific, to promote the awarding of contracts to small businesses  3  The requirement that federal agencies generally set aside contracts that have an anticipated value exceeding the simplified acquisition threshold exclusively for small businesses when there is a reasonable expectation that offers will be obtained from at least two responsible small businesses offering the products of different small businesses (Rule of Two) and the award will be made at a fair market price  4  The authority provided federal agencies to make sole source awards to small businesses when the award could not otherwise be made (e g , only a single source is available, under urgent and compelling circumstances)  5  The authority provided federal agencies to set aside contracts for, or grant other contracting preference to, specific types of small businesses (e g , 8(a) small businesses, HUBZone small businesses, WOSBs, and SDVOSBs)  It discusses the SBA's oversight and responsibilities concerning the small business goaling program, small business mentor-protégé programs, the 7(j) management and training program, and the surety bond guaranty program  It also discusses the role of the Office of Small and Disadvantaged Business Utilization (OSDBU), located in each federal agency, in promoting contracting with small businesses, and examines the role and responsibilities of various federal procurement officers, including procurement center representatives, commercial market representatives, and business opportunity specialists, in promoting small business contracting opportunities  This report concludes with a brief discussion of the strong bipartisan support for small business contracting programs  However, that does not mean that these programs face no opposition, or that issues have not been raised concerning the impact and operations of specific programs  For example, small business advocates note that implementing regulations in the Federal Acquisition Regulation (FAR) narrow the reach (and impact) of some small business contracting preferences by excluding specific types of contracts, such as those listed in the Federal Supply Schedules, from FAR requirements pertaining to small business contracting  Advocates want the federal government to enact policies that reduce or eliminate exclusions that narrow the reach of small business contracting preferences  Critics have questioned some of these programs' effectiveness, in terms of promoting both small business opportunities to win federal contracts and a more diversified, robust economy  With a few exceptions, businesses interested in bidding on a federal contract must obtain a Dun & Bradstreet Data Universal Numbering System (DUNS) number (i e , a unique nine-digit identification number) for each of the business's physical locations, and register with the federal government's System for Award Management (SAM)  SAM is used by government agencies for several purposes, including to find contractors  Businesses also must match their products and services to a North American Industry Classification System (NAICS) code  Businesses generally have a primary NAICS code, and may have multiple NAICS codes if they sell multiple products and services  Businesses that identify themselves as a small business in SAM must (1) meet the Small Business Act's definition of a small business and (2) not exceed size standards established, and updated periodically, by the SBA  The Small Business Act defines a small business as one that is organized for profit; has a place of business in the United States; operates primarily within the United States or makes a significant contribution to the U S  economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; and is not dominant in its field on a national basis  The business may be a sole proprietorship, partnership, corporation, or any other legal form  The Small Business Act authorizes the SBA to establish size standards to ensure that only small businesses are provided SBA assistance  The SBA currently uses two types of size standards to determine SBA program eligibility: industry-specific size standards and alternative size standards , for some lending and venture capital investment programs based on the applicant's maximum tangible net worth and average net income after federal taxes  The SBA's industry-specific size standards are used to determine eligibility for federal small business contracting purposes  The SBA determines if a business is small by comparing that business's economic characteristics (typically number of employees or average annual receipts) to size standards listed in the SBA's Table of Small Business Size Standards   The table has size standards for 1,036 industrial classifications in the North American Industrial Classification System  Businesses that exceed the applicable size standard for their primary industry do not meet the requirement of being small  The SBA's size standards are designed to (1) encourage competition within each industry and (2) ensure that SBA assistance is provided only to firms that are not dominant in their field on a national basis  The size standards are derived through an assessment of four economic factors: (1) the average firm size, (2) the average assets size as a proxy of start-up costs and entry barriers, (3) the four-firm concentration ratio (the cumulative share of total industry receipts of that industry's four biggest firms) as a measure of industry competition, and (4) the size distribution of firms  The SBA also considers the ability of small businesses to compete for federal contracting opportunities and, when necessary, several secondary factors "as they are relevant to the industries and the interests of small businesses, including technological change, competition among industries, industry growth trends, and impacts of size standard revisions on small businesses " Historically, the SBA has used the number of employees to determine if manufacturing and mining companies are small (ranging from fewer than 50 employees for some industries to fewer than 1,500 employees for others) and average annual receipts for most other industries (ranging from no more than $1 million for some industries to no more than $40 million for others)  To make it easier to determine if an offeror meets the SBA's definition of a small business, prior to soliciting bids, federal agencies are required to classify a product or service being acquired in only one (NAICS code) industry, "whose definition best describes the principal nature of the product or service being acquired even though for other purposes it could be classified in more than one " When acquiring a product or service that could be classified in two or more industries with different size standards, contracting officers must "apply the size standard for the industry accounting for the greatest percentage of the contract price " If a solicitation calls for more than one item and allows offers to be submitted on any or all of the items, "an offeror must meet the size standard for each item it offers to furnish " If a solicitation calling for more than one item requires offers on all or none of the items, "an offeror may qualify as a small business by meeting the size standard for the item accounting for the greatest percentage of the total contract price " With several notable exceptions (e g , HUBZone small businesses, SBA 8(a) program participants, and veteran-owned small businesses [VOSBs] and SDVOSBs seeking contracts with the Department of Veterans Affairs), businesses generally self-certify their status as small when they register their business in the SAM database  The contracting officer is required to accept an offeror's representation in a specific bid or proposal that it is a small business unless "(1) another offeror or interested party challenges the concern's small business representation or (2) the contracting officer has a reason to question the representation " If an offeror's small business status is challenged, the contracting officer is generally not allowed to award the contract until the SBA has made a size determination or 15 business days after the SBA receives the protest, whichever occurs first  The SBA's Office of Government Contracting Area Office (Area Office) serving the area in which the headquarters of the offeror is located initially reviews the protest  The Area Office is required, by regulation, to determine the offeror's size status within 15 business days after receipt of the protest, or "within any extension of time granted by the contracting officer " If the SBA does not make a determination within the required time, the contracting officer "may award the contract after determining in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the government " An appeal of the Area Office's decision may be filed with the SBA's Office of Hearings and Appeals (OHA)   If the OHA accepts the appeal for consideration and finds the protested concern to be ineligible for award, the contracting officer must "terminate the contract unless termination is not in the best interests of the government, in keeping with the circumstances described in the [aforementioned] written determination  However, the contracting officer shall not exercise any options or award further task or delivery orders " Furthermore, a concern cannot become eligible for a specific award after the SBA has determined that it is not a small business, even if the concern takes action to meet the definition of a small business  The SBA or the federal agency may suspend or debar a firm from future government contracts for misrepresenting its size status  In addition, individuals that knowingly misrepresent a business's size to secure a federal contract can be subject to civil and criminal penalties  15 U S C  §644(e)(1) states, "To the maximum extent practicable, procurement strategies used by a Federal department or agency having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers " To accomplish this goal, FAR regulations (FAR §19 202-1) require contracting officers, when applicable, to take the following actions prior to awarding a federal contract: 1  "Divide proposed acquisitions of supplies and services (except construction) into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement " 2  "Plan acquisitions such that, if practicable, more than one small business concern may perform the work, if the work exceeds the amount for which a surety may be guaranteed by the SBA against loss under 15 U S C  §694b [generally $6 5 million, or $10 million if the contracting officer certifies that the higher amount is necessary] " 3  "Ensure that delivery schedules are established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government " 4  "Encourage prime contractors to subcontract with small business concerns [primarily through the agency's role in negotiating an acceptable small business subcontracting plan with prime contractors on contracts anticipated to exceed $700,000 or $1 5 million for construction contracts] " 5  "Provide a copy of the proposed acquisition package to the SBA procurement center representative [PCR, duties are described later]" for his or her review, comment and recommendation, or, if a PCR is not assigned, to the SBA Area Office serving the area in which the procuring activity is located "at least 30 days prior to the issuance of the solicitation if (i) The proposed acquisition is for supplies or services currently being provided by a small business and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which makes it unlikely that small businesses can compete for the prime contract; (ii) The proposed acquisition is for construction and seeks to package or consolidate discrete construction projects and the magnitude of this consolidation makes it unlikely that small businesses can compete for the prime contract; or (iii) The proposed acquisition is for a consolidated or bundled requirement … The contracting officer shall provide all information relative to the justification for the consolidation or bundling, including the acquisition plan or strategy and if the acquisition involves substantial bundling, the information identified in [FAR] 7 107-4  The contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization [duties are described later] " 6  "Provide a statement explaining why the (i) Proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement; (ii) Delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the government; (iii) Proposed acquisition cannot be structured so as to make it likely that small businesses can compete for the prime contract; (iv) Consolidated construction project cannot be acquired as separate discrete projects; or (v) Consolidation or bundling is necessary and justified " 7  "Process the 30-day notification concurrently with other processing steps required prior to the issuance of the solicitation " 8  "If the contracting officer rejects the SBA procurement center representative's recommendation … document the basis for the rejection and notify the SBA procurement center representative [who (as described later) may appeal the rejection to the chief of the contracting office and, ultimately, to the agency head] " The SBA may assign one or more procurement center representatives (PCRs) to any contracting activity or contract administration office to implement the SBA's policies and programs  The SBA currently has 49 PCRs located in the SBA's six Area Offices  PCRs are required to comply with the contracting agency's directives governing the conduct of contracting personnel and the release of contract information  PCR duties include the following: Review proposed acquisitions to recommend "the setting aside of selected acquisitions not unilaterally set aside by the contracting officer;" new qualified small business sources; and the feasibility of breaking out components of the contract for competitive acquisitions  Review proposed acquisition packages  If the PCR (or, if a PCR is not assigned, the SBA Area Office serving the area in which the procuring activity is located) "believes that the acquisition, as proposed, makes it unlikely that small businesses can compete for the prime contract," the PCR can recommend any alternate contracting method that he or she "reasonably believes will increase small business prime contracting opportunities " The recommendation must be made to the contracting officer within 15 days after the package's receipt  Recommend small businesses "for inclusion on a list of concerns to be solicited in a specific acquisition " Appeal to the contracting office's chief "any contracting officer's determination not to solicit a concern recommended by the SBA for a particular acquisition, when not doing so results in no small business being solicited " This appeal may be further appealed to the agency head  Conduct periodic reviews of the agency's contracting activity, including the agency's assessment of any required small business subcontracting plan, "to ascertain whether the agency is complying with the small business policies in this regulation " Sponsor and participate in conferences and training "designed to increase small business participation in the contracting activities of the office " Every federal agency (except the SBA) that has procurement powers is required to have an OSDBU, whose director, by statute, reports directly to the head of the agency and has supervisory authority over agency staff performing certain procurement functions  The OSDBU's primary responsibility is to ensure that small businesses, SDBs, WOSBs, SDVOSBs, and HUBZone small businesses are treated fairly and that they have an opportunity to compete and be selected for a fair amount of the agency's contract dollars  Among its statutory responsibilities are the following: "Identify proposed solicitations that involve significant bundling of contract requirements, and work with the agency acquisition officials and the Administration to revise the procurement strategies for such proposed solicitations where appropriate to increase the probability of participation by small businesses as prime contractors, or to facilitate small business participation as subcontractors and suppliers, if a solicitation for a bundled contract is to be issued " Assist small businesses "to obtain payments, required late payment interest penalties, or information regarding payments due to the concern from an executive agency or a contractor " Assign "a small business technical adviser to each office to which the SBA has assigned" a PCR  The small business technical advisor "shall be a full-time employee of the procuring activity, well qualified, technically trained and familiar with the supplies or services purchased at the activity; and whose principal duty shall be to assist" the PCR  Provide the agency's "Chief Acquisition Officer and senior procurement executive … with advice and comments on acquisition strategies, market research, and justifications [related to limitations on the consolidation of contracts as a means to provide small businesses appropriate opportunities to participate as prime contractors and subcontractors] " Provide training to small businesses and contract specialists, provided that the training does not interfere with the director carrying out his or her other responsibilities  Ensure that a small business that notifies the PCR prior to a contract's award that "a solicitation, request for proposal, or request for quotation unduly restricts [its] ability … to compete for the award … is aware of other resources and processes available to address unduly restrictive provisions … even if such resources and processes are provided by such agency, the Administration, the Comptroller General, or a Department of Defense (DOD) procurement technical assistance program [described below] " Review all subcontracting plans "to ensure that the plan provides maximum practicable opportunity for small business concerns to participate in the performance of the contract to which the plan applies " In accordance with P L  109-163 , the National Defense Authorization Act of 2006, the DOD renamed its OSDBU the Office of Small Business Programs (OSBP)  The act also redesignated the Army, Navy, and Air Force's OSDBUs to OSBPs of the Department of the Army, Navy, and Air Force, respectively  At the agency level, procurement department heads (sometimes titled senior procurement executive ) are responsible for implementing small business programs at their agencies, including achieving program goals  In general, procurement department staff who work on small business issues (often titled small business specialists ) coordinate with OSDBU directors on their agencies' small business programs  Chief acquisition officers provide a focal point for acquisition in agency operations  Their key functions include "monitoring and evaluating agency acquisition activities, increasing the use of full and open competition, increasing performance-based contracting, making acquisition decisions, managing agency acquisition policy, acquisition career management, acquisition resources planning, and conducting acquisition assessments " The SBA must assign a breakout procurement center representative (breakout PCR) to each major procurement center  A major procurement center is, in the opinion of the SBA Administrator, a procurement center that purchases substantial dollar amounts of other than commercial items, and has the potential to incur significant savings as a result of the placement of a breakout PCR  The breakout PCR advocates for (1) the appropriate use of full and open competition, and (2) the breakout of items, "when appropriate and while maintaining the integrity of the system in which such items are used " The breakout PCR is in addition to the PCR  When a breakout PCR is assigned, the SBA must assign at least two co-located small business technical advisors  SBA breakout PCRs and technical advisors must comply with the contracting agency's directives governing the conduct of contracting personnel and the release of contract information  The SBA must obtain security clearances for its breakout PCRs and technical advisors as required by the contracting agency  The SBA has four commercial market r epresentatives who, among other duties, help prime contractors find small businesses that are capable of performing subcontracts; provide counseling on the contractor's responsibility to maximize subcontracting opportunities for small businesses; and conduct periodic reviews of contractors awarded contracts requiring an acceptable subcontracting plan that provides small businesses "the maximum practicable opportunity to participate in contract performance consistent with its efficient performance" (generally any solicitation to perform a contract that is expected to exceed $700,000 ($1 5 million for construction) and that has subcontracting possibilities)  The SBA's business opportunity s pecialists provide, among other duties, guidance, counseling, and referrals for assistance with technical, management, financial, or other matters intended to improve the competitive viability of SBA 8(a) program participants  They provide 8(a) program participants comprehensive assessments of the firm's strengths and weaknesses; monitor and document their compliance with 8(a) program requirements; advise them on compliance with contracting regulations after the award of a 8(a) program contract or subcontract; review and monitor their compliance with mentor-protégé agreements; represent the interests of the SBA Administrator and small businesses in the award, modification, and administration of 8(a) program contracts and subcontracts; and report fraud or abuse involving the 8(a) program  The Small Business Procurement Advisory Council (SBPAC), whose members are composed of the SBA Administrator (or his or her designee), the director of the Minority Business Development Agency, and the head of each OSDBU in each federal agency having procurement powers, has the following statutory duties: 1  Develop positions on proposed procurement regulations affecting the small business community  2  Submit comments reflecting such positions to appropriate regulatory authorities  3  Conduct reviews of each OSDBU to determine the office's compliance with its statutory requirements  4  Identify best practices for maximizing small business utilization in federal contracting that may be implemented by federal agencies having procurement powers  5  Submit annually, to the House Committee on Small Business and Senate Committee on Small Business and Entrepreneurship, a report describing (1) the comments submitted to appropriate regulatory authorities, including any outcomes related to the comments; (2) the results of its review of each OSDBU ; and (3) best practices identified for maximizing small business contracting   The Defense Logistic Agency's Procurement Technical Assistance Program (PTAC) helps "businesses pursue and perform under contracts with the Department of Defense, other federal agencies, state and local governments and with government prime contractors  Most of the assistance the PTACs provide is free  PTAC support to businesses includes registration in systems such as the System for Award Management (SAM), identification of contract opportunities, and help in understanding requirements and in preparing and submitting bids " The Competition in Contracting Act of 1984 generally requires "full and open competition" for government procurement contracts  However, various provisions of the Small Business Act authorize or, in some cases, require federal agencies to provide for other than "full and open competition through the use of competitive procedures" when contracting with small businesses  For example, as mentioned previously, federal agencies are generally required to reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000), but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses unless the contracting officer is unable to obtain offers from two or more small businesses that are competitive with market prices and the quality and delivery of the goods or services being purchased  In addition, federal agencies are generally required to set aside contracts that have an anticipated value exceeding the simplified acquisition threshold exclusively for small businesses when there is a reasonable expectation by the contracting officer that offers will be obtained by at least two responsible small businesses offering the products of different small businesses (Rule of Two) and the award will be made at a fair market price; may similarly set aside contracts exceeding the simplified acquisition threshold for competition reserved for specific types of small businesses (e g , 8(a) small businesses, HUBZone small businesses, WOSBs and SDVOSBs); may enter into negotiations directly with particular types of small businesses (e g , a sole source award) when the award could not otherwise be made (e g , only a single source is available or under urgent and compelling circumstances); and are required to grant HUBZone small businesses a price evaluation preference of not more than 10% in open and unrestricted competitions  Several SBA programs assist small businesses in obtaining and performing federal contracts and subcontracts  These include various prime contracting programs; subcontracting programs; and other assistance (e g , contracting technical training assistance and oversight of the federal small business goaling program and the Surety Bond Guarantee program)  Several contracting programs allow small businesses to compete only with similar firms for government contracts or receive sole source awards in circumstances in which such awards could not be made to other firms  These programs provide small businesses an opportunity to win government contracts without having to compete against larger and more experienced companies  The 8(a) Minority Small Business and Capital Ownership Development Program (named for the section of the Small Business Act from which it derives its authority) provides business development assistance to businesses owned and controlled by persons who are socially and economically disadvantaged  African Americans, Hispanics, Native Americans (including American Indians, Eskimos, Aleuts, and Native Hawaiians), Asian-Pacific Americans, and Subcontinent Asian Americans are presumed to be socially and economically disadvantaged  Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis  To be considered economically disadvantaged, an individual's net worth, excluding ownership interest in the 8(a) firm and equity in his or her primary personal residence, must be less than $250,000 at the time of application to the 8(a) Program, and less than $750,000 thereafter  Federal agencies are authorized to award contracts for goods or services, or to perform construction work, to the SBA for subcontracting to 8(a) firms  The SBA is authorized to delegate the function of executing contracts to the procuring agencies and often does so  Once the SBA has accepted a contract for the 8(a) Program, the contract is awarded through either a set-aside or on a sole source basis, with the contract amount generally determining the acquisition method used  When the contract's anticipated total value, including any options, is less than $4 million ($7 million for manufacturing contracts), the contract is normally awarded without competition (as a sole source award)  In contrast, when the contract's anticipated value exceeds these thresholds, the contract generally must be awarded via a set-aside with competition limited to 8(a) firms so long as there is a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers and the award can be made at fair market price  The SBA also provides technical assistance and training to 8(a) firms  Firms may participate in the 8(a) Program for no more than nine years  In FY2017, the federal government awarded $27 2 billion to 8(a) firms  $16 4 billion was awarded with an 8(a) preference ($8 billion through an 8(a) set-aside and $8 4 billion through an 8(a) sole source award); $4 8 billion was awarded to an 8(a) firm in open competition with other firms; and $6 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, women-owned small businesses, and service-disabled veteran-owned small businesses)  This program assists small businesses located in Historically Underutilized Business Zones (HUBZones) through set-asides, sole source awards (so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million, or $7 million for manufacturing contracts) and price evaluation preferences (of up to 10%) in full and open competitions  The HUBZone program targets assistance to small businesses located in areas with low income, high poverty, or high unemployment  To be certified as a HUBZone small business, at least 35% of the small business's employees must generally reside in a HUBZone  In FY2017, the federal government awarded $7 53 billion to HUBZone-certified small businesses  $1 90 billion was awarded with a HUBZone preference ($1 49 billion through a HUBZone set-aside, $65 3 million through a HUBZone sole source award, and $346 9 million through a HUBZone price-evaluation preference); $1 53 billion was awarded to HUBZone-certified small businesses in open competition with other firms; and $4 10 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses)  This program allows agencies to set aside contracts for SDVOSBs  Also, federal agencies may award sole source contracts to SDVOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6 5 million for manufacturing contracts)  For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs  In FY2017, the federal government awarded $18 2 billion to SDVOSBs  $6 8 billion was awarded through a SDVOSB set-aside award; $4 3 billion was awarded to a SDVOSB in open competition with other firms; and $7 1 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and WOSBs)  Under this program, contracts may be set aside for economically disadvantaged WOSBs in industries in which women are underrepresented and substantially underrepresented  Federal agencies may award sole source contracts to WOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6 5 million for manufacturing contracts)  In FY2017, the federal government awarded $21 3 billion to WOSBs  $648 9 million was awarded with a WOSB preference ($580 5 million through a WOSB set-aside and $68 4 million through a WOSB sole source award); $7 0 billion was awarded to a WOSB in open competition with other firms; and $13 7 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and SDVOSBs)  Federal contracting officers are required to provide the SBA's PCR (or, if a PCR is not assigned, the SBA Area Office serving the procuring activity area) a "reasonable period of time" to review any solicitation requiring submission of a small business subcontracting plan and to submit advisory findings before the solicitation is issued  The PCR's advisory comments regarding the small business subcontracting plan's acceptability must be submitted, in writing, to the appropriate contracting officer within five working days after the plan's receipt  As mentioned previously, the SBA's commercial market representatives help prime contractors find small businesses to perform subcontracts; counsel contractors on their responsibility to maximize subcontracting opportunities for small businesses; and conduct periodic reviews, often in concert with a SBA PCR, of contractors awarded contracts that require an acceptable small business subcontracting plan  Federal agencies may also set aside contracts or make sole source awards to small businesses not participating in any other program under certain conditions  The Department of Transportation's (DOT's) Disadvantaged Business Enterprise (DBE) Program originally began in 1980 as a minority/women's business enterprise program "established by regulation under the authority of Title VI of the Civil Rights Act of 1964 and other nondiscrimination statutes that apply to DOT financial assistance programs " Congress has reauthorized the DBE program several times since its inception; most recently in P L  114-94 , the Fixing America's Surface Transportation Act (FAST-Act)  The FAST-Act provides, that, except to the extent the Secretary of Transportation determines otherwise, not less than 10% of the amounts made available for any program under Titles I (federal-aid highways), II (innovative project finance), III (public transportation) and VI (innovation) of the act and 23 U S  Code 403 (highway safety research and development), shall be expended with DBEs  DOT also has a separate DBE program for airport concessions  A DBE is a for-profit small business owned and controlled by socially and economically disadvantaged individuals  Eligibility for the DBE program differs somewhat from the 8(a) program  For example, under the DBE program, women are presumed to be socially and economically disadvantaged individuals  Also, to be regarded as economically disadvantaged, an individual must have a personal net worth (excluding ownership interest in the firm and equity in his or her primary personal residence) that does not exceed $1 32 million  The DBE must also meet SBA size criteria and have average annual gross receipts not exceeding $23 98 million  Size limits for the airport concessions DBE program are higher  The DBE program's eight objectives are to 1  ensure nondiscrimination in the award and administration of DOT-assisted contracts in the department's highway, transit, and airport financial assistance programs; 2  create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; 3  ensure that the department's DBE program is narrowly tailored in accordance with applicable law; 4  ensure that only firms that fully meet the program's eligibility standards are permitted to participate as DBEs; 5  help remove DBE-participation barriers in DOT-assisted contracts; 6  promote the use of DBEs in all types of federally-assisted contracts and procurement activities conducted by recipients; 7  assist the development of firms that can compete successfully in the marketplace outside the DBE program; and 8  provide appropriate flexibility to recipients of federal financial assistance in establishing and providing opportunities for DBEs  Other federal programs promote subcontracting with small disadvantaged businesses (SDBs)  SDBs include 8(a) participants and other small businesses that are at least 51% unconditionally owned and controlled by socially or economically disadvantaged individuals or groups  Individuals owning and controlling non-8(a) SDBs may have net worth of up to $750,000 (excluding ownership interests in the SDB firm and equity in their primary personal residence)  Otherwise, however, SDBs must generally satisfy the same eligibility requirements as 8(a) firms, although they do not apply to the SBA to be designated SDBs in the same way that 8(a) firms do  Federal agencies must negotiate "subcontracting plans" with the apparently successful bidder or offeror on eligible prime contracts prior to awarding the contract  Subcontracting plans set goals for the percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that will be made to ensure that SDBs "have an equitable opportunity to compete for subcontracts " Federal agencies may also consider the extent of subcontracting with SDBs in determining to whom to award a contract or give contractors "monetary incentives" to subcontract with SDBs  As of February 11, 2019, the SBA's Dynamic Small Business Search database included 2,538 SBA-certified SDBs and 100,595 self-certified SDBs  The SBA's 7(j) Management and Technical Assistance program provides "a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities " Eligible individuals and businesses include "8(a) certified firms, SDBs, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals " In FY2017, the 7(j) Management and Technical Assistance program assisted 4,100 small businesses  The SBA's Surety Bond Guarantee program aims to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels  The program guarantees individual contracts of up to $6 5 million and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  The SBA's guarantee ranges from not to exceed 80% to not to exceed 90% of the surety's loss if a default occurs  In FY2017, the SBA guaranteed 10,397 bid and final surety bonds with a total contract value of more than $6 3 billion  A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner  The agreement binds the contractor to comply with the terms and conditions of a contract  If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed  The surety bond reduces the risk associated with contracting  Surety bonds are meant to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions  Surety bonds are important to small businesses interested in competing for federal contracts because the federal government requires prime contractors—prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States—to furnish a performance bond issued by a surety satisfactory to the contracting officer in an amount that the officer considers adequate to protect the government  Small business mentor-protégé programs typically seek to pair new businesses with more experienced businesses in mutually beneficial relationships  Protégés may receive financial, technical, or management assistance from mentors in obtaining and performing federal contracts or subcontracts, or serving as suppliers under such contracts or subcontracts  Mentors may receive credit toward subcontracting goals, reimbursement of certain expenses, or other incentives  The federal government currently has several mentor-protégé programs to assist small businesses in various ways  The 8(a) Mentor-Protégé Program is a government-wide program designed to assist small businesses "owned and controlled by socially and economically disadvantaged individuals" participating in the SBA's Minority Small Business and Capital Ownership Development Program (commonly known as the 8(a) program) in obtaining and performing federal contracts  For that purpose, mentors may (1) form joint ventures with protégés that are eligible to perform federal contracts set aside for small businesses; (2) make certain equity investments in protégé firms; (3) lend or subcontract to protégé firms; and (4) provide technical or management assistance to their protégés  The SBA's A ll S mall B usiness Mentor-Protégé Program is a government-wide mentor-protégé program for all small business concerns, consistent with the SBA's mentor-protégé program for participants in the SBA's 8(a) Business Development program  The Department of Defense (DOD) Mentor-Protégé Program , in contrast, is agency-specific  It assists various types of small businesses and other entities in obtaining and performing DOD subcontracts and serving as suppliers on DOD contracts  Mentors may (1) make advance or progress payments to their protégés that DOD reimburses; (2) award subcontracts to their protégés on a noncompetitive basis when they would not otherwise be able to do so; (3) lend money to or make investments in protégé firms; and (4) provide or arrange for other assistance  Other agencies also have agency-specific mentor-protégé programs to assist various types of small businesses or other entities in obtaining and performing subcontracts under agency prime contracts  The Department of Homeland Security (DHS), for example, has a mentor-protégé program wherein mentors may provide protégés with rent-free use of facilities or equipment, temporary personnel for training, property, loans, or other assistance  Because these programs are not based in statute, unlike the SBA and DOD programs, they generally rely upon preexisting authorities (e g , authorizing use of evaluation factors) or publicity to incentivize mentor participation  Currently, more than 1,200 mentor-protégé agreements are in place, even though there are issues with the accuracy and thoroughness of some federal agency records  Since 1978, federal agency heads have been required to establish federal procurement goals, in consultation with the SBA, "that realistically reflect the potential of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals" to participate in federal procurement  Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA  In 1988, Congress authorized the President annually to establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals  Congress required the government-wide minimum participation goal for small businesses to be "not less than 20% of the total value of all prime contract awards for each fiscal year" and "not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year" for small businesses owned and controlled by socially and economically disadvantaged individuals  Each federal agency was also directed to "have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency " The SBA was also required to report to the President annually on the attainment of the goals and to include the information in an annual report to Congress  The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance  The agency head is required to "make consistent efforts to annually expand participation by small business concerns from each industry category " If the SBA and the agency cannot agree on the goals, the agency may submit the case to the Office of Management and Budget (OMB) Office of Federal Procurement Policy (OFPP) for resolution  The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i e , non-appropriated funds), contracts not covered by the FAR, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System – Next Generation, or FPDS-NG (such as government procurement card purchases and contracts valued less than $10,000)  These exclusions typically account for 18% to 20% of all federal prime contracts each year  The SBA then evaluates the agencies' performance against their negotiated goals annually, using FPDS-NG data, managed by the U S  General Services Administration (GSA), to generate the small business eligible baseline  This information is compiled into the official Small Business Goaling Report, which the SBA releases annually  Each agency that fails to achieve any proposed prime or subcontract goal is required to submit a justification to the SBA on why it failed to achieve a proposed or negotiated goal with a proposed plan of corrective action  Agencies can take credit in every category that is applicable to the recipient of the contract  For example, "when counting goaling achievements, a contract awarded to a service-disabled Veteran-Owned Woman-Owned Small Business would be counted toward the Small Business (SB) goal, the Service-Disabled Veteran-Owned Small Business (SDVOSB) goal and the Women-Owned Small Business (WOSB) goal  However, these category counts are not summed to triple the total count  The Sum of Parts Does Not Equal the Whole (italics in original) " Over the years, federal government-wide procurement goals have been established for small businesses generally ( P L  100-656 , the Business Opportunity Development Reform Act of 1988, and P L  105-135 , the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997); small businesses owned and controlled by socially and economically disadvantaged individuals ( P L  100-656 ); women ( P L  103-355 , the Federal Acquisition Streamlining Act of 1994); small businesses located within a HUBZone ( P L  105-135 ); and small businesses owned and controlled by a service-disabled veteran ( P L  106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999)  The current federal small business procurement goals are at least 23 0% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year; 5 0% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses (including participants in the SBA's 8(a) Program) for each fiscal year; 5 0% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses; 3 0% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses; and 3 0% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses  There are no punitive consequences for not meeting these goals  However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting  For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings  As shown in Table 1 , the FY2017 Small Business Goaling Report , using FPDS-NG data, indicates that federal agencies met the federal procurement goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017  Table 1 also provides, for comparative purposes, the percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017  Before awarding a federal contract, the contracting officer must affirmatively determine that the business is responsible to perform the contract  If the contracting officer determines that an apparent successful small business offeror lacks certain elements of responsibility (e g , is unable to fulfill the requirements of a specific government procurement because it lacks capability, competency, capacity, credit, integrity, perseverance, tenacity, or limitations on subcontracting), the officer is required to refer the matter in writing to the SBA for review and a possible Certificate of Competency (COC), even if the next acceptable offer is also from a small business  The COC certifies in writing that the small business meets all required elements of responsibility for the purpose of receiving and performing a specific government contract  The "COC program empowers the SBA to certify to contracting officers as to all elements of responsibility of any small business concern to receive and perform a specific government contract  The COC program does not extend to questions concerning regulatory requirements imposed and enforced by other federal agencies " As mentioned previously, the SBA's commercial market representatives conduct periodic compliance reviews of contractors awarded contracts that require an acceptable small business subcontracting plan  In addition, once the contract is completed, federal agencies are required to pay the contractor on a timely basis and pay interest penalties for late payments  Under specified circumstances, federal agencies may also pay contractors before the contract's payment's due date  The periodic compliance review can take place on-site, at the contracting agency, or virtual  Materials that may be reviewed include the contractor's contract files, correspondence that is directly or indirectly related to the contract, IT systems, subcontracting methods, and procedures  Contractors are selected randomly for audit  The SBA may enter into agreements with other federal agencies to conduct these assessments  The compliance report includes compliant and non-compliant items found during the assessment of the contractor's subcontracting activities and a rating indicating the contractor's level of compliance or non-compliance, ranging from unsatisfactory to outstanding  If any deficiencies are found, the contractor is required to submit, within 30 days of the compliance review rating letter date, a corrective action plan (CAP)  The CAP is submitted to the SBA Area Office via email, or any method designated by the SBA  The commercial market representative conducts a follow-up compliance report within six months to a year of the date the SBA acknowledges receipt of the contractor's CAP to ensure that corrective actions have been taken to eliminate the deficiencies  The SBA keeps the federal agency that awarded the contract informed of the contractor's adherence to correcting the deficiencies  If the contractor refuses to provide or address all deficiencies in the CAP, a delinquent CAP letter is sent advising the contractor that it has 15 days from the letter's date to comply with federal regulations  If an acceptable CAP is not received in the allotted time frame the case is escalated to the SBA's subcontracting program manager who informs the SBA's Office of Government Contracting director and works with the SBA's Office of General Counsel and the federal agency that awarded the contract for resolution or to begin accessing liquidated damages  Once a contract is awarded, federal agencies are generally required to pay interest to prime contractors on any invoice payments the agency fails to make by the date(s) specified in the contract, or within 30 days of receipt of a proper invoice for the amount due if no date is specified in the contract  Similar requirements exist for prime contractors in paying subcontractors on construction contracts  These requirements are especially important for small businesses in the construction industry  Specifically, every construction contract awarded by a federal agency must contain clauses obligating the prime contractor to (1) pay the subcontractor for "satisfactory performance" under the subcontract within seven days of receiving payment from the agency and (2) pay interest on any amounts that are not paid within the proper time frame  The contract must also obligate the prime contractor to include similar payment and interest penalty terms in its subcontracts, as well as require its subcontractors to impose these terms on their subcontractors  This latter provision ensures that the payment and interest penalty requirements flow down to all tiers of construction subcontractors  In addition, required subcontracting plans must incorporate terms obligating the prime contractor to notify the agency awarding the contract in writing if a subcontractor is paid a reduced price for goods supplied or services completed under the contract, or if payment is made to the subcontractor more than 90 days past due  The prime contractor must include the reason for the reduction in payment or failure to pay a subcontractor within 90 days  If the contracting officer for a covered contract (a contract that requires an acceptable subcontracting plan) determines that a prime contractor has a history of unjustified, untimely payments to contractors, the contracting officer shall record the contractor's identity, describe the circumstances under which the contractor may be determined to have a history of unjustified, untimely payments to subcontractors, and include the contractor's identity in, and make publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor  This information is used by federal agencies to "evaluate the business ethics and quality of prospective contractors competing for Federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources " Federal agencies are permitted to make an accelerated payment up to seven days before the required payment date in a federal contract, or earlier if the agency deems it necessary on a case-by-case basis if, after receiving a proper invoice, it is in the best interest of the government, and any of the following is true: the invoice in under $2,500; the payment is to a small business; or the payment is related to an emergency, disaster, or military deployment  In addition, the Secretary of Defense is required, to the fullest extent permitted by law, to establish an accelerated payment date for its small business prime contractors, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract  The Secretary of Defense is also required to establish, to the fullest extent permitted by law, an accelerated payment date for its prime contractors that subcontract with small businesses, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract and the prime contractor agrees to make payments to the subcontractor "in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor " The small business contracting programs described in this report generally have strong bipartisan support  However, that does not mean that these programs face no opposition or that issues have not been raised concerning the impact or operations of specific programs  For example, small business advocates seek policies that reduce or eliminate exclusions that narrow the reach of small business contracting preferences, want the SBA to use the total value of all prime contract awards in the Small Business Goaling Report, and want the SBA to use a more discerning methodology for awarding performance grades to federal agencies in meeting its small business contracting goals  Critics have questioned some of these programs' effectiveness, in terms of both promoting small business opportunities to win federal contracts and a more diversified, robust economy  Many observers judge the relative success or failure of federal efforts to enhance small business contracting opportunities by whether the federal government and individual federal agencies meet the procurement goals in the annual Small Business Goaling Report  In recent years, the federal government has generally succeeded in meeting the government-wide goals of awarding 23% of the total value of all small business eligible prime contract awards to small businesses generally, 5% to SDBs, and 3% to SDVOSBs  However, it has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses  The Small Business Goaling Report is the most convenient measure available to compare federal small business contracting performance over time, but it has limitations  For example, the report does not include all federal contracts, because some are not deemed to be small business eligible and others are not recorded in the FPDS-NG  In addition, the report does not evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy  As one group of researchers has argued, the entire goal-setting process … is geared to measuring the dollars and contracts awarded to small business, and pays little attention to the effect that access to government contracts has on small business starts, growth, and wealth generation  Results of the program are also hard to isolate, difficult to measure, and generally not judged against the next best or other alternative policies [emphasis in original]  Comprehensive studies examining the effect of small business contracting preferences on small business startups, growth, wealth generation, and industry competitiveness may prove useful for congressional oversight  In the meantime, although the Small Business Goaling Report has its limitations, it can help policymakers identify programs most in need of examination  For example, the SBA has announced that it is focusing additional efforts on promoting the HUBZone program to federal contracting officials, primarily due to the continuing difficulties federal agencies have had in meeting the 3% goal for HUBZone small businesses 


Report 2: NASA’s mission is to drive advances in science, technology, aeronautics, and space exploration, and contribute to education, innovation, our country’s economic vitality, and the stewardship of the Earth  To accomplish this mission, NASA establishes programs and projects that rely on complex instruments and spacecraft  NASA’s portfolio of major projects ranges from space satellites equipped with advanced sensors to study the Earth to a telescope intended to explore the universe to spacecraft to transport humans and cargo to and beyond low-Earth orbit  Some of NASA’s projects are expected to incorporate new and sophisticated technologies that must operate in harsh, distant environments  The life cycle for NASA space flight projects consists of two phases— formulation, which takes a project from concept to preliminary design, and implementation, which includes building, launching, and operating the system, among other activities  NASA further divides formulation and implementation into phase A through phase F  Major projects must get approval from senior NASA officials at key decision points before they can enter each new phase  Figure 1 depicts NASA’s life cycle for space flight projects  Formulation culminates in a review at key decision point C, known as project confirmation, where cost and schedule baselines are established and documented in a decision memorandum  To inform those baselines, each project with a life-cycle cost estimated to be greater than $250 million must also develop a joint cost and schedule confidence level (JCL)  The JCL initiative, adopted in January 2009, is a point-in-time estimate that, among other things, includes all cost and schedule elements, incorporates and quantifies known risks, assesses the impacts of cost and schedule to date, and addresses available annual resources  NASA policy requires that projects be baselined and budgeted at the 70 percent confidence level  The agency baseline commitment established at key decision point C includes cost and schedule reserves held at the project—those within the project manager’s control—and NASA headquarters level  Cost reserves are for costs that are expected to be incurred—for instance, to address project risks—but are not yet allocated to a specific part of the project  Schedule reserves are extra time in project schedules that can be allocated to specific activities, elements, and major subsystems to mitigate delays or address unforeseen risks  NASA’s current portfolio of major space telescopes includes three projects—WFIRST, TESS, and JWST—that vary in cost, complexity, and phase of the acquisition life cycle  WFIRST, a project that entered the concept and technology development phase and established preliminary cost and schedule estimates in February 2016, is in the earliest stages of the acquisition life cycle  With preliminary cost estimates ranging from $3 2 billion to $3 8 billion, this project is an observatory designed to perform wide-field imaging and survey of the sky at near-infrared wavelengths to answer questions about the structure and evolution of the universe and to expand our knowledge of planets beyond our solar system  The current design includes a 2 4 meter telescope that was built and qualified for another federal agency over 10 years ago; the project is evaluating which components to reuse and which to modify, refurbish, or build new  TESS—a smaller project whose latest cost estimate is approximately $337 million—is targeted to launch in March 2018 and will be used to conduct the first extensive survey of the sky from space for transiting exoplanets  And finally, JWST, with a life-cycle cost estimate of $8 835 billion, is one of NASA’s most complex projects and top priorities  The telescope is designed to help understand the origin and destiny of the universe, the creation and evolution of the first stars and galaxies, and the formation of stars and planetary systems  With a 6 5-meter primary mirror, JWST is expected to operate at about 100 times the sensitivity of the Hubble Space Telescope  JWST’s science instruments are to detect very faint infrared sources and, as such, are required to operate at extremely cold temperatures  To help keep these instruments cold, a multi-layered tennis-court-sized sunshield is being developed to protect the mirrors and instruments from the sun’s heat  We have reported for several years on the JWST project, which has experienced significant cost increases and schedule delays  Prior to being approved for development, cost estimates for JWST ranged from $1 billion to $3 5 billion, with expected launch dates ranging from 2007 to 2011  Before 2011, early technical and management challenges, contractor performance issues, low levels of cost reserves, and poorly phased funding levels caused JWST to delay work after confirmation, which contributed to significant cost and schedule overruns, including launch delays  The Chair of the Senate Subcommittee on Commerce, Justice, Science, and Related Agencies requested from NASA an independent review of JWST in June 2010  In response, NASA commissioned the Independent Comprehensive Review Panel, which issued its report in October 2010  The panel concluded that JWST was executing well from a technical standpoint, but that the baseline cost estimate did not reflect the most probable cost with adequate reserves in each year of project execution, resulting in an unexecutable project  Following this review, Congress in November 2011 placed an $8 billion cap on the formulation and development costs for the project and NASA rebaselined JWST with a life-cycle cost estimate of $8 835 billion that included additional money for operations and a planned launch in October 2018  The new baseline represented a 78 percent increase to the project’s life-cycle cost from the original baseline and a launch date in October 2018, a delay of 52 months  The revised life-cycle cost estimate included a total of 13 months of funded schedule reserve  Our ongoing work indicates that these three projects are each making progress in line with their phase of the acquisition cycle, but also face challenges in execution  Some of these challenges are unique to the projects themselves and some are common among the projects in NASA’s portfolio  For example, when projects enter the integration and test phase, unforeseen challenges can arise and affect the cost and schedule for the project  Table 1 provides more details about the current acquisition phase, cost, and schedule status of NASA’s major space telescope projects based on our ongoing work  WFIRST  NASA’s preliminary cost and schedule estimates for the WFIRST project are currently under review as the project responds to findings in the WFIRST Independent External Technical/Management/Cost Review  This independent review was conducted to ensure the mission’s scope and required resources are well understood and executable  NASA initiated this review in April 2017 to address the National Academies’ concerns that WFIRST cost growth could endanger the balance of NASA’s astrophysics program and negatively affect other scientific priorities  The review found that the mission scope is understood, but not aligned with the resources provided and concluded that the mission is not executable without adjustments and/or additional resources  For example, the study team found that NASA’s current forecasted funding profile for the WFIRST project would require the project to slow down activities starting in fiscal year 2020, which would result in an increase in development cost and schedule  NASA agreed with the study team’s results and directed the project to reduce the cost and complexity of the design in order to maintain costs within the $3 2 billion cost target  The project is currently identifying potential ways to reduce the scope of planned activities (called “descopes”), assessing the science impact of those descopes, and then developing recommendations for the Astrophysics Division leadership  An example of a descope that may be considered is the requirement for WFIRST to be “star-shade ready,” which means the design must be compatible with a star-shade device that is positioned between it and the star being observed to block out starlight while allowing the light emitted by the planet through  TESS  The TESS project is currently holding cost and schedule reserves consistent with NASA center requirements, but there are no longer headquarters-held cost reserves to cover a delay if the project cannot launch as planned in March 2018  According to a project official, the project is holding 16 days of schedule reserve to its target March 2018 launch readiness date, which includes 6 days for the completion of integration and test, and 10 days for launch operations  The project previously used schedule reserves to accommodate the delayed delivery of its Ka-band transmitter, which is essential for TESS as it transmits the mission data back to Earth, due to continued performance and manufacturing issues  The two main risks to the March 2018 launch date are if: 1) SpaceX requires additional time past December 2017 for NASA’s Launch Services Program to certify that TESS can fly on its upgraded launch vehicle—certification is necessary because it will be the first time that NASA will use this version of the vehicle—and 2) any issues are identified during the remainder of environmental testing  The project is also conducting additional testing on its spare camera at temperatures seen in space to better understand expected camera performance on orbit  TESS will use four identical, wide field-of-view cameras to conduct the first extensive survey of the sky from space for transiting exoplanets  However, during thermal testing, the project found that the substance attaching the lenses to the camera barrel places pressure on the lenses and causes the cameras to be slightly out of focus  In June 2017, NASA directed the project to proceed with integrating the cameras—as they are expected to meet TESS’s top level science requirements even with the anomaly  At its most recent key decision review in August 2017, NASA reallocated $15 million of TESS’s headquarters-held reserves to the WFIRST project  While this had the effect of decreasing life cycle costs for TESS, it also increased risk as the project no longer has any additional headquarters-held cost reserves to cover a launch delay past March 2018  JWST  The JWST project continues to make progress towards launch, but the program is encountering technical challenges that require both time and money to fix and may lead to additional delays, beyond a delay recently announced  While the project has made much progress on hardware integration and testing over the past several months, it also used all of its remaining schedule reserves to address various technical issues, particularly on the spacecraft element  In September 2017, the JWST project requested from the European Space Agency—who will contribute the Ariane V launch vehicle—a launch window from March to June 2019, or 5 to 8 months later than the planned October 2018 launch readiness date, established in 2011  The project based this request on the results of a schedule risk assessment that incorporated inputs from the contractor on expected durations of ongoing spacecraft element integration work and other challenges that were expected to increase schedule  With the later launch window to June 2019, the project expected to have up to 4 months of new schedule reserves  However, shortly after requesting the revised launch window, the project learned from its contractor that up to another 3 months of schedule reserve use is likely, due to lessons learned from conducting deployment exercises of the sunshield, such as reach and access limitations on the flight hardware  As a result, and pending further examination of the schedule, the project now has approximately one month of schedule reserve to complete environmental testing of the spacecraft element and the final integration phase  The final integration phase is where the instruments and telescope will be integrated with the spacecraft and sunshield to form the completed observatory  As I previously noted, our work has shown the integration and test is the riskiest phase of development, where problems are most likely to be found and schedules slip  Given the risks associated with the integration and test work ahead, coupled with a level of schedule reserves that is currently well below the level stated in the procedural requirements issued by the NASA center responsible for managing JWST, additional delays to the project’s revised launch readiness date of June 2019 are likely  As a result, the funding available under the Congressional cost cap of $8 billion may be inadequate as the contractor will need to continue to retain higher workforce levels for longer than expected to prepare the mission for a delayed launch  As Congress, NASA, and the science community consider future telescope efforts, it will be exceedingly important to shape and manage new programs in a manner that minimizes cost overruns and schedule delays  This is particularly important for the largest programs as even small cost increases can have reverberating effects  NASA’s telescope and other science projects will always have inherent technical, design, and integration risks because they are complex, specialized, and often push the state of the art in space technology  But too often, our reports find that management and oversight problems—which can include poor planning, optimistic cost estimating, funding gaps, lax oversight, and poor contractor performance, among other issues—are the real drivers behind cost and schedule growth  To its credit, NASA has taken significant steps, partly in response to our past recommendations, to reduce acquisition risk from both a technical and management standpoint, including actions to enhance cost and schedule estimating, provide adequate levels of reserves to projects, establish better processes and metrics to monitor projects, and expand the use of earned value management to better monitor contractor performance  For example, in November 2012, we found that NASA employee skill sets available to analyze and implement earned value management vary widely from center to center, and we recommended that NASA conduct an earned value management skills gap analysis to identify areas requiring augmented capability across the agency, and, based on the results of the assessment, develop a workforce training plan to address any deficiencies  NASA concurred with this recommendation and developed an earned value management training plan in 2014 based on the results of an earned value management skills gap analysis that was conducted in 2013  Moreover, in recent years, we have found that many of the projects within the agency’s major project portfolio have improved their cost and schedule performance  Nevertheless, the extent to which NASA has adopted some of the following lessons learned within its portfolio of major projects is mixed, and NASA has an opportunity to strengthen its program management of major acquisitions, including its space telescopes, by doing so  Manage Cost and Schedule Performance for Large Projects to Limit Implications for Entire Portfolio  In 2013, following JWST’s cost increases and schedule growth, we found that though cost and schedule growth can occur on any project, increases associated with NASA’s most costly and complex missions can have cascading effects on the rest of the portfolio  For example, we found that the JWST cost growth would have reverberating effects on the portfolio for years to come and required the agency to identify $1 4 billion in additional resources over fiscal years 2012 through 2017, according to Science Mission Directorate officials  NASA identified approximately half of this required funding from the four science divisions within the Science Mission Directorate account  The majority of the cuts were related to future high priority missions, missions in the operations and sustainment phase, and research and analysis  In essence, NASA had to mortgage future high priority missions and research to address JWST’s additional resource needs  Similarly, the National Academy of Sciences has concluded in the past that it is important for NASA to have a clearly articulated and consistently applied method for prioritizing why and how its scarce fiscal resources are apportioned with respect to the science program in general and on a more granular level among component scientific disciplines  The academy noted that failure to do so could result in a loss of capacity, capability, and human resources in a number of scientific disciplines and technological areas that may take a generation or more to reconstitute once eliminated  NASA’s establishment of the WFIRST Independent External Technical/Management/Cost Review that I previously discussed is a step in the right direction to help ensure the Astrophysics Division incorporates this lesson learned  Establish Adequate Cost and Schedule Reserves to Address Risks  Twice in the history of the JWST program, independent reviewers found that the program’s planned cost reserves were inadequate  First, in April 2006, an Independent Review Team confirmed that the project’s technical content was complete and sound, but expressed concern over the project’s reserve funding, reporting that it was too low and phased in too late in the development lifecycle  The review team reported that for a project as complex as JWST, 25 to 30 percent total reserve funding was appropriate  The team cautioned that low reserve funding compromised the project’s ability to resolve issues, address risk areas, and accommodate unknown problems  As I previously mentioned, following additional cost increases and schedule threats, NASA commissioned the Independent Comprehensive Review Panel  In 2010, the panel again concluded JWST was executing well from a technical standpoint, but that the baseline cost estimate did not reflect the most probable cost with adequate reserves in each year of project execution, resulting in an unexecutable project  NASA heeded these lessons when it established a new baseline for JWST in 2011  For example, the revised schedule included more reserves than required by the procedural requirements issued by the NASA center responsible for managing JWST  We have found, however, that NASA has not applied this lesson learned to all of its large projects— most notably with its human spaceflight projects, including the Space Launch System, Orion Crew Capsule, and associated ground systems— and similar outcomes to the JWST project have started to emerge with these projects  We previously reported that all three of these programs were operating with limited cost reserves, which limited each program’s ability to address risks and unforeseen technical challenges  For example, we found in July 2016 that the Orion program planned to maintain very low levels of annual cost reserves until 2018  The lack of available cost reserves in the near term led to the program deferring work to address technical issues to stay within budget, and put the program’s future cost reserves at risk of being overwhelmed by deferred work  In April 2017, we also found that all three programs faced development challenges in completing work, and each had little to no schedule reserve remaining to the launch date—meaning they would have to complete all remaining work with minimal delay during the most challenging stage of development  We found that it was unlikely that the programs would achieve the planned launch readiness date and recommended that NASA reassess the date  NASA agreed with this recommendation and stated that it would establish a new launch readiness date  In November 2017, NASA announced that a review of the possible manufacturing and production schedule risks indicated a launch date of June 2020—a delay of 19 months—but the agency will manage to a December 2019 launch date because, according to NASA, they have put in mitigation strategies for those risks  We will follow-up on those mitigation strategies as part of future work on the human space exploration programs  Regularly and Consistently Update Project JCLs to Provide Realistic Estimates to Decision Makers  In 2009, NASA began requiring that programs and projects with estimated life-cycle costs greater than $250 million develop a JCL prior to project confirmation  This was a positive step for NASA to help ensure that cost and schedule estimates are realistic and projects are thoroughly planning for anticipated risks  This is because a JCL assigns a confidence level, or likelihood, of a project meeting its cost and schedule estimates  Our cost estimating best practices recommend that cost estimates should be updated to reflect changes to a program or be kept current as a program moves through milestones  As new risks emerge on a project, an updated cost and schedule risk analysis can provide realistic estimates to decision-makers, including the Congress  This is especially true for NASA’s largest projects as updated estimates may require the Congress to consider a variety of actions  However, there is no requirement for NASA projects to update their JCLs, and our prior work has found that projects—including JWST—do not regularly update cost risk analyses to take into account newly emerged risks  Our ongoing work indicates that of the 16 major projects currently in NASA’s portfolio that have developed JCL estimates, only 2 have reported updating their JCLs (other than required due to a rebaseline)  For example, the Interior Exploration using Seismic Investigations, Geodesy, and Heat Transport Project (InSight), a Mars lander, updated its JCL after the project missed its committed launch date  As a result, the project was able to provide additional information to decision makers about the probability that it will meet its revised cost and schedule estimates  As a project reaches the later stages of development, especially integration and testing, the types of risks the project will face may change  An updated project JCL would provide both project and agency management with data on relevant risks that can guide the project decisions  For example, in December 2012, we recommended the JWST project update its JCL  NASA concurred with this recommendation; however, we recently closed the recommendation because NASA had not taken steps to implement it and the amount of time remaining before launch would not have allowed the benefit of implementing the recommendation to be realized  An updated JCL may have portended the current schedule delays, which could have been proactively addressed by the project  Enhance Oversight of Contractors to Improve Project Outcomes  In December 2012, we found that the JWST project had taken steps to enhance communications with and oversight of its contractors  According to project officials, the increased communication allowed them to better identify and manage project risks by having more visibility into contractors’ activities  The project reported that a great deal of communication existed across the project prior to the Independent Comprehensive Review Panel; however, additional improvements were made  For example, the project increased its presence at contractor facilities as necessary to provide assistance; this included assigning two engineers on a recurring basis at a Lockheed Martin facility to assist in solving problems with an instrument  The JWST project also assumed full responsibility for the mission system engineering functions from Northrop Grumman in March 2011  NASA and Northrop Grumman officials both said that NASA is better suited to perform these tasks  We continue to see instances in our ongoing work that highlight the importance of implementing this lesson learned from JWST  For example, we found in 2017 that the Space Network Ground Segment Sustainment project—a project that plans to develop and deliver a new ground system for one Space Network site that provides essential communications tracking services to NASA and non-NASA missions—exceeded its original cost baseline by at least $401 7 million and been delayed by 27 months  The project has attributed some of the cost overruns and schedule delays to the contractor’s incomplete understanding of its requirements, which led to poor contractor plans and late design changes  The project also took steps to assign a new NASA project manager, increase physical presence at the contractor facility, and have more staff focused on validation and verification activities  In summary, NASA continues to make progress developing its space telescopes to help understand the universe and our place in it  But much like other major projects that NASA is developing, there continues to be an opportunity for NASA to learn from JWST and other projects that have suffered from cost overruns and schedule delays  Key project management tools and prior GAO recommendations that I have highlighted here today, could help to better position these large, complex, and technically challenging efforts for a successful outcome  We look forward to continuing to work with NASA and this subcommittee in addressing these issues  Chairman Babin, Ranking Member Bera, and Members of the Subcommittee, this completes my prepared statement  I would be pleased to respond to any questions that you may have at this time  If you or your staff have any questions about this testimony, please contact Cristina T  Chaplain, Director, Acquisition and Sourcing Management at (202) 512-4841 or chaplainc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement  GAO staff who made key contributions to this statement include Molly Traci, Assistant Director; Richard Cederholm, Assistant Director; Carrie Rogers; Lisa Fisher; Laura Greifner; Erin Kennedy; and Jose Ramos  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 

ground_truth: Acquisition management has been a long-standing challenge at NASA, although GAO has reported on improvements the agency has made in recent years. Three space telescope projects are the key enablers for NASA to achieve its astrophysics' science goals, which include seeking to understand the universe. In its fiscal year 2018 budget request, NASA asked for about $697 million for these three projects, which represents over 50 percent of NASA's budget for its astrophysics' major projects. In total, these projects represent an expected investment of at least $12.4 billion. This statement reflects preliminary observations on (1) the current status and cost of NASA's major telescope projects and (2) lessons learned that can be applied to NASA's management of its telescope projects. This statement is based on ongoing work on JWST and ongoing work on the status of NASA's major projects. Both reports are planned to be published in Spring 2018. This statement is also based on past GAO reports on JWST and NASA's acquisitions of major projects, and NASA input. The National Aeronautics and Space Administration's (NASA) current portfolio of major space telescopes includes three projects that vary in cost, complexity, and phase of the acquisition life cycle. GAO's ongoing work indicates that these projects are each making progress in line with their phase of the acquisition cycle but also face some challenges. For example, the current launch date for the James Webb Space Telescope (JWST) project reflects a 57-60-month delay from the project's original schedule. GAO's preliminary observations indicate this project still has significant integration and testing to complete, with very little schedule reserve remaining to account for delays. Therefore, additional delays beyond the delay of up to 8 months recently announced are likely, and funding available under the $8 billion Congressional cost cap for formulation and development may be inadequate. There are a number of lessons learned from its acquisitions that NASA could consider to increase the likelihood of successful outcomes for its telescope projects, as well as for its larger portfolio of projects, such as its human spaceflight projects. For example, twice in the history of the JWST program, independent reviews found that the program was not holding adequate cost and schedule reserves. GAO has found that NASA has not applied this lesson learned to all of its large projects, and similar outcomes to JWST have started to emerge. For example, NASA did not incorporate this lesson with its human spaceflight programs. In July 2016 and April 2017, GAO found that these programs were holding inadequate levels of cost and schedule reserves to cover unexpected cost increases or delays. In April 2017, GAO recommended that NASA reassess the date of the programs' first test flight. NASA concurred and, in November 2017, announced a launch delay of up to 19 months. GAO is not making any recommendations in this statement, but has made recommendations in prior reports to strengthen NASA's acquisition management of its major projects. NASA has generally agreed with GAO's recommendations and taken steps to implement them.