GAO

United States General Accounting Office

Report to the Chairman, Committee on

Small Business, U.S. Senate

July 2000 SMALL BUSINESS

SBA’s 8(a) Information

System Is Flawed and

Does Not Support the

Program’s Mission

GAO/RCED-00-197

Page 1 GAO/RCED-00-197 SBA’s 8(a) Information System

United States General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-285284 Letr

July 19, 2000

The Honorable Christopher S. Bond

Chairman, Committee on Small Business

United States Senate

Dear Mr. Chairman:

The Small Business Administration’s (SBA) 8(a) program is a business

development and contracting program for small socially and economically

disadvantaged firms. Firms that are certified by SBA for participation in the

program are eligible to receive contracts that federal agencies set aside for

8(a) firms and business development assistance from SBA in the form of

technical assistance and management training. In fiscal year 1999, about

6,000 firms participated in the 8(a) program, and $6 billion in federal

contracts were awarded to participating firms. SBA developed and

maintains an information system for the program containing information

about the firms, such as the location, minority status, and gender of the

owners, and the government contracts awarded to the firms while they

participate in the program. SBA uses this information to report on the

program’s results to the Congress, manage the program, and monitor the

progress of 8(a) firms.

Concerned about the quality of the information used to manage the 8(a)

program, you asked us to examine selected processes and procedures to

assess the strengths and weaknesses of the information system as a

management tool for SBA. As agreed with your office, this report addresses

the following questions: (1) Does the system meet the information needs of

SBA field and headquarters staff? (2) What plans, if any, does SBA have for

improving the existing system?

Results in Brief The 8(a) information system, while intended to be a comprehensive tool

enabling SBA to monitor the program, does not meet the information needs

of headquarters or district officials. Potentially useful information, such as

the amount of training and assistance provided for participating firms, is

not captured as part of SBA’s information-gathering process. This limits

SBA’s ability to assess whether its efforts have an impact on the ultimate

performance goal of creating commercially viable and stable firms. In

addition, because of recent changes in the 8(a) contracting process, most
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Page 2 GAO/RCED-00-197 SBA’s 8(a) Information System

federal agencies are required to submit quarterly contracting data to SBA’s

headquarters instead of submitting copies of contracts to SBA’s district

offices. Some federal agencies have not submitted the quarterly

information, and some of the information that has been submitted has not

been in a usable format, so it has not been entered into the system or

provided for the district offices, according to SBA’s headquarters officials.

These problems have severely undermined the completeness and accuracy

of the information in the system on contracts. For example, the total value

of the contracts awarded to participating firms is underrepresented by the

system, on average, by nearly $500 million annually, according to SBA. The

system is so difficult to use that most of the district offices we visited had

devised other methods—including maintaining redundant local systems—

to obtain the information they needed in a timely fashion.

SBA plans to update the 8(a) information system as part of an agencywide

information systems modernization initiative. Although program officials

have recognized the need to update the system since 1996 and have

planned other update efforts, none of them resulted in substantial progress

in improving the information system. SBA has an agencywide information

systems modernization initiative under way, but planning for the

modernization of the 8(a) system will not be completed for some time,

according to SBA. In the meantime, SBA has begun to develop a strategic

information technology plan for the 8(a) program that combines and

updates recommendations from the agency’s earlier business process

reengineering studies, including efforts to update the information system.

These studies include an April 1999 review that recommended that SBA (1)

develop automated applications for firms wishing to enter the program, (2)

consolidate all program information sources into one system, and (3) use

another federal information system—the Federal Procurement Data

System—as a source for 8(a) contract data.

We provided SBA with a draft of this report for review and comment. SBA

concurred with the report’s recommendations and provided technical

clarifications, which were incorporated as appropriate.

Background The Small Business Act, as amended, authorizes the 8(a) program to help

socially and economically disadvantaged small businesses gain access to

the economic mainstream of American society. Firms that enter the

program are eligible to receive 8(a) contracts from federal agencies

without competition from firms outside the program. Firms in the program

may also receive training and other assistance through SBA.
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Page 3 GAO/RCED-00-197 SBA’s 8(a) Information System

To be eligible for the 8(a) program, a firm must be a small business that is at

least 51- percent owned and controlled by one or more socially and

economically disadvantaged individuals. A firm is considered small if it

meets size standards established by SBA for its particular industry. Under

the program, certain ethnic groups such as African Americans and Hispanic

Americans are presumed to be socially disadvantaged. Other individuals

can be admitted to the program if they can adequately document that they

are disadvantaged. To meet the economically disadvantaged test, each

individual must have a net worth of less than $250,000, excluding his or her

ownership interest in the firm and personal residence. Also, a firm must

generally have been in business for at least 2 years and possess a

reasonable prospect for success as determined by SBA on the basis of the

firm’s operating revenues and the firm owner’s technical and management

experience, among other things.

Once a firm is accepted into the program, a business opportunity specialist

in the SBA district office that serves the geographical area where the firm’s

principal place of business is located is assigned to service the firm during

its participation in the program. The business opportunity specialist is

responsible for, among other things, reviewing and approving contract

offerings, entering and updating financial and contracting information in

the 8(a) information system, assisting the firm with preparing a business

plan, conducting annual reviews of the firm’s progress in implementing its

plan, and analyzing year-end financial statements for certain compliance

issues.

SBA’s current 8(a) information system was developed in response to the

Small Business Act, as amended by the Business Opportunity Development

Reform Act of 1988, which required SBA to develop and implement a

process for the systematic collection of data on the operations of the 8(a)

program and report annually to the Congress.1 The mandate, among other

things, required SBA to report data on the demographics of participating

firms and the dollar value of the contracts the firms received, and to assess

what additional resources are needed to provide services for firms in the

program. SBA encountered numerous problems in developing the system,

which was originally scheduled to be complete in 1990. Our previous work

criticized the agency for not following federal regulations and guidelines

1 See sec. 7(j)(16) of the Small Business Act, as added by sec. 408 of the 1988 Reform Act (15

U.S.C. 636(j)(16)).
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Page 4 GAO/RCED-00-197 SBA’s 8(a) Information System

for defining the requirements of the system in relation to the agency’s

mission and users’ needs. 2

When SBA’s information system was implemented in 1995—5 years after

SBA’s original projection—SBA described it as a comprehensive tool that

would enable the agency to monitor the assistance provided for, the

contracts awarded to, and the progress made with business development.

The system, referred to as SACS/MEDCOR, is made up of two parts: the

Servicing and Contracting System (SACS) and the Minority Enterprise

Development Central Office Repository (MEDCOR). Basic information

about 8(a) firms, including such demographic data as the location, minority

status, and gender of the owners, is stored in SACS, while data about

proposed and awarded contracts resides in MEDCOR.

SACS/MEDCOR is maintained at the district-office level, and information is

transmitted periodically to a centralized location for headquarters’ use.

Data on firms applying to the program are initially entered into another 8(a)

information system and are then transferred to SACS/MEDCOR when the

firms are accepted into the program. Figure 1 illustrates how data are

entered into SACS/MEDCOR from the point of a firm’s application to enter

the program.

2 See Small Business: Problems Continue With SBA’s Minority Business Development

Program (GAO/RCED-93-145, Sept. 17, 1993) and Small Business: SBA Cannot Assess the

Success of Its Minority Business Development Program (GAO/T-RCED-94-278, July 27,

1994).
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Page 5 GAO/RCED-00-197 SBA’s 8(a) Information System

Figure 1: Processing of Data on 8(a) Firms

Dotted lines indicates district staff interaction

with 8(a) firm

Division of Program Certification and Eligibility

Servicing and Contracting System

DPCE

SACS 

Sends application

to become 8(a) firm

Dallas 8(a)DPCE

regional center

Application is reviewed 

by DPCE and entered into 

Certification Tracking System

Certification

Tracking System After approval, firm’s basic 

data are copied to SACS

SACS 

centralized 

Dallas 8(a) staff 

District staff access and

update firm information

SACS Dallas 

district office

local area network

Small business

in Dallas, Texas

Firms’ data are copied 

to local area network at 

appropriate district office

SBA 8(a) headquarters 
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Page 6 GAO/RCED-00-197 SBA’s 8(a) Information System

SBA’s 8(a) Data System

Does Not Meet Its

Needs

SACS/MEDCOR, while intended to be a comprehensive tool enabling SBA

to monitor the progress with business development, the contract awards,

and the program performance, does not meet the information needs of 8(a)

headquarters or district officials. The system does not allow for the

tracking of training or assistance provided for firms, making it difficult to

assess the program’s effectiveness. Also, recent changes in the 8(a)

contracting process have made the contract information in the system

unusable. In addition, the system is so difficult to use that most of the

district offices we visited had devised other methods—including

maintaining redundant local systems—to obtain the information they

needed in a timely fashion. Other problems, such as data validation

weaknesses caused by the removal of edit checks from the system and

unclear security procedures, also exist.

The System Does Not Track

Business Development

Activities

SBA does not currently have a method for systematically tracking the

training and assistance that 8(a) firms receive. SBA’s Deputy Assistant

Administrator for Technology within the office that oversees the 8(a)

program said that SBA had planned for its information system to track

assistance provided through SBA’s management assistance program but

that this part of the system was never used because the management

assistance program’s appropriation declined about the time the system was

implemented. Also, according to SBA, the system was obsolete by the time

it was implemented because the program’s emphasis shifted from clientspecific technical assistance, accomplished under task orders, to

classroom-type executive training, provided by recognized educational

institutions. If information on training and assistance is needed, the 8(a)

program manager said headquarters would send an information request to

the district offices. However, SBA’s district office officials in Atlanta,

Dallas/Fort Worth, New York City, and San Francisco told us that they do

not have a centralized system to track the training or assistance that they or

others provide for 8(a) firms. SBA’s District Office officials in Washington,

D.C., said that since SBA does not have a centralized system to track the

training or assistance provided for 8(a) firms, they maintain a spreadsheet

with this information.

SBA managers said that the lack of a system to track and assess the results

of business development activities creates a weakness in the program

because it is difficult to assess the program’s effectiveness. The officials

said that the system’s inability to record this type of training and assistance

could lead to an underaccounting of the benefits that firms receive from the
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Page 7 GAO/RCED-00-197 SBA’s 8(a) Information System

program. For example, a district manager noted a case in which an 8(a)

firm received considerable assistance developing its marketing and other

capabilities. This firm, through the auspices of the district office, later

negotiated and won a contract with a commercial firm. This outcome could

not be credited within the system because (1) staff have no way of

recording the training and assistance provided for firms other than in

informal notations and (2) the contract awarded to the firm was not an 8(a)

contract, so the award information could not be noted in the system.

SBA has piloted a system—the Business Assessment Tool—for use by

district business opportunity specialists to help define the developmental

needs of 8(a) firms. The assessment tool was designed to match

information from a series of 58 questions used to assess a firm’s

developmental assistance needs for the business training and counseling

resources provided by SBA and other service providers. The tool also

provided a mechanism for tracking training and assistance. In July 1999,

SBA piloted the Business Assessment Tool at 14 SBA district offices, where

it was used to assess 53 firms. SBA officials said that the tool, which is not

integrated into SBA’s current information system, is being reassessed

because the pilot showed that it could be made more user friendly. For

example, if a business opportunity specialist was not able to complete all

the entries in one session, the system would not save the entries already

completed.

Recent Changes in the

Contracting Process

Undermined the 8(a)

Information System’s

Completeness and Accuracy

Headquarters and district staff maintained that they could no longer ensure

that the 8(a) contract award information in the system is complete and

accurate. District and headquarters staff have been responsible for entering

data on 8(a) contracts. These entries can take place at various points: (1)

when a contract requirement is sent to SBA for approval, (2) when a

contract is actually awarded, and (3) when a contract is modified. This

process is illustrated in figure 2.
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Page 8 GAO/RCED-00-197 SBA’s 8(a) Information System

Figure 2: Flow of Contract Data

District staff cite a marked decrease—estimated at up to 50 percent at one

district office—in the notification of contract awards and modifications

from contracting agencies during fiscal year 1999. SBA officials estimated

that the 8(a) contracting amounts are underrepresented in SACS/MEDCOR,

MEDCOR

Contracting agency 

sends offer letter to SBA 

district office. District 

staff enter 

the contract offer 

into MEDCOR; a 

“requirements” number 

is generated by 

the system.

Agency contracts with 

8(a) firm under MOU. 

SBA district office may 

not be notified at the 

time. If it is, it updates 

contract data in 

MEDCOR. Linking SBA’s 

requirements number 

with the agency’s contract 

number may be difficult.

SBA district office staff 

meet with firm or review 

annual financial

information; may learn 

about contracts.

Contract is modified; 

district office may not be 

notified at the time; may 

be difficult to connect to 

other contract records.

Dotted lines indicate when the likelihood increases 

that data may be incomplete or inaccurate.

Memorandum of Understanding

Minority Enterprise Development 

Central Office Repository

MOU

MEDCOR
B-285284

Page 9 GAO/RCED-00-197 SBA’s 8(a) Information System

on average, by nearly $500 million annually when compared with data from

the Federal Procurement Data System (FPDS). According to SBA officials,

the cause of this decrease is a recent change in the way that contracting

agencies interact with and report back to SBA when contracts are awarded.

Though agencies must report information on contracts of over $25,000 to

FPDS, which is maintained by the General Services Administration, they

are no longer required to provide SBA’s district offices with copies of 8(a)

contracts when contracts are awarded. Rather, most agencies are required

to provide SBA’s headquarters with contract information on a quarterly

basis.3 However, some agencies have not provided the information, and

some of the information that has been provided has not been in a usable

format, so it has not been entered into the system or provided for the

district offices, according to headquarters officials.

District staff said that on occasion, they have become aware of contracts

only because of incidental contacts with the firms they monitor—when

issues arise between the contractor and the contracting agency—or as a

part of their ongoing effort to maintain complete and accurate information

for their files. District officials said they cannot readily produce accurate

reports on the number of contracts awarded to 8(a) firms in their district.

In fact, staff in one district office said they had been questioned by their

district office director about why the number of contracts awarded to firms

in their district had decreased dramatically when in fact the information

system lacked data on an estimated 50 percent of the contracts awarded.

Nevertheless, staff in every district we visited said that they spend time

entering contracting data into the system.

Recognizing this shortcoming, SBA began using FPDS data in mid-fiscal

year 2000 to prepare its fiscal year 1999 report to the Congress. However,

difficulties that SBA encountered in matching its demographic information

on firms to the contract information on 8(a) firms coming from FPDS

caused SBA to miss its April 30 deadline for providing the Congress with its

fiscal year 1999 report. SBA must connect FPDS data with information on

8(a) firms in its database in order to report on the mix of program

participants and their success in winning contract awards. According to

SBA, this matching entailed considerable staff effort. Also, without the

linkages, the data cannot be broken down by district offices; hence,

headquarters and district management do not have accurate numbers on

3 SBA plans this quarterly reporting to be an interim measure until the agency can convert to

using FPDS.
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Page 10 GAO/RCED-00-197 SBA’s 8(a) Information System

the contract awards facilitated by each office. One SBA official noted that

from at least half to perhaps all of one staff person’s time is required over

the course of the year to produce the annual report.

Additional Data Quality

Problems Exist in the

System

Our review of the current system uncovered additional data quality

problems. We called 100 randomly selected firms to verify firms’ addresses

and found that about 10 percent of the data examined on these firms were

inaccurate or incomplete. In addition, when we examined selected data

from SACS/MEDCOR to test for logic and consistency among related data

elements, we found anomalies in the data. For example, whereas each 8(a)

firm has a single designated chief executive officer (CEO)—and may have

multiple partners—the database showed that some firms did not have a

CEO designated and others had multiple CEO designations. A

knowledgeable SBA official told us that one reason for the data quality

problems is that SACS/MEDCOR has a limited ability for edit checks on

data and that even district offices known for quality data entry practices

had been found to have data quality difficulties, such as duplicated

information for some firms.

Using the system to track a firm over time can also be problematic. For

example, if a firm changes its name—prompted, for example, by a new

owner—SBA staff, when entering the firm’s new name into the system,

must remember to manually record the firm’s previous name in a “history”

file if a historical link is to be maintained in SACS/MEDCOR. Without this

manual intervention, no record of the firm under its prior name would exist

within the system. The lack of an automated process to record name

change histories could impair the ability of SBA staff to manage or

investigate their firms’ status in the program.

Inefficient System Does Not

Meet the Needs of District

Office Staff

The current 8(a) information system does not meet the needs of district

office staff, and as a result, district offices have developed redundant local

systems. In a 1997 report, an SBA contractor said that in its survey of

district offices, one district office said that SACS/MEDCOR “does not

benefit workers (not a useful tool);” staff from another district said

SACS/MEDCOR is “too complicated” and “cumbersome” and “does not

help the BOS [business opportunity specialist].” Other districts had similar

complaints. Four of the five district offices we visited—which together, are

responsible for approximately 30 percent of the 8(a) firms in the program—

had instituted some procedure to cope with their difficulties with entering,

retrieving, or processing information. The office strategies ranged from
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Page 11 GAO/RCED-00-197 SBA’s 8(a) Information System

establishing a specific staff position to develop specialized reports and

assist business opportunity specialists and contracting officers in their use

of the system to developing and maintaining redundant local systems that

staff found easier and more versatile to use. Although individualized

reports and queries can be produced from SACS/MEDCOR through

separate reporting software, some district staff had difficulty with the

software or did not use it. District staff also noted that they did not find the

standard reports available in the current system useful for their

management needs.

Another problem with the current system is that the numbering scheme for

contracts does not match the contracting agencies’ contract numbers,

thereby making it difficult for district staff to enter information pertaining

to the contracts. When district staff enter a new contract offer into

SACS/MEDCOR, the system automatically assigns a “requirements”

number. This number is used to uniquely identify the contract offer (and

later, the awarded contract and any associated contract modifications). If

SBA’s requirements number is not provided by the contracting agency on its

award letter, district staff must explore SACS/MEDCOR for the associated

data or, as a last resort, call the contracting agency and request that staff

there look up the SBA number and provide it.

System Security Could Be

Strengthened

The nature of SACS/MEDCOR—software and data located at both the

headquarters- and district-office levels—creates a situation in which the

data on 8(a) firms and contracts are only as secure as the measures taken

at both levels to protect it. The SACS/MEDCOR application software and

data collected on 8(a) firms are resident on the local network servers in the

67 district offices, and the data are uploaded periodically (generally once a

week) to SBA’s headquarters, where the national data are stored and can be

accessed by headquarters staff. Data are input and maintained at both the

district offices and the 8(a) headquarters office, and each office determines

how to control access. Therefore, data that are input at each location are

only as secure as the security measures—including access controls—at

that location. Access should be limited to only the data and functions that

individual staff need to perform their assigned duties.4 However, at several

of the district offices we visited, business opportunity specialists could

review and change system data for any firm in the district.

4 See Federal Information System Controls Audit Manual, vol. 1 (GAO/AIMD-12.19.6, Jan.

1999).
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Page 12 GAO/RCED-00-197 SBA’s 8(a) Information System

In a recent review of agencywide security measures, we found that “SBA

has not developed procedures to deal with risk assessments and to provide

a framework for managing risk and monitoring the adequacy of controls.

Standard Operating Procedures are obsolete.”5 SBA recently developed

standard operating procedures for agencywide security issues. However,

these procedures do not address the 8(a) program specifically, and the

program is operating under Standard Operating Procedures established in

1990 before the system was developed.

No Substantial

Improvements Have

Been Made to the

System, but SBA Plans

to Modernize It As Part

of an Agencywide

Effort

While efforts to update the information system were planned beginning in

1996, and program officials recognize that the current system is outdated,

no substantial improvement has been made to the system. For example, an

effort to automate the 8(a) application process was piloted in October 1996

but never adopted. Another effort to streamline and automate the annual

review process performed by district business opportunity specialists has

also not been completed. According to program managers, this lack of

progress is due in large part to the frequent changes in the 8(a) program’s

leadership. As shown in figure 3, the office under which the program is

administered has been managed by five different Associate Deputy

Administrators during the 4-year period from March 1996 to March 2000.

Each time the Associate Deputy Administrator changed, there were

corresponding management changes in the career-level managers of the

8(a) program. According to program officials, these leadership changes

have contributed to an environment in which progress on the information

system, as well as on the 8(a) program overall, has languished. In addition,

according to SBA’s Deputy Assistant Administrator for Technology within

the office that oversees the 8(a) program, SACS/MEDCOR was developed

collaboratively by the 8(a) program office and SBA’s information resource

management office; however, the system was not developed in adherence

with Federal Information Processing Standards. In his opinion, such

adherence to established software development standards would have

reduced or eliminated the problems with software development continuity

caused by management turnover.

5

See Information Technology Management: SBA Needs to Establish Policies and

Procedures for Key IT Processes (GAO/AIMD-00-170, May 31, 2000).
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Page 13 GAO/RCED-00-197 SBA’s 8(a) Information System

Figure 3: Time Line of SBA’s 8(a) Information Systems (SACS/MEDCOR)

SBA is in the process of modernizing its information systems across the

entire agency; however, the modernization of the 8(a) system will not begin

for some time. The SBA modernization is planned in three phases:

• Phase 1 of the initiative will focus on the Loan Monitoring System,

which aids in loan monitoring and oversight.

• Phase 2 is intended to modernize SBA’s financial management, human

resource, and procurement systems.

• Phase 3 will focus on government contracting, entrepreneurial

development, and minority enterprise development—all functions that

are part of the 8(a) program. SBA plans to start the planning activities

for phase 3 in 2002.

While SBA has not yet entered phase 3 of the modernization initiative,

managers of the 8(a) program are moving ahead with plans to consolidate

and update recommendations from previous studies of the system

requirements for the 8(a) business development program. One study,

performed by SETA Corporation for SBA and delivered on April 26, 1999,

presented the basis for a revised information system to support core 8(a)

business functions. It identified user requirements and specifications for a

1990 1991 1992 1993 1994 1996 1998 1999 2000 1995 1997

Original implementation

date for new system

SBA did

a limited

pilot test

of system

GAO found

that plans 

did not follow

requirements

and 

guidelines

SBA’s survey

identified

major system

design flaws

GAO found

system 

unable

to provide

basic data

SBA

implements

system in all 

field offices

Automated

application

piloted (never 

adopted)

Contractor’s 

studies on 

revising system

SBA reviews

old surveys to

prepare for

modernization

Crusto

Events

Stanley Vacant Neal Whitmore Hobson Jenkins

(Acting)

Hayes Ballentine

Terms of Associate Deputy Administrators for Government Contracting and Minority Enterprise Development
B-285284

Page 14 GAO/RCED-00-197 SBA’s 8(a) Information System

recommended system, including (1) using automated applications to enter

the 8(a) program, (2) consolidating all 8(a) information sources into one

system, and (3) using the FPDS as a source for 8(a) contract data. Although

the study identified user requirements, researchers did not talk with

district office officials, who are the system’s primary users.

Conclusions The information system used in the 8(a) program is not providing the

timely, accurate, complete, and appropriate information needed at the

headquarters and district office levels to manage the program. District staff

find the system cumbersome and difficult to use. Contracting data are so

incomplete that the data cannot be used to provide meaningful

management reports at either the headquarters or district level. Also, the

system does not mirror the 8(a) program’s stated goal of creating

commercially viable and stable firms because no mechanism is in place to

easily track the training received by firms or the assistance provided by

district business opportunity or contract specialists that may result in

additional contracts for the firms. Therefore, such activities cannot be

readily measured in any meaningful way, and the success of individual

activities, or of individual field offices, cannot be measured in an efficient

manner. Although SBA is in the process of modernizing its information

systems, the modernization of the 8(a) system will not begin for some time.

Recommendations We recommend that the Administrator of the Small Business

Administration ensure that her staff, upon entering the planning phase of

the 8(a) information systems modernization effort, design an integrated

information system that

• provides a method for collecting data on appropriate performance

measures, focusing on the assistance provided for 8(a) firms in addition

to the number of 8(a) contracts awarded;

• takes advantage of the links to existing federal contract information

sources, such as the Federal Procurement Data System, to minimize (1)

the reporting responsibilities of contracting agencies and (2) data entry

duties required at the district office level;

• is designed in light of current software and data management

development procedures and business processes and allows maximum

flexibility and ease of use by all levels of staff; and

• is protected at all levels by appropriate security controls, which are

specifically addressed in up-to-date Standard Operating Procedures.
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Page 15 GAO/RCED-00-197 SBA’s 8(a) Information System

In the interim, SBA should not continue to require 8(a) district staff to enter

contracting information into the current system.

Agency Comments and

Our Evaluation

We provided SBA with a draft of our report for review and comment. SBA

concurred with the report’s recommendations and did not take exception

to the factual accuracy of the report. SBA provided additional information

to clarify certain points, including, its initial development of a strategic

information technology plan for the Office of Government Contracting and

Minority Enterprise Development; the changing nature of the 8(a) program

since SACS/MEDCOR was deployed; and the use of data from the Federal

Procurement Data System for reporting to the Congress. We have

incorporated this additional information within the report as appropriate

and have included SBA’s comments in appendix 1.

Scope and

Methodology

To provide information on the history of the current 8(a) information

system, we interviewed SBA’s headquarters and district office officials. SBA

was unable to provide much documentation on the development of its

current system, so we relied extensively on documents that we had

retained in our files from previous reviews of the 8(a) information system,

our previous reports on the 8(a) program, and legislative history

information and regulations.

To determine whether the system meets the information needs of SBA’s

headquarters and district office staff, we interviewed headquarters and

district office officials, collected and analyzed documents and studies, and

obtained and assessed the 8(a) SACS/MEDCOR database. We interviewed

business opportunity specialists and contracting officers and their

managers at five district offices: Dallas/Fort Worth; New York City; San

Francisco; Washington, D.C.; and Atlanta. We selected the district offices

on the basis of the number of 8(a) firms they oversee and the geographic

location of the offices. These five offices oversee more than 30 percent of

the firms in the SACS/MEDCOR file that SBA provided us with at the

beginning of our review. We collected and analyzed documents, such as the

user manuals for SACS/MEDCOR, and studies performed by contractors

that outline recommendations for system changes. We also performed

electronic data testing on SACS/MEDCOR to determine the accuracy,

completeness, and reasonableness of key data elements.
B-285284

Page 16 GAO/RCED-00-197 SBA’s 8(a) Information System

To determine what plans, if any, SBA has for improving the system, we

interviewed SBA officials and obtained documentation for their plans. We

also used information collected on our other reviews of SBA’s overall

information system modernization.

We performed our review from January through July 2000 in accordance

with generally accepted government auditing standards.

As arranged with your office, unless you publicly release its contents

earlier, we plan no further distribution of this report until 30 days from the

date of this letter. At that time, we will send copies to the Honorable John F.

Kerry, Ranking Minority Member of the Committee; other interested

congressional committees; the Honorable Aida Alvarez, Administrator,

Small Business Administration; and other interested parties. Copies will be

made available to others upon request.

If you or your staff have any questions about this report, please contact me

at (202) 512-7631. Key contributors to this report were Susan Campbell,

Andy Clinton, Curtis Groves, Barbara Johnson, and Kirk Menard.

Sincerely yours,

Stanley J. Czerwinski

Associate Director,

Housing, Community Development, and

Telecommunications Issues
Page 17 GAO/RCED-00-197 SBA’s 8(a) Information System
Page 18 GAO/RCED-00-197 SBA’s 8(a) Information System

Appendix I

Comments From the Small Business

Administration ApendxiI
Appendix I

Comments From the Small Business

Administration

Page 19 GAO/RCED-00-197 SBA’s 8(a) Information System
Appendix I

Comments From the Small Business

Administration

Page 20 GAO/RCED-00-197 SBA’s 8(a) Information System

Now on p. 6.
Appendix I

Comments From the Small Business

Administration

(385840) Letr Page 21 GAO/RCED-00-197 SBA’s 8(a) Information System

Now on pp. 8 and 9.
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