United States Government Accountability Office

GAO Testimony 

Before the Committee on Small Business, 

House of Representatives 

HURRICANE KATRINA

Agency Contracting Data 

Should Be More Complete 

Regarding Subcontracting 

Opportunities for Small 

Businesses 

Statement of William B. Shear, Director, 

Financial Markets and Community Investment 

For Release on Delivery

Expected at 2:00 p.m. CDT

Thursday, April 12, 2007

 

GAO-07-698T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 12, 2007

HURRICANE KATRINA

Agency Contracting Data Should Be More 

Complete Regarding Subcontracting 

Opportunities for Small Businesses 

Highlights of GAO-07-698T, a testimony 

before the Committee on Small Business, 

House of Representatives

Small businesses received a total of 28 percent of the $11 billion in 

contracting dollars that DHS, GSA, DOD, and the Corps directly awarded in 

response to Hurricane Katrina between August 2005 and June 2006 (see fig. 

below). DHS awarded the highest dollar amount to small businesses (about 

$1.6 billion) and GSA awarded the highest percentage of its Katrina-related 

contracting dollars directly to small businesses (72 percent of about $658

million). Small businesses in Alabama, Mississippi, and Louisiana received 

66 percent of the $1.9 billion awarded to businesses in these states. 

Required information on small business subcontracting was not consistently 

available in official procurement data systems for the four agencies we

reviewed. For example, the systems had no information on whether DHS or 

GSA required small business subcontracting plans for 70 percent or more of 

their contracting funds. In addition, the four agencies often did not provide 

or document reasons for their determinations that plans were not required, 

even though federal rules require such documentation when prime contracts 

meet criteria for having these plans. Incomplete information about 

subcontracting limited GAO’s ability to determine the extent to which 

agencies complied with contracting rules and gave small businesses 

maximum opportunities to win subcontracts. 

 

Percentage of Katrina-Related Contract Dollars Awarded to Small Businesses, by DHS, GSA, 

DOD, and the U.S. Army Corps of Engineers 

In response to Hurricane Katrina,

the Departments of Homeland 

Security (DHS) and Defense 

(DOD), the General Services 

Administration (GSA), and the U.S.

Army Corps of Engineers (Corps) 

were responsible for over 90 

percent of the federal funds 

awarded for relief efforts via 

contracting as of March 2007. 

GAO initiated work and completed 

a report under the Comptroller 

General’s authority last month

describing the extent to which 

small businesses participated in 

these contracting opportunities. 

This testimony, which summarizes

information from that report, 

discusses (1) the amounts that 

small and local businesses received 

directly from contracts with DHS,

GSA, DOD, and the Corps for relief 

and recovery efforts related to

Hurricane Katrina and (2) the 

extent to which small businesses 

received subcontracts for relief and 

recovery efforts. 

What GAO Recommends

GAO recommended in its March 

2007 report that DHS, GSA, and 

DOD take steps designed to ensure

compliance with federal 

contracting regulations and more 

transparently disclose the extent to 

which subcontracting opportunities 

are available to small businesses. 

These agencies generally agreed

with GAO’s recommendations. 

 

www.gao.gov/cgi-bin/getrpt?GAO-07-698T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William B. 

Shear at (202) 512-8678 or shearw@gao.gov. 
Madam Chairwoman and Members of the Committee: 

I am pleased to be here in New Orleans to discuss small business 

participation in the rebuilding of the Gulf Coast in the aftermath of 

Hurricane Katrina. As of March 2007, the Departments of Homeland 

Security (DHS) and Defense (DOD), the U.S. Army Corps of Engineers 

(Corps), and the General Services Administration (GSA) accounted for 

over 90 percent of the federal funds awarded for relief efforts through 

contracting.1 The agencies were to use the funds to, among other things, 

award contracts for a range of services related to hurricane relief and

recovery. 

My statement today is based on a report we issued in March 2007, which 

discussed the amounts that small businesses received through prime 

contracts and subcontracts related to Hurricane Katrina.2

 In my testimony, 

I will discuss (1) the amounts that small and local businesses received 

directly from federal agencies through contracts for relief and recovery

efforts related to Hurricane Katrina, and (2) the extent of subcontracting 

by selected large prime contractors and the lack of required information in 

official procurement data systems on subcontracting accomplishments 

and plans. 

To address these objectives, we analyzed data on contracts awarded or 

used by DHS, GSA, DOD, and the Corps for Katrina-related projects 

overall, and, specifically for projects in Alabama, Louisiana, and 

Mississippi from August 1, 2005, through June 30, 2006. We identified 

contracts that were used for activities related to Hurricane Katrina and 

that required subcontracting plans. We also interviewed officials from 

each of the four agencies, the Small Business Administration (SBA), and 

the Office of Management and Budget (OMB). We conducted our work 

between March 2006 and February 2007 in accordance with generally 

accepted government auditing standards. 

 1

We are reporting on the Corps and the rest of DOD separately because, of the four 

supplemental appropriations measures for Department of Defense activities relating to

Hurricane Katrina relief (Pub. L. Nos. 109-61, 109-62, 109-148, and 109-234), the latter three 

specifically directed certain funds to the Corps for its disaster relief activities. 

2

GAO, Hurricane Katrina: Agency Contracting Data Should Be More Complete Regarding 

Subcontracting Opportunities for Small Businesses, GAO-07-205 (Washington, D.C., 

Mar. 1, 2007). 

Page 1 GAO-07-698T 
In summary: 

Small businesses received 28 percent of the $11 billion in contracting 

dollars DHS, GSA, DOD, and the Corps awarded directly for relief and 

recovery from Hurricane Katrina. DHS awarded the highest dollar amount 

to small businesses (about $1.6 billion), and GSA awarded the highest 

percentage of its Katrina-related contracting dollars directly to small 

businesses (72 percent of about $658 million). Small businesses received

approximately 66 percent of the $1.9 billion awarded by the four agencies 

to businesses in Alabama, Mississippi, and Louisiana. 

Information on whether DHS and GSA required subcontracting plans was 

generally not available in the federal government’s official procurement 

database for more than 70 percent of the contracting dollars each agency

awarded for activities related to Hurricane Katrina. This database should 

have contained information on whether or not the agencies required 

subcontracting plans in these instances. When the database did contain 

information on whether or not agencies required the plans, we found 

additional information about them that was incomplete. Specifically, the 

four agencies we reviewed varied in their determinations that

subcontracting plans were not required from their large prime contractors, 

ranging from 12 percent (GSA) to 77 percent (DOD) of their Katrinarelated contracting dollars. Information on the agencies’ reasons for not 

requiring these plans, which should have been readily available, was 

incomplete. 

In order to more transparently disclose the extent to which subcontracting 

opportunities are available to small businesses, we recommended that 

DHS, GSA, and DOD (1) issue guidance reinforcing the need for agencies 

to document in publicly available sources their decisions regarding 

subcontracting plan requirements, and (2) consider asking their Inspectors 

General to conduct reviews to ensure that this guidance and related 

requirements are being followed. The agencies generally agreed with our 

recommendations and described various steps they are taking to 

implement them. We plan to follow up with the agencies on their efforts to 

implement these recommendations. 

When the President declares a state of emergency after a natural or other 

major disaster, the declaration gives the federal government the authority Background 

Page 2 GAO-07-698T 
to engage in various emergency response activities, many of which federal 

agencies provide through contracts with private businesses.3

 Such

activities include debris removal, temporary housing assistance, 

reconstruction, and the provision of supplies. These contracts are subject

to federal procurement regulations and to the Stafford Act, which, among 

other things, sets forth requirements for the federal response to 

presidentially declared disasters. A provision of the Stafford Act requires 

federal agencies to give contracting preferences, to the extent feasible and 

practicable, to organizations, firms, and individuals residing or doing 

business primarily in the area affected by a major disaster or emergency.4

Federal agencies’ contracts with private businesses, whether made in the

normal course of agency operations or specifically related to a natural 

disaster declaration, are, in most cases, subject to certain goals to increase

participation by various types of small businesses. The Small Business Act, 

as amended, defines a small business generally as one that is 

“independently owned and operated and that is not dominant in its field of

operation.”5

 In addition, a business must meet the size standards published 

by SBA to be considered “small.” The act sets a governmentwide goal for 

small business participation of not less than 23 percent of the total value

of all prime contract awards—contracts that are awarded directly by an 

agency—for each fiscal year.6

The general rules governing procurement are set out in federal 

procurement statutes and in the Federal Acquisition Regulation (FAR). 

Among other things, these rules require that any business receiving a 

prime contract for more than the simplified acquisition threshold7

 must 

agree to give small business the “maximum practicable opportunity” to 

 3

See Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Pub.

L. No. 93-288, as amended, 42 U.S.C. §§ 5121 – 5204c. 

4

42 U.S.C. § 5150. 

5

Public Law 85-536, as amended, 15 U.S.C. § 632(a). 

6

15 U.S.C. § 644(g). 

7

FAR section 201.1 defines “simplified acquisition threshold” to mean $100,000, except 

when the acquisition of supplies or services is used to support a contingency operation or 

facilitate defense against nuclear, biological, chemical, or radiological attack. In those 

instances, the term means $250,000 for contracts to be awarded and performed inside the

United States and $1 million for contracts to be awarded and performed outside the United 

States. 

Page 3 GAO-07-698T 
participate in the contract.8

 Additionally, for contracts (or modifications to

contracts) that (1) are individually expected to exceed $500,000 ($1 million 

for construction contracts) and (2) have subcontracting possibilities, the 

prime contractor generally must have in place a subcontracting plan.9

 This

plan must identify the types of work the prime contractor believes it is 

likely to award as subcontracts and the percentage of subcontracting 

dollars it expects to direct to the specific categories of small businesses 

for which the Small Business Act sets specific goals.10

When they award contracts, federal agencies collect and store 

procurement data in their own internal systems—typically called contract 

writing systems. The FAR requires federal agencies to report the 

information about procurements directly to the Federal Procurement Data 

System–Next Generation (FPDS-NG), GSA’s governmentwide contracting 

database, which collects, processes, and disseminates official statistical 

data on all federal contracting activities of more than $2,500.

11 This system 

automatically obtains from other systems or online resources additional 

information that is important to the procurement, such as the contractor’s 

location. According to GSA, nearly all civilian agencies have directly 

linked their contract writing systems to FPDS-NG so that information 

about their contracting activities is available in “real time.” DOD also 

reports its contracting information to FPDS-NG via its system, DD-350, but 

GSA does not publicly reveal these data for 90 days due to security 

considerations. 

 8

FAR § 19.702. 

9

Id. The dollar threshold was changed to $550,000 on September 28, 2006. 71 Fed. Reg. 

57363 (Sept. 28, 2006). 

10These and other aspects of the small business subcontracting plan requirement are set 

forth at FAR Part 19.7.

11The FPDS-NG reporting threshold in FAR 4.602(c) was raised from $2,500 to $3,000. 71

Fed. Reg. 57,364 (Sept. 28, 2006). 

Page 4 GAO-07-698T 
Our March 2007 report identified the extent to which DHS, GSA, DOD, and 

the Corps awarded funds directly to small businesses; the extent to which

different types of small businesses received funds; and, the extent to 

which small businesses located in Alabama, Mississippi, and Louisiana 

received funds for Katrina-related projects. We found that small 

businesses received 28 percent of the $11 billion that DHS, GSA, DOD, and 

the Corps awarded for Katrina-related projects, but the percentages varied 

among the four agencies (fig. 1).12 Assessed individually, DHS awarded the 

highest dollar amount to small businesses—about $1.6 billion dollars—and 

GSA awarded the highest percentage of its dollars to small businesses—72

percent of about $658 million. 

Small Businesses 

Received Varied 

Amounts of the 

Contracting Dollars 

That DHS, GSA, DOD, 

and the Corps 

Awarded

Figure 1: Amount and Percentage of Katrina-Related Contract Dollars Awarded to

Businesses by DHS, GSA, DOD, and the Corps 

Note: Dollars are rounded to the nearest hundred thousand and percentages were calculated from 

unrounded numbers. 

Among categories of small businesses, small disadvantaged businesses 

received 24 percent of the approximately $3 billion that the four agencies 

awarded to small businesses. Other categories of small businesses, 

including women- and veteran-owned businesses and businesses located 

 12Each of the agencies we reviewed establishes annual goals for small business

participation. Among the agencies, these goals ranged from 23 to 45 percent in fiscal years 

2005 and 2006. 

Page 5 GAO-07-698T 
in historically underutilized business zones (HUBZones)13, received from 2 

to 16 percent (fig. 2). Contracting dollars awarded directly to businesses 

can be counted in more than one category, so the dollars awarded to 

various types of small businesses are not mutually exclusive. 

Figure 2: Dollar Amount of Katrina-Related Prime Contracts Awarded to Small Businesses by Socioeconomic Group 

Note: Percentages cannot be totaled across columns because under SBA Guidelines, contracting 

dollars awarded directly to businesses can be counted in more than one category—for example, a 

small disadvantaged business owned by a woman can be counted as both disadvantaged and 

women-owned. Dollars are rounded to the nearest hundred thousand and percentages were 

calculated from unrounded numbers. 

a

The service-disabled category is a subset of the veteran-owned business category.

Small businesses in Alabama, Mississippi, and Louisiana received 66 

percent of the $1.9 billion in Katrina-related contracting dollars awarded to 

local businesses by the four agencies we reviewed. Among the three 

states, the proportion of Katrina-related contracting dollars awarded to 

small businesses was largest in Mississippi (75 percent), followed by 

Alabama and Louisiana at 65 percent and 62 percent, respectively, of the 

dollars awarded (table 1). While small businesses in Louisiana received the 

smallest proportion of these Katrina-related dollars, the actual amount the 

 13HUBZones are economically distressed metropolitan or nonmetropolitan areas—that is, 

areas with low-income levels or high unemployment rates—and must employ some staff 

who live in those zones. See 15 U.S.C. § 632.

Page 6 GAO-07-698T 
businesses received was nearly double what small businesses received in 

Mississippi. In general, these small local businesses received contracting

dollars directly from the four agencies to provide trailers, administrative 

and service buildings, restoration activities, and other supportive services. 

Table 1: Small Businesses Received the Majority of Contracting Dollars Awarded Directly to Local Businesses 

Dollars in millions 

Alabama Louisiana Mississippi

All 

businesses Small businesses All businesses Small businesses 

All 

businesses Small businesses 

 Agency 

Dollar 

amount 

Dollar 

amount Percent

Dollar 

amount 

Dollar 

amount Percent

Dollar 

amount 

Dollar 

amount Percent

DHSa$160 $119 75% $460 $345 75% $138 $138 100%

GSA 77 72 92 48 26 54 210 194 92

DOD 10 10 98 7 6 89 45 9 20

Corps 84 16 19 609 320 53 114 42 36

Total $331 $217 65% $1,124 $697 62% $508 $383 75%

 Source: FPDS-NG and DD-350 data on contract actions awarded between August 1, 2005 and June 30, 2006. 

Note: Dollars are rounded to the nearest million and percentages were calculated from unrounded 

numbers. 

a

DHS data are missing information on the contractor’s state for 3.5 percent of its records. Where 

possible, GAO used available information on the contractor’s city and place of performance to identify 

the state in which the contractor was located. 

Our March 2007 report also included information on the extent to which 

small businesses received subcontracts from DHS and GSA prime 

contractors, and selected military prime contractors, that were awarded 

Katrina-related contracts. The report described the accomplishments that 

these prime contractors reported, identified certain instances where 

accomplishment data was not available because contractors had not 

submitted it, and also identified two key ways in which necessary 

information on subcontracting plan requirements was incomplete. 

Information on 

Subcontracting 

Accomplishments and 

Plans Was Incomplete 

Page 7 GAO-07-698T 
Contractors that have individual subcontracting plans are generally 

required to report on their subcontracting goals and accomplishments 

twice a year to the federal government. However, we found that this 

information was not consistently available for some DHS and GSA 

contracts. For the military contracts we analyzed, accomplishment data 

were available. 

For DHS, in response to our inquiries, agency officials researched 

contracts that appeared to meet the regulatory criteria for requiring a 

subcontracting plan (i.e., awarded to a large business for over $500,000 or 

$1,000,000 for construction) but which FPDS-NG indicated either did not 

require a subcontracting plan or the system was missing information on a 

plan requirement altogether. For every contract that an agency awards, the 

agency is required to indicate in FPDS-NG whether a subcontracting plan

is required. These officials found that subcontracting plans were, in fact, 

required for seven contracts, but that this had not been entered into FPDSNG. DHS officials determined that subcontracting accomplishment 

information was available on four of the seven contracts.14 For these four 

contracts, the contractors reported awarding from 14 to 83 percent of their 

subcontracting dollars, which ranged from $154 to $520 million, to small 

businesses as of March 31, 2006. For the remaining three contracts, 

subcontracting information was not available either because the prime 

contractor had not, as required, reported subcontracting accomplishment 

information to the electronic subcontracting reporting system (eSRS) as of 

March 31, 2006, or the contractor was not required to report on individual

contracts.15

Subcontracting 

Accomplishment 

Information Was Not 

Consistently Available for 

Some DHS and GSA 

Contracts Related to 

Hurricane Katrina 

For GSA, information was generally unavailable on the subcontracting 

accomplishments associated with the 11 contracts (worth a total of about

$9.6 million) that the agency awarded to large businesses for Katrinarelated activities and that included subcontracting plans. According to 

 14The FPDS-NG data for DHS initially showed that a subcontracting plan was required for 

two contracts the department awarded for Katrina-related activities which we could not

find in eSRS. DHS officials subsequently researched these contracts and determined that 

neither required a subcontracting plan—one was an award to a small business (for which

the requirement does not apply) and the other indicated that there were no subcontracting

possibilities.

15One of the contracts DHS awarded was for a commercial item. For commercial item 

contracts, contractors are only required to annually report on their subcontracting 

activities for all of their government contracts. These annual reports do not identify 

subcontracting activities by individual contracts. 

Page 8 GAO-07-698T 
agency officials, subcontracting accomplishment information was not 

available because contractors had failed to report it, the data had not been 

finalized, or, in one case, the contractor had reported aggregated figures 

for both Katrina-related and other subcontracts. 

We reviewed 4 of the top 10 recipients of prime contracting dollars from 

DOD and the Corps for projects related to Hurricane Katrina.16 Together, 

these 10 contractors accounted for 60 percent of these agencies’ prime 

contracting dollars. Of these top 10 recipients, only 4 received contracts 

that were strictly for Hurricane Katrina-related projects and were required 

to submit small business subcontracting plans for these projects.17 These 4 

contractors were large businesses and received eight contracts from the 

Corps that accounted for $928 million of the Corps’ contracting dollars as

of March 31, 2006.18 In accordance with federal requirements for reporting 

of subcontracting information, the contractors reported the amounts they 

subcontracted to businesses by business size and type. According to the 

reports submitted for the period ending March 31, 2006, these 4 

contractors awarded from 88 to 100 percent of their subcontracting dollars 

to small businesses, or from about $11,000 to $201 million.19 According to 

their subcontracting plans, the 4 contractors we reviewed intended to use 

subcontractors to assist with a variety of clean-up and repair activities, 

including excavation, debris removal, and temporary roofing installation. 

 16Because DOD does not electronically aggregate information on the subcontracting 

accomplishments of all military contractors, we chose to look at the top 10 military 

contractors. 

17Four prime contractors were not required to identify subcontracting opportunities 

because they were small businesses or the contract lacked subcontracting possibilities. 

Under FAR, a contract is not required to have a subcontracting plan if, among other things,

the contract is with a small business or if no subcontracting possibilities exist. See FAR §§ 

19.702(b)(1), 19.705-2(b). Of the remaining six contractors, two had contracts for both 

Katrina and other activities, and we excluded these contractors from our analysis because 

we could not isolate only the Katrina-related subcontracting accomplishments using the

information that was available. 

18The four contractors received a total of 15 contracts from the Corps, but we excluded 7

from our analysis because they either had non-Katrina-related actions against them or were 

not required to include subcontracting plans.

19We analyzed subcontracting awards to small businesses as of a specific point in time. 

However, these contracts may extend past March 31, 2006. Subcontracting 

accomplishments may vary over time if the amount prime contractors award to all 

businesses, and small businesses specifically, changes over the life of a contract. 

Page 9 GAO-07-698T 
Information on 

Subcontracting Plan 

Requirements Was Missing 

or Incomplete 

In two respects, key information on small business subcontracting plans 

was not consistently available in official procurement data systems for the 

four agencies. First, primarily with respect to DHS and GSA contract 

actions, the official procurement data system had no information at all on

whether or not they required subcontracting plans for 70 percent or more 

of their contracting funds. For DOD and the Corps, this system lacked 

information on whether they required subcontracting plans for one 

percent of their contracting funds. Table 2 shows the total amounts each 

agency awarded to large businesses for contracts valued over $500,000 and 

the extent to which no information was available in the official

procurement data system on whether the agencies required subcontracting 

plans for those contracts (column 6). 

Table 2: Subcontracting Plan Requirements by Dollar Amount Awarded 

Dollars in millions 

Agency 

Total

amount 

awarded to

large 

businesses 

over 

$500,000a

Percent of total amount 

awarded and dollar 

amount requiring a

subcontracting plan

Percent of total amount 

awarded and dollar 

amount with no

subcontracting

possibilities 

Percent of total amount 

awarded and dollar 

amount reported as not 

requiring a

subcontracting plan

Percent of total amount 

awarded and dollar 

amount with no

information on

subcontracting plan 

requirements

DHS $4,866.2 1% $27.2 0% $16.3 29% $1,406.0 70% $3,416.7

GSA 127.1 7 8.9 4 4.7 12 15.1 77 98.4

DOD 631.2 22 141.4 0 77 483.6 1 6.2

Corps $2,468.7 76% $1,880.1 0% 23% $574.5 1% $14.1

Source: GAO analysis of FPDS-NG and DD-350 data for contract actions awarded between August 1, 2005, and June 30, 2006. 

Note: Dollars are rounded to the nearest hundred thousand and percentages were calculated from 

unrounded numbers. 

a

One million dollars for construction. 

Second, the four agencies’ systems showed that the agencies had 

determined that subcontracting plans were not required for contracts 

representing 12 to 77 percent of the dollars they awarded to large 

businesses for Katrina-related projects. Agencies are required to document 

their reasons for these determinations. However, information on the four

agencies’ reasons for not requiring these plans, which should have been 

readily available, was incomplete. 

Overall, procurement officials from the four agencies were able to explain

some of the missing or incomplete subcontracting plan information by, for 

example, identifying data entry errors or providing evidence of reasons for 

Page 10 GAO-07-698T 
not requiring the subcontracting plans. For example, DHS officials 

determined that $545 million of the DHS contracting funds the 

procurement data system showed as not requiring a plan had been 

miscoded and should have been entered in the procurement system under 

a different category, showing that the contracts offered “no subcontracting 

possibilities.” In another instance, GSA officials did not require a 

subcontracting plan for a $26 million contract for ice because they 

believed the urgency of the situation required buying and shipping the ice 

faster than normal procedures would allow. Nonetheless, at the time we 

issued our report contracting dollars remained for each agency with 

incomplete subcontracting plan information and which agency officials 

had not been able to explain. These amounts ranged from $3.3 million for 

DOD (excluding the Corps) to $861 million for DHS. 

In our report, we concluded there was little doubt that Hurricane Katrina 

posed challenges to the agencies to award contracts quickly while still 

following government procurement rules, especially those regarding 

subcontracting plans. Certain choices, such as documenting compliance 

with these requirements at a later date (something GSA and DOD officials 

indicated was the case), might have been understandable. Nonetheless, 

more than a year after the hurricane, we reported that a substantial 

amount of information about the four agencies’ subcontracting 

requirements remained incomplete. Conclusively demonstrating 

compliance with the rules about subcontracting plans is important for 

reasons beyond just documentation. By requiring these plans, agencies 

commit prime contractors to specific goals for providing opportunities to 

small businesses and give themselves tools—incentives as well as 

sanctions—that they can use to ensure the contractors engage in good

faith efforts to meet their small business subcontracting goals. In doing so, 

the agencies ensure compliance with federal procurement regulations and

that small businesses have all of the practical opportunities to participate

in federal contracts that they are supposed to have. Because so much key 

information about subcontracting plans was incomplete in federal 

procurement data systems and, at the conclusion of our review, remained 

unresolved, we cannot tell the extent to which the agencies are complying 

with the regulations. Furthermore, the lack of transparency surrounding 

much of the agencies’ subcontracting data—missing information on plans 

when contracts appear to meet the criteria for having them—may lead to 

unwarranted perceptions about how the federal procurement system is 

working, particularly in terms of the government’s stated preference for 

contracting with small businesses. 

Page 11 GAO-07-698T 
Therefore, to ensure compliance with federal contracting regulations and 

more transparently disclose the availability of subcontracting 

opportunities for small businesses, we recommended that the Secretaries 

of Homeland Security and Defense and the Administrator of General 

Services issue guidance reinforcing, among other things, the necessity for

documenting in publicly available sources the agencies’ decisions, 

particularly in instances when the agencies decided not to require 

subcontracting plans. Moreover, we recommended that the agencies 

consider asking their respective Inspectors General to conduct a review to 

ensure that this guidance and related requirements were being followed. 

The agencies generally agreed with our recommendations and are taking

steps to address them. For example, GSA officials recently told us the 

agency’s Chief Acquisition Officer will soon issue two “acquisition alerts” 

reminding contracting officers of the importance of subcontracting plan

requirements as well as the documentation associated with complying 

with the requirements. Army Corps of Engineers officials told us they are 

currently developing a new training module on these topics and expect to

deliver it to their contracting officers this summer. 

Madam Chairwoman, this concludes my prepared statement. I would be 

happy to answer any questions at this time. 

For further information on this testimony, please contact William B. Shear 

at (202) 512-8678 or shearw@gao.gov. Individuals making key 

contributions to this testimony included Bill MacBlane, Assistant Director; 

Emily Chalmers; Julia Kennon; Tarek Mahmassani; Lisa Moore; Paul 

Thompson; and, Bill Woods. 

Contacts and 

Acknowledgments 

Page 12 GAO-07-698T 
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