Report to the Committee on Small 

Business, House of Representatives 

United States General Accounting Office 

GAO

April 2004 CONTRACT 

MANAGEMENT 

DOD Needs Measures 

for Small Business 

Subcontracting 

Program and Better 

Data on Foreign 

Subcontracts 

GAO-04-381 
www.gao.gov/cgi-bin/getrpt?GAO-04-381.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David Cooper 

at (202) 512-4841 or cooperd@gao.gov. 

Highlights of GAO-04-381, a report to 

Committee on Small Business, House of 

Representatives 

April 2004

CONTRACT MANAGEMENT 

DOD Needs Measures for Small Business 

Subcontracting Program and Better Data 

on Foreign Subcontracts 

In order to foster small business participation in subcontracting, government 

contractors with larger dollar value contracts are required to have 

subcontracting plans that establish goals for contractors to award small 

businesses a percentage of subcontract dollars. DOD created the Test 

Program to provide more small business opportunities and reduce the 

administrative burden for contractors in managing their subcontracting 

programs. Many of DOD’s largest contractors participate in the program. 

Although the Test Program was started more than 12 years ago, DOD has yet 

to establish metrics to evaluate the program’s results and effectiveness. As a 

result, there is no systematic way of determining whether the program is 

meeting its intended objectives and whether further changes need to be 

made. DOD contracted for an assessment of the Test Program in 2002, but 

the results of the assessment are considered preliminary and, therefore, have 

not been reported. DOD is required to report the results of the Test Program 

in 2005, when the program is set to expire. 

DOD contractors participating in the Test Program have experienced mixed 

success in meeting their various small business subcontracting goals. DOD 

and contractor officials noted that a changing acquisition environment has 

added to their challenge in meeting small business goals. Two of the major 

challenges they identified include (1) the increased breadth, scope, and 

complexity of DOD prime contracts that require, among other things, 

teaming arrangements with other, typically large contractors and (2) prime 

contractors’ strategic sourcing decisions to leverage their purchasing power 

by reducing the number of their suppliers including small businesses. 

DCMA plays a key role in overseeing the performance of contractors in the 

Test Program and has made significant changes to its policy and guidance. 

The revised approach is designed to better monitor contractors’ efforts, 

provide more consistency in assessing contractor performance, and hold 

contractors accountable for achieving their subcontracting goals. DCMA is 

still in the process of revamping its oversight activities. 

GAO could not assess the full extent contractors used firms performing 

outside the U.S. because of data reliability concerns. Contractors in GAO’s 

review reported several reasons for awarding subcontracts to firms 

performing outside the U.S., such as fulfilling commitments included in 

offset agreements or executing teaming arrangements for major defense 

programs. Without accurate and complete information on subcontracts to 

firms performing outside the U.S., DOD cannot make informed decisions on 

industrial base issues. 

More small businesses are turning 

to subcontracting as a way to 

participate in the federal 

government’s $250 billion 

procurement program. DOD, 

accounting for about two-thirds of 

federal procurements, has a critical 

role in providing opportunities to 

small businesses through 

subcontracting programs such as 

the Test Program for Negotiation of

Comprehensive Small Business 

Subcontracting Plans (Test 

Program). In addition, Congress 

raised concerns about the potential 

for small businesses to lose 

opportunities to firms performing 

work outside of the United States. 

GAO was asked to review (1) 

DOD’s assessment of the Test 

Program’s effectiveness, (2) the 

performance of contractors 

participating in the Test Program, 

(3) the Defense Contract 

Management Agency’s (DCMA) 

oversight of contractors’ small 

business subcontracting efforts, 

and (4) the extent and reasons 

contractors are subcontracting 

with businesses performing outside 

the U.S. 

GAO recommends that the 

Secretary of Defense (1) establish 

metrics to assess the overall 

effectiveness of the Test Program 

and (2) establish procedures to 

improve the quality of the 

information in its database of 

subcontracts to firms performing 

outside the U.S. DOD concurred 

with GAO’s recommendations. 
Page i GAO-04-381 Contract Management 

Letter 1

Results in Brief 2

Background 4

DOD Has Yet to Assess the Overall Outcome of Its Test Program 8

DOD Contractors Have Mixed Success in Reaching Small Business 

Goals 10

DCMA Is Taking Steps to Improve Oversight of the Subcontracting 

Program 13

Extent of Subcontracting Activity with Firms Performing Outside 

U.S. Is Unknown, and Reasons for Subcontracting Varied 15

Conclusions 18

Recommendations for Executive Action 19

Agency Comments and Our Evaluation 19

Appendix I Scope and Methodology 21 

Appendix II Small Business Concern Categories 23 

Appendix III Comments from the Department of Defense 24 

Related GAO Products 29 

Table 

Table 1: Total Subcontract and Small Business Subcontract Awards 

from DOD Contracts, Fiscal Years 1993 through 2002 5

Figure 

Figure 1: Percentage of Total Subcontract Dollars Awarded to 

Small Businesses from DOD Contracts, Fiscal Years 1993 

through 2002 6

Contents 
Page ii GAO-04-381 Contract Management 

Abbreviations 

DCMA Defense Contract Management Agency 

FAR Federal Acquisition Regulation 

HUBZone Historically Underutilized Business Zone 

LMI Logistics Management Institute 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It 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. 
Page 1 GAO-04-381 Contract Management 

April 5, 2004 

The Honorable Donald A. Manzullo 

Chairman 

The Honorable Nydia M. Velazquez 

Ranking Democratic Member 

Committee on Small Business 

House of Representatives 

Recognizing the importance of creating a dynamic environment where 

small businesses—with their innovation and diversity—can flourish, the 

federal government has sought to improve small business access to its 

$250 billion procurement program. Small businesses more and more are 

turning to subcontracting as a way to participate in federal procurements. 

Contractors with larger dollar value contracts1

 are required to have 

subcontracting plans that establish goals for small business’ share of 

subcontract dollars to be awarded. Some in Congress have raised 

concerns about the need to improve access of small businesses to federal 

contracting opportunities. In addition, they have raised concerns about 

small businesses losing subcontracting opportunities to firms performing 

work outside of the United States. 

The Department of Defense (DOD) plays a key role in the success of the 

federal government’s small business programs because it accounts for 

about two-thirds of federal procurements. Over the last several years, 

information reported by DOD contractors shows that the dollar amount of 

subcontracts awarded to small businesses2

 has increased and is higher 

than it has ever been. On the other hand, the share of DOD’s contracting 

activity awarded to small businesses as subcontracts has declined steeply 

 1

 Subcontracting plans are required for most contracts over $500,000 or $1 million for 

construction contracts. FAR 19.702(a)(1); 13 CFR § 125.3(a). 

2

 According to DCMA officials, DOD contractors are supposed to report actual subcontract 

achievements on the Standard Form 294 or 295. How contractors report the data depends 

on their accounting system. For example, if they are on an accrual basis, they may capture 

the subcontract award at any convenient point in time (e.g., when they execute the 

subcontract or purchase order). If they operate on a cash basis, they would capture the 

transaction when they pay the subcontractor. The government allows contractors to decide 

which way as long as they follow Generally Accepted Accounting Principles (GAAP). One 

of the principles of GAAP is that a contractor must apply the same methodology 

consistently. 

United States General Accounting Office 

Washington, DC 20548 
Page 2 GAO-04-381 Contract Management 

in recent years—from about 43 percent in 1995 to about 34 percent in 

2002. DOD created the Test Program for Negotiation of Comprehensive 

Small Business Subcontracting Plans (Test Program) to provide more 

small business opportunities and reduce the administrative burden for 

contractors in managing their subcontracting programs.3

 Many of DOD’s 

largest contractors participate in the Test Program, and the Defense 

Contract Management Agency (DCMA) plays a key role in overseeing their 

performance. 

Due to DOD’s critical role in providing opportunities to small business, we 

reviewed (1) DOD’s assessment of the Test Program’s effectiveness, 

(2) the performance of contractors participating in the Test Program, 

(3) DCMA oversight of contractors’ small business subcontracting efforts, 

and (4) the extent and reasons contractors are subcontracting with 

businesses performing outside the U.S.4

To conduct this work, we interviewed and obtained documentation from 

the Office of the Under Secretary of Defense, Office of Small and 

Disadvantage Business Utilization, DCMA, DOD’s Office of Program 

Acquisition and International Contracting, and several contractors. We 

limited our review of internal controls to reviewing DCMA’s plans, 

methods, and procedures used to meet its small business subcontracting 

program mission, goals, and objectives. Because of concerns about data 

reliability of prime contract data,5

 we limited our use of this data to 

providing background information and identifying contractors. We did not 

independently verify subcontract data obtained from DOD and contractors 

but, instead, relied on DCMA reviews of contractors’ reporting systems to 

assure data accuracy and completeness. We performed our work from 

March 2003 to March 2004 in accordance with generally accepted 

government auditing standards. A more detailed description of our scope 

and methodology is found in appendix I. 

Although the Test Program was started more than 12 years ago, DOD has 

yet to establish metrics to evaluate the program’s overall results and 

 3

 National Defense Authorization Act for Fiscal Years 1990 and 1991, P.L. 101-189, § 834. 

4

 DOD collects data about businesses performing work outside the U.S., but not data on 

whether businesses are domestic or foreign-owned. 

5

 For more information about data reliability concerns, see U.S. General Accounting Office, 

Reliability of Federal Procurement Data, GAO-04-295R (Washington, D.C.: Dec. 30, 2003). 

Results in Brief 
Page 3 GAO-04-381 Contract Management 

effectiveness. DOD contracted for an assessment of the Test Program in 

2002. However, the results of that assessment are considered preliminary, 

and the report has not been issued.6

 DOD, DCMA, and contractor officials 

we interviewed have various views on the strengths and weaknesses of the 

program. Some officials believe the Test Program increases high-level 

corporate attention, while others thought it reduces accountability at 

lower corporate-levels and visibility of contractors meeting their small 

business goals for individual contracts. DOD is required to report the 

results of the Test Program in 2005 when the program is set to expire. 

DOD contractors participating in the Test Program have experienced 

mixed success in meeting their various small business subcontracting 

goals. DOD and contractor officials noted that a changing acquisition 

environment has added to their challenge in meeting small business goals. 

Two of the major challenges they identified include (1) the increased 

breadth, scope, and complexity of DOD prime contracts that require, 

among other things, teaming arrangements with other, typically large 

contractors and (2) prime contractors’ strategic-sourcing decisions to 

leverage their purchasing power by reducing the number of their suppliers 

including small businesses. According to DOD and contractor officials, 

both have the potential to either restrict subcontracting opportunities for 

small businesses or push those opportunities to lower tiers of the supply 

chain. Contractor officials also said their ability to meet some small 

business goals is influenced by the limited supply of qualified small 

businesses that could provide the needed goods and services. 

To improve oversight of contractor performance in meeting small business 

subcontracting goals, DCMA began changing its approach in 2002. The 

revised approach is designed to better monitor contractors’ efforts, 

provide more consistency in assessing contractor performance, and hold 

contractors accountable for achieving their subcontracting goals. While 

DCMA has made significant changes to its policy and guidance, it is still in 

the process of revamping its oversight activities. 

We could not assess the full extent contractors’ subcontract with firms 

performing outside the U.S. because of data reliability concerns. DOD only 

recently took action to improve the information collected on 

subcontracting with overseas firms. Contractors in our review reported 

 6

 Logistics Management Institute, Review of the Department of Defense Comprehensive 

Subcontracting Plan Test Program, AQ001R2 (Mclean, Va.: July 2002), Draft. 
Page 4 GAO-04-381 Contract Management 

several reasons for awarding subcontracts to firms performing outside the 

U.S., such as fulfilling commitments included in offset agreements7

 or 

executing teaming arrangements for major defense programs. 

This report contains two recommendations to the Secretary of Defense to 

establish metrics to assess the overall effectiveness of the Test Program 

and improve the quality of the information in its database of subcontracts 

to firms performing outside the U.S. In written comments on a draft of this 

report, DOD concurred with both recommendations. 

Over the last 10 years, DOD prime contract and total subcontract dollar 

awards have increased. From 1993 to 2002, DOD prime contract dollars 

increased almost 15 percent, from $136.8 billion to $157.1 billion.8

 As 

shown in table 1, total subcontract dollars awarded by DOD contractors9

increased more than 40 percent, from $53.0 billion to $75.5 billion. In 

addition, small businesses have generally received increasing dollar 

amounts from DOD contractors over a 10-year period—from $19.9 billion 

in fiscal year 1993 to $25.8 billion fiscal year 2002.10

 7

 An agreement between a U.S. supplier of defense articles or services and a foreign 

country under which the supplier agrees to purchase goods and services of the foreign 

country in consideration for the country’s purchase of the supplier’s defense articles or 

services. 22 U.S.C. 2776(e)(1). 

8

 The total dollar amounts are for dollars submitted on Individual Contracting Action 

Reports, DD Form 350, for actions that obligate or de-obligate more than $25,000. 

9

 The annual subcontracting data was obtained from the Office of the Under Secretary of 

Defense, Office of Small and Disadvantage Business Utilization for fiscal years 1993 

through 2002. We did not independently test the reliability of the data received from this 

office, which relies on DOD contractors to report this subcontract information semiannually on Standard Form 295 (SF 295). 

10 The dollars reported in this paragraph are in constant fiscal year 2002 dollars. 

Background 
Page 5 GAO-04-381 Contract Management 

Table 1: Total Subcontract and Small Business Subcontract Awards from DOD 

Contracts, Fiscal Years 1993 through 2002 

Dollars in billions 

Fiscal year a

Total subcontract dollars 

awarded 

Subcontract dollars 

awarded to small 

businesses

1993 $53.0 $19.9 

1994 52.4 20.1

1995 50.9 21.7

1996 52.5 21.9

1997 59.1 24.5

1998 56.9 23.9

1999 55.3 22.7

2000 57.0 22.4

2001 61.3 23.8

2002 $75.5 $25.8

Source: GAO analysis of DOD-provided data. 

a

In constant fiscal year 2002 dollars. 

However, as shown in figure 1, small businesses’ share of total subcontract 

dollars from DOD contractors has decreased in recent years. The percent 

share that small business received has ranged from a high of about 

43 percent ($21.7 billion) in fiscal year 1995 to a low of about 34 percent 

($25.8 billion) in fiscal year 2002.11

 11 All dollars are in constant fiscal year 2002 dollars. 
Page 6 GAO-04-381 Contract Management 

Figure 1: Percentage of Total Subcontract Dollars Awarded to Small Businesses 

from DOD Contracts, Fiscal Years 1993 through 2002 

In order to foster the participation of small businesses in subcontracting, 

the Federal Acquisition Regulation (FAR) requires DOD contractors to 

have subcontracting plans for most contracts of more than $500,000 

($1 million for construction contracts).12 These plans document what 

actions the contractor will take to provide various types of small 

businesses with the maximum practicable opportunities to participate in 

subcontracting. See appendix II for description of small business 

categories. Contractors with DOD are to provide semiannual reports to 

DCMA on their small business achievements for each contract that has a 

subcontracting plan as well as semiannual summary reports that 

encompass all their contracts with a particular agency. 

 12 FAR 19.702 (a). However, subcontracting plans are not required (1) from small 

businesses; (2) for personal service contracts; (3) for contracts or contract modifications 

performed outside a state, territory, or possession of the U.S., the District of Columbia, and 

the Commonwealth of Puerto Rico; or (4) for modifications of contracts within the general 

scope of the contract that do not contain the clause at FAR 52.219-8, Utilization of Small 

Business Concerns. FAR 19.702 (b). 
Page 7 GAO-04-381 Contract Management 

The National Defense Authorization Act for Fiscal Years 1990 and 1991 

authorized DOD to establish the Test Program for Negotiation of 

Comprehensive Small Business Subcontracting Plans (Test Program), 

which allowed the negotiation, administration, and reporting of 

subcontracting plans on a plant, division, or companywide basis rather 

than a plan for each individual contract. The purpose of the Test Program 

is to increase subcontracting opportunities for various types of small 

businesses while reducing the administrative burdens on contractors. The 

companies that participated in this Test Program in fiscal year 2002 

accounted for about 41 percent of DOD’s subcontracting activity in that 

same fiscal year. The Office of the Under Secretary of Defense, Office of 

Small and Disadvantage Business Utilization is responsible for the overall 

assessment of the Test Program. Originally scheduled for fiscal years 1991 

through 1992, the Test Program has been extended several times and is 

scheduled to end September 30, 2005.13 Under the Test Program, small 

business goals are negotiated annually, whereas for individual plans, goals 

are generally negotiated once for the life of the contract.14

As of fiscal year 2003, 15 contractors have comprehensive plans under the 

Test Program. DCMA is responsible for reviewing DOD contractors’ 

subcontracting plans and monitoring and assessing contractor’s 

performance to determine how well contractors are implementing their 

plans and meeting their small business goals. DCMA is also involved in 

annually negotiating goals with contractors participating in the Test 

Program. 

Since 1982, DOD has required prime contractors to report quarterly to 

DOD’s Office of Program Acquisition and International Contracting on 

contracts exceeding $500,000 when the contractor or its first tier 

subcontractor will perform any part of the contract that exceeds $100,000 

outside the U.S., unless a foreign place of performance (1) is the principal 

place of performance and (2) is identified in the firm’s offer.15 First-tier 

 13 Section 817, P.L. 106-65. 

14 Under the Test Program, the comprehensive subcontracting plan is to target specific 

industry categories where types of small businesses have not historically participated. For 

individual plans, the contractor must pay liquidated damages if the contracting officer 

determines the contractor failed to make a good faith effort to comply with the 

subcontracting plan. For both types of plans, the reporting requirement is semiannually. 

15 DFARS 252.225-7004(a)(2). Contracts and subcontracts for commercial items, military 

construction, ores, natural gas, utilities, petroleum products and crudes, timber, and 

subsistence are not required to be reported. 
Page 8 GAO-04-381 Contract Management 

subcontractors that award subcontracts in excess of $100,000 to be 

performed outside the U.S. are also subject to the reporting requirement. 

Reported information is to include the type of supply or service provided, 

the principal place of subcontract performance, and the dollar value of the 

transaction. The information is used as part of DOD’s efforts to monitor 

foreign procurements and assess matters related to defense trade balances 

and domestic industrial base capabilities.16 DOD’s Office of Program 

Acquisition and International Contracting reports to the Director of 

Defense Procurement and Acquisition Policy. 

Although the Test Program has been in existence since fiscal year 1991, 

DOD does not know if it is achieving its intended objectives to provide 

more small business subcontracting opportunities and to reduce 

administrative burden for contractors. The Office of the Under Secretary 

of Defense, Office of Small and Disadvantage Business Utilization, which 

is to report the results of the Test Program in December 2005, shortly after 

the program is set to expire, commissioned a preliminary study of the 

program in 2002. The data assessing the merits of the program were never 

formally released, but the resulting preliminary report had a number of 

recommendations. DOD recognizes that it needs to establish metrics and 

other criteria for measuring program results in meeting the intended 

objectives. We found that DOD and contractor officials have various views 

on the strengths and weaknesses of the program. 

To assess the Test Program, DOD commissioned a preliminary review of 

the program by the Logistics Management Institute (LMI). LMI noted in its 

draft report that, in terms of achievements for subcontracting to small 

businesses, the Test Program results improved impressively between 1991 

and 1996—from small businesses receiving 12 percent of total 

subcontracts to receiving about 36 percent—but declined to about 29 

percent by 2000. LMI attributed the decline to factors external to the 

program—some of which we discuss later. Most of its recommendations 

dealt with addressing ways of improving small business achievements, but 

also included program-specific recommendations, such as 

• increasing visibility of subcontracting activity at the corporation’s division 

and program level, where feasible; 

 16 10 U.S.C. sec 2505 requires periodic national technology and industrial base assessments. 

DOD Has Yet to 

Assess the Overall 

Outcome of Its Test 

Program 

Past Assessment of the 

Test Program Was 

Preliminary 
Page 9 GAO-04-381 Contract Management 

• deducting directed-source procurements from subcontracting 

achievement calculations; 

• allowing subcontracting plan renegotiations to reflect major contract 

awards that occur after negotiations; 

• establishing annual meetings of program participants and DCMA to allow 

exchange of ideas, best practices, and lessons learned; 

• permitting removal of poor performing participants after appropriate 

notice; 

• requiring participants to track and annually report administrative savings 

and costs and results of their outreach activities; and 

• limiting enrollment to 20 participants. 

While the final report has not been issued, DOD officials said they have 

taken into consideration a number of the recommendations from the study 

by LMI. For example, DCMA has taken steps to improve oversight of 

contractor performance and hold contractors more accountable for 

achieving their subcontracting goals, and DOD has chartered a council to 

share Test Program knowledge and experience. In addition, some DOD 

program offices require contractors to report on their subcontracting 

activity at the program level to increase visibility of subcontracting to 

small businesses. 

Despite DOD’s attempts to assess the program, it still does not know 

whether using the Test Program is affecting subcontracting opportunities 

for small businesses and reducing administrative burden for the 

contractors. DOD, through DCMA, is to report on each participating 

contractor’s performance by December 15, 2005 by comparing the 

contractor’s performance under the program with its performance for 

3 fiscal years before the acceptance into the program.17 DOD officials told 

us they are uncertain how they will measure contractors’ performance to 

meet their reporting requirement and assess trends over time. This 

uncertainty is in part due to not having the original participants in the 

program to establish a baseline to evaluate performance and changes in 

company compositions. Further, these officials noted that mergers and 

acquisitions can greatly change company compositions and business bases 

from year to year making trend determinations difficult. DCMA officials 

told us they plan on hiring a contractor to help them complete their review 

 17 65 FR 7509 (Feb. 15, 2000). 

DOD Lacks Test Program 

Measurements to Assess 

Overall Effectiveness 
Page 10 GAO-04-381 Contract Management 

of the overall results of the Test Program and will use the results of the 

LMI study as a tool to help develop Test Program metrics. 

DCMA and contractor officials we interviewed gave varied opinions—both 

positive and negative—on the Test Program. Some said that while they 

were uncertain about its increasing small business opportunities, they 

thought participating in the Test Program helped increase the visibility of 

the results of small business program companywide or divisionwide. 

Others said the comprehensive plan sometimes resulted in lost visibility of 

individual contract performance and reduced accountability at the 

program level. In fact, one contractor recently stopped participating in the 

program because of the lost ability to monitor individual contract 

performance. DCMA and contractor officials we interviewed said they 

were uncertain if there had been a reduction of administrative burden 

since, for example, under the Test Program contractors were required to 

prepare a detailed plan, negotiate small business goals each year, and 

submit performance data semiannually. Plus, certain large DOD programs 

requested contractors to report small business data. Many agreed that, 

regardless of what type of plan contractors used, success of the small 

business program relies on contractor management’s commitment to 

meeting small business goals. DCMA and contractor officials also stated 

that contractor management must have the ability to monitor company 

performance on those goals. 

Between fiscal years 1999 and 2003, the DOD contractors we reviewed had 

varied success in meeting their small business goals. DOD and contractor 

officials provided several reasons for the mixed success of the 

subcontracting program, but DOD has not formally studied those factors 

that may encourage or discourage the participation of small businesses in 

DOD subcontracts. 

In the past 5 years, the 15 DOD contractors participating in the Test 

Program had varying success in meeting their small business goals 

established in their subcontracting plans. Overall, the contractors in the 

Test Program were not consistent from year to year in meeting their goals 

for the traditional small business categories. For example, in at least 3 of 

the past 5 years, 11 of the 15 contractors met their overall small business 

goals, seven contractors met their goals for small disadvantaged 

businesses, and six contractors met their goals for women-owned small 

businesses. 

Views Varied on Merits of 

the Test Program 

DOD Contractors 

Have Mixed Success 

in Reaching Small 

Business Goals 

Contractors Have Met 

Some Small Business 

Goals, but Results Are 

Inconsistent 
Page 11 GAO-04-381 Contract Management 

DOD and contractor officials noted that a changing acquisition 

environment has added to the challenge in meeting their small business 

goals. Changes included (1) the increased breadth, scope, and complexity 

of DOD prime contracts that require, among other things, teaming 

arrangements with other, typically large contractors and (2) prime 

contractors’ strategic sourcing decisions to leverage their purchasing 

power by reducing the number of their suppliers including small 

businesses. Contractor officials also said that the relatively limited supply 

of qualified small businesses that could provide the needed goods and 

services also increases the difficulty in meeting small business goals. DOD 

has not studied to what degree the changing acquisition environment or 

other factors contribute to the success or failure of its small business 

subcontracting program. 

Contractor and DCMA officials report that the breadth, scope, and 

complexity of DOD prime contracts for weapons systems has increased 

over the years. According to officials, this has had several consequences, 

which have limited the opportunities for small businesses. First, prime 

contractors are increasingly relying on teaming arrangements to win 

contracts. Their teaming partners, typically large businesses, receive a 

sizable portion of the first-tier subcontracts. For example, under a major 

defense contract, the contractor awarded about 56 percent of its total 

subcontract dollars to its teaming partners, significantly reducing the 

opportunities of small businesses to win first-tier subcontracts. Also, 

prime contractors are increasingly serving as systems integrators instead 

of systems manufacturers and are buying major assemblies rather than 

parts and components. Systems integrators are often responsible for the 

development, management, and eventual delivery of a large weapon 

system. Consequently, as in the case of teaming arrangements, systems 

integrators often use large businesses as first-tier subcontractors. 

Contractor officials said that although small businesses may still be 

receiving contract dollars through second- or lower-tier subcontracts, 

contractors could only count their first-tier subcontract awards towards 

their small business goals. 

In addition, many contractors have made the strategic-sourcing decision to 

reduce the number of suppliers in their supplier base. Contractors report 

reducing their supplier bases by as much as 50 percent over the past 

5 years in a move to leverage their purchases, cut costs, and improve 

Changing Contracting 

Environment May Affect 

Contractors’ Ability to 

Meet Small Business Goals 
Page 12 GAO-04-381 Contract Management 

performance to remain competitive in the world market.18 Contractors also 

noted that by reducing the number of contractors, they often relied on 

larger corporatewide contracts, which could also affect their small 

business suppliers. For example, officials of one contractor noted that 

when it went to a single information systems contractor, it no longer 

contracted with a number of small firms. 

Finally, contractors report difficulty in finding qualified small businesses 

to provide the goods and services needed. Contractor officials said this is 

particularly true for small business programs with certification 

requirements—such as the programs for small disadvantaged businesses 

and Historically Underutilized Business Zone (HUBZone) businesses—and 

for very recent programs, such as the service-disabled veterans program. 

The Small Business Administration has certified significantly fewer small 

disadvantaged businesses and HUBZone firms than hoped. Consequently, 

contractors often have difficulty meeting small disadvantaged business 

goals, and few have met their HUBZone goals.19 Further, according to 

DCMA officials responsible for on site monitoring of subcontracting plans, 

qualified businesses in different small business categories usually compete 

for the same type of work. Consequently, according to these DCMA 

officials, contractors have difficulty meeting goals for all small business 

types and often report wide fluctuations in subcontracting achievements 

among the groups, depending on which ones win contracts in a given year. 

The categories of small business that DOD uses include small businesses, 

small disadvantaged businesses, women-owned small businesses, veteranowned and service-disabled veteran-owned small businesses, HUBZone 

businesses, Historically Black Colleges and Universities, and Minority 

Institutions.20

 18 For more information on supplier base management, see U.S. General Accounting Office, 

Best Practices: Taking a Strategic Approach Could Improve DOD’s Acquisition of 

Services, GAO-02-230 (Washington D.C.: Jan. 18, 2002). 

19 For more information on the small disadvantaged business and HUBZone programs, see 

U.S. General Accounting Office, Small Business: Status of Small Disadvantaged Business 

Certifications, GAO-01-273 (Washington, D.C.: Jan. 19, 2001) and Small Business: 

HUBZone Program Suffers From Reporting and Implementation Difficulties, GAO-02-57

(Washington, D.C.: Oct. 26, 2001). 

20 See appendix II for more information on the various small business concerns. 
Page 13 GAO-04-381 Contract Management 

Since 2002, DCMA has taken steps to help improve its oversight of DOD’s 

small business program. These steps include issuing an updated policy for 

monitoring contractors’ small business subcontracting programs, issuing 

new guidance to help DCMA personnel in implementing small business 

program requirements, and developing new criteria for rating contractor 

performance. 

Previously, DCMA, through its small business specialists, carried out its 

small business subcontracting program responsibilities through 

(1) contractor orientation and training, (2) small business outreach and 

“matchmaking,” (3) Test Program review and negotiation, and 

(4) contractor performance evaluations. Training primarily involved 

informing the contractors and other DCMA personnel of contractor 

responsibilities and small business program requirements. Outreach and 

“matchmaking” activities included attending or arranging small business 

conferences and open houses and identifying qualified small businesses to 

contractors. 

DCMA policies and procedures also required small business specialists to 

review contractors’ subcontracting performance and perform two kinds of 

reviews: annual reviews of Test Program participants and reviews of 

contractor subcontract performance.21

• Test Program plan reviews—annually assess each contractor participating 

in the Test Program. The review includes determining how well the 

contractor is performing under the plan, including whether it met its goals 

for the year. However, these reviews do not result in an overall rating. 

• Contractors’ subcontract-performance reviews—assess all DOD 

contractor facilities with subcontracting plans, whether comprehensive or 

individual.22 In general, DCMA reviews the DOD contractors it is 

responsible for monitoring on an annual basis.23 The review assesses 

contractor policies and procedures, outreach activities, record keeping 

and reporting procedures, training that contractor personnel received to 

 21 These are often referred to as “640 Reviews” because of the form used. 

22 For more discussion on DCMA’s reviews, see U.S. General Accounting Office. Small 

Business Subcontracting Report Validation Can be Improved, GAO-02-166R (Washington, 

D.C.: Dec. 13, 2001). 

23 DCMA officials said they review almost all of the contractors included in their reviews 

annually. 

DCMA Is Taking Steps 

to Improve Oversight 

of the Subcontracting 

Program 

DCMA Role Encompassed 

a Broad Range of 

Responsibilities 
Page 14 GAO-04-381 Contract Management 

implement their small business subcontracting program, and contractor 

performance on meeting small business goals. DCMA assigned ratings on a 

5-point scale from “outstanding” to “unsatisfactory.” DCMA small business 

specialists said that because the rating criteria were loosely defined, 

contractors could receive different ratings depending on the interpretation 

of the small business specialist. For example, in fiscal year 2001, one 

company’s performance received a “highly successful” rating even though 

it had not met any of its three long-standing small business goals24 for that 

period of the review. In fiscal year 2002, DCMA rated another company’s 

performance as “unacceptable” although it had demonstrated similar 

performance on its goals. 

DCMA’s new policy and guidance emphasizes the agency’s oversight 

function. In July 2003, DCMA published an updated policy for monitoring 

contractors’ small business subcontracting programs. While DCMA 

continues to conduct its reviews under its revised policy, it created more 

specific criteria for determining contractor performance. The criteria 

particularly emphasize contractors’ small business goal achievements and 

contractor accountability, including the contractors participating in the 

Test Program. For example, under DCMA’s new rating criteria, to receive a 

“highly successful” performance rating, the contractor must meet three 

long-standing small business goals and at least one of the newer goals (e.g. 

veteran-owned small business) as well as demonstrating significant 

success in other initiatives identified in its subcontracting plan. 

In September 2003, DCMA published a new procedural guide to assist 

DCMA Small Business Specialists in implementing the small business 

program. For example, the guidance provides factors, such as a 

contractor’s past performance, that should be considered when 

negotiating goals with Test Program participants. DCMA continues to 

assess the oversight of the Test Program and whether further changes 

need to be made. 

Other steps DCMA has taken that allow the more efficient use of its 

resources include establishing a risk-based approach to its reviews of 

contractors and limiting its training and outreach functions. The riskbased approach allows DCMA to skip a review of a contractor for 1 year if 

the contractor’s previous year’s rating was “outstanding,” there were no 

 24 DOD considers the long-standing small business goals to include the overall small 

business, small disadvantaged business, and woman-owned small business. 

DCMA Has Increased 

Focus on Oversight 
Page 15 GAO-04-381 Contract Management 

significant changes in their contracting activity, and there were no 

significant personnel changes affecting the contractor’s small business 

program. In addition, according to DCMA officials, DCMA is significantly 

limiting its training and outreach functions on the basis that other 

organizations, such as the Small Business Administration and 

Procurement Technical Assistance Centers,25 already provide these 

services. 

We could not determine the extent of subcontracting to firms performing 

outside the U.S. because of inconsistent reporting of subcontracting 

activities by contractors and poor database management by DOD. 

According to the contractors in our review, most subcontracts to firms 

performing outside the U.S. accounted for a small percentage of their total 

subcontract dollars. Further, the contractors stated that most of the 

dollars to firms performing outside the U.S. were awarded on a 

noncompetitive basis. These contractors reported several reasons for 

awarding subcontracts to firms performing outside the U.S in fiscal year 

2002. 

We could not assess the full extent that defense contractors’ subcontract 

with firms performing outside the U.S. In November 1998, we reported that 

DOD’s Office of Program Acquisition and International Contracting did not 

have safeguards for ensuring the completeness and accuracy of its 

database of subcontracts to firms performing outside the U.S.26 At that 

time, we found instances in which DOD contractors did not report their 

subcontracts to firms performing outside the U.S. in accordance with 

DOD’s reporting requirements because they were unaware of the reporting 

requirements or misunderstood the criteria for reporting this type of 

subcontract. Plus, we identified that DOD lacked standards and 

procedures for managing this database. 

In October 2003, during our review, the Director of Defense Procurement 

and Acquisition Policy—through the Office of Program Acquisition and 

 25 States, colleges and universities, tribal organizations, and non-profit organizations under 

contract with DOD typically run these centers. They are to provide assistance in 

contracting with federal, state, and local governments. 

26 U.S. General Accounting Office, Defense Trade: Weaknesses Exist in DOD Foreign 

Subcontract Data, GAO/NSIAD-99-8 (Washington, D.C.: Nov. 1998). 

Extent of 

Subcontracting 

Activity with Firms 

Performing Outside 

U.S. Is Unknown, and 

Reasons for 

Subcontracting Varied 

Concerns Remain about 

Reliability of Data on 

Subcontracts Performed 

Outside U.S. 
Page 16 GAO-04-381 Contract Management 

International Contracting—began to take the following actions to address 

contractor compliance 

• sent letters to the top 100 parent companies of DOD contractors to remind 

them about DOD reporting requirements for subcontracts to firms 

performing outside the U.S. and requested they ensure all their 

subsidiaries also comply with this reporting requirement, 

• sent a memorandum to the Senior Acquisition Executives of the Military 

Department and the Defense Agencies requesting they remind their 

contracting officers of the reporting requirement, 

• engaged in outreach efforts with government and industry personnel to 

help ensure this effort to improve contractor compliance was fully 

communicated, 

• sent a memorandum to DCMA requesting its assistance in periodically 

verifying that contractors are complying with the reporting requirements, 

and 

• clarified reporting requirements for subcontracts to firms performing 

outside the U.S. 

The Office of Program Acquisition and International Contracting intends 

to perform periodic verification of reporting of subcontracts to firms 

performing outside the U.S. and is in the process of establishing those 

procedures. Because no action had been taken to improve data reliability 

until recently, we could not rely on the data available to determine the 

extent that DOD contractors were subcontracting with firms outside the 

U.S. 

Contractors at four of the five locations we visited spent between 

approximately 2 and 6 percent of their total DOD subcontracting dollars in 

fiscal year 2002 on subcontracts to firms performing outside the U.S.27 The 

fifth contractor subcontracted about 18 percent of its subcontracting 

dollars with firms performing outside the U.S. in fiscal year 2002 due to a 

teaming arrangement for a large defense contract it was awarded. 

According to a contractor official, this percentage would more typically be 

around 10 percent. At the five contractor locations, the total subcontract 

 27 The five contractor locations we visited are: Raytheon Company, Space and Airborne 

Systems, El Segundo, Calif.; The Boeing Company, Integrated Defense Systems, El 

Segundo, Calif.; Northrop Grumman Corp., Air Combat Systems, El Segundo, Calif.; 

Northrop Grumman Corp., Space and Technology (formerly TRW Space and Electronics), 

Redondo Beach, Calif.; and Lockheed Martin Aeronautics Company, Ft. Worth, Tex. 

Contractors Report 

Awarding a Small 

Percentage of Subcontract 

Dollars to Firms 

Performing Outside the 

U.S. 
Page 17 GAO-04-381 Contract Management 

dollars to firms performing outside the U.S. ranged between 

approximately $29 million and $1.9 billion in fiscal year 2002. These 

subcontracts were for items such as parts for military systems, 

communication equipment for satellites, components for military aircraft, 

and sensors for satellite weather forecasting. 

While one contractor reported awarding most of its subcontract dollars to 

firms performing outside the U.S. on a competitive basis in fiscal year 

2002, four contractors reported awarding the majority of their subcontract 

dollars non-competitively. Consequently, small businesses generally did 

not have the opportunity to compete for these types of subcontracts. 

Contractor officials said that even when their subcontracts with firms 

performing outside the U.S. were competed, they were not necessarily for 

the type of products that small businesses had the expertise or technology 

to provide. For example, one contractor competitively awarded a contract 

for an amplifier used in communication equipment to a firm outside the 

U.S. The contractor did not identify or solicit small businesses in the 

competition because of the unique technology and expertise required for 

that particular amplifier. 

Contractor officials said the reasons for the awards to firms performing 

outside the U.S. in fiscal year 2002 include: 

• Directed source—Contractor officials stated some subcontracts were 

awarded to companies outside the U.S. because DOD directed them to 

subcontract with a certain supplier. For example, a prime contractor was 

directed by DOD to award a subcontract to a company outside the U.S. to 

produce a sensor for a weather forecasting satellite because the company 

previously had a contract directly with the U.S. Government. 

• Offset agreements28—The contractors said that to sell military goods and 

services to other countries, they often have to form agreements with 

foreign countries that necessitate subcontracting with foreign firms to 

some degree. For example, one U.S. prime contractor awarded a 

subcontract to a firm in a foreign country because a prior offset agreement 

required the contractor to purchase about $1 billion in goods and services 

from firms in that country. The $32.3 million subcontract was for a 

 28 An agreement between a U.S. supplier of defense articles or services and a foreign 

country under which the supplier agrees to purchase goods and services of the foreign 

country in consideration for the country’s purchase of the supplier’s defense articles or 

services. 22 U.S.C. 2776(e)(1). 

Subcontracts Awarded for 

Various Reasons 
Page 18 GAO-04-381 Contract Management 

structural frame for the troop ramp and an air deflector for the C-17 

transport aircraft. 

• International agreements—Sometimes subcontracts are awarded to 

companies outside the U.S. because of international agreements between 

the U.S. and foreign countries. For instance, a contractor awarded a series 

of subcontracts to firms performing outside the U.S. based on an 

international agreement in which a 13-nation consortium contributed to 

the development of components for a missile to be used by these nations.29

Some of the components produced by the various countries included 

control systems, rocket motors, and guidance systems. 

• Team Arrangements—This is an arrangement where two or more 

contractors form a partnership or joint venture to act as a potential prime 

contractor or a potential prime contractor agrees with one or more other 

contractors to have them act as its subcontractors under a specified 

Government contract or acquisition program.30 

• Product specialization—Contractor officials said it was very expensive 

to develop and change suppliers of specialized parts; therefore, DOD 

contractors typically continue to award contracts to the same supplier that 

originally supplied the products. That supplier may be located outside the 

U.S. For instance, one contractor awarded a subcontract to such a 

supplier because it was the only one that had a specification drawing for 

the production of pedestals for a radar system. In another case, a DOD 

contractor awarded a subcontract to a company outside the U.S. because 

it was the only supplier that already had the tools and the expertise to 

manufacture and produce a horizontal stabilizer for the F-5 aircraft. 

Because of its large contracting operations, DOD is critical to the success 

of federal programs designed to provide opportunities for small 

businesses. DOD has recognized the importance of its role in federal 

contracting; has taken limited steps to help improve opportunities for 

small businesses, such as the Test Program; and has revised DCMA 

guidance to hold contractors more accountable for their small business 

goals. However, after 12 years of implementing the Test Program, DOD 

does not know whether these initiatives are effective. While DOD has 

collected data over the years, it has not established metrics to evaluate the 

effectiveness of the Test Program. As a result, there is no systematic way 

 29According to a contractor official at this firm, the number of countries involved in the 

program can change from year to year depending on various circumstances. In fiscal year 

2002, 10 countries, including the U.S., were in the program. 

30 For additional information on contractor team arrangements, see FAR 9.6. 

Conclusions 
Page 19 GAO-04-381 Contract Management 

of determining whether the program is meeting its intended objectives and 

whether further changes need to be made. 

In addition, the reliability of the data submitted by contractors on their 

subcontracts to firms performing outside the U.S. remains a concern. DOD 

has only recently started to take action on improving its data collection 

and has yet to establish procedures for validating the information. Without 

accurate and complete information on subcontracts to firms performing 

outside the U.S., DOD cannot make informed decisions on industrial base 

issues. 

We are making the following two recommendations to the Secretary of 

Defense: 

In order to evaluate the effectiveness of the Test Program, we recommend 

the Secretary of Defense direct the Office of the Under Secretary of 

Defense, Office of Small and Disadvantage Business Utilization, to develop 

metrics to assess the overall results of its Test Program. 

Also, to ensure DOD has the information it needs to accurately determine 

the number and dollar amount of subcontracts to firms performing outside 

the U.S., we recommend the Secretary of Defense direct DOD’s Office of 

Program Acquisition and International Contracting to establish procedures 

to improve the quality of the information in its database of subcontracts 

performed outside the U.S. 

DOD provided us with written comments on a draft of this report. DOD 

concurred with our findings and recommendations and noted some 

additional actions it took or is taking to address our recommendations. We 

incorporated these actions in this report where appropriate. DOD’s 

comments appear in appendix III. 

As requested by your office, unless you publicly announce the contents of 

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

the date of this letter. 

At that point, copies of this report will be sent to interested congressional 

committees and the Secretary of Defense. We will also make copies 

available to others upon request. In addition, the report will be available at 

no charge on the GAO Web site at http://www.gao.gov. 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 
Page 20 GAO-04-381 Contract Management 

Please contact me at (202) 512-4841, or Hilary Sullivan at (214) 777-5652, if 

you have any questions regarding this report. Major contributors to this 

report were Vijay Barnabas, David Bennett, Frederick Day, Michael Gorin, 

Gary Middleton, Pauline Reaves, Sylvia Schatz, and Suzanne Sterling. 

David E. Cooper 

Director 

Acquisition and Sourcing Management 
Appendix I: Scope and Methodology 

Page 21 GAO-04-381 Contract Management 

To determine DOD’s assessment of the Test Program’s effectiveness, we 

reviewed legislation, regulations, directives, and policies regarding this 

program. We also reviewed a July 2002 study conducted by LMI for DOD 

that looked at the overall results of the Test Program. In addition, we met 

with officials at DCMA headquarters, district, and field locations as well as 

officials at selected contractor locations to discuss their views on the 

advantages and disadvantages of the Test Program. 

To determine the performance of contractors participating in the Test 

Program, we collected data on the 15 DOD contractors (i.e., parent 

companies or their subsidiaries) participating in the Test Program. More 

specifically, we obtained 5 years of small business goal and performance 

data, fiscal years 1999 to 2003, on the extent that the contractors were 

meeting their small business goals from DCMA headquarters and district 

officials as well as contractor officials. The contractors in the Test 

Program as of fiscal year 2003 are the following 

• The Boeing Company; 

• General Electric Aircraft Engines; 

• Harris Corporation, Government Communications Systems Division; 

• Lockheed Martin Aeronautics Company; 

• Lockheed Martin Simulation, Training & Support (formerly 

Information Systems); 

• Lockheed Martin Missiles & Fire Control; 

• Lockheed Martin Space Systems Company; 

• Northrop Grumman Air Combat Systems; 

• Northrop Grumman Electronic Systems and Sensors; 

• Raytheon Company; 

• Textron Systems, a Textron Company; 

• Bell Helicopter Textron Inc.; 

• United Technologies Corp, Hamilton Sundstrand Division; 

• United Technologies Corp, Pratt & Whitney Government Division; and 

• United Technologies Corp, Sikorsky Aircraft Division. 

To determine DCMA’s oversight of contractors’ small business 

subcontracting efforts, we met with officials at DCMA headquarters, 

district, and field locations as well as officials at selected contractor 

locations to identify and discuss DCMA’s role. We also gathered 

information on updated policy and guides for monitoring contractors’ 

small business subcontracting programs and new criteria for rating 

contractor performance. We limited our review of internal controls to 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 22 GAO-04-381 Contract Management 

reviewing DCMA’s plans, methods, and procedures used to meet its small 

business subcontracting program mission, goals, and objectives. 

To determine the reasons and extent contractors are subcontracting with 

businesses performing outside the U.S.1

 we identified the contractors’ 

rationale with officials at the five selected contractor locations. We also 

gathered information for the most current year that data was available, 

fiscal year 2002, from contractor officials at same five locations. We did 

not independently verify this data. In addition, we reviewed the steps DOD 

had taken to address past database deficiencies and discussed recent 

changes at DOD’s Office of Program Acquisition and International 

Contracting on their management of the database of subcontracts 

performed by contractors outside the U.S. 

We conducted our review between March 2003 and March 2004 in 

accordance with generally accepted government auditing standards. 

 1

 DOD collects data about businesses performing work outside the U.S. but does not 

request information if the business is domestic or foreign-owned. 
Appendix II: Small Business Concern 

Categories 

Page 23 GAO-04-381 Contract Management 

Program Description 

Small business concern A small business concern is one that is independently owned and operated and is not 

dominant in its field of operation. 15 U.S.C. 632(a)(1). A small business concern is further 

defined as (1) a business entity that is organized for profit; (2) with a place of business 

located in the U.S.; and (3) which operates primarily within the U.S. or which makes a 

significant contribution to the U. S. economy through tax payments or use of American 

products, materials, or labor; and (4) meets the size standard for its primary business 

activity or industry as designated by the applicable North American Industry Classification 

System (NAICS) codes. 13 C.F.R. 121.101(a); 121.105(a); FAR 19.001. 

Small disadvantaged business concern A small disadvantaged business is a small business concern that is 51% or more owned 

by one or more socially and economically disadvantaged persons who manage and 

operate the concern. 15 U.S.C. 637(d)(3)(C). Black Americans, Hispanic Americans, Asian 

Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed 

by regulation to be socially disadvantaged. 13 C.F.R. 124.103(b). Other individuals can 

qualify if they show by a “preponderance of the evidence” that they are socially 

disadvantaged. 13 C.F.R. 124.103(c). A small disadvantaged must also (1) meet SBA’s 

established size standard for its main industry; and (2) have principals who have a net 

worth, excluding the value of the business and personal home, of less than $750,000. 13 

C.F.R. 124.1002(b) (c). 

Woman-owned small business concern A woman-owned business is a small business concern that is 51% owned by one or more 

women who manage and operate the concern. 15 U.S.C. 637(d)(3)(D); FAR 2.101. 

Veteran-owned small business concern A veteran-owned business is a small business concern that is 51% owned by one or more 

veterans who manage and operate the concern. 15 U.S.C. 637(d)(3)(E); FAR 2.101. 

Service-disabled veteran-owned small 

business concern 

A service-disabled veteran-owned business is a small business concern that is 51% 

owned by one or more service-disabled veterans who manage and operate the concern. 

15 U.S.C. 632(q)(2); FAR 2.101. 

HUBZone small business concern A HUBZone is a small business concern that (1) meets SBA’s size standards for its 

primary industry classification; (2) is owned and controlled by one or more U.S. citizens; 

(2) has a principal office located in a HUBZone (a historically underutilized business zone, 

which is in an area located within one or more qualified census tracts, qualified nonmetropolitan counties, or lands within the external boundaries of an Indian reservation); 

and (3) has at least 35 percent of its employees residing in a HUBZone. 15 U.S.C. 

632(p)(3) (5); 13 C.F.R. 126.103; 126.203. 

Historically black college or university A historically black college or university means an institution determined by the Secretary 

of Education to meet the requirements of 34 C.F.R. 608.2. FAR 2.101. 

Minority institution A minority institution is an institution of higher education whose enrollment of a single 

minority or a combination of minorities (American Indian, Alaskan Native, Black, and 

Hispanic—Mexican, Puerto Rican, Cuban, and Central or South American) exceeds 50 

percent of the total enrollment. FAR 2.101; 20 U.S.C. 1067k(2) (3). 

Source: GAO review of laws and regulations. 

Appendix II: Small Business Concern 

Categories 
Appendix III: Comments from the Department of Defense 

Page 24 GAO-04-381 Contract Management 

Appendix III: Comments from the 

Department of Defense 
Appendix III: Comments from the Department of Defense 

Page 25 GAO-04-381 Contract Management 

Note: Page numbers in the draft 

report may differ from those in 

this report. 
Appendix III: Comments from the Department of Defense 

Page 26 GAO-04-381 Contract Management 
Appendix III: Comments from the Department of Defense 

Page 27 GAO-04-381 Contract Management 
Appendix III: Comments from the Department of Defense 

Page 28 GAO-04-381 Contract Management 
Related GAO Products 

Page 29 GAO-04-381 Contract Management 

Joint Strike Fighter Acquisition: Cooperative Program Needs Greater 

Oversight to Ensure Goals Are Met. GAO-03-775. Washington D.C.: July 21, 

2003. 

Sourcing And Acquisition: Challenges Facing the Department of 

Defense. GAO-03-574T Washington D.C.: March 19, 2003. 

Small Business Contracting: Concerns About the Administration’s Plan 

to Address Contract Bundling Issues. GAO-03-559T. Washington D.C.: 

March 18, 2003. 

Small Business Administration: The Commercial Marketing 

Representative Role Needs to Be Strategically Planned and Assessed. 

GAO-03-54. Washington D.C.: November 1, 2002. 

Best Practices: Taking a Strategic Approach Could Improve DOD’s 

Acquisition of Services. GAO-02-230. Washington D.C.: January 18, 2002. 

Small Business Subcontracting Report Validation Can Be Improved. 

GAO-02-166R. Washington D.C.: December 13, 2001. 

Small Business: More Transparency Needed in Prime Contract Goal 

Program. GAO-01-551. Washington D.C.: August 1, 2001. 

Small Business: Status of Small Disadvantaged Business Certifications. 

GAO-01-273. Washington D.C.: January 19, 2001. 

Small Business: Trends in Federal Procurement in the 1990s. 

GAO-01-119. Washington D.C.: January 18, 2001. 

Defense Trade: Observations on Issues Concerning Offsets. GAO-01-278T. 

Washington D.C.: December 15, 2000. 

Defense Trade: Weaknesses Exist in DOD Foreign Subcontract Data. 

GAO/NSIAD-99-8. Washington D.C.: November 13, 1998. 

Related GAO Products 

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