In fiscal year 2014, DOD’s prime contractors subcontracted for $133 billion in goods and services to support DOD’s missions, of which $44 billion, or 33 percent, was awarded to small businesses. The Federal Acquisition Regulation (FAR) generally requires proposed prime contractors to have individual subcontracting plans in place for contracts (including modifications) of more than $650,000—or $1.5 million for construction contracts—whenever subcontracting opportunities exist. These plans are to document subcontracting goals as a specific dollar amount planned for small business awards and as a percentage of total available subcontracting dollars to various socioeconomic categories of small businesses. The plans also are to identify the types of products and services suitable for subcontracting awards. Under the authorizing statute, as implemented in regulation, each participant in the Test Program negotiates and reports on subcontracting goals and achievements for a specific fiscal year on a plant, division, or corporate-wide basis. A comprehensive plan may cover a large number of individual contracts. For example, one participant told us about a plan that covered more than 3,000 contracts that otherwise would require individual subcontracting plans. Reporting small business subcontracting activity in a comprehensive plan means that less data may be available on the subcontracting activities for specific contracts or programs. In addition, comprehensive subcontracting plans are to include various initiatives to enhance small business subcontracting opportunities through specific programs or other actions. According to a DOD official, these initiatives are not specific to any one contract, but can be completed across the entire scope of defense work the prime contractor performs. Table 1 highlights the key differences between the comprehensive subcontracting plans used in the Test Program and individual subcontracting plans. Current Test Program eligibility is limited by statute to defense contractors that performed at least three DOD prime contracts for supplies and services worth a combined value of at least $5 million during the preceding fiscal year. In addition, the contractor must have achieved a small disadvantaged business subcontracting participation rate of at least 5 percent during the preceding fiscal year. Participation in the Test Program is voluntary and, as shown in table 2, there are currently 12 participants. According to data in the Federal Procurement Data System—Next Generation, the federal government’s contract reporting system, 8 of these contractors are ranked among the top 10 U.S. defense contractors, based on contract dollars obligated in fiscal year 2014. According to DOD officials, the DOD Office of Small Business Programs (OSBP) is responsible for overseeing the Test Program, but delegates the management and oversight of comprehensive subcontracting plan annual negotiations and performance evaluation to the Defense Contract Management Agency (DCMA). DCMA is responsible for reviewing and approving Test Program participants’ proposed comprehensive subcontracting goals and initiatives to ensure that they are challenging yet realistic. DCMA is also responsible for reviewing the achievements of the participants at the end of the fiscal year and rating their performance. The Test Program does not have an overall measure for demonstrating success in creating small business subcontracting opportunities; instead, metrics are established for each individual participant. The performance of participants in the Test Program is measured by their achievement of negotiated goals and initiatives. Congress has extended the program eight times but has not made the program permanent in part because of a lack of data on program performance. The latest extension was in the National Defense Authorization Act for Fiscal Year 2015 in which Congress temporarily extended the Test Program to December 31, 2017, and made a number of amendments to the program. These amendments included, among other things: an increase in the eligibility requirements; additional reporting requirements on subcontracting activities and costs to increase visibility at the contract, program, and military department levels; and an additional consequence for failure to make good faith efforts to comply with the program. DOD commissioned reviews of the Test Program from two consulting groups in 2002, 2007, and 2013. These reviews examined the performance of Test Program participants against their goals and initiatives and whether administrative savings had been achieved. According to DOD officials, DOD has not released these reviews publicly or submitted them to the Congress. All of the reviews found that the program resulted in administrative costs savings and enhanced subcontracting opportunities for small businesses. Some in the small business community have publicly raised concerns about the Test Program. The primary concern is that the lack of data available to evaluate the program precludes a determination of the program’s effectiveness and impact on small businesses. Specifically, some small business advocates believe that more data are needed to evaluate whether the program has resulted in more awards in areas such as innovative technology research that traditionally have not been made available to small businesses. Prior DOD reviews estimated that use of the Test Program resulted in the avoidance of millions of dollars in administrative costs for both participants and DOD and may offer other benefits. Significant one-time administrative costs could result if the Test Program were canceled or allowed to expire and comprehensive subcontracting plans could no longer be used. Test Program participants and DOD officials we interviewed stated that the use of comprehensive subcontracting plans results in benefits other than administrative cost avoidance as well. However, DOD has not taken action to address the program’s status. DOD’s reviews estimated that the program resulted in millions of dollars in cost avoidance for the program’s participants. According to these reviews, cost avoidance is enabled primarily by the use of a single comprehensive subcontracting plan for multiple contracts rather than an individual subcontracting plan for each contract. Our examination of the methodologies and data used in these reviews, as well as our own analysis of more recent data on contracts covered by comprehensive subcontracting plans, support these conclusions. Table 3 shows the total estimated annual administrative costs avoided by the participants, according to the DOD reviews. Some of the Test Program participant officials we interviewed explained that they have not quantified their administrative cost avoidance under the program; however, they stated that savings likely accrued from negotiating a single plan for multiple contracts as opposed to individual plans. One participant official stated that utilizing comprehensive subcontracting plans also allows them to use fewer people for the administrative tasks of developing and monitoring subcontracting plans. Certain participants noted that the resources that would have gone to the development and administration of individual plans can be used instead for increased small business outreach activities such as more small business forums. Expansion of the Test Program from division-level to company-level could increase the cost avoidance for certain participants, but officials from one division-level participant we interviewed stated that the continued test status of the program served to inhibit that expansion. The 2007 DOD review also found the cost avoided by Test Program participants and DOD would increase substantially if more prime contractors used the program, but that this was unlikely due to their reluctance to enter the program because of its test status. In addition to the costs avoided by program participants, DOD also may benefit from avoiding administrative costs as a result of the Test Program. The 2007 DOD review found that DOD benefited from negotiating, administering, and monitoring consolidated small business subcontracting plans rather than multiple individual plans. For example, for fiscal year 2005, the review estimated that the administrative cost avoided by DOD under the Test Program was at least $45 million. Defense officials stated that additional participation in the Test Program by other prime contractors could increase the department’s cost avoidance, but stated that they are not considering new participants for the program due to its test status. DOD’s 2013 review noted that the program participants at that time had about 7,000 contracts and subcontracts that would require individual subcontracting plans if the Test Program did not exist. The estimated cost to convert the contracts to individual subcontracting plans if the Test Program were canceled or allowed to expire was $21.7 million. The review also noted that the combined cost for the participants to prepare, submit and negotiate their comprehensive subcontracting plans on an annual basis under the Test Program was approximately $660,000. In addition, most of the current participants have been in the Test Program for at least 10 years; two have been in the program since its inception 25 years ago. As a result, converting from comprehensive subcontracting plans to individual subcontracting plans may require participants to add personnel and change their current administrative systems. One participant noted that reverting to individual subcontracting plans would require an additional 44 employees to handle the additional administrative workload and an estimated $2 million in system changes. Our analysis of similar data supports these estimates. We analyzed data from DCMA for contracts that were active as of March 2015 for 6 of the 12 Test Program participants, including those with the largest number of contracts, and found a total of 3,299 contracts that would require individual subcontracting plans in the absence of the Test Program. Using estimates provided by DOD for the cost and number of hours required to develop an individual subcontracting plan, we determined that these six participants would need to spend between $6.3 million and $9.5 million to convert existing contracts to individual subcontracting plans. One participant we interviewed estimated that for fiscal year 2013, the cost to convert all of the contracts under the Test Program to individual plans would have been approximately $6.6 million. The cost to this participant to prepare, review, and negotiate its fiscal year 2013 comprehensive subcontracting plan was $159,000. As is the case with the Test Program participants, DOD would likely experience an increase in costs for negotiating, administering, and monitoring individual small business subcontracting plans if the program were to end. Defense officials noted that DOD would have to hire additional personnel in DCMA and the military services to manage the thousands of additional individual subcontracting plans. These personnel—which would include contracting officers, small business specialists, and cost analysts—all require specific levels of expertise and training depending on the cost and complexity of the contract. According to DOD officials, it would be challenging to provide the amount of resources required with the limited acquisition workforce DOD employs and available budgets for hiring new personnel. According to some of the Test Program participants we interviewed, the use of comprehensive subcontracting plans as opposed to individual subcontracting plans also provides additional non-monetary benefits.