When the President declares a state of emergency after a natural or other major disaster, the declaration gives the federal government the authority to engage in various emergency response activities, many of which the agencies provide through contracts with private businesses. Such activities include, among other things, debris removal, temporary housing assistance, reconstruction, and the provision of supplies. These contracts are subject to federal procurement regulations. 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.” In addition, a business must meet the size standards published by SBA to be considered “small”; these standards use businesses’ annual revenue or their number of employees as criteria for determining size. 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. The Small Business Administration (SBA) is responsible for reporting annually to the President and Congress on agencies’ achievements relative to the goals. Because some agencies’ activities lend themselves to contracting opportunities more than others, SBA negotiates goals in annual procurement with federal executive agencies to achieve the 23 percent governmentwide goal for contract dollars awarded directly by a federal agency. As a result, some agencies have goals higher than 23 percent, while others may have goals that are lower than or just at 23 percent. For example, the agencies we reviewed had different goals for awarding contract dollars directly to small businesses in fiscal years 2005 and 2006. DHS’s goals were 23 and 30 percent for 2005 and 2006, respectively. GSA’s goals were 43 and 45 percent, respectively, and DOD’s (including the Corps) goal was 23 percent for both years. The Small Business Act also sets annual prime contract dollar goals for participation by five specific types of small businesses: small businesses (23 percent); small disadvantaged businesses (5 percent); women-owned or service-disabled, veteran-owned, (5 and 3 percent, respectively); and businesses located in historically underutilized business zones (HUBZones, 3 percent). The Small Business Act defines these businesses as follows: Small businesses are those that are independently owned and operated, and are not dominant in their field of operations. Small disadvantaged businesses must be owned and controlled by socially and economically disadvantaged individuals, such as African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, or Native Americans. These owners must have at least a 51 percent stake in the business. Women-owned small businesses must have at least 51 percent female ownership. For publicly owned businesses, one or more women must hold at least 51 percent of the stock and control both management and daily business operations. Service-disabled, veteran-owned small businesses must be owned—also at least 51 percent—by one or more veterans with a service-related disability. In addition, the management and daily operations of the business must be controlled by one or more veterans with a service-related disability. HUBZone small businesses must have their principal offices physically located in these historically underutilized business zones, which 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 these zones. Finally, the Stafford Act sets forth requirements for the federal response to presidentially declared disasters. It 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. The general rules governing procurement for executive agencies are set out in federal procurement statutes and in the Federal Acquisition Regulation (FAR). Individual agencies may also have additional acquisition regulations to supplement the FAR. The FAR requires agencies to measure small business participation in their acquisition programs. A small business may participate via contracts that are awarded directly by a federal agency or through subcontracts with the businesses that receive contracts directly from a federal agency. Any business receiving a contract directly from a federal executive agency for more than the simplified acquisition threshold must agree to give small business the “maximum practicable opportunity” to participate in the contract “consistent with its efficient performance.” 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. The subcontracting plan must identify the types of work the prime contractor believes it is likely to award as subcontracts as well as 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. For contracts that have individual subcontracting plans, prime contractors must semiannually and at project completion report on their progress toward reaching the goals in their subcontracting plans. Contractors that meet or exceed their goals may receive monetary incentives if the contract included such incentives. Contractors that fail to meet their subcontracting goals may be assessed damages if the contracting officer for the contract (i.e., the agency official responsible for awarding and monitoring the contract) determines that the contractor failed to make a good-faith effort to comply with a subcontracting plan. 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. 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. The Disadvantaged Business Enterprise Program (DBE Program) of DOT was enacted to help ensure nondiscrimination in the award and administration of DOT-assisted contracts in the department’s highway, transit, and airport financial assistance programs. State DOTs, transit authorities, and airports receiving DOT funding for transportation projects are to have a goal-oriented program for small businesses owned and controlled by socially and economically disadvantaged individuals to participate on DOT-assisted contracts. The objectives of the DBE Program are to ensure that these businesses have an equitable opportunity to participate in contracts awarded by the recipients of DOT financial assistance, and that they receive a share of the resulting contract awards. Within DOT, the three major operating administrations—FHWA, FAA, and the Federal Transit Administration (FTA)—oversee the DBE Program. DOT requires that the state and local transportation agencies and airports that receive its funds set two kinds of goals for DBE participation: (1) annual goals for the percentage of dollars that DBEs would be expected to receive through contract and subcontract awards of all DOT-assisted contracts for the year absent the effects of discrimination and (2) when appropriate and as needed to meet the annual goal for the year, contract- specific goals for DBE participation as subcontractors on prime contracts that have subcontracting possibilities. According to DOT officials, there were no overall DBE goals set for Katrina-related contracts as a whole. DOT also requires that the state and local agencies certify the eligibility of the DBE firms participating in DOT-assisted contracts through on-site visits, personal interviews, and reviews of business licenses and stock ownership. The purpose of certification is to ensure that the firms that state and local agencies certify as DBEs are owned and controlled by individuals who are socially and economically disadvantaged as the statute and implementing regulations define those terms. SBA’s Small Disadvantaged Business Program (SDB) and DOT’s DBE Program share many common certification requirements. According to DOT officials, a memorandum of understanding (MOU) is presently under consideration for renewal that establishes processes and procedures to streamline the certification of firms certified under DOT rules in SBA programs and participation of firms certified under SBA rules in DOT programs. Overall, 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. These four agencies awarded about $3 billion of their Katrina-related contracting dollars directly to small businesses and over $8 billion to large businesses between August 1, 2005, and June 30, 2006 (fig. 1). 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. While small businesses received 28 percent of the funds that DHS, GSA, DOD, and the Corps awarded, they received 55 percent of contract actions for activities related to Hurricane Katrina, awarded directly by these agencies (fig. 2). Individually, the agencies awarded from 41 to 68 percent of their contract actions to small businesses, with DHS awarding the lowest percentage and GSA awarding the highest. In relation to Hurricane Katrina, small businesses have received contracts directly from the four agencies to provide a variety of products, such as trailers and sewage treatment equipment, and services, such as construction, data entry, and housing.