Government Contracts Monitor

Short Take: Contracting Officers (Still) Not Monitoring 8(a) Compliance with Subcontracting Limitations

October 21, 2014

By: Eric Whytsell

A September 16, 2014 Government Accountability Office (GAO) (GAO-14-706) concluded that contracting officers (COs) are not properly monitoring subcontracting by 8(a) prime contractors to ensure compliance with applicable subcontracting limitations. Indeed, only two of the COs associated with the 10 contracts GAO reviewed had asked for and reviewed necessary information and made certain that the subcontracting limitations were not exceeded. The other COs, however, neither monitored 8(a) subcontracting nor were they fully aware of what they were required to do in this regard.

Unfortunately, the findings echo those in similar reports issued in April 2006 and January 2012, suggesting that little has changed over the past eight years. The GAO blamed the ongoing problem in part on the fact that the COs’ monitoring responsibilities are outlined in agency agreements with the Small Business Administration rather than being set forth in the Federal Acquisition Regulation (FAR), which serves as the COs’ primary source of information about federal procurement policies. This is particularly troubling given last year’s statutory changes to the subcontracting limitations that apply to all small business primes (described in a previous post here) – changes that have still not made it into the FAR.

In response, the GAO recommends that the Office of Federal Procurement Policy (OFPP) Administrator take the appropriate steps to amend the FAR to: (1) set out COs' responsibilities for monitoring 8(a) subcontracting limits; and (2) require 8(a) contractors to regularly report on the amount of their subcontracted work. OFPP has agreed with GAO's recommendations, so COs and 8(a) contractors should expect to see the recommended regulatory changes in the (relatively) near future. We will monitor and report on developments as they unfold.

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