Contract Management:

Proteges Value DOD's Mentor-Protege Program, but Annual Reporting to Congress Needs Improvement

GAO-07-151: Published: Jan 31, 2007. Publicly Released: Jan 31, 2007.

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Congress authorized the Mentor-Protege Program to boost the participation of small disadvantaged businesses as subcontractors and suppliers under Department of Defense (DOD) and other contracts. The program provides incentives to major defense contractors (mentors) to help small disadvantaged businesses (proteges) strengthen their ability to compete for contracts. GAO administered a Web-based survey to determine whether former proteges believe the program enhanced their business development; examined the accuracy of the Mentor-Protege Program Office's annual reporting to Congress; determined whether DOD reported on the progress of former proteges and their contributions to small business goals; and, identified how program funds have been obligated and used.

Most of the 48 former proteges that responded to GAO's questionnaire reported that the Mentor-Protege Program was a valuable experience and enhanced business development. Ninety-three percent of responding proteges reported the Mentor-Protege Program enhanced, at least to some degree, their firms' overall capabilities. While proteges also attributed increases in contracts and revenues as a result of their participation in the program, about one-quarter reported that the program had no impact on gaining new contracts or on increasing revenues. Although DOD's annual reports to the Congress indicate the program has increased business opportunities, the accuracy of these reports is questionable, primarily because the data are not validated before the reports are submitted to Congress. Specifically, each March DOD submits its annual report to Congress, based on mentor-prepared reports on protege progress, but the Defense Contract Management Agency does not complete its validation of the mentor-prepared reports until the following September. In addition, many of the validations are incomplete or not done at all. GAO could not measure the contribution of the Mentor-Protege Program to the statutory objective of awarding 5 percent of DOD's contracting dollars to small disadvantaged businesses. To do this, the progress of those proteges completing the program since the program's inception would need to be identified. This data is not available. Over the past 3 years, the majority of the Mentor-Protege Program's funds, which totaled about $70 million, were obligated to mentors. The mentors were reimbursed for the developmental assistance they provided to proteges either directly or indirectly. Defense Contract Management Agency reviews determined that the reimbursements received by mentors during fiscal years 2003 and 2004 were reasonable.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To better evaluate the success of the DOD Mentor-Protege Program and to improve annual reporting to Congress, the Secretary of Defense should direct the Defense Contract Management Agency (DCMA) to ensure that all Mentor-Protege agreements are audited in accordance with DOD regulations and DCMA guidance and that these audits are summarized into a single report so that the Mentor-Protege Program Office and Congress have reliable data on whether the program is accomplishing its goals and to determine whether any corrective action is necessary.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: In written comments, DOD concurred with our recommendations, stating that the implementation of a new Defense Contract Management Agency guidebook and revised reporting processes will address our recommendations. Initially, MP program officials told us that the reporting processes had not been fully implemented. Further, the program office told us that the Secretary of completing the annual agreement reviews, DCMA also completed follow-up reviews on proteges to comply with the two-year post Mentor-Protege agreement review requirement. The September 2009 DOD Mentor-Protege Program Annual Report to Congress summarized the validated results of DCMA's 2007 and 2008 annual review activities for ongoing and two-year post Mentor-Protege agreements, as GAO had recommended in its January 2007 report. The data validation and inclusion in annual reporting to the Congress should improve the accuracy of reported results, and provide the Congress with a more reliable assessment of the Mentor-Protege program and its impact on protege firms both during and after participation in the program.

    Recommendation: To better evaluate the success of the DOD Mentor-Protege Program and to improve annual reporting to Congress, the Secretary of Defense should direct direct DOD's Office of Small Business to submit its annual report to Congress only after the data in the report have been validated by DCMA and require that the annual report contain information on the progress of proteges for 2 years following their completion of the Mentor-Protege Program.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: In written comments, DOD concurred with our recommendations, stating that the implementation of a new Defense Contract Management Agency guidebook and revised reporting processes will address our recommendations. Initially, MP program officials told us that the reporting processes had not been fully implemented. Further, the program office told us that the Secretary of completing the annual agreement reviews, DCMA also completed follow-up reviews on proteges to comply with the two-year post Mentor-Protege agreement review requirement. The September 2009 DOD Mentor-Protege Program Annual Report to Congress summarized the validated results of DCMA's 2007 and 2008 annual review activities for ongoing and two-year post Mentor-Protege agreements, as GAO had recommended in its January 2007 report. The data validation and inclusion in annual reporting to the Congress should improve the accuracy of reported results, and provide the Congress with a more reliable assessment of the Mentor-Protege program and its impact on protege firms both during and after participation in the program.

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