Small Business: Status of SBA's 8(a) Minority Business Development Program

Pursuant to a congressional request, GAO discussed the Small Business Administration's (SBA) 8(a) business development program and the Department of Defense's (DOD) small disadvantaged business program. GAO noted that: (1) while SBA has improved certain aspects of the 8(a) program and increased the total value of new 8(a) contracts awarded, it has not yet implemented key changes mandated by Congress; (2) SBA contract dollars are still concentrated among a small percentage of firms; (3) of the 5,155 firms in the SBA program at the end of fiscal year (FY) 1994, about 56 percent did not receive any contracts during the year; (4) federal agencies direct sole-source contracts to firms they are familiar with to avoid competition thresholds; (5) SBA is requiring each of its district offices to develop specific initiatives to increase contracting opportunities for more 8(a) firms; and (6) SBA field offices are not conducting annual business plan reviews to ensure that they accurately reflect the firms' business development goals and non-8(a) contract needs. GAO also noted that DOD: (1) awarded $6.1 billion in prime contracts to small disadvantaged businesses in FY 1994 and about 18 percent of these contract dollars through small business set-asides; and (2) contracting officials prefer the 8(a) program because it allows them to select contractors they are familiar with.