Summary

In response to a congressional request, GAO reviewed the Small Business Administration's (SBA) 8(a) Procurement Program to: (1) provide a statistical overview of the program's participants; (2) assess the extent of concentration of 8(a) activity; (3) determine whether SBA prepared graduating firms for the competitive market; (4) determine the adequacy of SBA program administration and monitoring; (5) ascertain whether program participants consistently met contract terms and conditions; and (6) determine the impact of the program on other small businesses.

GAO found that: (1) from 1968 through 1987, about 1,287 firms graduated from the SBA 8(a) program; (2) 72 percent of the firms were in the program 5 years or less; (3) 50 firms received about $1.1 billion, or 35 percent, of the 8(a) contracts awarded in 1987; (4) the program has not been effective in assisting firms to be self-sufficient, since most firms were heavily dependent on 8(a) sales; (5) SBA did not fully comply with its requirements for helping firms to develop their non-8(a) business because of inadequate staff; (6) most 8(a) contractors met contract delivery dates and delivered services or products that exceeded quality specifications; (7) the $3 billion annual expenditure on 8(a) procurements represented less then 2 percent of the federal government's total procurement; and (8) it was unable to determine the impact of the program on non-8(a) firms.