Summary

GAO evaluated the impact of the Small Business Administration (SBA) 8(a) program on the Department of Defense (DOD), which is the program's largest participant, to: (1) determine whether procurement activities received fair market prices, acceptable quality, and timely delivery of goods and services procured through the 8(a) program; (2) identify any negative impacts and their causes; and (3) develop program improvements which would minimize negative impacts while allowing SBA to accomplish the program's mission.

GAO found that adequate information was not available to determine the full cost of the 8(a) program, because of the difficulty that procurement activities face in arriving at fair market prices in the absence of competition and a well-documented procurement history. Because of impediments to matching agency requirements with appropriate contractors, some participants fail to meet delivery schedules or to perform required work. Although GAO could not measure the full impact of the 8(a) program on DOD procurement, GAO found that it can result in higher contract prices, lost progress payments, unproductive use of supply center procurement funds, supply shortages, and/or extensive administrative efforts.