DOD, Army Corps of Engineers falter on subcontracting metrics

As the Pentagon and the Army Corps of Engineers awarded money to Gulf Coast small businesses in the aftermath of Hurricanes Katrina and Rita in 2005, they failed to closely monitor whether contractors adhered to their subcontracting plans, according to the Government Accountability Office.

The Federal Acquisition Regulation requires contracting officials to check on how prime contractors are doling out their large contracts as planned, but officials with the Corps and the Defense Department could not show that they consistently scrutinized prime contractors, the Government Accountability Office concluded in its Aug. 17 report.

Subcontracting plans include a description of the types of work the prime contractor believes it’s likely to award to subcontractors and a percentage of total planned subcontracting dollars for small businesses.

The Corps and DOD were two of four agencies that awarded the most money in federal contracts for rebuilding efforts following Katrina and Rita—each a Category 5 storm and two of the strongest hurricanes ever recorded—both of which hit the coast in August and September of 2005. Gulf Coast small businesses directly received almost $2.9 billion in total federal contract funds awarded for recovery projects for Katrina and Rita between fiscal 2005 and 2009. But GAO could not get a complete picture of how much money was awarded to area small business via subcontracts.

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In performing a review of the plans, GAO found the Corps and DOD could not provide reports on contractors’ subcontracting accomplishments on 13 of 43 construction contacts that included plans.

However, Linda Oliver, DOD’s acting small business director, wrote that GAO auditors didn’t ask for paper copies of the documents about monitoring efforts after not finding them in the Electronic Subcontracting Reporting System. The Corps provided a number of paper copies of checkups on subcontracting plans afterward.

Even so, GAO reported that the Corps didn’t provide subcontracting accomplishment reports for 11 of its contracts and could not provide a reason for why information was unavailable for these contracts. In addition, DOD did not provide subcontracting information on 2 of the 14 construction contracts that GAO reviewed. DOD officials said that they could not find any paper or electronic subcontracting accomplishment reports after searching their retained records, according to GAO’s report.

GAO recommended officials ensure their contracting offices are checking subcontracting plans.