GAO raps COMMITS contract

GAO briefing on Commerce Information Technology Solutions Next Generation contract

The Commerce Department's Commerce Information Technology Solutions Next Generation (COMMITS NexGen) contract structure allows companies to outgrow their small-business status while still earning small-business work, the Government Accountability Office has found.

In a briefing issued today, GAO wrote that "many of the 55 COMMITS NexGen contractors have grown significantly or have been acquired by larger businesses" since the contract was first awarded. In addition, GAO found, a significant number of task orders intended for smaller businesses instead went to larger ones.

COMMITS NexGen was hailed early on for its tiered structure, still unique among governmentwide acquisition contracts. Although it was open only to small businesses, it divided those businesses into three tiers, allowing the smallest of the small businesses to compete without fear of much larger small businesses vying for the same contracts.

However, the contract does allow incumbent contractors to compete to keep task orders they already have, even if the task orders would normally be open only to companies in the smaller tiers. In addition, a company that first won a task order under a different contract is counted as an incumbent under COMMITS NexGen.

COMMITS does not include applicable North American Industry Classification System codes on task orders. The NAICS codes determine the criteria by which a company is considered small in the Small Business Administration system. For example, Internet service providers are small if they have no more than $23 million in annual revenues, while telecommunications resellers are small if they have 1,500 or fewer employees.

By not specifying NAICS codes on task orders, the COMMITS program does not verify that contractors meet a particular size standard for a given task order, opening the possibility that COMMITS may be overstating small-business contracting requirements.

Finally, Commerce has not fully implemented measures for assessing the program’s performance.

GAO found that 16 of the 55 contractors no longer meet the size standards for their designated tiers, and eight are no longer qualified for any of the three tiers. Six of the contractors have been acquired by or merged with large companies without having to recertify their size on the contract.

COMMITS officials said they will begin collecting performance data later this year, and SBA has proposed regulations that would address the size-status concerns. Therefore, GAO chose to make no recommendations in its briefing.