Small business subcontracting reported by Department of
Energy facility management contractors is overstated,
according to a new Government Accountability Office report.
It said increased contractor oversight could give small
businesses a better opportunity to compete for the $20
billion the department pays to 34 contractors annually
for facility management – about $3.3 was reportedly
passed to subcontractors in fiscal 2004.
Small business subcontracting is reported as a percentage
of total subcontracted dollars, but according to
GAO-05-459, contractors excluded more subcontracts with
large businesses than allowed under federal reporting
guidelines, making the small business percentage appear
larger than it actually is.
“If these subcontracts had been included, some contractors
said it was likely they would have requested lower goals,”
said the report.
It said another way a small business subcontracting
percentage could appear “misleadingly large” is if a
contractor channels just a small portion of its contract
to a few small businesses.
“DoE has not taken adequate steps to address known
problems with the contractor-reported data,” said GAO,
adding the department needs more clearly defined roles,
responsibilities and “needed interaction of the various
headquarters and field organizations” that oversee
subcontracting efforts.
The report said Energy officials knew contractors weren’t
following federal guidelines to develop subcontracting
goals in 2002, and that additional guidance issued by
the department’s small business office has had little
effect, prompting the department to issue further
guidance in March 2005 – though it’s too early to tell
if it will be followed.
