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GAO Report Finds Agencies Stumbling on Sole-Source Justifications

gao reportAccording to a December 12 GAO Report, without the proper justification, Federal agencies awarded $2.3 Billion to small disadvantaged companies. Section 881 of the 2010 National Defense Authorization Act requires agencies to provide written justification for sole-source awards to 8(a) firms worth more than $20 million. The regulation was passed in April 2010 however it took until March 2011 to put the rules in place. This was due to the 180 days officials had to amend the Federal acquisition requirement.

According to the Office of Federal Procurement Policy, the holdup was due to the American Indian Tribes and Alaska Native Corporations. Fourteen large sole-source contracts were awarded, by five agencies, between the time the law was enacted and the new rules were put in place. Only three of the contracts complied with the new regulations. The United States Government Accountability Office (GAO) also looked into previous year’s data and noticed the sole-source award was dwindling for small businesses. In 2011, only 20 such contracts were awarded, while in 2010 50 contracts were awarded. According to Kevin Allis, Executive Director of the Native American Contractors Association (NACA), said the justification rule has drastically affected American Indian contractors in the Federal marketplace.

Federal government contracts cannot even meet the goal of awarding 23% of the contracts to small business, and are considering raising it to 25%. Now, Section 811 is making it even more difficult. Given the current economic situation the country is going through, we need to make it easier for small business to win the contracts and not harder. Only then can a true recovery start to happen.

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