GAO: $2.3 billion in 8(a) contracts awarded without justification

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The federal government awarded more than $2.3 billion in sole-source contracts to 8(a) companies in fiscal year 2010 without the proper justifications thanks to a lag in updating the federal acquisition regulation, the Government Accountability Office said in a new report.

The National Defense Authorization Act for fiscal year 2010 required that the FAR be amended within 180 days after enactment to require justifications for 8(a) sole-source contracts over $20 million.

The FAR Council, which updates the FAR, missed the mandatory deadline by almost 325 days. During this delay, based on data in the Federal Procurement Data System-Next Generation, 42 sole-source 8(a) contracts with reported values over $20 million, totaling over $2.3 billion, were awarded without being subject to a justification.

GAO recommended that the Office of Federal Procurement Police issue guidance to clarify the circumstances in which an 8(a) justification is required. GAO also recommended that the General Services Administration, which operates FPDS-NG, implement controls in FPDS-NG to help ensure that contract values are accurately recorded, and that the Small Business Administration take steps to ensure that its staff confirm the presence of justifications.

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