Audit of Department of Defense Small Business Subcontracting Requirements

Rec. A.1.a.1: The DoD OIG recommended that the Director of the DoD Office of Small Business Programs, in coordination with Defense Pricing and Contracting issue supplemental guidance to increase contracting personnel understanding of Federal Acquisition Regulation requirements related to determining small business prime contractor compliance with subcontracting limitations. The guidance should include, at a minimum, contracting personnel responsibilities for identifying subcontractors, monitoring the amounts small business prime contractors pay to subcontractors, and determining prime contractor compliance with limitations. In addition, guidance should require maintaining a list of subcontractors and any documentation to support compliance in the official contract file, in order to assist in transferring subcontractor information when a contract is assigned from one contracting officer to another. Furthermore, the guidance should require contracting personnel to report instances of non-compliance with subcontracting limitations in the contractor's performance information.