DHS meets small-biz goals but needs to try harder

The Homeland Security Department needs to try harder to facilitate contracting opportunities for small, minority and disadvantaged firms, concluded a report from Homeland Security Committee Chairman Rep. Bennie Thompson (D-Miss.).

Although the department is meeting its small-business goals, Thompson criticized what he called long-standing double-counting practices in which a single business may be counted in more than one category or classification for purposes of federal recordkeeping.

"While the department has technically met its goals for small-, minority- and disadvantaged-business contracting, the means by which they've met these goals raises serious questions," Thompson wrote. "We cannot allow this numbers game to continue."

"Crediting a single procurement action to more than one contracting goal may create a misperception of the participation of small, minority and disadvantaged businesses," Thompson said.

In fiscal 2007, the department spent $12.2 billion on contracting, more than a third of its overall budget. Forty percent of total procurement dollars were obligated in the fourth quarter, a trend that increases the risk of fraud and abuse, according to the report developed by Thompson's committee staff.

Departmentwide, the top 10 firms in each of the small business categories received a majority of the money in that category. Alaska native corporations received at least 28.3 percent of the money spent on contracts with 8(a) firms.

The 21-page report makes four recommendations:

• The secretary of Homeland Security should fix weaknesses in small-, minority- and disadvantaged-business contracting.
  
• The secretary should end the concentration of procurement actions in the fourth quarter of the fiscal year.
  
• The secretary should determine how Alaska native corporations might be limiting the opportunities of other 8(a) firms.
  
• GAO should be asked to determine the impact of double-counting on the attainment of DHS small-, minority- and disadvantaged-business goals.