Subsequently, the federal government established a program to  certify SDBs as eligible for preferences when being considered for federal  prime and subcontracting opportunities. More Than 9,000 Firms Certified, More Than Two-Thirds From Existing 8(A) Certifications

As of August 24, 2000, according to SBA officials, 9,034 small business firms  were certified as SDBs. The remaining 2,629, or 29 percent,  were small business firms that applied to the program and were certified by  SBA. Table 1  shows the composition of the SDB certifications. Table 2  shows the status of the applications submitted to SBA by small business  concerns for SDB certification. Officials Identify Uncertainty About the Program, Costs, Benefits, and Qualifications as Factors for Low Number of Applications

The number of SDBs that have been certified through the SDBC program is  significantly lower than the 30,000 projected by SBA, based on the number  of firms that had self-certified as SDBs. Officials gave different  reasons for this view. Finally, an SBA official we interviewed pointed out that, in some cases,  firms that had previously self-certified as SDBs might not currently qualify  for SDB status. Scope and Methodology

To determine the number of businesses that SBA had certified as socially  and economically disadvantaged since the implementation of the SDBC  program, we met with and obtained information from SBA and reviewed  data contained in the SBA Pro-Net database. Also, we sent letters to 30  representatives from federal agencies' Office of Small Disadvantaged  Business Utilization requesting their view on reason for the lower-than- expected SDB certifications.
What GAO Found

The federal government has an annual, governmentwide procurement goal of at least five percent for small disadvantaged businesses (SDB). SDBs are eligible for various price and evaluation benefits when being considered for federal contract awards. SDB firms must have their SDB status certified by the Small Business Administration (SBA). Because of concerns over reports that fewer businesses were receiving SDB certification than expected, GAO examined the SBA certification processes to (1) determine the number of businesses that SBA had certified as socially and economically disadvantaged since the implementation of the Small Disadvantaged Business Certification program and (2) obtain views on reasons for the current difference in the number of SDB certifications from the number that had previously self-certified as SDBs. SBA records show that 9,034 small business firms were certified as SDBs as of August 24, 2000. According to SDB officials, 6,405 of these were automatically certified because of their 8(a) certification. The number of SDBs that have been certified by SBA is significantly lower than the 30,000 projected by SBA based on the number of firms that had self-certified as SDBs. Possible reasons for this discrepancy include (1) company reluctance to participate because of their uncertainty as to when or how the program would be implemented, (2) the perception by businesses that the application process is burdensome, and (3) the belief by some companies that the benefits do not justify the effort.