The program is implemented by CMRs, who promote small business subcontracting in two primary ways, as described in SBA regulations.First, CMRs review prime contractors’ compliance with the requirements of their subcontracting plans. Second, CMRs conduct various marketing activities, such as marketing small businesses to prime contractors or matching certain types of small business subcontractors with prime contractors. In addition, workloads and prime contractor coverage vary greatly between CMRs. SBA officials and CMRs have several concerns about the CMR role. At the end of fiscal year 2001, about 90 percent of the CMRs had other substantial responsibilities in addition to their CMR duties. Shift from On-Site to Desk Reviews

CMRs use desk reviews far more frequently than on-site reviews to monitor prime contractors’ compliance with subcontracting plans. With downsizing and retirements taking place and no staff assigned to replace lost personnel, the number of CMR FTEs declined significantly and resulted in workload imbalances across and even within SBA’s Area Offices. Travel fund reductions have meant fewer on-site visits and greater reliance on desk reviews. Without such a plan, SBA implemented ad hoc measures to deal piecemeal with resource declines. Conclusions

Subcontracting on federal contracts is a large and growing marketplace for small businesses. CMRs have been long considered to be key to fostering small business participation in such subcontracting. Unless steps are taken to better assess, evaluate, and plan for the future of the CMR role, SBA will continue to lack an understanding of CMR contributions to small business subcontracting. Recommendations for Executive Action

We recommend that the Administrator of SBA assess, evaluate, and plan the CMR role, including addressing such issues as the impact of assigning multiple roles to CMRs, the appropriate CMR role focus, the effectiveness of compliance- monitoring methods, and the impact of uneven CMR workloads and prime contractor coverage;  develop specific outcome and impact measures for CMRs’ clearly communicate the strategic plan and expectations for the CMR role to both SBA staff and small businesses. Four staff that work 80 percent of their time as Commercial Marketing Representatives (CMRs) constitute about three full-time equivalents (FTEs), not four FTEs.
Why GAO Did This Study

Subcontracting on federal contracts is a large and growing marketplace for small businesses. The Small Business Administration's (SBA) Commercial Marketing Representatives (CMRs) have long been considered to be key to fostering small businesses' participation in subcontracts. GAO was asked to assess the role that CMRs are playing in administering SBA's subcontracting assistance program.

What GAO Found

CMRs are supposed to promote small business subcontracting in two primary ways. First, they review prime contractors' compliance with the requirements of their subcontracting plans--either through on-site visits to contractors or by simply reviewing their subcontractor activity reports. Second, they conduct various marketing activities, such as marketing small businesses to prime contractors. In recent years, however, additional duties placed on CMRs have often taken priority over these responsibilities. In fact, in fiscal year 2000, 87 percent of the CMRs had other substantial responsibilities. Moreover, workloads and prime contractor coverage now vary greatly between CMRs. Additionally, CMRs are relying more on "desk" reviews of subcontractors' activity to monitor compliance with subcontracting plans as opposed to on-site reviews. This is a concern to some SBA officials who believe that on-site reviews are more thorough, though others believe the desk review offers the potential for greater coverage. Declines in staffing and travel funds have contributed to the changing role of the CMR. With downsizing and retirements taking place and no staff assigned to replace lost personnel, the number of CMR full-time equivalents (FTEs) has decreased significantly and has resulted in workload imbalances. While there are concerns about the changing nature of the CMR role, SBA has not strategically planned for these changes or assessed their collective impact. Instead, it has implemented ad hoc measures to deal piecemeal with resource declines. Unless steps are taken to better evaluate and plan for the future of CMRs, SBA will continue to lack an understanding of their contributions to small business subcontracting.