Small Businesses Continue to Win Construction Work

Our analysis of overall data on construction contract awards indicates that small businesses are continuing to win work and that their ability to compete is not being impaired. Since 1997, construction contract awards to small businesses have increased steadily in the face of a decline in overall construction awards. Officials analyzed these projects to assess whether the work could accommodate smaller contractors but concluded that only by having a single contractor build the entire project could the work be performed efficiently. In these cases, small businesses were able to participate. To assess the extent to which DOD's contracting officers had combined construction requirements, we reviewed the laws and implementing regulations defining contract bundling and reviewed large contracts for construction awarded at selected contracting offices. For these contracts, we reviewed contract documentation to determine whether requirements had been combined, the reasons cited for combining requirements, and the extent of small businesses' participation in competition for the contracts. We are sending copies of this report to the Secretary of Defense and the Acting Administrator of the Small Business Administration.
Why GAO Did This Study

Congress appropriates billions of dollars annually to construct buildings and other facilities for military training and operations. Small business have carried out a significant portion of this work. Congress and small business advocates, however, had become concerned that agencies were combining requirements into larger contracts that small businesses could not win. GAO examined the contract bundling of military construction requirements.

What GAO Found

GAO determined whether (1) overall data on construction contract awards to small businesses indicated that their ability to compete for contracts had been impaired and (2) selected Department of Defense (DOD) contracting offices had combined construction requirements in ways that hampered small businesses' ability to compete. Overall data on military construction contract awards to small businesses revealed that small businesses are generally continuing to win work and that their ability to compete is not being impaired. The Small Business Administration reviewed and approved of DOD's plan to determine whether the construction work being done could accommodate smaller contractors. Small businesses were able to compete for the remaining contracts.