Summary: Questions have arisen concerning a delay in implementing an amendment to the Small Business Act. The amendment provides for small business concerns of disadvantaged owners to have the maximum opportunity to participate in the performance of Federal contracts. It requires many contracts to contain provisions for subcontracting plans which are designed to achieve the statutory aims. The questions concerned: whether all Federal agencies were legally required to implement the amendment as of October 24, 1978; whether the failure to do so excused any agency from requiring its contractors to comply with the amendment; and what the legal status is of all contracts awarded since that date which do not contain the mandated subcontracting plans. GAO concluded that there existed only the requirement for agencies to begin the process of developing the implementing regulations and that agencies were not required to have contractors comply with the amendment until the regulations were issued. Contracts which were awarded after October 24, 1978, but prior to the issuance of the implementing regulations, are not impaired by the absence of the subcontracting plans. However, contracts awarded after the issuance of the regulations should contain the plans and are legally deficient if they do not. Agencies have been requested to take corrective action on these contracts wherever feasible, with the remedies depending on particular circumstances.
