A Defense Department program designed to steer some of the government's biggest spender's dollars to minority business has been a failure, according to testimony before a House subcommittee this week.
With implementation of the program left to the discretion of individual Pentagon procurement officers, more than one-third of the Defense Department's 100 largest contractors did not participate in the effort to increase the number of minority subcontracts on Pentagon projects, said R. W. Gutman, procurement director for the General Accounting Office.
Some of the contractors who did participate in the program did so only minimaly. According to a document reluctantly released by the Pentagon, Boeing Co., which received more than $1 billion in Pentagon contracts in fiscal year 1976 gave only $554,000 in subcontracts to minority firms.
AM General Corp., which received $122.3 million from the Defense Department that year, gave $4,000 to million subcontractors, according to the document, and Litton Systems, Inc., which receive $960.9 million in Pentagon contracts awarded only $487,000 to minority firms.
"Under no firm guidelines as to what to do or how to do it, nor under any obligation to provide a specific percentage of the contract to minority business, the majority of the companies involved in the program have done very little," said Rep. Joseph P. Addabbo, (D-N.Y.) chairman of the Small Business Committee's subcommittee on minority enterprise. Addabbo's subcommittee held hearings on the program Wednesday and yesterday.
Under the pentagon's minority and small business subcontracting program, the recipient of any contract for more than $500,00 which provides opportunities for minority subcontracting must make an effort to farm out some of the work.
The policy is not written into law, but is part of a Defense Department regulation governing procurement.
Addabbo's subcommittee investigated the program in 1975, and concluded it is "totally inadequate" and contains "a glaring lack of specific objectives.
A GAO report, requested by the subcommittee after former President Ford did not respond to the panel's 1975 report, reached a similar conclusion, but placed blame evenly on major contractors and the Pentagon, which GAO said does not adequately monitor the program.
Representatives of Boeing, AM, General and FMC Corp., another large Pentagon contractor, were invited to testify before Addabbo's subcommittee on Wednesday.
"Perhaps not surprisingly," Addabbo said, "all three corporations declined the invitation to testify.
Yesterday, Deputy Assistant Secretary of Defense for procurement Dale R. Babione told the subcommittee the department's prime contractors awarded $103 million of the department's $38.9 billion of procurement to minority firms.
"While this is a significant increase, I am not satisfied with this performance and have met with appropriate DOD officials to develop a plan for improving opportunities for minority firms," Babione said.