A new GAO report is putting a spotlight on how much the Federal Government knows about who ultimately owns or controls companies receiving federal awards.
GAO found that federal award reporting requirements do not explicitly require entities to provide beneficial ownership information, and there is no central repository containing that information for businesses receiving federal awards. While SAM includes information on corporate relationships, GAO notes that it generally does not identify the individuals who ultimately own or control a company.
The issue is not new. Section 885 of the FY2021 National Defense Authorization Act directed GSA to include beneficial ownership information for certain federal contractors and grant recipients in a federal database. GAO reports that the requirement has yet to be fully implemented, with GSA awaiting rulemaking associated with FAR Case 2021-005.
For GovCon executives, there is no new reporting requirement coming out of this report. But the combination of congressional direction, an unresolved FAR case and GAO’s continued focus on ownership transparency makes this an issue worth understanding, particularly for firms operating in the small business and set-aside markets.
