SOURCE: American Small Business League

American Small Business League

November 26, 2014 07:10 ET

Pentagon Loses Landmark Legal Battle Over Subcontracting Data

PETALUMA, CA--(Marketwired - Nov 26, 2014) - The Pentagon has lost a landmark Freedom of Information Act (FOIA) case to the American Small Business League (ASBL). San Francisco Federal District Court Judge William Alsup has ordered the Pentagon to release the small business subcontracting data that has been submitted by Sikorsky under the Comprehensive Subcontracting Plan Test Program (CSPTP).

The Pentagon had refused to release the data claiming that it contained "confidential financial information." Judge Alsup disagreed and denied both of their motions for summary judgment and ordered the Pentagon to release the information to the ASBL by December 3, 2014.

"Judge Alsup's ruling will be the basis for the American Small Business Leagues efforts to ensue the subcontracting information that has been submitted by all of the participants of the Comprehensive Subcontracting Plan Test Program will be made publicly available," said ASBL's attorney Robert Belshaw.

Current participants of the Pentagon's CSPTP include, BAE Systems, Boeing, GE Aviation, General Dynamics, Hamilton Sundstrand Corporation, Harris Corporation, L3 Communications, Lockheed Martin, Northrop Grumman Electronics Systems, Pratt & Whitney, Raytheon Company and Sikorsky Aircraft Corporation.

The ASBL originally requested the data because they believed the CSPTP was designed to create a loophole in federal contracting law that has allowed many of the Pentagon's largest prime contractors to circumvent federal law establishing small business subcontracting goals.

When the Pentagon implemented the CSPTP in 1990 it eliminated any publicly available information on small business subcontracting goals and any penalties that Pentagon contractors could face for refusing to comply with their small business subcontracting goals. Although the CSPTP eliminated all transparency and penalties for prime contractors, the stated mission of the program was to "increase subcontracting opportunities for small businesses."

In 2004 the Government Accountability Office (GAO) released the results of an investigation into the CSPTP that stated, "Although the Test Program was started more than 12 years ago, DOD has yet to establish metrics to evaluate the program's results and effectiveness."

Professor Charles Tiefer, one of the nation's leading experts on federal contracting law released a legal opinion on the CSPTP that stated, "The program is a sham and its extension will be seriously harmful to vital opportunities for small business to get government contracting work... There is no doubt in my mind the CSPTP has significantly reduced subcontracting opportunities for small businesses. It should not have gotten its 25 years of extension as a never-tested 'Test Program.' Let it expire."

"Think of the lunacy of removing all transparency and penalties for small business subcontracting programs for the Pentagon's largest prime contractors and test it for 25 years to see of it increases subcontracting opportunities for small businesses. It's an unparalleled example of fraud and corruption at the Pentagon. We expect Judge Alsup's ruling to lead to the eventual release of data on all firms participating in the CSPTP that will prove the Pentagon has cheated American small businesses out of well over a trillion dollars in subcontracts," stated ASBL President Lloyd Chapman.

For more information contact ASBL attorney Robert Belshaw (415) 956-9590, ASBL Communications Director Steve Godfrey (707) 789-9575, or Sikorsky Supplier Diversity Manager Martha Crawford (203) 386-3241.

ASBL documentary trailer