A bigger Voice for Small Business

Department of Homeland Security Sued Over Boeing Contract

by | Nov 1, 2010 | Press Release

Press Release

Department of Homeland Security Sued Over Boeing Contract

November 1, 2010

The Department of Homeland Security (DHS) is being sued by the American Small Business League (ASBL) for refusing to release subcontracting reports on contracts awarded to defense giant Boeing. (https://www.asbl.com/documents/Complaint_47KB_Boeing.pdf)  

The ASBL filed suit in United States District Court, Northern District of California on Tuesday, October 26.  The case was filed after DHS repeatedly refused to respond to a Freedom of Information Act (FOIA) request for Individual Subcontracting Reports (ISR) and Summary Subcontracting Reports (SSR) on a prime contract awarded to Boeing.

The ASBL believes the information contained in the reports may show that Boeing and the DHS cooperated in an effort to circumvent federal law, which requires 23 percent of all federal contracts to be awarded to small businesses. The ASBL is gathering information on several major government prime contractors in preparation for litigation that may include cases filed under the False Claims Act, and Section 16(d) of the Small Business Act.

In 1992, the 9th Circuit Court of Appeals ruled that subcontracting reports are releasable to the public, and do not contain trade secret or proprietary information. 

“It is really kind of silly that we are having to file this suit because the 9th Circuit ruled over 20 years ago that this information is releasable.  The fact that DHS is willing to get involved with a lawsuit they have no hope of winning, really speaks to the damaging nature of this information,” ASBL President Lloyd Chapman said.

The ASBL has won a series of Freedom of Information Act (FOIA) cases against the federal government. Some of the information obtained by the ASBL indicates the federal government diverted small business contracts to Boeing and hundreds of other Fortune 1000 firms. The Obama Administration is currently awarding small business contracts to firms such as Lockheed Martin, Raytheon, L-3 Communications, British Aerospace (BAE), Northrop Grumman, and Dell Computer. (https://www.asbl.com/documentlibrary.html)  

To date, the ASBL has six outstanding lawsuits in the federal court system and plans to file a series of additional lawsuits before the end of the year.

American Small Business League sues DHS

by | Nov 1, 2010 | ASBL News

News

American Small Business League sues DHS

By Staff
UPI
November 1, 2010

PETALUMA, Calif., Nov. 1 (UPI) -- The American Small Business League is suing the U.S. Department of Homeland Security over its contract awarding policies.

"The Department of Homeland Security is being sued by the American Small Business League for refusing to release subcontracting reports on contracts awarded to defense giant Boeing," the ASBL said in a news release issued Monday.

On Oct. 26, the ASBL filed suit in United States District Court, Northern District of California after the Homeland Security Department allegedly repeatedly declined to respond to an ASBL Freedom of Information Act request for information on both Individual and Summary Subcontracting Reports on prime contracts that the department awarded to Boeing.

ASBL President Lloyd Chapman said: "It is really kind of silly that we are having to file this suit because the 9th Circuit ruled over 20 years ago that this information is releasable. The fact that (Homeland Security) is willing to get involved with a lawsuit they have no hope of winning, really speaks to the damaging nature of this information.

Source: http://www.upi.com/Business_News/Security-Industry/2010/11/01/American-Small-Business-League-sues-DHS/UPI-55981288645456/


Lawmakers seek probe on DoD subcontracting

by | Oct 29, 2010 | ASBL News

News

Lawmakers seek probe on DoD subcontracting

By Sean Reilly
Federal Times
October 29, 2010

Five House members have asked the Government Accountability Office to look into whether a Defense Department program is accomplishing its mission of increasing small-business subcontracting opportunities.

Some two decades after its creation, the Comprehensive Subcontracting Plan Test Program "has never been evaluated to determine if the goals of the program have been met," Rep. Yvette Clarke, D-N.Y., and the other four lawmakers wrote last month in requesting the investigation.

Specifically, they want GAO to explore whether allowing large prime contractors to use subcontracting plans on a corporate, division or plantwide basis has led to an increase in small-business subcontracting opportunities and whether primes are meeting their annual subcontracting goals. The lawmakers are also seeking a detailed accounting of the extent to which small businesses are being used as subcontractors on contracts issued to large participants in the program.

At GAO, the request is under consideration by top management, a spokeswoman said Friday.

Source: http://www.federaltimes.com/article/20101029/DEPARTMENTS01/10290303/

Democrats call for investigation of Defense subcontracting

by | Oct 27, 2010 | ASBL News

News

Democrats call for investigation of Defense subcontracting

By Robert Brodsky
Government Executive
October 27, 2010

Five House Democrats have called on the Government Accountability Office to investigate a little-known Defense Department program designed to increase subcontracting opportunities for small businesses.

The lawmakers, led by Rep. Yvette Clarke of New York, said the Pentagon's Comprehensive Subcontracting Plan Test Program has not been formally reviewed since it was established 20 years ago.

"Until the program is evaluated and audited there is no way of knowing whether these small businesses actually received their due contracts, or whether the money went to other large contractors," Clarke said.

The investigation would determine if the program has led to an increase in small business opportunities and whether prime contractors are meeting the annual goals they establish. It also would include a detailed accounting of the use of small firms on these contracts, according to the GAO request letter.

Reps. Bennie Thompson of Mississippi, Carolyn Maloney of New York, Lynn Woolsey of California, and Chellie Pingree of Maine also signed on.

The Defense Department said it is in process of conducting its own study of the effectiveness of the subcontracting program. "At this point, it would be premature to discuss a still ongoing and incomplete study," spokeswoman Cheryl Irwin said. "The study should be complete in about 12 months."

The program allows 14 large Defense contractors, including industry goliaths such as BAE Systems, Boeing Co., Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co., to consolidate their small business subcontracting plans into one companywide document, rather than submitting them on a contract-by-contract basis.

Typically, prime contractors are required to submit an Individual Subcontracting Report for every contract over a certain dollar threshold. The report, which includes the company's small business subcontracting plans and dollar goals, allows the government to track a company's progress in meeting those objectives.

Under the program, however, participants need to turn in only a Summary Subcontracting Report once every six months. Critics suggest the diminished reporting makes it more difficult to determine if the large prime contractors are meeting their small business subcontracting goals.

"Federal contracting data calls into question whether the 14 large prime contractors who are participants in the CSPTP are actually meeting their small business subcontracting goals," the letter stated.

The goal of the program is to increase the overall percentage of subcontracts awarded to small businesses, specifically to small disadvantaged businesses. But, some small business advocates suggest it actually serves as a loophole for participating firms to circumvent small business subcontracting goals.

"Clearly this program wasn't designed to help small businesses; it was designed to help prime contractors avoid paying liquidated damages for noncompliance with their small business subcontracting goals," said Lloyd Chapman, president of the California-based American Small Business League. "The elimination of this program would force prime contractors to award billions more in subcontracts to small businesses and create jobs across the country."

Chapman said ASBL has requested numerous documents on the subcontracting program through the Freedom of Information Act, but Defense has yet to provide them.

To be eligible for the program, a prime contractor must have performed at least three Defense contracts worth more than a combined $5 million in the preceding year and have achieved a small disadvantaged business subcontracting rate of 5 percent or more.

Participants must offer a broad range of subcontracting opportunities and accept -- or at least work toward -- a small disadvantaged business goal of 5 percent or more every fiscal year. The Defense Contract Management Agency must approve the plans annually.

Congress first authorized the Comprehensive Subcontracting Plan Test Program in October 1990, and it has been reauthorized three times since.

Source: http://www.govexec.com/dailyfed/1010/102710rb1.htm

Congress to Investigate Pentagon Comprehensive Test Program

by | Oct 26, 2010 | Press Release

Press Release

Congress to Investigate Pentagon Comprehensive Test Program

October 26, 2010

Petaluma, Calif. – On Thursday, October 21, five members of the House of Representatives, lead by Congresswoman Yvette Clarke (D-NY) asked the U.S. Government Accountability Office (U.S. GAO) to investigate a Department of Defense (DoD) subcontracting program that appears to have slashed subcontracting opportunities for small businesses. In addition to Congresswoman Clarke, the request was backed by Representatives Bennie Thompson (D-MS), Carolyn Maloney (D-NY), Lynn Woolsey (D-CA), and Chellie Pingree (D - ME).

While the stated mission of the Comprehensive Subcontracting Plan Test Program (CSPTP) is to increase contracts to small businesses, the American Small Business League (ASBL) has long maintained that the program actually allows large government prime contractors to circumvent small business subcontracting goals.  As established, the program eliminated subcontracting reports available to the public, and penalties for non-compliance with subcontracting goals. 

“Federal contracting data calls into question whether the 14 large prime contractors who are participants in the CSPTP are actually meeting their small business subcontracting goals,” the letter states.

The CSPTP was established in 1990.  To date the Program has never been evaluated.

“Clearly this program wasn’t designed to help small businesses, it was designed to help prime contractors avoid paying liquidated damages for non-compliance with their small business subcontracting goals,” ASBL President Lloyd Chapman said. “The elimination of this program would force prime contractors to award billions more in subcontracts to small businesses and create jobs across the country.”

Participants of the program include BAE Systems, GE Aviation, Lockheed Martin, Raytheon, and Harris Corporation and seven other prime contractors.  According to federal data, participants of the CSPTP received $55.24 billion in contracts from DoD during fiscal year (FY) 2009. 1 out of every 6 dollars spent by DoD during FY 2009 were awarded to participants of the program.

“As a Member of the House Small Business Committee, I know the importance of the federal government meeting goals that it has put in place to create business opportunities for small businesses.  Evaluating the Comprehensive Subcontracting Plan Test Program (CSPTP) is imperative so that we fully understand if this program has created the subcontracting opportunities for small and disadvantaged businesses that it was designed to do.  For 20 years this program has been in place, and now is the time we fully examine its progress,” stated Rep. Clarke. “Small businesses are the economic engine for our country.  Know that I will continue to hold a high level of accountability for our federal government on behalf of our small businesses nationwide.”

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