DOD Must Give Sikorsky Contract Data To Small Biz Group
By Khadijah M. Britton
November 26, 2014
Law360, New York (November26, 2014, 2:42 PM ET) -- A California federal court has ordered the Pentagon tocough up never-seen subcontracting data on Sikorsky Aircraft Corp. to anorganization representing small businesses, saying the information was notexempt from Freedom of Information Act disclosure because it did not exposeprivileged financial or business information about Sikorsky.
In his order, U.S. DistrictJudge for the Northern District of California William Alsup told the U.S. Department of Defense ithad to release Sikorsky's Comprehensive Subcontracting Plan to the American SmallBusiness League by Dec. 3 or appeal his decision to the Ninth Circuit.
"We are thankful thatthe court rejected the vague 'confidential commercial or financial information'claim raised by the Department of Defense," ASBL attorney Robert Belshawtold Law360. "Hopefully the results of this decision will go a long waytowards revealing the extent to which large defense contractors are complyingwith the Small Business Act's mandate that women-, veteran- and minority-ownedsmall business subcontractors receive a fair share of the billions of federalfunds annually allocated to defense spending."
On Aug. 9, 2013, ASBL filedan FOIA request for Sikorsky's 2013 master Comprehensive Subcontracting Planfor participation in the Department of Defense's Comprehensive SubcontractingPlan Test Program, or CSPTP.
According to the ASBL'sbrief, the Small Business Act of 1953 would normally require large contractorsto submit individual subcontracting reports and summary subcontracting reportsto show how government contracts and subcontracts are being awarded to smallbusinesses.
However, since 1990, whenCongress passed the "test program" as part of a defense appropriations bill,some large defense contractors have been able to do away with these reports andinstead file comprehensive subcontracting plans, which are meant to identify"all subcontract amounts awarded to small businesses on all governmentcontracts the prime contractor fulfills," according to the ASBL.
The organization's FOIArequest sought access to Sikorsky's version of this document, to see if itdoes, indeed, show awarding of subcontracts to eligible small businesses.
The organization accusedthe test program of "eliminat[ing] all transparency on publicly available smallbusiness subcontracting information and any penalties for Pentagon primecontractors that failed to comply with federally mandated small businesssubcontracting goals" in a statement to Law360.
After the Pentagon placedthe ASBL's request in its complex processing queue, thus indefinitelypostponing the agency's response, the organization brought suit on May 12.
The ASBL then soughtsummary judgment on whether the documents it requested could be disclosed, "inwhole or in part." The DOD retorted that the organization's motion was mootbecause the agency had determined that the requested plan could not bereleased, applying the FOIA exemption for trade secrets and privileged orconfidential commercial or financial information.
As Judge Alsup noted, theagency did not attempt to apply any other FOIA exemptions in any of itspre-trial motions.
"Neither the lodgeddocument nor [Sikorsky's representative's] declaration adequately shows how theredacted information is 'likely to cause substantial competitive injury' ifdisclosed," Judge Alsup said.
Further, Judge Alsuprejected the DOD's raising of a second FOIA exemption after briefing, sayingthe contact information for Sikorsky staff was available online, and as such,amounted to a "trivial privacy interest" for which an FOIA exemption could notapply.
If the agency appeals, theASBL says it could open the door for the organization to access all othersimilar subcontracting plans and help it in its mission to uncover whethergovernment money is going to small businesses or merelybeing held up in larger businesses whose subsidiaries are"grandfathered in" under the law because they were acquired within the lastfive years.
"We have the opportunity toestablish some useful precedent in the Ninth Circuit," Belshaw told Law360."A favorable ruling by that court would definitely ease the way to gettingthese documents released."
Current participants in theCSPTP include the Boeing Co., BAESystems PLC, GE Capital Aviation Services, General Dynamics Corp., HamiltonSundstrand Corp., Harris Corp., L-3 CommunicationsHoldings Inc., Lockheed Martin Corp., Northrop Grumman Corp., United Technologies Corp.'saircraft engines subsidiary Pratt & Whitney, RaytheonCo., and Sikorsky.
According to the ASBL, theorganization promotes the interests of small businesses through socialmarketing and policy review along with monitoring federal contracts that areawarded to large corporations rather than to small businesses.
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