SAN FRANCISCO — The American Small BusinessLeague lost an appeal on Jan. 6 in the U.S. Court of Appeals for the 9thCircuit in San Francisco in an attempt to show evidence of reducedsubcontracting opportunities for small businesses in Pentagon contracts.

In the Freedom of Information Act Requestcase, according to a news release, the ASBL sought to have Sikorsky AviationCorporations disclose its subcontracting plan that it submitted to thePentagon's 27-year-old Comprehensive Subcontracting Plan Test Program. ASBL wascontesting the transparency of the Pentagon's contract procurement and wantedto prove that the CSPTP program has cheated small businesses out of more than$5 trillion.

In November 2014, the ASBL a won its originalFOIA case against the Pentagon in federal district court. Judge William Alsupdetermined Sikorsky's CSPTP information had no trade secret or proprietary orconfidential financial information, and ruled that Sikorsky had to provideevidence of compliance with federal contract law.

Alsup also accused the Pentagon of covering upthe information, and later accused the Pentagon and Sikorsky of trying tosuppress evidence.

The appellate court overruled Alsup in favorof Sikorsky, even though it never saw the documents on which Alsup based hisverdict.

"The 9th Circuit Court of Appeals made a hugemistake," ASBL President Lloyd Chapman told the Northern California Record."Judge Alsup had Sikorsky's documents and decided nothing constitutes a tradesecret or is proprietary, and even accused the Pentagon of fraud. How can the9th Circuit Court overrule the district court if it has never seen thedocuments? It's lunacy."

"It is a serious setback for small businessesof getting a piece of the federal contracting pie," Charles Tiefer, professorof contracting government at the University of Baltimore School of Law, toldthe Northern California Record. "This opinion will make it harder forsmall businesses to challenge the federal monopoly of federal contracts. Itwill make it only too easy for big defense contractors like Sikorsky to dodgetheir responsibilities to subcontractors with worthy small businesses."

Tiefer, who was commissioner in 2008-2011 ofthe Commission on Wartime Contracting, has written a legal opinion corroboratingthe ASBL's case, in which he calls the CSPTP "seriously harmful" tosmall businesses.

"It is obvious that big defense contractorslike to keep profit to themselves and allow little for other small businesses,"Tiefer said. "Every contractor has to have a subcontracting plan and contractwith small businesses. For understanding government contracting, ASBL wanteddisclosure of Sikorsky. Sikorsky is supposed to subcontract to small businessesthe parts and skilled labor. It is part of the supply chain."

Chapman said the case removes all transparencyfrom the last 27 years of the Pentagon's harmful federal-contract activities.

"The taxpayers don't know how $5 trillion oftheir tax dollars have been spent for the last 27 years," he said.

The ASBL is planning to appeal the case,according to the news release.

"The CSPTP program says you don't need a planfor each contract—you can have a national plan," Tiefer said. "I don't believethere are numerical quota requirements, so you're just citing a national plan.There is no way to check a contract. The ASBL wanted to see these plans andshow they are window dressing, providing a curtain to contractors to monopolizeor pick and choose the subcontractor that will give them the most profit."

For the full article, click here: http://norcalrecord.com/stories/511077832-appeals-court-rules-against-small-business-group-in-transparency-case-over-pentagon-contracts

Earlier this month, a federal appeals court issued a rulingthat dealt a blow to the causes of open government and contracting transparency.In the long run, it could also harm contracting competition and the economicviability of America's small businesses.

On January 6, the USCourt of Appeals for the 9th Circuit ruled that the Department of Defense(DoD) does not have to disclose the small business subcontracting plan of oneof its largest suppliers, Sikorsky Aircraft Corporation. In 2013, the AmericanSmall Business League (ASBL), as part of its long-running campaign to documenthow federalsmall business contracts get diverted to not-so-small businesses, submitteda Freedom of Information Act (FOIA) request for Sikorsky's most recent plan.The document identifies all subcontract amounts Sikorsky awarded to smallbusinesses on its DoD contracts during fiscal year 2013.

Sikorsky and several other large defense contractors reportthis data as part of the ComprehensiveSubcontracting Plan Test Program, an initiative DoD launched in 1990 toincrease contracting opportunities for small firms. The public has largely beenkept in the dark about the program. ASBL and other small business advocatescontend that it hasnot lived up to its promise: according to ASBLpresident Lloyd Chapman, the program has "cheated American small businessesout of well over a trillion dollars in subcontracts."

In 2014, the USDistrict Court in San Francisco ordered DoD to release Sikorsky'ssubcontracting plan. The 9th Circuit reversed the lower court, ruling that someof the data—the names of Sikorsky's subcontractors, the type and dollar amountof the goods and services subcontracted by Sikorsky, details about thecompany's subcontracting process and organizational structure—falls under FOIAExemption 4, which shields trade secrets and commercial or financialinformation that is privileged or confidential. The appeals court ruled thatother data in the document—the signatures of government officials and the namesand work contact information of Sikorsky employees—is off-limits under FOIAExemption 6, which covers personally identifiable information.

The ASBL, which has a long and relativelysuccessful FOIA litigation track record, plans to appeal the case to theSupreme Court. The issue on appeal is whether DoD met its burden of proof byproviding reasonably specific evidence that disclosure will, in regard toExemption 4, "cause substantial harm to the competitive position" of Sikorskyand, in regard to Exemption 6, "constitute a clearly unwarranted invasion ofpersonal privacy." Two factors weighing in ASBL's favor: 1) the trade secretdata in the document will eventually become too old and outdated to harmSikorsky if it is released, and 2) the contact information for several Sikorskyemployees named in the document can be found online.

The diversion of small business contracts to large companiescontinues to be a seriousmanagement and performance challenge for agencies, as well as a recurringissue of concern on Capitol Hill. The Pentagon's subcontracting plan program,in particular, has comeunder heightened scrutiny in Congress. Even DoD has publiclydisparaged the program, admitting there is no evidence it has helped smallbusinesses, and even that it "has led to an erosion of [DoD's] small businessindustrial base."

But Congress refuses to outright kill the program. Mostrecently, a provision in the 2017National Defense Authorization Act (section 826) extended the programthrough 2027.

For the full article, click here: http://www.pogo.org/blog/2017/01/court-blocks-access-small-business-contracting-secrecy.html