25 Year Old Fraudulent Pentagon Contracting Program Exposed

Press Release

25 Year Old Fraudulent Pentagon Contracting Program Exposed

By Lloyd Chapman
American Small Business League
October 9, 6400

PETALUMA, CA--(Marketwired - Jun 12,2014) - According to the American Small Business League, the American SmallBusiness League (ASBL) has uncovered a 25 year old program thathas allowed some of the Pentagon's largest prime contractors to violate federalcontracting for almost a quarter of a century.

The Comprehensive Subcontracting PlanTest Program slid under the radar of journalists and the publicsince 1990. The test program was adopted under the guise of increasingsubcontracting opportunities for small businesses.

In reality the test program did justthe opposite. Some of the biggest names in the defense and aerospaceindustry were allowed to circumvent federal law that required small businesscontracting goals be achieved. Firms participating inthe program were exempt from any reports that had previously been available tothe general public.

In addition to the total lack oftransparency, prime contractors participating in the test program were exemptfrom any penalties such as "liquidated damages"for non-compliance with their small business subcontracting goals.

The ASBL estimates American smallbusinesses were defrauded out of over a trillion dollars in federalsubcontracts over the last 25 years as a result of the program.

The 2015 National DefenseAuthorization Bill proposes to extend the Comprehensive Subcontracting PlanTest Program into its 28th year of testing.

Language in the bill acknowledges thePentagon has never been able to provide any data that the removal oftransparency and penalties for prime contractors has ever increasedsubcontracting opportunities for small businesses.

Section 811 of the bill states, "However, after nearly 24 years since the originalauthorization of the program, the test program has yet to provide evidence thatit meets the original stated goal of the program..."

A 2004 Government AccountabilityOffice investigation also found no evidence if theremoval of transparency and penalties for prime contractors increasedopportunities for small businesses.

The Pentagon has also refused torelease any data on firms participating in the test program under the Freedomof Information Act.

The ASBL has filed suit against the Pentagonin Federal District Court in San Francisco after the agency refused to provide dataon Comprehensive Subcontracting Plan Test Program participant Sikorsky. TheASBL has also requested data submitted to the test program by BritishAerospace and Engineering (BAE) and Lockheed Martin.

The ASBL has launched a nationalcampaign to block the renewal of the Program. To date, the Pentagon's plan torenew the Comprehensive Subcontracting Plan Test Program into its 28th year oftesting has gone unreported in the mainstream media.

To view full press release, clickhere: http://www.marketwired.com/press-release/25-Year-Old-Fraudulent-Pentagon-Contracting-Program-Exposed-1919903.htm


Pentagon Data on British Aerospace Sought Under Freedom of Information Act

Press Release

Pentagon Data on British Aerospace Sought Under Freedom of Information Act

By Lloyd Chapman
American Small Business League
October 9, 3600

PETALUMA, CA--(Marketwired - Jun 10,2014) - According to the American Small Business League, under the Freedom ofInformation Act, The American Small Business League (ASBL)has requested the most recentdata submitted to the Pentagon by British Aerospace and Engineering (BAE).

The ASBL is specifically requestingthe most recent information BAE submitted to the Pentagon as a participant inthe Comprehensive Subcontracting PlanTest Program. The ASBL believes the data may indicate the Pentagonhas falsified compliance with federal law establishing small businesscontracting goals.

The Pentagon adopted the ComprehensiveSubcontracting Plan Test Program in 1990 after subcontracting plans andquarterly reports, SF 294s, became public that indicated the Pentagon and someprime contractors were violating federal law establishing small businesscontracting goals.

The Comprehensive Subcontracting PlanTest Program was disguised as a program to increase subcontracting opportunitiesfor small businesses. In reality it removed all transparency and eliminated anypenalties such as "liquidated damages"for any prime contractor that failed to achieve their small businesssubcontracting goals.

The ASBL believes the real goal of theComprehensive Subcontracting Plan Test Program is to obscure data that haspreviously been publicly available and shows that the Pentagon and primecontractors have violated federal contracting law. The ASBL estimates smallbusinesses have been defrauded out of over one trillion dollars in subcontractsover the last 25 years as a result of the Test Program.

The program has now been tested for 25years and the Pentagon has consistently refused to release any data on theresults of the Test Program.

A 2004 Government AccountabilityOffice investigation found no evidence theTest Program had ever increased subcontracting opportunities for smallbusinesses.

The language in the 2015 NationalDefense Authorization Bill (H.R. 4435) proposes to renew the Test Program intoits 28th year. The language in Section 811of the billacknowledges that over the last 25 years there has never been any evidence theTest Program has achieved any of its stated goals.

Section 811 states, "However, after nearly 24 years since the originalauthorization of the program, the test program has yet to provide evidence thatit meets the original stated goal of the program..."

The ASBL has also filed suit inFederal District Court in San Francisco against the Pentagon for refusing to release data from Sikorskysubmitted under the Comprehensive Subcontracting Plan Test Program.

During the last 25 years no journalisthas ever reported on the Comprehensive Subcontracting Plan Test Program or thegoal of the program to increase subcontracting opportunities for smallbusinesses by removing all transparency and penalties for Pentagon primecontractors that do not comply with their small business goals.

To view full press release, clickhere: http://www.marketwired.com/press-release/Pentagon-Data-on-British-Aerospace-Sought-Under-Freedom-of-Information-Act-1919188.htm


Obama Administration Ignores Simple Solution to Job Creation with QE3

Press Release

Obama Administration Ignores Simple Solution to Job Creation with QE3

October 9, 6000

Petaluma, Calif. – The American Small Business League (ASBL) is disappointed at the latest move by the Obama administration to stimulate the economy. Based on past efforts by the Federal Reserve, the ASBL does not believe that a third round of Quantitative Easing (QE3) is the most efficient and cost-effective way to stimulate the economy.

Economic data indicates that to create jobs, stimulus must be aimed at the middle class and America's 28 million small businesses. U.S. Census Bureau data indicates that small businesses generate more than 90 percent of all net new jobs. The Kauffman Foundation released a report in 2010 stating that small businesses have created virtually 100 percent of all net new jobs in the past three decades.

There is no guarantee QE3 will compel banks to lend more money to small businesses and the middle class. Based on data following QE1 and QE2, banks will not lend more to small businesses. In fact, banks such as Bank of America have recently slashed lending to small businesses.

If the Obama administration wants to create jobs and stimulate the economy, the simplest way would be to cease the practice of diverting federal funds that by law should be going to small businesses to some of the biggest companies in the world.

Investigations by the General Accounting Office and Inspectors General throughout the government have consistently found that the Obama administration has awarded funds meant for small businesses to companies such as Lockheed Martin, Boeing, Raytheon, AT&T, Hewlett-Packard, Motorola, General Electric, General Dynamic, and even foreign companies like Thales, Finmeccanica, British Aerospace and Russian defense broker Rosoboronexport.

The Small Business Administration Office of Inspector General has named the diversion of federal small business contracts to large corporations as the number one management challenge at the SBA for the past seven years.

If President Obama, Fed Chairman Bernanke and Congressional leaders are serious about creating jobs, the ASBL's suggestion is for President Obama to keep his February 2008 campaign promise when he said, "It is time to end the diversion of federal small business contracts to corporate giants."

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Obama administration Proposes Policy to Divert Small Business Funds to Corporate Giants

Press Release

Obama administration Proposes Policy to Divert Small Business Funds to Corporate Giants

By American Small Business League
October 9, 8400

A proposed rule from the U.S. Small Business Administration (SBA) will allow federal agencies to divert billions of dollars in federal small business funds to large businesses every year.
 
Due to fraud and abuse, federal agencies annually award tens of billions of dollars worth of federal funds to large businesses as “small business” awards. Federal agencies then count those awards toward their annual federal small business procurement goals.

SBA adopted regulations that could have addressed the issue in 2006
and are now issuing the proposed regulations to the same section of the federal code. However, the proposed regulations fail to address these existing problems in the federal marketplace and will also weaken small business programs so that large companies can “poach”billions in taxpayer-funded small business funds with less fear of prosecution.
 
Without taking the steps that the ASBL has recommended, the SBA’s proposed regulations will do nothing to address fraud and abuse in federal small business programs.
 
For over a decade, ASBL President Lloyd Chapman and small business advocates have fought to prevent large companies and their subsidiaries from receiving federal small business contracts.
 
Last month, the ASBL led a coalition of small business advocates and watchdog organizations in sending requests to the Obama administration, asking that the SBA accurately represent the percentage of federal contracts awarded to legitimate small businesses. Despite our request, the most recent federal report dramatically overstates the federal government’s compliance with the Congressionally-mandated 23 percent small business procurement goal.
 
Since 2003, a series of federal investigations have uncovered hundreds of billions of dollars in federal small business contracts being diverted to large businesses. These include Lockheed Martin, Apple, AT&T, BAE, Rolls-Royce, Finmeccanica and Russian arms company Rosoboronexport.
 
In 2008, Barack Obama issued the statement, “It is time to end the diversion of federal small business contracts to corporate giants.” After being elected, he never mentioned it again.
 
“It’s unconscionable that the Obama administration would propose giving more small business contracts to corporate giants at a time when our middle class economy is suffering one of the worst economic recessions in history,” Chapman said.
 
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Defense Contractor Earns $119 million in Small Business Contracts Despite Illegally Providing U.S. Military Technology to China,

Press Release

Defense Contractor Earns $119 million in Small Business Contracts Despite Illegally Providing U.S. Military Technology to China,

American Small Business League
October 9, 1600

United Technologies Corporation (UTC), a Fortune 500 company which owns numerous large defense contractors including Pratt & Whitney, Hamilton Sundstrand and Sikorsky Aircraft, was fined $75 million last week after it was found that the firm had illegally exported U.S. computer software that helped China build its first modern attack helicopter, the Z10 (which was first delivered to China in 2009 and still remains in production today).
 
However, while UTC has now been given a slap on the wrist for violating a U.S. embargo on military exports to China that dates back to Tiananmen Square events in 1989, no mention has been made of the $119 million in federal small business contracts the U.S. has awarded to UTC since 2006 – the same year the Justice Department launched its probe into export violations committed by UTC while under contract with the Pentagon.
 
UTC is just one of many large corporations that received billions of dollars worth of federal small business contracts in recent years. Others include Lockheed Martin, Apple, Rolls-Royce, Chevron, GE, Time Warner, and Russian arms company Rosoboronexport.
 
In 2005, the Small Business Administration Office of the Inspector General issued Report 5-15, which stated, “One of the most important challenges facing the SBA and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for those awards.”
 
In 2008, President Obama even issued the statement, “It is time to end the diversion of federal small business contracts to corporate giants.”
 
Legislation has been introduced to prevent large corporations from receiving federal small business contracts but neither committee leadership nor the President have supported the bill (H.R. 3184).
 
“The Pentagon has given over $2 billion worth of federal contracts (including $119 million in small business contracts!) to a company that illegally sold U.S. military technology to China,” ASBL President Lloyd Chapman said. “Such rampant abuse of federal programs designed to help small businesses has gone on for the last decade because Congress, the President and the mainstream media refuse to address these blatant issues.”
 
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