During its approval of the defense budget back

in 1989, Congress added a new test program intended to simplify the

subcontracting process for large defense contractors. In theory, proponents

said, the tweak would lead large prime contractors to pass more work along to

small businesses.

A quarter century later, some of the world's

largest defense contractors are still taking advantage of the program — which,

oddly enough, remains in "test" mode. Odder still, the test has yet to be

evaluated.

Called the Comprehensive Subcontracting Plan

Test Program, the initiative allows large defense contractors to establish

company-wide or division-wide subcontracting plans that outline how the company

or each of its units generally intends to partner on any work awarded by the

federal government. Any time one of the participating companies competes for

work, it can present the general subcontracting strategy.

Normally, prime contractors are required as part of the bidding process to

submit a specific subcontracting plan for each individual project, which

details how much of the work they plan to outsource and to what type of

companies.

Originally approved for a two-year test, the

test program has since been extended by Congress several times, with its latest

authorization set to expire at the end of the year. Its current test

participants include a dozen of the nation's largest defense contractors,

including Lockheed Martin, Boeing, Northrop Grumman and General Dynamics.

Now 25 years after its inception, the Defense

Department's Web site still refers to the program as a "test," stating that its

purpose is "to determine whether comprehensive subcontracting plans will result

in increased subcontracting opportunities for small business while reducing the

administrative burden on contractors."

The idea is that, by alleviating some of the hassle of partnering with small

businesses and by allowing those subcontractors to perhaps become part of a

larger firm's overarching, routinely-used subcontracting network (rather than

competing for one-off projects), more work — and more contracting dollars — would trickle down to small

firms.

However, there's no telling whether that has

panned out.

In 2004, the Government Accountability Office

released the government's first report on the initiative, stating that, "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."

Six years later, still without any metrics in

place, several lawmakers sent a letter to the GAO formally requesting a

follow-up investigation, noting that the program still had "never been

evaluated." A second GAO report was never filed. DOD, meanwhile, still has

never put forth a report on the results of the program.

Not surprisingly, that hasn't sat well with

small business organizations. The National Small Business Association, Small

Business and Entrepreneurship Council, U.S. Hispanic Chambers of Commerce and a

half dozen other advocacy groups in April sent a letter to the House Small Business Committee and House Armed Service

Committee urging them not to keep extending an initiative that has no data

demonstrating its value and effectiveness.

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