Over thepast quarter century, the Defense Department has been testing a contractingprogram that was intended to help small businesses obtain a larger share offederal work. However, Pentagon officials and small business leaders say theinitiative has not only failed to help small contractors, it's actually hurtthem.

In otherwords, neither those running the program nor those it was supposedly intendedto help believe the program works. Thus, many expected the experiment to cometo an end when its most recent congressional approval expires on Wednesday.

But that'snot happening.

In whatcritics are calling another victory for Washington's massive contractingdarlings at the expense of small businesses, Congress has approvedlegislation extending the contracting initiative, called the ComprehensiveSubcontracting Plan Test Program (CSPTP), for another three years. It's theeighth time the program has been revived.

Under therules of the test program, large contractors are permitted to submitcompany-wide or division-wide small-business subcontracting doctrines thatapply to any of the firm's federal contract proposals. Outside the program,prime contractors must submit a unique subcontracting plan for each bid,including which small firms they intended to partner with and how much money willflow through to the partners.

In thelegislation authorizing a two-year test back in 1989, lawmakers said CSPTP wasmeant to "determine if comprehensive subcontracting plans on a corporate,division or plant-wide basis would lead to increased opportunities for smallbusinesses."

By allaccounts, they have done precisely the opposite.

MaureenSchumann, a Defense Department spokeswoman, said recentlythat the program "has led to an erosion of [the agency's] small businessindustrial base." And while the department has yet to publish any formalreports on the program's results, she said the Pentagon's internal analysissuggests that, while it has resulted in savings for the participating largecontractors — including local behemoths such as Lockheed Martin, NorthropGrumman and General Dynamics — there is no evidence that the CSPTP hasbenefited small companies.

Duringnegotiations over the program earlier this year, Schumann said the DefenseDepartment was in favor of letting the initiative expire. It's the first timethe agency has openly expressed its opposition to the program.

Many smallbusiness groups have criticized the initiative, as well, and this month, theGovernment Accountability Office published a report stating that thecomprehensive plans make it difficult and sometimes impossible to track subcontractingdollars.

"From whatwe heard, the small business community was not in favor of extending theprogram," Jared Leopold, a spokesman for the Senate Small Business andEntrepreneurship Committee, wrote in a recent e-mail.

So thenwhy did lawmakers extend it again?

The billauthorizing a three-year extension of the program originated in the House ArmedServices Committee, which added some new reporting requirements intended toshed additional light on the test program moving forward. In a report filed bythe committee about the proposed extension, lawmakers acknowledged "afternearly 24 years since the original authorization of the program, the testprogram has yet to provide evidence that it meets the original stated goal ofthe program."

Aspokesperson for the committee declined to speak on the record about why theprogram was tweaked and extended rather than simply allowed to expire. However,a staff member of the House Armed Services Committee familiar with thenegotiations, who spoke on the condition of anonymity because the member wasnot authorized to speak publicly, explained that the three-year revival wasmeant to serve as an off ramp, so to speak, allowing largecontractors participating in the CSPTP to update their reportingprocedures to meet the subcontracting requirements that apply to contractorsoutside the program.

The idea,the staff member said, was to wind down the program gradually, rather thanbringing it to an abrupt halt at the end of this year.

One smallbusiness lobbying group says the reauthorization was pushed through under aveil of secrecy that should have already been removed.

StevenGodfrey, a spokesman for the California-based American Small Business League,echoed the Defense Department by saying that the lone benefactors of theprogram appear to be large contractors; however, a simpler bidding processisn't the only perk, he said. Under the law, CSPTP participants are exempt frompaying damages if they fall short of statutory small-business subcontractingrequirements.

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