Law360, Nashville (November 14, 2017, 7:15 PM EST) --Sikorsky Aircraft Corp. told a California federal court Monday that the U.S.Department of Defense was mistaken to release previously redactedinformation from a company subcontracting plan under the Freedom of InformationAct, saying a FOIA exemption should have applied but that it would not sue tostop the release.
Despite the company's objections, the DOD on Nov. 10 released to the AmericanSmall Business League a new copy of Sikorsky's 2013 comprehensivesubcontracting plan as part of the FOIA suit filed by ASBL, with "significantlyfewer" redactions than a previously released version of the plan, the companysaid in a notice to the court.

While it has decided against filing a so-called reverse FOIA action to blockrelease of the information, Sikorsky said it believes that the newly releasedinformation should have remained exempt from disclosure under FOIA Exemption 4,which covers trade secrets, arguing the government had gone against the NinthCircuit's interpretation of that exemption.
       
That new information includes, for example, the names of small businesscontractors the company uses to comply with a government small businesssubcontracting test program, details of confidential projects that make use ofthose subcontractors, and what Sikorsky does to set and meet its small businesssubcontracting goals, Sikorsky claimed.

"The disclosure of such information is likely to give Sikorsky's competitors asignificant competitive advantage over Sikorsky," it said.

For example, competitors could use it to identify and poach Sikorsky's provenbase of small business suppliers and glean information from what the companychooses to make against what it chooses to buy, according to the company.

Any justifications for the release of the new information based on publiclyavailable information are also incorrect, as although some subcontractors havebeen publicly revealed as Sikorsky suppliers, their specific roles in meetingits subcontracting goals and the company's methods for recruiting them had notbeen, Sikorsky argued.

ASBL President Lloyd Chapman told Law360 on Tuesday that he continues to believethe requested documents should be released to ASBL completely unredacted and that he will push for a trial if need be,arguing data on Sikorsky's suppliers is available from government databases andother public sources — including Sikorsky's own press releases — and is not atrade secret. He also claimed that the company may be acting disingenuously inredacting certain purported personal information from the plan documents.

Noting he had yet to fully analyze the newly unredactedinformation released to ASBL, Chapman said that an initial review of thatinformation "seemed to indicate" that some of the firms Sikorsky has claimedare small business suppliers may in fact be larger businesses, which he arguedmay be indicative of a larger issue.

"If the Pentagon allowed Sikorsky to report rewards to large multi-nationals assmall business awards and there was no oversight on that ... It would be myassumption that the Pentagon is allowing all of the major contractors whoparticipate in this program to do the same thing," he said.

The DOD does not typically comment on pending litigation.

ASBL filed its suit in 2014 after a related FOIA request was effectivelyrejected by the DOD. It has claimed the Sikorsky subcontracting plan willreveal whether small businesses are receiving DOD subcontracts from largedefense contractors, as required by law, or not.

Specifically, the group believes that the DOD's Comprehensive Subcontract PlanTest Program, created in 1989 as a test program for DOD prime contractors to usegeneral, companywide subcontracting plans instead of the more specificper-contract plans required by other agencies, has been used to "cheat smallbusiness out of hundreds of billions in subcontracts." Sikorsky, now owned by Lockheed Martin Corp.,is a major manufacturer of military helicopters.

A district court in November 2014 ordered theDOD and Sikorsky to cough up the company's subcontractingplan, unredacted, before the Ninth Circuit in Januaryreversed that decision, saying FOIA exemptions 4 and6, which covers personal privacy, applied to certain redacted information inthe plan.

Once back before the district court, the DOD on Oct. 12 said it intended torelease some previously redacted information to ASBL, a move the group hasclaimed stems from discovery in the suit running counter to Sikorsky's claimsabout needing to protect its trade secrets.

A further hearing in the case is set for Wednesday.

ASBL is represented by Robert E. Belshaw of Belshaw Law, and Jonathan W. Cuneo,Charles Tiefer and Matthew E. Miller of Cuneo Gilbert & LaDuca LLP.

The DOD is represented by Brian J. Stretch, Sara Winslow, Ellen London andKimberley Friday of the U.S. Attorney'sOffice for the Northern District of California.

Sikorsky is represented by Rex. S. Heinke and JessicaW. Weisel of AkinGump Strauss Hauer & Feld LLP.

The case is American Small Business League v. U.S. Department of Defense, casenumber 3:14-cv-02166, in the U.S. District Court for the NorthernDistrict of California.

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