Small Business Activist Wins Interim Victory Against Pentagon, Sikorsky


Small Business Activist Wins Interim Victory Against Pentagon, Sikorsky

By Charles Clark
Government Executive
November 16, 2017

For four years, the small but vocalAmerican Small Business League has argued that large federal contractorsmislead agencies and the public by overstating their use of small businesses assubcontractors to meet statutory goals.

In U.S. District Court in San Franciscolast Friday, attorneys for the advocacy group led by Lloyd Chapman and based inPetaluma, Calif., successfully pried out the previously non-public names ofsuppliers and other subcontractors used by Sikorsky Aircraft Corp.

The helicopter maker had joined with theDefense and Justice departments in seeking to withhold such information asproprietary when submitted to the Pentagon under its 27-year-old ComprehensiveSubcontracting Plan Test Program, designed to measure corporate potentialfor increasing small business opportunities in subcontracting.

Small business booster Chapman has longchallenged the Pentagon's program as nonproductive and oriented mostly towardobfuscating the degree to which large contractors win defense business intendedfor smaller ones.

After Chapman filed a FOIA request for thenames of Sikorsky's subcontractors, the company and the government resisted,winning a round in court last January. They argued that the FOIA requestinfringed on rights to withhold proprietary information. "Disclosure wouldprovide competitors with information that they could use to improve their ownsystems and capabilities to Sikorsky's detriment," it said in a brief toprotect its 2012 submission to the Pentagon.

The withheld information comprised"personal identifying information of Sikorsky employees, including their names,phone numbers and email addresses, which was not disclosed to protect the individuals'privacy; information regarding Sikorsky's training program, which isproprietary because Sikorsky's approach to training distinguishes it from itscompetitors and likely is a relevant factor in evaluating the strength ofSikorsky's bid proposals . . . [and] the dollar amounts of actual subcontractsawarded within the fiscal year, which is proprietary because it revealsSikorsky's purchasing strategies and methodologies and subcontractingforecasts."

After several rounds of negotiationswith District Judge William Alsup, Justice lawyers released versions of thedocument, each with fewer redactions than the last, before releasing the mostrevealing version yet on Nov. 10.

After examining the documents, Chapmantold Government Executive this week he found them "indecipherable,"though just getting the new document made him feel he'd "struck gold. There aresome interesting anomalies. For some companies we find no information, some haveonly one employee, and some are currently subsidies of Fortune 500 companies,"he said. "It's a very peculiar list."

In response, his lawyers will berequesting the names of all of Sikorsky's suppliers and contractors. And in thenear future," Chapman added, he will be requesting the names of all thesuppliers and subcontractors in Pentagon programs. "The significance is thatcontractors that participate in the Comprehensive Subcontracting Plan TestProgram cannot withhold the names of subcontractors. It shows the Pentagon wasright when it said that small business contracts have plummeted as result ofthe program."

A Sikorsky spokesman, Paul Jackson, toldGovernment Executive, "We continue to maintain that the Sikorsky SmallBusiness Plan contains proprietary and confidential information, and we willcontinue to oppose any further release of the information in question."  

A Defense spokesman said he could notcomment on pending litigation.

A Justice spokesman told GovernmentExecutive that the negotiated release of a less-redacted version of thedocument "does not resolve this matter as to those portions not released, norwill it answer the many unanswered questions as to what sort of investigationwas conducted in the first instance by the defendants, and why this litigationwas necessary." He declined to comment on whether the content of the documentsconstitutes evidence in the dispute over whether large corporationsmisrepresent their use of small business subcontractors.

Chapman's team, however, remainsoptimistic about continuing the case with a jury trial. "Some of theinformation we seek had actually been posted on government websites and issuedin pressreleases by Sikorsky," said one of Chapman's attorneys, JonathanCuneo, a partner of the Washington, D.C.-based Cuneo Gilbert & LaDuca LLP."The defendants hid behind a spurious trade secrets claim for four years.Ironically, this case involves information with no national securitysensitivity about a single source, non-competitive Defense Departmentcontract."  

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