Pentagon Loses Landmark Legal Battle Over Subcontracting Data

Press Release

Pentagon Loses Landmark Legal Battle Over Subcontracting Data

By Lloyd Chapman
American Small Business League
November 26, 2014

PETALUMA, CA--(Marketwired - Nov 26,2014) - The Pentagon has lost a landmark Freedom of Information Act (FOIA)case to the American Small Business League (ASBL). San FranciscoFederal District Court Judge William Alsup has ordered the Pentagon to release the small businesssubcontracting data that has been submitted by Sikorsky under theComprehensive Subcontracting Plan Test Program (CSPTP).

The Pentagon had refused to release the dataclaiming that it contained "confidential financial information."Judge Alsup disagreed and denied both of their motions for summary judgment andordered the Pentagon to release the information to the ASBL by December 3,2014.

"Judge Alsup's ruling will be thebasis for the American Small Business Leagues efforts to ensue thesubcontracting information that has been submitted by all of the participantsof the Comprehensive Subcontracting Plan Test Program will be made publiclyavailable," said ASBL's attorney Robert Belshaw.

Current participants of the Pentagon's CSPTPinclude, BAE Systems, Boeing, GE Aviation, General Dynamics, Hamilton SundstrandCorporation, Harris Corporation, L3 Communications, Lockheed Martin, NorthropGrumman Electronics Systems, Pratt & Whitney, Raytheon Company and SikorskyAircraft Corporation.

The ASBL originally requested the databecause they believed the CSPTP was designed tocreate a loophole in federal contracting law that has allowed manyof the Pentagon's largest prime contractors to circumvent federal lawestablishing small business subcontracting goals.

When the Pentagon implemented theCSPTP in 1990 it eliminated any publicly available information on smallbusiness subcontracting goals and any penalties that Pentagon contractors couldface for refusing to comply with their small business subcontracting goals.Although the CSPTP eliminated all transparency and penalties for primecontractors, the stated mission of the program was to "increase subcontractingopportunities for small businesses."

In 2004 the Government AccountabilityOffice (GAO) released the results of an investigation into the CSPTP thatstated, "Although the Test Program wasstarted more than 12 years ago, DOD has yet to establish metrics to evaluatethe program's results and effectiveness."

Professor Charles Tiefer, one of thenation's leading experts on federal contracting law released a legal opinion on the CSPTPthat stated, "The program is a sham and its extension will be seriouslyharmful to vital opportunities for small business to get government contractingwork... There is no doubt in my mind the CSPTP has significantly reducedsubcontracting opportunities for small businesses. It should not have gottenits 25 years of extension as a never-tested 'Test Program.' Let itexpire."

"Think of the lunacy of removingall transparency and penalties for small business subcontracting programs forthe Pentagon's largest prime contractors and test it for 25 years to see of itincreases subcontracting opportunities for small businesses. It's anunparalleled example of fraud and corruption at the Pentagon. We expect Judge Alsup'sruling to lead to the eventual release of data on all firms participating inthe CSPTP that will prove the Pentagon has cheated American small businessesout of well over a trillion dollars in subcontracts," stated ASBLPresident Lloyd Chapman.

For more information contact ASBLattorney Robert Belshaw (415) 956-9590, ASBL Communications Director SteveGodfrey (707) 789-9575, or Sikorsky Supplier Diversity Manager Martha Crawford(203) 386-3241.

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