PETALUMA, CA -- (Marketwired) -- 05/12/14 -- The Pentagon is refusing to comply with Freedom of Information Act requests for specific data on the volume of subcontracts awarded by any of the nation's twelve largest defense contractors participating in the 25-year-old Comprehensive Subcontracting Plan Test Program.
The American Small Business League has been attempting to obtain specific data on contractors participating in the Comprehensive Subcontracting Plan Test Program under the Freedom of Information Act since 2010. They plan to file suite against the Pentagon this week in Federal District Court in San Francisco.
The Pentagon website for the Comprehensive Subcontracting Plan Test Program states, "The purpose of the test is to determine whether comprehensive subcontracting plans will result in increased subcontracting opportunities for small businesses while reducing the administrative burden on contractors." (Link)
No results on the effectiveness of the 25-year-old test program have ever been produced or released to the public.
The program was enacted 25 years ago and yet it is virtually unknown across government. No journalist has ever written about the program.
The program had two provisions. The first was prime contractors participating in the test program no longer had to release quarterly (SF 294) and annual (SF 295) subcontracting reports that had been previously available to the general public. The second provision of the test program was that prime contractors participating in the test program were exempt from any and all penalties under the law for non-compliance with their federally mandated small and small disadvantaged business subcontracting goals.
The Comprehensive Subcontracting Plan Test Program was enacted in 1989, shortly before the 9th Circuit Court of Appeals in San Francisco issued a ruling against the Defense Logistics Agency that found subcontracting reports submitted to the Pentagon from prime contractors were public information.
Prior to the implementation of the Comprehensive Subcontracting Plan Test Program in 1989, all Pentagon prime contractors were required to submit quarterly (SF 294) and annual (SF 295) small business subcontracting reports. Federal law mandated that any prime contractor that failed to make a "good faith effort" to comply with their small and small disadvantaged business subcontracting goals could be required to pay liquidated damages in the amount of the deficiency.
The American Small Business League believes the Comprehensive Subcontracting Plan Test Program is a significant loophole created by the Pentagon to allow prime contracts to ignore federal law that requires a minimum of 23% of all federal contracts and subcontracts be awarded to small businesses and avoid any penalties for noncompliance with those goal.
The ASBL believes the data they obtain through their litigation will prove legitimate small businesses have been defrauded out of trillions in federal small business contracts since the test program began 25 years ago.