By Daniel Wilson
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 redacted information from a company subcontracting plan under the Freedom of Information Act, saying a FOIA exemption should have applied but that it would not sue to stop the release.
Despite the company’s objections, the DOD on Nov. 10 released to the American Small Business League a new copy of Sikorsky’s 2013 comprehensive subcontracting plan as part of the FOIA suit filed by ASBL, with “significantly fewer” redactions than a previously released version of the plan, the company said in a notice to the court.
While it has decided against filing a so-called reverse FOIA action to block release of the information, Sikorsky said it believes that the newly released information should have remained exempt from disclosure under FOIA Exemption 4, which covers trade secrets, arguing the government had gone against the Ninth Circuit’s interpretation of that exemption.
That new information includes, for example, the names of small business contractors the company uses to comply with a government small business subcontracting test program, details of confidential projects that make use of those subcontractors, and what Sikorsky does to set and meet its small business subcontracting goals, Sikorsky claimed.
“The disclosure of such information is likely to give Sikorsky’s competitors a significant competitive advantage over Sikorsky,” it said.
For example, competitors could use it to identify and poach Sikorsky’s proven base of small business suppliers and glean information from what the company chooses to make against what it chooses to buy, according to the company.
Any justifications for the release of the new information based on publicly available information are also incorrect, as although some subcontractors have been publicly revealed as Sikorsky suppliers, their specific roles in meeting its subcontracting goals and the company’s methods for recruiting them had not been, Sikorsky argued.
ASBL President Lloyd Chapman told Law360 on Tuesday that he continues to believe the 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 and other public sources — including Sikorsky’s own press releases — and is not a trade secret. He also claimed that the company may be acting disingenuously in redacting certain purported personal information from the plan documents.
Noting he had yet to fully analyze the newly unredacted information released to ASBL, Chapman said that an initial review of that information “seemed to indicate” that some of the firms Sikorsky has claimed are small business suppliers may in fact be larger businesses, which he argued may be indicative of a larger issue.
“If the Pentagon allowed Sikorsky to report rewards to large multi-nationals as small business awards and there was no oversight on that … It would be my assumption that the Pentagon is allowing all of the major contractors who participate 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 effectively rejected by the DOD. It has claimed the Sikorsky subcontracting plan will reveal whether small businesses are receiving DOD subcontracts from large defense contractors, as required by law, or not.
Specifically, the group believes that the DOD’s Comprehensive Subcontract Plan Test Program, created in 1989 as a test program for DOD prime contractors to use general, companywide subcontracting plans instead of the more specific per-contract plans required by other agencies, has been used to “cheat small business 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 the DOD and Sikorsky to cough up the company’s subcontracting plan, unredacted, before the Ninth Circuit in January reversed that decision, saying FOIA exemptions 4 and 6, which covers personal privacy, applied to certain redacted information in the plan.
Once back before the district court, the DOD on Oct. 12 said it intended to release some previously redacted information to ASBL, a move the group has claimed stems from discovery in the suit running counter to Sikorsky’s claims about 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 and Kimberley Friday of the U.S. Attorney’s Office for the Northern District of California.
Sikorsky is represented by Rex. S. Heinke and Jessica W. Weisel of Akin Gump Strauss Hauer & Feld LLP.
The case is American Small Business League v. U.S. Department of Defense, case number 3:14-cv-02166, in the U.S. District Court for the Northern District of California.