Pentagon Accused Of Cover-Up In Case Over Sikorsky Data

 

PETALUMA, Calif., Feb. 25, 2015 /PRNewswire-USNewswire/ — The American Small Business League (ASBL) is accusing the Pentagon of trying to cover-up trillions of dollars in fraud in a federal case over data submitted to the 25-year-old Comprehensive Subcontracting Plan Test Program (CSPTP).

In August 2013 under the Freedom of Information Act (FOIA), the ASBL requested the most recent comprehensive subcontracting plan that Sikorsky Aviation Corporation submitted to the CSPTP. The ASBL’s goal was to file a test case to challenge the Pentagon’s refusal to release any data on the program in over 25 years and prove the program had defrauded small businesses out of trillions of dollars in subcontracts since the program began in 1990.

On November 23, 2014, Judge Alsup ruled against the Pentagon and ordered them to release the Sikorsky data to the ASBL by December 3, 2014.

On December 2, 2014, the Office of Solicitor General intervened in the case and secured a 60-day stay of the release of the data.

“The purpose of the Freedom of Information Act is so the public can see how our government works. Congress passed this law to make the small businesses have access to some of these projects, and here is the United States covering it up,” stated Judge Alsup in his November 6, 2014 hearing.

On December 11, 2014, Sikorsky filed a motion with the U.S. District Court for their right to intervene with the case.

“DOD argued that the Plan was exempt from disclosure under FOIA because it contained confidential commercial and financial information, the disclosure of which would cause substantial harm to Sikorsky’s competitive position,” stated Rex Heinke, attorney for Sikorsky Aircraft in their motion to intervene.

Judge Alsup referred to this case as a “David and Goliath” battle between ASBL and both the DoD and Sikorsky. “You get to come in there and be the underdog again against the big company and against the big government… They are trying to suppress the evidence,” Alsup stated to the ASBL.

On Jan. 21, both the Pentagon and Sikorsky filed a motion to appeal the case to the 9th Circuit Court of Appeals.

In September 2014, Professor Charles Tiefer, one of America’s leading experts on federal contracting law issued a legal opinion on the CSPTP. He stated, “The program is a sham and its extension will be seriously harmful to vital opportunities for small business… It should not have gotten its 25 years of extension as a never-tested ‘Test Program.’ Let it expire.”

In a December 31, 2014 article in the Washington Post, Pentagon spokeswoman Maureen Schumann admitted the CSPTP had in fact reduced subcontracting opportunities for small business. Ms. Schumann stated that the program “has led to an erosion of [the agency’s] small business industrial base,” and that “there is no evidence that the CSPTP has benefited small companies.”

“The move in Washington to close the Small Business Administration is clearly designed to cover-up the rampant fraud that has been exposed in small business programs like the Comprehensive Subcontracting Plan Test Program,” stated Lloyd Chapman, President of the American Small Business League.

Pentagon Appeals Sikorsky Case To 9th Circuit Court Of Appeals

 

PETALUMA, Calif., Feb. 2, 2015 (GLOBE NEWSWIRE) — The Pentagon has filed an appeal in a Freedom of Information Act (FOIA) case they lost to the American Small Business League (ASBL). The 9th Circuit Court of Appeals will now hear the case.

On November 23, Federal District Court Judge William Alsup ordered the Pentagon to release a report Sikorsky Aviation Corporation submitted to the Comprehensive Subcontracting Plan Test Program to the ASBL by December 3.

“The purpose of the Freedom of Information Act is so the public can see how our government works. Congress passed this law to make the small businesses have access to some of these projects, and here is the United States covering it up,” said Judge Alsup in the hearing.

The ASBL originally requested the Sikorsky data to test the Pentagon’s refusal to release any data on the CSPTP in over 25 years and prove the program had cheated small businesses out of trillions of dollars in subcontracts.

The ASBL also hoped to use the data to convince Congress not to include language in the 2015 National Defense Authorization Act (NDAA) that would renew the CSPTP into its twenty-eighth year of testing.

ASBL President and founder Lloyd Chapman has been an outspoken critic of the CSPTP. No Washington based organization claiming to represent the interests of small businesses has ever publicly criticized the program since it began over 25 years ago.

“The Comprehensive Subcontracting Plan Test Program has allowed the Pentagon to cheat American small businesses out of trillions of dollars in subcontracts for over 25 years. The Pentagon knows the release of this data will prove that fact,” stated Chapman.

The Pentagon adopted the CSPTP in 1990 under the pretense of “increasing subcontracting opportunities for small businesses.” In reality the program eliminated all transparency on small business subcontracting programs by prime contractors and eliminated all non-compliance penalties such as “liquidated damages.”

In a Dec. 30 article in the Washington Post, Pentagon spokeswoman Maureen Schumann confirmed Chapman’s criticism that small businesses had been shortchanged by the CSPTP. She stated the program “has led to an erosion of [the agency’s] small business industrial base,” and while the Pentagon suggests that it has resulted in savings for the participating large contractors, “there is no evidence that the CSPTP has benefited small companies.”

In September, Prof. Charles Tiefer issued a legal opinion on the CSPTP that confirmed Chapman’s concerns that the program has harmed small businesses. Prof. Tiefer stated, “The program is a sham and its extension will be seriously harmful to vital opportunities for small business… There is no doubt in my mind the CSPTP has significantly reduced subcontracting opportunities for small businesses… Let it expire.”   Despite overwhelming evidence the CSPTP had significantly reduced subcontracting opportunities for small businesses, President Obama signed the 2015 NDAA and renewed the CSPTP into its twenty-eighth year of testing, until 2017.

Pentagon Loses Landmark Legal Battle Over Subcontracting Data

 

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 Francisco Federal District Court Judge William Alsup has ordered the Pentagon to release the small business subcontracting data that has been submitted by Sikorsky under the Comprehensive Subcontracting Plan Test Program (CSPTP).

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

“Judge Alsup’s ruling will be the basis for the American Small Business Leagues efforts to ensue the subcontracting information that has been submitted by all of the participants of the Comprehensive Subcontracting Plan Test Program will be made publicly available,” said ASBL’s attorney Robert Belshaw.

Current participants of the Pentagon’s CSPTP include, BAE Systems, Boeing, GE Aviation, General Dynamics, Hamilton Sundstrand Corporation, Harris Corporation, L3 Communications, Lockheed Martin, Northrop Grumman Electronics Systems, Pratt & Whitney, Raytheon Company and Sikorsky Aircraft Corporation.

The ASBL originally requested the data because they believed the CSPTP was designed to create a loophole in federal contracting law that has allowed many of the Pentagon’s largest prime contractors to circumvent federal law establishing small business subcontracting goals.

When the Pentagon implemented the CSPTP in 1990 it eliminated any publicly available information on small business subcontracting goals and any penalties that Pentagon contractors could face for refusing to comply with their small business subcontracting goals. Although the CSPTP eliminated all transparency and penalties for prime contractors, the stated mission of the program was to “increase subcontracting opportunities for small businesses.”

In 2004 the Government Accountability Office (GAO) released the results of an investigation into the CSPTP that stated, “Although the Test Program was started more than 12 years ago, DOD has yet to establish metrics to evaluate the program’s results and effectiveness.”

Professor Charles Tiefer, one of the nation’s leading experts on federal contracting law released a legal opinion on the CSPTP that stated, “The program is a sham and its extension will be seriously harmful to vital opportunities for small business to get government contracting work… There is no doubt in my mind the CSPTP has significantly reduced subcontracting opportunities for small businesses. It should not have gotten its 25 years of extension as a never-tested ‘Test Program.’ Let it expire.”

“Think of the lunacy of removing all transparency and penalties for small business subcontracting programs for the Pentagon’s largest prime contractors and test it for 25 years to see of it increases subcontracting opportunities for small businesses. It’s an unparalleled example of fraud and corruption at the Pentagon. We expect Judge Alsup’s ruling to lead to the eventual release of data on all firms participating in the CSPTP that will prove the Pentagon has cheated American small businesses out of well over a trillion dollars in subcontracts,” stated ASBL President Lloyd Chapman.

DOJ Retreats on Defense of Pentagon-Sikorsky Case in Upcoming Trial

Washington, DC, October 20 – Stunning information revealed during depositions in a four year long Freedom of Information Act (FOIA) battle led the Department of Justice (DOJ) to largely abandon defending the Department of Defense (DOD) against a lawsuit seeking information about Sikorsky Aircraft Corporat ion’s (Sikorsky) small business subcontracts.  A key assertion by Sikorsky that releasing materials it filed with DOD would reveal trade secrets is unsupportable, DOJ apparently determined.  Accordingly, DOJ notified the Court and co-defendant Sikorsky on October 12 that DOD intends to release most of the requested information in two weeks.  The December 11 trial has been postponed.

The American Small Business League (ASBL) initially sought Sikorsky’s small business subcontracting plan in an August 2013 Freedom of Information Act filing. When DOD refused, Sonoma, CA based ASBL filed suit in the U.S. District Court in San Francisco in 2014. In an early hearing, Judge William Alsup on November 6, 2014 said: “The purpose of the Freedom of Information Act is so the public can see how our government works. Congress passed this law to make small businesses have access to some of these projects, and here is the United States covering it up.”

“We whole-heartedly agreed with Judge Alsup then and now welcome the unraveling of that cover-up,” said Lloyd Chapman, ASBL’s president. “We believe the covered-up information will help expose the fact that the Pentagon and its largest prime contractors have used the Comprehensive Subcontract Plan Test Program to cheat small business out of hundreds of billions in subcontracts since the program began in 1989.”

“Some of the information we seek had actually been posted on government web sites and issued in press releases by Sikorsky,” explained Jonathan W. Cuneo, partner of Washington, DC-based Cuneo Gilbert & LaDuca, LLP, representing ASBL.  “The defendants hid behind a spurious trade secrets claim for four years.  Ironically, this case involves information with no national security sensitivity about a single source, non-competitive Defense Department contract.”

Among facts undermining Sikorsky’s trade secrets defense is an expert report by former FAA official David Downey who said information about Sikorsky’s subcontractors is “widely” available in the industry.

 

With its principal office in Washington, DC, Cuneo Gilbert & LaDuca, LLP represents clients in a range of civil justice and legislative matters including civil and human rights, antitrust, consumer protection, product liability and securities and intellectual property.