By Lloyd Chapman Shadowproof December 15, 2014
President Obama will sign the 2015 National Defense Authorization Act (NDAA) any day now and renew a Pentagon program that has cheated American small businesses out of hundreds of billons if not trillions of dollars in subcontracts for more than a quarter of a century.
The 25-year-old Pentagon Comprehensive Subcontracting Plan Test Program (Test Program) will be renewed into its 28th year of testing into 2017. This program is one of the best examples in history of how blatantly corrupt the federal government actually is.
You have to admire the dedication of those guys at the Pentagon. They have been testing a theory since 1990 that removing all transparency on federal small business subcontracting programs might “increase subcontracting opportunities for small businesses.” To really try and help small businesses land more federal subcontracts the Pentagon added one more feature to the “Test Program”, all participants are exempt from any penalties for non-compliance.
Any Pentagon prime contractor that participates in the “Test Program” is exempt from any penalties they had previously faced for failing to comply with their federally mandated small business subcontracting goals such as “liquidated damages.”
So under the pretense of “increasing subcontracting opportunities for small businesses” the Pentagon has eliminated all penalties for non-compliance and all publicly available documents that could be used to track a prime contractor’s compliance with their small business subcontracting goals.
They have now been testing this theory at the Pentagon for over 25 years and apparently the results are inconclusive because Congress has decided to renew it for three more years. (They should try that theory out at the IRS. Eliminate tax returns and penalties for not paying your taxes and test it for 25 years to see if it increases tax revenue.)
Here is one of the more astounding aspects of this blatant anti-small business scam; no member of Congress has ever seen any reports or data on the “Test Program” since it began in 1990. For more than 25 years the Pentagon has refused to release any data on the program.
Obviously the “Test Program” was not designed to help small businesses. It was developed to create a loophole for Pentagon prime contractors to circumvent federal law mandating small businesses receive a minimum of 23% of all federal contracts. I knew if I could get the reports the prime contractors were submitting it would prove that point. The reports would also prove the Pentagon had violated federal law and lied to Congress about the true volume of subcontracts that had been awarded to small businesses.
I believe the Pentagon has defrauded American small businesses out of well over one trillion dollars in subcontracts and possibly as much as two trillion over the last 25 years.
I decided to challenge the Pentagon’s refusal to release any data on the program. As a test case I requested the most recent report submitted by Sikorsky Aviation Corporation under the Freedom of Information Act. Not surprisingly the Pentagon refused to provide the data.
My goal was to use the data to prove the Pentagon has committed fraud and try and halt the renewal of the “Test Program” by Congress
I filed suite in Federal District Court in San Francisco. On November 23, Federal District Court Judge William Alsup ruled in my favor. He ordered the Pentagon to release the data by December 3rd. I knew they wouldn’t release the data because Congress would be voting to renew the “Test Program” the following week.
I predicted that in a press release that went out on December 3rd.
I was right, my lawyer called me on the morning of December 3rd and told me the Office of Solicitor General had intervened on behalf of the Pentagon and requested a 60-day stay. Judge Alsup had to grant it.
The following week Congress voted to renew the Comprehensive Subcontracting Plan Test Program into its 28th year of testing.
Sikorsky has now contacted my attorney and told him they will also be intervening in the case.
The Pentagon knows that once I get the Sikorsky data, I can the get all the data submitted by all of the participants of the “Test Program”. Current participants include: Boeing, BAE Systems, GE Aviation, General Dynamics, Hamilton Sundstrand Corporation, Harris Corporation, L3 Communications, Lockheed Martin, Northrop Grumman, Pratt & Whitney, Raytheon and Sikorsky.
Here is what all the fuss is about; one number, the percentage of subcontracts Sikorsky awarded to small businesses. So why are the Pentagon, the Solicitor General and Sikorsky so jacked up over this?
Is it because I am a conspiracy nut like the Pentagon would have everyone believe?
Probably not, it looks like my theories are correct and the release of this data will prove the Pentagon has violated multiple federal laws and cheated small businesses out of trillions.
I have found stories on the Internet about other whistleblowers and journalists that obtained information under the Freedom of Information Act that was much less damaging to the federal government than the data I am seeking. They had their homes raided by armed FBI and Homeland Security agents.
Just in case, I went out and had a t-shirt made that I sleep in. It says WHISTLBLOWER, DONT SHOOT ME on the front and back. I thought that would look great in my mug shot.
If it’s not the FBI, something involving the Justice Department or the IRS is probably in my future. Possibly before January 22nd when the Pentagon has to release the data.
On the other hand, I met President Obama, I endorsed him in the primaries and he released a nice statement about the American Small Business League. I worked on his first campaign and he said repeatedly he would have the most transparent Administration in history. Maybe I’ll be getting some type of award for my efforts to expose fraud and corruption at the Pentagon.