After years of litigation, a small business advocacy group has succeeded in forcing the Defense Department into a trial over its obligations under the Freedom of Information Act to release data requested from major contractors detailing their questionable use of subcontractors.
On March 8, U.S. District Judge William Alsup in San Francisco rejected, in part, a Justice Department attorney's request for the dismissal of a case brought by Lloyd Chapman of the Petaluma, Calif.-based American Small Business League.
Chapman has long protested and litigated for agency disclosure of contractor data collected under a little-known research initiative called the Comprehensive Subcontracting Plan Test Program, portraying the program as a dodge that allows large companies to get undeserved credit for meeting mandatory annual agency goals for hiring small businesses.
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The Defense Department and companies such as Connecticut-based helicopter maker Sikorsky (now owned by Lockheed Martin Corp.) have argued that releasing all data would compromise proprietary information valued by competitors. Chapman recently expanded his document requests to cover GE Aviation.
“The Pentagon is obviously trying to hide the fact that the Comprehensive Subcontracting Plan Test Program has created a massive loophole in federal contracting laws that has significantly reduced opportunities for small businesses,” Chapman said. “It’s unimaginable that the Pentagon will be 'testing' this blatant anti-small business loophole for over 38 years.”
The ruling itself, however, grants some of the Justice Department’s requests for dismissal while rejecting others. The judge accepted the government’s arguments that it had made adequate searches of files and accepted its use of an exemption allowing redaction of some of the documents' details to avoid personal private information.
But the ruling favored the small business league in requiring disclosure of contractor past performance, asking the government’s counsel to advise the court on how to proceed.
The Justice Department declined to comment, and the Pentagon did not respond to Government Executive inquiries.
Sikorsky spokesman Paul Jackson said, “Sikorsky and Lockheed Martin continue to work with the Department of Defense in regard to the matter and maintain that much of the requested information is subject to FOIA exemption as trade secrets and commercial or financial information that is privileged or confidential.” Both companies, he added, “remain committed to supporting small business development and the United States government’s Comprehensive Subcontracting Plan Test Program.”
Karl Olson, an attorney for the American Small Business League, said, “We look forward to going to trial in this case,” on behalf of a client who will continue to “shine a light on the extent to which the defense contractors comply, or don’t comply, with the Small Business Act in their subcontracting. This is an important case, and the public has a right to know about how its billions of dollars are spent, and such things as the government’s compliance reviews of the defense contractors, and how the contractors responded.”