National Defense Authorization Bill Includes 24 Year Old Failed Test Program

PETALUMA, CA--(Marketwired - May 22, 2014) - According to the American Small Business League, the 2015 National Defense Authorization Bill (H.R. 4435) includes an extension of the 24 year old Comprehensive Subcontracting Plan Test Program (CSPTP). Under the current bill, the CSPTP would be extended until the end of 2017 even though there has never been any data that found the Test Program achieved its goals.

The CSPTP was supposed to increase federal government subcontracting opportunities for small businesses working with prime contractors. In reality, the Test Program has two dubious provisions that dramatically reduce subcontracting opportunities for small businesses.

The first provision allows participating prime contractors to avoid quarterly subcontracting reports that were once available to the public. The second provision eliminates any penalties for non-compliance with subcontracting goals.

A 2004 investigation by the Government Accountability Office (GAO) found that the Pentagon was unable to produce any data to show the CSPTP had achieved any of the stated goals of improving subcontracting opportunities for small businesses. Report GAO-04-381 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."

Even the language in the current Defense Authorization Bill acknowledges the failure of the 24 year old Test Program stating, "However, after nearly 24 years since the original authorization of the program, the test program has yet to provide evidence that it meets the original stated goal of the program..."

The American Small Business League (ASBL) believes the CSPTP was created after the Ninth Circuit Court of Appeals ruled subcontracting reports were releasable to the public under the Freedom of Information Act. The ASBL believes the CSPTP is an intentional loophole that allows prime contractors to circumvent federal contracting law that requires small businesses receive a minimum of 23% of all federal contracts and subcontracts, and then withhold any evidence of contracting fraud.

The Pentagon has refused to comply with Freedom of Information Act requests from the ASBL for specific subcontracting data on prime contractors participating in the Test Program. On May 12, 2014 the ASBL sued the Pentagon under the Freedom of Information Act in federal District Court in San Francisco for refusing to provide subcontracting data on Sikorsky.

ASBL President Lloyd Chapman stated, "A 24 year old Test Program is insane. The Comprehensive Subcontracting Plan Test Program is a loophole that allows the nation's largest prime contractors to violate federal contracting law and cheat American small businesses out of billions of dollars a year in federal contracts. The fact the Pentagon is refusing to release any subcontracting data proves the Test Program is a scam and was intended to legalize contracting fraud. It should be eliminated, not extended."