Contact Information: Contact: Christopher Gunn Communications Director American Small Business League (707) 789-9575
Pentagon Program Promotes Fraud and Abuse in Federal Sub-Contracting, According to the American Small Business League
| Source: American Small Business League
PETALUMA, CA--(Marketwire - February 20, 2008) - The following is a statement by the American
Small Business League:
The American Small Business League has launched a national campaign to
abolish the Defense Department's Comprehensive Subcontracting Plan Test
Program, which it believes encourages fraud and abuse in federal small
business subcontracting.
Under FAR clause 52.219-16, titled "Liquidated Damages - Subcontracting
Plan (Jan 1999)," any government contractor that fails to meet its small
business-contracting goal is required to pay damages to the federal
government in the amount of the deficiency. However, participants in the
comprehensive test program, like: BAE Systems, GE Aviation, General
Dynamics, L3 Communications, Lockheed Martin, Northrop Grumman, and
Raytheon are allowed to circumvent the liquidated damages clause and
therefore avoid penalties for non-compliance with federal law which
mandates contracting with small businesses.
In 1990, Congress passed Public Law 101-189, which established the
Comprehensive Subcontracting Plan Test Program. Opponents of the
Comprehensive Subcontracting Plan Test Program believe that it was created
as a loophole to allow prime contractors to circumvent the liquidated
damages clause by removing the primary reporting function used by the
federal government to review compliance with subcontracting goals and by
removing the penalty for non-compliance.
"The Comprehensive Subcontracting Plan Test Program was clearly written by
lobbyists for major prime contractors in the defense and aerospace industry
and needs to end immediately," President of the American Small Business
League Lloyd Chapman said. "It is ridiculous to think that 18 years ago
they passed a test program and it is still in place. This legislation was
passed to help prime contractors circumvent their small business
subcontracting goals and was never intended to help small businesses in any
way. With that in mind, we are going to do everything that we can to see
that this program is eliminated as soon as possible."
The ASBL estimates that over the last 18 years, hundreds of billions of
dollars in federal small business subcontracting dollars have been diverted
from legitimate small businesses by participants of the Comprehensive
Subcontracting Plan Test Program.
The ASBL's campaign to abolish the Comprehensive Subcontracting Plan Test
Program will be a campaign to educate every member of Congress,
presidential candidates, members of the media and chambers of commerce
across the country about the negative impact that the program has had on
small businesses in every state. Additionally, the ASBL intends to
encourage small businesses around the country to file litigation under the
False Claims Act against prime contractors that have falsified their
subcontracting plans, initiate an GAO investigation and push for
congressional hearings on the subject.