Pentagon Funding Bill Would Dismantle Federal Small Business Programs

PETALUMA, CA--(Marketwired - September 15, 2016) - According to the American Small Business League, Senator John McCain, Chairman of the Senate Armed Services Committee, has included language in the 2017 National Defense Authorization Act (NDAA) that would severely weaken Federal small business contracting and subcontracting programs. If Congress passes the Senate version of the 2017 NDAA thousands of small businesses across the country could see billions of dollars in federal contracts disappear.

The NDAA bill (S.2943) includes three provisions that could dismantle federal law that mandates American's 28 million small businesses receive a minimum of 23% of all federal contracts. McCain's version of the 2017 NDAA would exclude small businesses from participating in all foreign contracts. It would also create a loophole that would allow the Pentagon to fabricate compliance with the federal governments 23% small business contracting goal.

Senator McCain's version of the 2017 NDAA also includes language that would make the Pentagon's controversial 27-year-old Comprehensive Subcontracting Plan Test Program (CSPTP) permanent. The CSPTP was adopted in 1989 after the Pentagon was forced to release small business subcontracting reports that indicated Pentagon prime contractors were not complying with federal small business subcontracting laws and regulations.

The Test Program was adopted under the guise of "increasing subcontracting opportunities for small business." In reality, it eliminated all public transparency on small business subcontracting data. It also eliminated penalties that had existed for prime contractors that violated federal contracting law.

The Pentagon has refused to release any data on the Test Program for 27 years. In 2015, the Pentagon finally produced a study that admitted the CSPTP had actually dramatically reduced subcontracting opportunities for small businesses since 1989. The American Small Business League (ASBL) estimates since 1989 American small businesses were cheated out of nearly two trillion dollars in federal subcontracts as a result of the Test Program.

Professor Charles Tiefer one of the nation's leading experts on federal contracting law released a legal opinion of the CSPTP describing it as a "sham." In his legal opinion Professor Tiefer stated, "The program is a sham and its extension will be seriously harmful to vital opportunities for small business to get government contracting work... Let it expire."

The ASBL filed suit against the Pentagon for refusing to release data on the CSPTP under the Freedom of Information Act. During the ASBL's suit against the Pentagon, Federal District Court Jude William Alsup stated, "So it would be more like a David and Goliath. 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."

The ASBL has launched a national campaign to encourage Senator McCain to remove the language from the 2017 National Defense Authorization Bill that would dismantle federal small business contracting programs.