Outgoing Congress renews aging law that shields federal contract data from public eye, blocks fines

Outgoing Congress renews aging law that shields federal contract data from public eye, blocks fines
Lloyd Chapman (SourceL American Small Business League)

While government agencies snoop into the private lives of Americans, Congress maintains a stone wall around trillions of dollars in public contracts. Just before their Christmas break, lawmakers quietly renewed the Comprehensive Subcontracting Plan Test Program, an oxymorically titled law that blocks disclosure of Pentagon spending.

The only thing “comprehensive” about the program is its blanket blockade of subcontractor data. With its latest renewal, the aging “test program” will turn 27 years old in 2017.

Said Lloyd Chapman, president of the California-based American Small Business League, “It eliminates transparency and eliminates penalties” for noncompliance. Chapman, in an interview, went on to note that Fortune 500 companies such as Verizon are reaping windfalls under CSPTP, and taxpayers are paying the price.

“Taxpayers were cheated out of $2.5 trillion over the last 25 years,” he estimated.

Chapman acknowledges that critics have only guesstimates because CSPTP is as dark as a black box.

“The public needs to know, but the government has not been forthcoming. A lot of money is not being reported,” said Ashok Mehan, CEO of Fedmine, a government data collection company in Maryland.

In 2004, the U.S. Government Accountability Office zeroed in on foreign subcontractors.

“Without accurate and complete information on subcontracts to firms performing outside the U.S., (the Department of Defense) cannot make informed decisions on industrial base issues,” the GAO report said.

In 2011, U.S. Rep. Hank Johnson, D-Ga., introduced H.R. 3184 to redistribute $200 billion a year from large corporations that receive federal small-business contracts to small businesses that Chapman says are supposed to receive the money. The measure went nowhere.

Congress first approved CSPTP in 1990, ostensibly to relieve contractors of burdensome government record-keeping rules.

“I don’t know that it’s overly cumbersome,” Mehan said of the accounting requirements.

Despite a 9th Circuit Court of Appeals ruling that small-business contractor data on taxpayer-funded projects cannot be kept secret, subcontractor information on helicopter maker Sikorksy Aircraft Corp. was delayed before Congress renewed CSPTP last month. Sikorsky is scheduled to release a report Thursday, but Chapman isn’t counting on it.

With the test program extended, he said, “Loopholes will continue to allow the government and prime Pentagon contractors to cover up.”

In addition to shielding data, CSPTP protects contractors from fines for failing to achieve small-business subcontracting goals. Ironically, the program’s stated objective is to “increase subcontracting opportunities for small businesses.”

“Who in their right mind could possibly believe eliminating all transparency and penalties in Pentagon small business subcontracting would ever increase subcontracting opportunities for small businesses?” Chapman asked in an op-ed article for The Hill.

Read more by Kenric Ward at Watchdog.com.

Kenric Ward

Kenric Ward

Kenric Ward is a national correspondent and writes for the Texas Bureau of Watchdog.org. Formerly a reporter and editor at two Pulitzer Prize-winning newspapers, Kenric has won dozens of state and national news awards for investigative articles. His most recent book is “Saints in Babylon: Mormons and Las Vegas.”


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