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Pentagon to Review 21-Year-Old Test Program

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After it was recently announced that several members of Congress requested that the Government Accountability Office (GAO) investigate the Pentagon's Comprehensive Subcontracting Plan Test Program (CSPTP), the Department of Defense (DoD) stated that it would be conducting its own evaluation and study of the program, which should be concluded within approximately a year. To date, this 21 year old "test program" has never been evaluated by the Pentagon to determine if the program is working or meeting any of its intended goals.

The original, and continually stated, purpose of the program is to increase subcontracting opportunities available to small businesses under federal contracts awarded to 14 large prime contractors. In reality, the CSPTP has dramatically reduced the amount of subcontracting opportunities available to small businesses while at the same time eradicating accountability and oversight measures. This has been achieved by abolishing specific subcontracting reports prime contractors must normally submit, regarding the volume of subcontracting dollars awarded to small businesses. The CSPTP has also been harmful by eliminating penalties for non-compliance with mandated small business subcontracting goals.

The GAO may launch an investigation into the program in the near future. The American Small Business League (ASBL) believes that the GAO will find that over the last 21 years, the nation's largest prime defense contractors have been allowed to circumvent federal law that requires a minimum of 23 percent of all federal contracting and subcontracting dollars be spent with small businesses. The ASBL believes the real purpose of the CSPTP is to allow large contractors to avoid paying liquidated damages for non-compliance with their small business subcontracting goals, as required under subpart 11.5 of the Federal Acquisition Regulation (FAR).

In order to help place the CSPTP, and the money involved into context, defense spending alone accounts for approximately 70 percent of the federal government's entire acquisition budget, as it is officially reported, which does not include funding for "black" projects and intelligence operations. For fiscal year (FY) 2009, DoD spent over $311 billion, officially, contracting out for goods and services. Out of that $311 billion, the 14 large defense contractors that participate in the CSPTP received over $55 billion in contracts from DoD. This means that one of every six dollars spent by DoD during FY 2009 was spent with one of the participants of in the CSPTP.

I find it laughable that this program has been in place for 21 years, and now the Pentagon has finally decided to evaluate this "test program," only after it was announced that Congress has requested the GAO to conduct an independent evaluation of the program. The program is up for renewal for another 4 years in the National Defense Authorization Act for Fiscal Year 2011 currently in the Senate. If it is renewed, the program will have been in place for a quarter-century without ever being evaluated. The ASBL estimates that over the life of the CSPTP, small businesses have been cheated out of more than $1 trillion dollars in missed subcontracting opportunities as a direct result of the program. The ASBL is also preparing to file an injunction against the Pentagon to force a halt to the continuation of the program.