Pull the plug on Pentagon's 25-year-old test program

In 1990 Congress allowed the Pentagon to adopt the Comprehensive Subcontracting Plan Test Program (CSPTP). The CSPTP’s current website states, “The purpose of the test is to determine whether comprehensive subcontracting plans will result in increased subcontracting opportunities for small businesses while reducing the administrative burden on contractors.”

Under the guise of increasing subcontracting opportunities for small businesses the CSPTP actually did just the opposite. The CSPTP created a loophole in federal contracting law that has allowed Pentagon prime contractors to ignore legislation establishing small business subcontracting goals for 25 years.

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Prior to the CSPTP, prime contractors were required to submit individual small business subcontracting plans (ISR’s) and semiannual (SF 294) and annul (SF 295) small business subcontracting reports on every major contract. All this information was available to the public. The data could be used to track a prime contractor's compliance with their small business subcontracting goals. The CSPTP eliminated all publicly available information and all transparency on a prime contractor’s compliance with small business goals.

Prior to the CSPTP, prime contractors could face “liquidated damage” for failure to comply with their small business subcontracting goals. The CSPTP exempted participating prime contractors from “liquidated damages” or any other penalties for failure to comply with federal law establishing small business goals.

Under the pretense of “increasing subcontracting opportunities for small businesses”, the CSPTP eliminated all transparency on a prime contractor’s compliance with small business subcontracting goals and eliminated all penalties for prime contractors that failed to comply with small business subcontracting goals.

The Pentagon has been testing the CSPTP for 25 years and it appears that both the House and Senate are poised to renew the program into its 28th year of testing, 2017.

Over the last 25 years, the Pentagon has never released any data of any kind on the CSPTP and certainly no data to indicate it has achieved its stated goal of increasing subcontracting opportunities for small businesses. The Pentagon is even refusing to release any specific subcontracting data submitted to the CSPTP under the Freedom of Information Act.

Based on all the research we have done at the American Small Business League (ASBL) it appears small businesses have lost somewhere between 1 and 1.5 trillion dollars in subcontracts since the CSPTP began in 1990.

It does appear that both the House and Senate are ashamed and embarrassed by their continued renewal of 25-year-old untested Pentagon test program.

In the House version of the 2015 National Defense Authorization Bill (H.R. 4435) , section 811 which contains the language renewing the controversial “Test Program” into its 28th year of testing has been hidden under the title, “Subtitle B—Industrial Base Matters”.

The desire by lawmakers in the House to try and hide section 811 may be based on the language in the “Chairman’s Mark” of the 2015 National Defense Authorization Bill. It states, "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..."

A 2004 GAO investigation into the CSPTP agreed and 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.”

In the Senate version of the 2015 National Defense Authorization Bill (S.2410), the language in Section 823 renewing the CSPTP until 2017 seems ambiguous and gives the Pentagon total power to determine if the CSPTP should be renewed.

One of the main reasons the CSPTP has been able to survive for close to a quarter of a century, without objection, is the fact no one outside the Pentagon seems to be aware of the untested test program.  No journalist in 25 years has ever reported on the absurdity of eliminating transparency and penalties for Pentagon prime contractors under the guise of increasing subcontracting opportunities for small businesses.

The CSPTP may be one of the most perfect examples of everything the American people dislike about their government. A program that was adopted under the guise of helping small businesses has actually cheated them out of over a trillion dollars has been renewed by every President and every Congress for 25 years. Now President Obama and Congress want to renew the CSPTP into its 28th year.

Absolutely amazing!

Chapman is president and founder of the American Small Business League.