SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

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Fraudulent Pentagon Test Program Hidden in 2015 National Defense Authorization Bill

PETALUMA, CA -- (Marketwired) -- 06/23/14 -- According to the American Small Business League, the renewal of a 25-year-old fraudulent Pentagon program has been hidden in the House version of the 2015 National Defense Reauthorization Bill.

The renewal of the Comprehensive Subcontracting Plan Test Program (CSPTP) into its 28th year of testing is covered in section 811 of the FY 15 National Defense Authorization Bill (H.R. 4435). To try and hide the renewal of the controversial and fraudulent program section 811 has been obscured from the bill.

The language renewing the Test Program is hidden under the section titled, "Subtitle B--Industrial Base Matters."

The Comprehensive Subcontracting Plan Test Program began in 1990 under the guise of "increasing subcontracting opportunities for small businesses." In reality the Test Program was carefully written to do just the opposite. Prior to the Test Program all Pentagon prime contractors were required to submit subcontracting plans and quarterly and annual subcontracting reports that were available to the public.

Pentagon prime contractors participating in the Test Program were no longer required to submit any subcontracting plans and reports that were once available to the public effectively eliminating all transparency.

Prior to the Test Program all Pentagon prime contractors were subject to "liquidated damages" for failing to achieve subcontracting goals required under federal law. Under the Test Program prime contractors were exempt from any "liquidated damages" or other penalties for non-compliance with subcontracting goals.

With the elimination of publicly available subcontracting plans, achievement reports and all penalties for non-compliance, prime contractors had little or no incentive to comply with federal law establishing subcontracting goals.

The American Small Business League (ASBL) estimates that since the Comprehensive Subcontracting Test Program was established in 1990 small businesses have likely been defrauded out of over one trillion dollars in federal subcontracts.

The decision by the House of Representatives to hide section 811 may have also been based on the embarrassing language that had been included in the "Chairman's Mark" of the bill. Language in section 811 that renewed the Test Program into its 28th year of testing (2017) stated:

"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..."

The American Small Business League filed suit against the Pentagon in May in Federal District Court in San Francisco after the Pentagon refused to release any data on the Test Program under the Freedom of Information Act.

The American Small Business League has also launched a national campaign working with Chambers of Commerce across the country to block the renewal of the Comprehensive Subcontracting Plan Test Program.

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