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Small Biz Group Wants Access To Bechtel Contract Info

By Mike Cherney
March 2, 2011

Law360, New York (March 2, 2011) -- Citing cpncerns that big government contractors are not giving enough work to small businesses, the California-based American Small Business League wants the U.S. Army to release information on contracts awarded to global engineering firm Bechtel Corp.

The league filed a lawsuit Tuesday in the U.S. District Court for the Northern District of California saying the Army violated the Freedom of Information Act by refusing to release uncensored versions of reports detailing which companies Bechtel subcontracted with to perform government work.

Federal law requires 23 percent of all contracts to be awarded to small businesses, and each federal agency sets small business subcontracting goals in conjunction with the U.S. Small Business Administration. The ASBL suspects Bechtel and the Army could be cooperating to circumvent these rules.

The ASBL says it is gathering information on several major government contractors, and could launch additional lawsuits under the False Claims Act and the Small Business Act.

Kevin Baron, the director of government affairs for the league, said the Army released redacted versions of the Bechtel subcontracting reports. But the reports censored the dollar amount and percentages that small business subcontractors were receiving, which Baron said was the key information.

The league requested two types of subcontracting reports — an individual subcontracting report, which details the Bechtel subcontractors on one specific contract, and the most recent summary subcontracting report, which details subcontractors on all government contracts awarded to Bechtel.

The individual subcontracting report related to a $100 million deal with the Army's Joint Munitions Command in Rock Island, Ill., for hazardous waste treatment and disposal, Baron said. Bechtel has performed that work for the Army since at least 2005, at a cost of $804 million, Baron said.

Baron said the league is confident the court will order the Army to turn over the subcontracting reports, noting that the organization has won more than half a dozen similar FOIA suits in the past.

In 1992, the U.S. Court of Appeals for the Ninth Circuit ruled that the subcontracting reports could be released to the public and did not contain proprietary information.

Lloyd Chapman, the president of the ASBL, blasted President Barack Obama in a statement Tuesday, saying that despite Obama's promises to have the most transparent administration in history, his administration continues to withhold even the simplest information on federal small business contracts.

“Any time the Obama administration withholds information that has always been released to the public, it shows us that we have found evidence of contracting fraud and abuse,” Chapman said. “I am confident that's what we will find with this information.”

In a study on government contracts for fiscal year 2009, the league determined that 65 percent of the total volume of contract dollars coded as going to small businesses actually went to large corporations. The study reviewed the top 100 recipients of federal small business contracts.

The government awarded $16.6 billion in small business contracts in fiscal year 2009, but $10.7 billion of that amount went to large companies, according to the league's study. The league said its results showed the government is inflating the achievements of its small business goal by diverting billions of dollars in small business contracts to large companies.

The league is represented in the current FOIA suit by Gutierrez & Associates.

The case is American Small Business League v. U.S. Department of the Army, case number 11-955, in the U.S. District Court for the Northern District of California.

source: http://www.law360.com/california/articles/229198



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