April 18, 2011
Petaluma, Calif. – On Wednesday, April 13, the American Small Business League (ASBL) filed suit against the U.S. Department of Housing and Urban Development (HUD) after the agency refused to release subcontracting reports on a contract awarded to Fortune 500 defense giant Lockheed Martin. The ASBL filed suit in United States District Court, Northern District of California. (http://www.asbl.com/documents/complaint_lockheedmartin_sub_report.pdf)
The case was filed after HUD repeatedly refused to respond to a Freedom of Information Act (FOIA) request for documents related to Lockheed Martin’s compliance with small business subcontracting goals.
The ASBL believes the information contained in Lockheed’s subcontracting reports may show that the contractor is not complying with its small business goals. Additionally, the ASBL is concerned the reports may indicate that Lockheed and HUD cooperated in an effort to circumvent federal law, which requires 23 percent of all federal contracts to be awarded to small businesses.
The ASBL’s most recent lawsuit against HUD is yet another legal action originating from ASBL efforts to gather information on the subcontracting practices of a series of major government prime contractors, which may lead to litigation filed under the False Claims Act, and Section 16(d) of the Small Business Act. The ASBL’s suit against HUD is the 14th lawsuit filed by the ASBL against the Obama Administration in pursuit of publicly releasable documents regarding government contracting programs. In 1994, the 9th Circuit Court of Appeals ruled that subcontracting reports are releasable to the public, and do not contain trade secret or proprietary information.
Despite continually promising the most transparent administration in history, the Obama Administration has actually been amongst the least transparent. In early 2010, the Associated Press conducted a review of FOIA reports filed by 17 major agencies, and found across the board increases in the number of rejections. While the federal government as a whole received fewer FOIA requests during the first year of the Obama Administration, agencies increasingly said “no” to requesters looking for public documents. (http://www.breitbart.com/article.php?id=D9EFRPJG0)
“I can’t blame them for trying to withhold this information because it shows that the Obama Administration is failing to address widespread abuse in small business contracting programs. Every day corporate giants are circumventing their small business subcontracting goals, and every day more than $800 million in small business contracts are diverted to corporate giants,” ASBL President Lloyd Chapman said. “That is why we have to go to federal court for every piece of paper regarding small business contracting programs. They are treating this stuff like it’s top secret.”