Law360, New York (November
26, 2014, 2:42 PM ET) -- A California federal court has ordered the Pentagon to
cough up never-seen subcontracting data on Sikorsky Aircraft Corp. to an
organization representing small businesses, saying the information was not
exempt from Freedom of Information Act disclosure because it did not expose
privileged financial or business information about Sikorsky.
In his order, U.S. District
Judge for the Northern District of California William Alsup told the U.S. Department of Defense it
had to release Sikorsky’s Comprehensive Subcontracting Plan to the American Small
Business League by Dec. 3 or appeal his decision to the Ninth Circuit.
"We are thankful that
the court rejected the vague 'confidential commercial or financial information'
claim raised by the Department of Defense," ASBL attorney Robert Belshaw
told Law360. "Hopefully the results of this decision will go a long way
towards revealing the extent to which large defense contractors are complying
with the Small Business Act's mandate that women-, veteran- and minority-owned
small business subcontractors receive a fair share of the billions of federal
funds annually allocated to defense spending."
On Aug. 9, 2013, ASBL filed
an FOIA request for Sikorsky’s 2013 master Comprehensive Subcontracting Plan
for participation in the Department of Defense’s Comprehensive Subcontracting
Plan Test Program, or CSPTP.
According to the ASBL’s
brief, the Small Business Act of 1953 would normally require large contractors
to submit individual subcontracting reports and summary subcontracting reports
to show how government contracts and subcontracts are being awarded to small
However, since 1990, when
Congress passed the “test program” as part of a defense appropriations bill,
some large defense contractors have been able to do away with these reports and
instead file comprehensive subcontracting plans, which are meant to identify
“all subcontract amounts awarded to small businesses on all government
contracts the prime contractor fulfills,” according to the ASBL.
The organization’s FOIA
request sought access to Sikorsky’s version of this document, to see if it
does, indeed, show awarding of subcontracts to eligible small businesses.
The organization accused
the test program of “eliminat[ing] all transparency on publicly available small
business subcontracting information and any penalties for Pentagon prime
contractors that failed to comply with federally mandated small business
subcontracting goals” in a statement to Law360.
After the Pentagon placed
the ASBL’s request in its complex processing queue, thus indefinitely
postponing the agency’s response, the organization brought suit on May 12.
The ASBL then sought
summary judgment on whether the documents it requested could be disclosed, “in
whole or in part.” The DOD retorted that the organization’s motion was moot
because the agency had determined that the requested plan could not be
released, applying the FOIA exemption for trade secrets and privileged or
confidential commercial or financial information.
As Judge Alsup noted, the
agency did not attempt to apply any other FOIA exemptions in any of its
“Neither the lodged
document nor [Sikorsky’s representative’s] declaration adequately shows how the
redacted information is ‘likely to cause substantial competitive injury’ if
disclosed,” Judge Alsup said.
Further, Judge Alsup
rejected the DOD’s raising of a second FOIA exemption after briefing, saying
the contact information for Sikorsky staff was available online, and as such,
amounted to a “trivial privacy interest” for which an FOIA exemption could not
If the agency appeals, the
ASBL says it could open the door for the organization to access all other
similar subcontracting plans and help it in its mission to uncover whether
government money is going to small businesses or merely
being held up in larger businesses whose subsidiaries are
“grandfathered in” under the law because they were acquired within the last
“We have the opportunity to
establish some useful precedent in the Ninth Circuit,” Belshaw told Law360.
"A favorable ruling by that court would definitely ease the way to getting
these documents released.”
Current participants in the
CSPTP include the Boeing Co., BAE
Systems PLC, GE Capital Aviation Services, General Dynamics Corp., Hamilton
Sundstrand Corp., Harris Corp., L-3 Communications
Holdings Inc., Lockheed Martin Corp., Northrop Grumman Corp., United Technologies Corp.'s
aircraft engines subsidiary Pratt & Whitney, Raytheon
Co., and Sikorsky.
According to the ASBL, the
organization promotes the interests of small businesses through social
marketing and policy review along with monitoring federal contracts that are
awarded to large corporations rather than to small businesses.
To view full Law360
article, click here: http://www.law360.com/articles/599786/dod-must-give-sikorsky-contract-data-to-small-biz-group