past quarter century, the Defense Department has been testing a contracting
program that was intended to help small businesses obtain a larger share of
federal work. However, Pentagon officials and small business leaders say the
initiative has not only failed to help small contractors, it’s actually hurt
words, neither those running the program nor those it was supposedly intended
to help believe the program works. Thus, many expected the experiment to come
to an end when its most recent congressional approval expires on Wednesday.
critics are calling another victory for Washington’s massive contracting
darlings at the expense of small businesses, Congress has approved
legislation extending the contracting initiative, called the Comprehensive
Subcontracting Plan Test Program (CSPTP), for another three years. It’s the
eighth time the program has been revived.
rules of the test program, large contractors are permitted to submit
company-wide or division-wide small-business subcontracting doctrines that
apply to any of the firm’s federal contract proposals. Outside the program,
prime contractors must submit a unique subcontracting plan for each bid,
including which small firms they intended to partner with and how much money will
flow through to the partners.
legislation authorizing a two-year test back in 1989, lawmakers said CSPTP was
meant to “determine if comprehensive subcontracting plans on a corporate,
division or plant-wide basis would lead to increased opportunities for small
accounts, they have done precisely the opposite.
Schumann, a Defense Department spokeswoman, said recently
that the program “has led to an erosion of [the agency’s] small business
industrial base.” And while the department has yet to publish any formal
reports on the program’s results, she said the Pentagon’s internal analysis
suggests that, while it has resulted in savings for the participating large
contractors — including local behemoths such as Lockheed Martin, Northrop
Grumman and General Dynamics — there is no evidence that the CSPTP has
benefited small companies.
negotiations over the program earlier this year, Schumann said the Defense
Department was in favor of letting the initiative expire. It’s the first time
the agency has openly expressed its opposition to the program.
business groups have criticized the initiative, as well, and this month, the
Government Accountability Office published a report stating that the
comprehensive plans make it difficult and sometimes impossible to track subcontracting
we heard, the small business community was not in favor of extending the
program,” Jared Leopold, a spokesman for the Senate Small Business and
Entrepreneurship Committee, wrote in a recent e-mail.
why did lawmakers extend it again?
authorizing a three-year extension of the program originated in the House Armed
Services Committee, which added some new reporting requirements intended to
shed additional light on the test program moving forward. In a report filed by
the committee about the proposed extension, lawmakers acknowledged “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
spokesperson for the committee declined to speak on the record about why the
program was tweaked and extended rather than simply allowed to expire. However,
a staff member of the House Armed Services Committee familiar with the
negotiations, who spoke on the condition of anonymity because the member was
not authorized to speak publicly, explained that the three-year revival was
meant to serve as an off ramp, so to speak, allowing large
contractors participating in the CSPTP to update their reporting
procedures to meet the subcontracting requirements that apply to contractors
outside the program.
the staff member said, was to wind down the program gradually, rather than
bringing it to an abrupt halt at the end of this year.
business lobbying group says the reauthorization was pushed through under a
veil of secrecy that should have already been removed.
Godfrey, a spokesman for the California-based American Small Business League,
echoed the Defense Department by saying that the lone benefactors of the
program appear to be large contractors; however, a simpler bidding process
isn’t the only perk, he said. Under the law, CSPTP participants are exempt from
paying damages if they fall short of statutory small-business subcontracting
full Washington Post article, click here: http://www.washingtonpost.com/business/on-small-business/businesses-pentagon-agree-this-program-doesnt-work-congress-saved-it-anyway/2014/12/30/80d72aa0-9066-11e4-ba53-a477d66580ed_story.html