Obama Will Approve 25 Year Old Anti-Small Business Loophole In Defense Authorization Bill

I predict President Obama will approve the 2015 National Defense Authorization Bill that contains a 24 year old anti-small business loophole for the Pentagon’s largest prime contractors.

The Comprehensive Subcontracting Plan Test Program (CSPTP) was adopted in 1990 to supposedly determine if allowing prime contractors to avoid publicly available quarterly subcontracting reports and the elimination of any penalties for noncompliance with subcontracting goals would increase subcontracting opportunities for small businesses.

In the 24 years since the CSPTP began, the Pentagon has never been able to provide any data, reports or information of any kind that would indicate the Test Program achieved its goal of increasing opportunities for small businesses. A 2004 GAO investigation found the Pentagon was unable to provide any data that the CSPTP had achieved any of its goals.

The CSPTP was adopted after the Pentagon lost a Freedom of Information Act case in the Ninth Circuit Court of Appeals. The Pentagon refused to release quarterly (SF 294) and annual (SF 295) subcontracting reports that could be used to track a prime contractor’s compliance with their subcontracting reports.

The CSPTP also exempts prime contractors from the “Liquidated Damages” that were required under federal law for prime contractors that “failed to make a good faith effort” to achieve their small and small disadvantaged business subcontracting goals.

The American Small Business League (ASBL) has launched a legal challenge to the CSPTP in Federal Court. On May 12,2014, we filed our first Freedom of Information Act case against the Pentagon in Federal District Court in San Francisco for refusing to release subcontracting data from the CSPTP for Sikorsky.

I know we will win our cases against the Pentagon for subcontracting data from the CSPTP because the Ninth Circuit Court of Appeals has already ruled subcontracting data submitted to the Pentagon is releasable to the public.

Since President Obama likes the CSPTP so much, I think he should direct the IRS to adopt the same principals the Pentagon has adopted under the Comprehensive Subcontracting Plan Test Program. The IRS should immediately launch a 24 year test program to see if eliminating the requirements to file tax returns and eliminating any penalties for not paying your taxes actually increases tax collection. If the CSPTP is working at the Pentagon I’m sure it will work for the IRS. This will greatly streamline things over at the IRS and significantly reduce their administrative burden. The elimination of any penalties for non-payment of taxes will also reduce the administrative burden of the Justice Department and streamline their workload.

All of our research at the ASBL indicates that over the last 24 years, the CSPTP has allowed Pentagon prime contractors to circumvent federal law that requires a minimum of 23% of all federal contracts be awarded to small businesses. I estimate American small businesses have been defrauded out of over two trillion dollars in subcontracts as a result of the CSPTP.

I will be filling a series of lawsuits against the Pentagon to force the elimination of the CSPTP even after President Obama renews it.

The CSPTP is so secretive no journalist has ever even reported on it. I challenge anyone to find even one story from the mainstream media on this scam in the entire 24 years it has been it place.

I have been sounding the alarm of this Pentagon scam against small businesses for years.

If you want to help support America’s 28 million small businesses and the middle class economy, send this blog to all of your friends and ask them to send it to all of their friends. Join the fight to end the rampant fraud and abuse against American small businesses. Everyone needs to contact their Senators, Congressmen and the Whitehouse and tell them to end the fraudulent Anti-Small Business Comprehensive Subcontracting Plan Test Program immediately.

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