NASA sued for failing to disclose contracting information

In a bid to hold NASA accountable to meeting federally mandated goals for small business contracting, advocates demanded for the third time that the agency release contracting information for its space operations.

The American Small Business League filed a lawsuit on June 8 asking the U.S. District Court for the Northern District of California to require NASA to release subcontracting reports involving United Space Alliance LLC, a spaceflight operations company co-owned by defense giants Lockheed Martin Corp. and Boeing Co., and NASA's primary industry partner in managing the space shuttle and the International Space Station programs.

The advocacy group wants to know if United Space Alliance has complied with small business subcontracting goals under those contracts. The organization alleges that NASA violated the Freedom of Information Act by withholding agency records, while NASA claims the data was exempt from disclosure as "commercial or financial information obtained from a person which is privileged or confidential."

The suit is the latest in a series of legal actions the small business group has taken since 2004 against various federal agencies -- including the Army and the Energy Department -- to make them account for any large corporations listed as small businesses in government awards. ASBL has won about half the cases.

ASBL suspects NASA is withholding data that will prove it is allowing major prime contractors to falsify compliance with small business subcontracting goals, as well as inflating fulfillment of small business targets by counting "clearly large" firms as small, according to Lloyd Chapman, the group's president.

The federal government sets out to award 23 percent of the total value of all prime contracts to small businesses annually. The Small Business Administration negotiates individual objectives for each agency, ensuring that when combined they meet the overall statutory goals.

In 2007, SBA instituted requirements for long-term federal contracts to be recertified every five years and at every option point going forward. This would take into consideration the possibility of growth and ensure agencies receive credit for making contract awards to small businesses only as long as the firms remain small. But advocates say instances of large corporations being listed as small businesses in federal contracting awards keep cropping up.

ASBL spokesman Christopher Gunn said large companies that showed up in data on small business awards in 2008 included Lockheed Martin, Boeing, Raytheon Co. and Northrop Grumman Corp.

Corporations that raked in billions of dollars in federal contracts and did not meet the criteria for being small were labeled as such in Washington Technology's top 2010 government contractors, a list compiled from government procurement data, said Guy Timberlake, chief executive officer of The American Small Business Coalition, which helps small businesses win federal contracts and strengthens their partnerships with the government.

Whether these cases resulted from mistakes in data entry or fraud remains a point of contention between the federal government and advocacy groups.

Timberlake said because federal contracting programs are such complicated bureaucratic exercises, some corporations exploit the loopholes and lack of oversight. They go "code shopping," seeking out industry codes that will identify them as a small business, even if the definitions do not apply to their actual operations, he said.

Whether a corporation meets the criteria of being coded as a small business depends on a host of factors, including its subsidiaries, affiliations, primary industry, number of employees and annual revenues.

"Some out there may say, 'Uncle Sam is really bogged down right now, so they'll never notice me.' " Timberlake said. "In addition to deliberate efforts to scam the system, just as many corporations are simply not getting good information from various expert resources."

He added, "There is a level of enforcement with teeth that is needed" in a more competitive climate, but "additional scrutiny entails process, which entails costs." It is difficult to come up with extra money for oversight at a time when the government is tightening its belt, he said.

United Space Alliance, which received $1.5 billion in contracts from NASA in fiscal 2009, according to ASBL, said it has both large and small businesses as subcontractors. "Small businesses play a vital role in our efforts to support the nation's space program," said spokeswoman Tracy Yates, "and USA is absolutely committed to working with as many small companies as possible to meet that goal."

SBA declined to be quoted for this story. A NASA spokeswoman said the agency is looking into the matter, but has no further information to provide at this point.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

When you download a report, your information may be shared with the underwriters of that document.