Did you know that small businesses make up 99.7 percent of U.S. employer firms and 64 percent of net new private-sector jobs? The Energy Department relies on a vast network of small businesses around the country and has made our “small business first” policy a focal point in the mission work we do. We are strongly committed to ensuring that our small businessmen and women have a fair opportunity to compete for contracts and subcontracts -- providing crucial services to our government and the American people.
What makes the Energy Department’s contracting strategy different from that of other federal agencies is that much of the Department of Energy's budget is spent on 17 National Laboratories, a network of nuclear weapons facilities and Cold War nuclear cleanup sites -- where most of our mission work is done. These mission requirements are carried out through large prime contracts. In fact, 85 percent of our total procurement dollars go to these facility management contractors, which are sometimes called “Management and Operations” (M&O) contractors.
Because they employ thousands of scientists, engineers and other workers who staff our facilities, these facility management contractors are -- by definition -- not small businesses themselves. That’s why when the U.S. Small Business Administration calculates the total percentage of our prime contracts that are awarded directly to small businesses, the percentage is rather small. We don't dispute that, but the full story is more complicated.
The Department of Energy works closely with our prime contractors to make sure that small businesses have a fair chance to compete for subcontracts.
The M&O contractors that operate the Department’s labs and other sites can’t do all the work themselves, so they, in turn, rely on a large number of subcontractors. In fact, almost half -- 48 percent -- of the subcontracts that come from our M&O contractors and other large prime contractors go to small businesses, including almost 10 percent that go to Women Owned Small Businesses.
In Fiscal Year 2012, the total amount of prime contracts and subcontracts from the Department of Energy that went to small businesses was about $6.4 billion. That’s about 26 percent of our overall procurements. The total also includes $1.3 billion in prime and subcontract awards to Women Owned Small Businesses.
These small business subcontractors are essential to the effective operation of our National Labs and other facilities. For example, as a subcontractor to the Battelle Energy Alliance, Idaho Falls-based WestOne Logistics receives and distributes all of the inbound freight to Idaho National Laboratory. The company delivers more than 6,000 shipments a month to the Lab’s many facilities, which are spread out across a large, remote 890 square mile campus.
Another small business, National Resource Management of Knoxville, Kentucky, provides construction services to Oak Ridge National Laboratory and maintains solar assisted charging stations for a fleet of electric vehicles that serve the laboratory.
Across the country, these subcontractors are helping spur economic growth in local communities near the Energy Department’s National Labs and sites. In Washington State, the Tri- Cities Washington Development Council (TriDEC) works closely with the Energy Department to bolster the subcontracting practices to create more jobs. TriDEC helps to promote economic sustainability in the surrounding cities around the Energy Department’s Hanford site, which is the largest nuclear cleanup sites in the country.
“Adjacent communities and local small businesses have repeatedly supported DOE’s efforts nationwide and understood the complexity and risks of cleanup -- including today’s challenges at Hanford, such as preparing for tank waste treatment or chromium getting into the Columbia River,” stated Gary Petersen, Vice President for Federal Programs at the Tri Cities Development Council. “At Hanford, the approach of using prime contracts to get to small businesses is working extremely well. Under the Richland Operations Office, for example, the targets range from 49 to 65 percent of subcontracted work scope that must go to small businesses, and over the past five years each of the prime contractors have beat these targets.”
Our outreach to small businesses is something we work on year-round. We encourage small businesses to participate in our Mentor Protégé Program, which teams large and small businesses together to foster networking opportunities and improve technical capabilities. The Department currently has 38 active mentors and 64 active protégés.
For more information about our current and future work with Small Business, visit our website: www.smallbusiness.energy.gov
What are the key facts?
Almost half of the subcontracts that come from our Management and Operations contractors and other large prime contractors go to small businesses.
In Fiscal Year 2012, $1.3 billion prime contracts and subcontracts from the Department of Energy went to Women Owned Small Businesses.