Kenneth Fletcher
WC Monitor
3/07/2014
PHOENIX, Ariz.—While the Department of Energy works on implementing a new rule counting some subcontracts awarded by M&O contractors toward DOE’s small business goals, officials said here this week that DOE will continue focusing on prime small business contracting opportunities. The FY 2014 appropriations bill passed in January allows DOE to count first tier subcontracts awarded by management and operating contractors to small and disadvantaged businesses towards the Department’s overall small business procurement goals. But that won’t impact prime opportunities, John Hale, director of the DOE Office of Small And Disadvantaged Business Utilization, said at this year’s Waste Management Symposia.”We believe that, as it relates to small businesses, opportunities to really grow and develop, we need to make sure we have many prime opportunities available to small businesses, so we will still strongly advocate for small business opportunities,” Hale said.
DOE is currently working with the White House Office of Management and Budget and the Small Business Adminis-tration to implement the changes, which will be reflected in how DOE M&O first tier subcontracts are weighted in the SBA’s small business goals scorecard. The Department has received low marks from the SBA, earning a failing grade in its FY 2012 scorecard. “If you look at our profile, we’re a subcontracting agency, meaning 85 percent of our procurement dollars approximately are spent on our large contractors,” Hale said, adding later: “The implication for us is that we feel that hey, we are doing all this work using federal appropriated dollars, we’ll get more credit for that if you will. We’ll be more careful and work with our programs and really advocate that as it relates to prime small business and the subcontracting that we’ll still focus on prime small business and also having meaningful work.”
Language Largely Doesn’t Apply in EM
For DOE’s Office of Environmental Management, the impact will be marginal—the langauge in the appropriations bill applies to M&O contractors, which are only in place at the Savannah River Site and the Waste Isolation Pilot Plant. Jack Surash, EM Deputy Assistant Secretary for Acquisition and Project Management, said that EM will continue to place and emphasis on small business prime contracts. “It really doesn’t change things that much for EM, because we have 40 major contracts. We have exactly two that are management and operating,” Surash said. “All the rest are traditional cost type contract, or in DOE parlance, non-M&O contracts. It’s not going to change a whole lot, so our emphasis will continue just as you’ve seen it the last few years to continue focus on prime small business opportunities.”
Nevertheless, the new rule has been a concern for some small business officials struggling as a result of federal budget cuts and an increase in staff augmentation subcontracts for DOE work. “I think it is going to reduce the opportunities as prime contractors. That’s one negative effect, and it is not going to increase the second tier subcontracts as well,” one small business executive told WC Monitor in January (WC Monitor, Vol. 25 No. 3). A different small business official said the move goes against the spirit of small business goals. “One of the key words that’s not in there, that they to seem to fall back on all the time, is meaningful small business contracts,” that official said. “If it’s going to go back to commodities, which is real easy for an M&O contractor to do, all they are going to do is buy their stationary and janitorial supplies from a small business. They can make it up with one or two contracts.”