Small Businesses Mostly Off the Radar for Energy Department Contracts
Despite federal mandates requiring agencies to help small businesses, the U.S. Department of Energy (DOE) has awarded the vast majority of its contracts to large corporations.
In each of the past two years, the DOE has not met its goals—which were lower than other agencies’ already—of awarding work to small businesses. In 2011 and 2012, the agency gave out less than 6% of its work to small firms and less than 2% of all small-business contracting dollars awarded by the government.
No wonder the DOE was characterized as “the government’s weakest link in the small-business contracting arena,” according to J.D. Harrison at The Washington Post.
Small contractors say the Energy Department could be doing more to help them compete with the big boys.
“It feels like we’re in the back of the crowd, waving our hands, trying to let people know we’re here and that we can do the work,” Jennifer Dickerson, owner of EnRep, a small subcontracting company in Florida, told the Post. EnRep employs a staff of 38 people and brings in about $6 million annually.
Officials in the department say the snubbing is not deliberate or intentional, but rather a product of the DOE’s work and mission.
For instance, a big part of Energy’s budget goes toward operating national laboratories and nuclear-weapons facilities. These operations are managed and run by contractors that can handle a lot of responsibilities, which means small businesses are out of the running for this kind of work, officials say.
One of the large corporations that the DOE contracts for work, Lockheed Martin, earned $2.6 billion for DOE-contracted projects last year. That is twice as much as all of DOE’s small business contracts combined ($1.3 billion).
“We need to come to the table and look at ways to pull some of the smaller portions out of these very large contracts and award those components as prime contracts,” said Dickerson. She pointed out that the Department of Defense (DOD) pays about 20% of its contracting funds to small businesses. “If DOD can do it, so can DOE,” she told the Post.
“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,” Dot Harris, director of the DOE’s Office of Economic Impact and Diversity, wrote in a blog post last month. “We don’t dispute that, but the full story is more complicated.”
To Learn More:
Why Does the Energy Department Have Trouble Working with Small Businesses? (by J.D. Harrison, Washington Post)
Small Business Contracting Numbers Inflated by Errors and Exclusions, Data Show (by J.D. Harrison, Washington Post)
Energy Department Awards Grants for Exotic Research (by Noel Brinkerhoff, AllGov)
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