REPORTING OF ENERGY DEPARTMENT SMALL BUSINESS CONTRACTS
Statement of Kyle E. McSlarrow Deputy Secretary U.S. Department of Energy
Committee on Senate Energy and Natural Resources
May 18, 2004
Mr. Chairman, Members of the Committee, I am pleased to be here today to discuss the Department of Energy`s efforts to support opportunities for small business. As President Bush said in his Proclamation of Small Business Week last September, “Small businesses create the majority of new jobs in our Nation and account for more than half of the output of our economy. They lead the way in generating new ideas and creating new technologies, goods, and services for our country and for the world.“ In his Proclamation he reaffirmed the Administration`s “commitment to helping more small business owners and their employees realize the American Dream.“
Secretary Abraham and I are expanding opportunities for small business and have taken numerous measures to promote and increase the participation of small business in Department of Energy contracts. Most of the Department`s contracts are awarded to operate the multi-billion dollar nuclear weapons laboratories complex and multi-billion dollar environmental cleanup programs to resolve the legacy of the Cold War and to build the Nation`s repository for nuclear waste at Yucca Mountain. Large contracts also are awarded for our advanced scientific laboratories specializing in genomics, scientific supercomputing, fusion energy and nanoscience. The Department awards over $19 billion in prime contracts each year. Over 85 percent of that (or over $16 billion) goes to large facility management contractors who then award approximately 50 percent of their subcontracts to small business. The prime contracts awarded to small business by the Department currently represent about 5 percent (or nearly $800 million) of the total procurement dollars at the Department. To promote the participation of small businesses, Secretary Abraham issued a Policy Statement on “Supporting Small Businesses in Implementing DOE Missions“ on September 23, 2002.
This DOE policy directs all Departmental elements to examine and seek to expand their grant and contract opportunities with small businesses. It also tasks the Director of the Office of Small and Disadvantaged Business Utilization to prepare a Department-wide comprehensive small business strategy to ensure that small businesses are provided the maximum practicable opportunity to participate in Departmental programs at the prime contract level.
Additionally, the Secretary directed the plan to include a strategy to increase the level and expand the type of subcontracts awarded to small businesses by the Department`s facility management contractors. At the Department of Energy, our small business programs are ably led by Theresa Alvillar Speake, Director of the Office of Economic Impact and Diversity. This office, which directs all of the Department`s small business efforts, has developed a 20-year Strategic Small Business Plan that includes 14 action items intended to increase small business contracting at the Department. The plan establishes processes by which the Department reviews each upcoming contract to identify opportunities for small business.
I would note that since relatively few of our major contracts come up for consideration each year, several years will be required for us to achieve our goal. In accordance with that plan:
- The Department launched a national marketing campaign to inform small businesses about the contracting opportunities available both at the prime and subcontract level. A highlight of our recruiting effort is the annual small business conference, which was held last year in New Mexico. I attended and spoke there. The small business conference is scheduled this year for July 7-9 in Philadelphia. This provides us an excellent forum to present the various contracting opportunities available at DOE.
- DOE sets an annual corporate goal (including prime and subcontracts). The goal for prime contracts has climbed from 3.7 percent in FY 2003 to 5.0 percent in FY 2004, and 5.5 percent in FY 2005.
- Departmental elements are required to formulate a small business goal for the work they will direct to small business. Each element`s progress in meeting its goal is rated on a quarterly basis and reported to senior Department officials. Each element is also responsible for insuring the success of their prime contractors in meeting the subcontracting goals.
- The Department promotes mentor-protege relationships between large business and small business in order to increase the number of small businesses that can successfully compete for DOE awards.
- We have established a small business advisory team, a group consisting of small business trade associations, chambers of commerce, and other federal agencies to provide advice and guidance to our Small Business Office on small business programs and activities.
- DOE components sponsor meetings of small and large businesses to discuss upcoming requests for proposals to encourage the establishment of teams to combine the advantages of small and large businesses, or combine the strengths of several small businesses.
- DOE components also conduct market research before issuing an RFP to identify small businesses with capabilities in specific areas.
- We have created a database of interested small businesses for reference in future contracts.
- We have reduced the documentation that small businesses are required to submit in response to RFPs.
- Additionally, we review all of our large contracts to identify opportunities to break out portions of the work for small business.
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