Newspaper article THE JOURNAL RECORD

U.S. Government Study Hits Department of Energy over Contracting Goals

Newspaper article THE JOURNAL RECORD

U.S. Government Study Hits Department of Energy over Contracting Goals

Article excerpt

Small businesses haven't been getting their fair share of subcontracts from contractors working with the federal Department of Energy, according to a study by the U.S. Government Accountability Office.

Misleading data has created the false impression that DOE is meeting its small business subcontracting goals, undermined DOE's oversight of subcontracting efforts, and generated mistrust among members of the small business community, reads the study. Furthermore, DOE actions to date have not adequately addressed problems with misleading data.

The DOE is the largest civilian contracting agency in the federal government, spending $22.4 billion on contracts in fiscal 2004. The majority of that amount, nearly $19 billion, went for large facility management contracts for managing DOE's laboratories, production facilities, and environment restoration sites.

Federal regulations stipulate that DOE's facility management contractors in turn subcontract with small businesses as much as possible. Working with the Small Business Administration, DOE's Small Business Office set a goal of having 50 percent of its total subcontracting dollars be directed to small businesses each year.

In Oklahoma, Southwestern Power Administration serves as the state's DOE procurement office, with 49 active awards valued at $29.7 million, as of Sept. 30, 2004. Calls to the administration Monday were not returned.

In fiscal year 2004, DOE's 34 facility management contractors worldwide subcontracted out about $6.5 billion, $3.3 billion of which went to small businesses, according to the report.

Though on first blush it appears the contractors are meeting their 50 percent goal, the GAO study found that a number of contractors are artificially limiting the number of subcontracts they include in their reports, thereby inflating the percentage of subcontracts for small businesses. …

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