DATE: February 22, 2000

FROM: Barry McVay, CPCM

SUBJECT: Department of Energy (DOE); Maximizing Small Business Utilization

SOURCE: DOE Policy Flash 2000-03, February 16, 2000

AGENCIES: Office of Procurement and Assistance Policy, DOE

ACTION: Notice

SYNOPSIS: Because the Small Business Administration (SBA) has directed that DOE change the way it reports management and operating (M&O) subcontract small business awards, DOE has developed a strategy to increase small business participation in its contracting program.

FOR FURTHER INFORMATION CONTACT: Gwendolyn S. Cowan, 202-586-8182.

SUPPLEMENTAL INFORMATION: Since 1991, DOE has been counting M&O small business subcontracts as prime contract awards on the grounds that M&O contractors are extensions of DOE, so M&O subcontracts should be considered the same as DOE prime contracts. However, SBA has directed that DOE start reporting M&O subcontracts as subcontracts. Under the old method, about 18% of DOE contract dollars went to small businesses; under the new method, about 3% of DOE contract dollars will go to small businesses. However, the percentage of subcontract dollars awarded to small businesses will increase dramatically, so the overall total number of dollars going to small businesses will remain approximately the same -- about $3.3 billion.

Nevertheless, Energy Secretary Bill Richardson has decided to enhance DOE's small business program by creating a Small Business Committee to report to him and the Deputy Secretary on the development and implementation of several small business strategies. The committee will be co-chaired by the Director of the Office of Economic Impact and Diversity and the Director of the Office of Procurement and Assistance Management, and will include representatives from the program offices, field activities, and major contractors.

Among the strategies announced by the secretary that will be developed and implemented by the committee are:

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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