Western business: Small businesses say national labs could help

ALBUQUERQUE, N.M. -- Rudy Gonzalez sold his house in Virginia, moved back home to the Southwest and set up the office for his new construction company in a downtown apartment.

After Builtek Construction Inc. finished its first job building housing for U.S. Border Patrol agents in Big Bend, Texas, the 30- year-old entrepreneur was broke.

But his small company had the start of a good reputation, and six years later, Builtek has a $2 million subcontract to build the walls and doors of a nanotechnology facility at Sandia National Laboratories.

Walking among workers in hard hats and construction equipment in the partially finished structure, Gonzalez said, "If it wasn't for Sandia, a company like mine would have never seen a project like this."

Still, Gonzalez and other small-business advocates say national laboratories could do more to support small companies by increasing direct contracts to them.

At Los Alamos National Laboratory in northern New Mexico, there has been a recent decline in the amount of money going to small businesses. On the other hand, Sandia and the Waste Isolation Pilot Project near Carlsbad have seen increases in money paid to small companies.

Richard Marquez, Los Alamos lab's associate director for administration, said the lab's efforts to recruit small businesses were sidetracked by a procurement scandal early last year.

That resulted in the drop in money spent on small-business contracts -- from $431 million in fiscal 2002 to $417 million the next fiscal year.

"We've got to stop that trend and get it back up to a healthy profile," Marquez said.

In July, the lab was able to begin refocusing its efforts, and some contracts suitable for small businesses are now in the pipeline, he said.

But small businesses doing work at Los Alamos have yet to feel the effects.

The lab has "been in a shutdown mode, and it's had a huge impact on small-business people," said Tina Cordova, president and co-owner of Queston Construction Inc.

Her company has not seen a direct contract from Los Alamos in 18 months, although typically it has had as many as 20 employees working there, she said.

Even with his work at Sandia, Gonzalez said his company has had a tough few months, working with a large out-of-state company and nearly going bankrupt after 4 1/2 months of delays.

Gonzales said Sandia worked with him and increased his contract to cover the additional expenses.

"To their credit, they came on board," he said.

Gonzalez believes the labs should put mechanisms in place so large contractors can't save construction costs on the backs of small businesses.

Theresa Carson, manager of supplier information and relations at Sandia labs, said the lab has taken a lot of initiatives to encourage small businesses -- from small-business fairs to posting business opportunities on its Web site.

Sandia and WIPP also have unbundled contracts -- breaking large projects into smaller jobs that small businesses can bid for.

Sandia's efforts have increased the amount of money going to small businesses from $360 million in fiscal year 2001 to $459 million two years later. But the percentage of contracts going to small businesses decreased from 69 percent to 53 percent over the same period.

The percentage decline was due to larger companies getting contracts on the Mesa Project, the largest capital construction project ever undertaken at the lab.

But, Carson said, the lab tried to protect small businesses by requiring large companies to include them as subcontractors. The move allowed companies like Gonzalez's to get some of the business.

And although this year has been tough for small businesses trying to get contracts at Los Alamos, Marquez said that's about to change. He is shooting to have at least 50 percent of the lab's procurement dollars going to small businesses -- up from 43 percent in fiscal 2003.

The lab's Business Advisory Council is working on such issues as how to make bidding for lab contracts more transparent by better communicating business standards to small businesses, he said.

"We typically haven't done a very good job of communicating those in advance," he said.

Marquez also said town meetings with small-business owners are helping.

Cordova, who has attended two such meetings, agreed they have been "very beneficial."

The Department of Energy's Waste Isolation Pilot Project is the bright spot when it comes to small businesses.

In fiscal 2003, 86 percent of the procurement money was paid to small firms, said Bob Prentiss of Washington TRU Solutions, which runs WIPP.

The money going to small businesses has increased from $20 million in fiscal year 2001 to $38.6 million two years later.

"There's this tremendous versatility and expertise out there in the small-business world," Prentiss said.

Copyright C 2004 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.