Reporting of Energy Contracts Is Up To Congress An interagency study group has concluded that the Energy Department cannot count subcontracts at its large facilities as prime contracts without congressional authorization. The study, mandated by Congress, suggested that some work in Energy’s large management and operating contracts could be broken out for award to small businesses, but the department would need a “substantial increase” in acquisition personnel to manage the additional smaller contracts. The study was conducted by the Energy Department, SBA and its Office of Advocacy and the Defense Nuclear Facilities Safety Board. Congress ordered the study last year after Sen. Pete Domenici (R-NM) proposed counting subcontracts as prime contracts to help the department meet its small business procurement goals. More than 70% of Energy’s budget goes to the large management and operating (M&O) contractors who run its national laboratories and other facilities. The department has traditionally been the poorest performer in small business contracting, awarding less than 5% of its prime contract dollars to small firms in recent years. The M&O contractors say they subcontract up to half their work to small firms. Domenici’s proposal, endorsed by the M&O contractors, would have treated them as if they were government agencies, so their subcontracts would be counted as prime contracts. The study group concluded that since SBA and the Office of Management and Budget have refused to endorse the change, an act of Congress would be needed to override them. Small business groups and their advocates in Congress have warned that if Energy was permitted to count subcontracts as primes, other departments would want the same treatment, reducing prime contract opportunities for small businesses. (SAA, 5/28/04) Energy has moved to break up some of its M&O contracts to create opportunities for small companies to work as primes. The study group said the department should “consider each opportunity [for unbundling] judiciously, choosing those that minimize the risks to accountability and effective and efficient performance of the M&O or other management contract.” The study group also recommended that M&O contractors help small firms develop their capability to do specialized technical work.