INL spends the majority of its money with small businesses

Construction subcontractors pour 13-foot concrete walls at a new Idaho National Laboratory facility in 2015. courtesy of Idaho National Laboratory

Construction subcontractors work on a new Idaho National Laboratory facility west of the Radiological and Environmental Sciences Laboratory in Idaho Falls. courtesy of Idaho National Laboratory

Stacey Francis courtesy of Idaho National Laboratory

It takes a little more paperwork to do business with Idaho National Laboratory.

Requirements are more stringent for lab contracts. Processes and specifications are more clearly outlined from the get-go, including the type of labor used on a project, the plasterboard within a wall or the paint covering it.

That doesn’t keep small businesses from working with the lab, however. INL contractor Battelle Energy Alliance spent $194,555,080 with small businesses during fiscal year 2017, which was 58.1 percent of the lab’s total business.

That’s about 7 percent more than the small business quota Battelle is required to meet every year through services, including construction and research work, as well as consumables, such as office supplies.

Far from being an impediment, the small business quota complements lab missions, INL Small Business Program Manager Stacey Francis said.

“We buy everything from paper clips to nuclear fuel, and a lot of that comes through small businesses,” she said. “The advantage is many of them are here in our backyard. If I order something from an office supply company in Rexburg — it’s delivered directly to my desk the next day.”

Small business quotas exist across the Department of Energy lab complex, and are reconsidered each year based off past performance and upcoming lab priorities. If nuclear fuel expenditures are expected to increase, for example, small business quotas may decrease slightly because fuel is purchased elsewhere.

Of the small business spending Battelle did last year, 42 percent went to Gem State companies, which was 12 percent above an in-state quota.

To seek businesses, Francis’ team conducts outreach through the state, and attends forums as well as events.

Of Gem State spending between 2005 and 2017, Battelle’s largest chunk, $938 million went to eastern Idaho. Western Idaho received $264.8 million in awards and southeastern Idaho received $180 million.

Though doing business with Idaho companies is preferable, Battelle pursues the cheapest contract, regardless of where the associated business is based.

“We’re spending federal government taxpayer dollars, so we have to be good stewards of those dollars,” Francis said. “If somebody from Utah comes in with the best value, then we’re obligated to look at them.”

Some services also aren’t offered in Idaho.

Though fabrication is often done locally, much high-end manufacturing is done out of state. Software also is usually developed elsewhere.

There are advantages to working with local businesses, however.

“They’re so versatile and agile — they can turn on a dime,” Francis said. “Whereas a large business takes a lot longer to adapt to changing scope.”

Local businesses also possess a familiarity with the region, as well as other contractors and suppliers, that’s hard to replicate on a larger and more distant scale.

Idaho Falls-based Walsh Engineering Services was created in 2005 to fill an underserved niche at INL. When Battelle has work that exceeds its internal engineering capacity, it turns to companies such as Walsh.

“The benefit is that we understand how work is done for the site, and that’s why we’re able to perform for them. We work with them so often we understand the requirements,” said Walsh Vice President Mark Varvel.

That’s important because the requirements are different than those of the commercial sector.

Brad Allen is an estimator for Utah-based Raass Brothers. The construction company mainly takes governmental contracts, previously including INL.

Each lab contractor operates a little differently, but it’s typical for them to more thoroughly vet government contracts for labor, materials and other components, Allen said. There are more submittals, reports and updates to complete throughout the span of the project.

“When it’s private there’s a lot more leniency. They ask for paint and that can mean any number of options, whereas the government would spell those things out,” he said. “They have plans, drawings and specs, and you have to provide exactly what it is they’re asking for — no variations.”

That can be nice to avoid gray areas during a project, Allen said — “You know exactly what it is you have to do and how you’ll do it,” — but it also means government contracts can be more complicated.

“When we first started doing site work there was a learning curve — a pretty heavy learning curve. Going through that process took a couple jobs to figure that out,” Allen said. “But once you get dialed in and know what you’re doing there are fewer surprises with the work you’re doing.”

Possibly most important: the check at the end of the job. For commercial work, it doesn’t always come.

“In the outside world you don’t always know if you’re going to get paid. You hope you do, but there are chances things fall through,” Varvel said.

That doesn’t usually happen when you contract with a government agency.

“The government doesn’t necessarily award a project they don’t have funding for, so your risk of not being paid is pretty much nonexistent,” Allen said. “As long as you fulfill your obligation you’ll get paid.”


Reporter Kevin Trevellyan can be reached at 208-542-6762.


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