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LANL highlights work with NM small businesses

Copyright © 2021 Albuquerque Journal

Even as many small businesses in New Mexico struggled while the pandemic dragged down the economy, Los Alamos National Laboratory increased its spending with small businesses in the state by 30%, according to an economic impact report the lab released last month.

LANL boosted spending with New Mexico small businesses by nearly $125 million to $413 million during fiscal year 2020, which ended Sept. 30, and covered roughly the first six months of the COVID-19 outbreak.

The lab reported that small business in the state handled 7,315 projects, 202 more than the year before.

The report was released about a month after lab managers received low marks for small-business relations on its annual evaluation by the National Nuclear Security Administration, the semiautonomous agency within the Department of Energy that’s in charge of national security and oversees the production of the U.S. nuclear stockpile.

But LANL Director Thom Mason said in a statement that working with small businesses soon became a priority when management of the lab switched from Los Alamos National Security to Triad National Security LLC, a consortium made up of the Battelle Memorial Institute, the University of California and the Texas A&M University System.

“When Triad began managing LANL at the beginning of FY19, we set clear priorities,” Mason said. “One of these was to strengthen the laboratory impact to the region’s economic growth. Last year’s increase in small-business subcontracting was largely the result of our increased efforts to collaborate with small-business partners and to bring in new business partnerships. We hit the ground running on that goal in FY2019 and really saw the pace ramp up in FY2020.”

Across all states, LANL increased its total small-business spending by 17% to $652 million, according to the lab’s data.

Mason said an increase in the lab’s budget, from $2.75 billion to $3 billion, translated to more money flowing from the lab to small businesses in 2020.

“This increase launched an industrious period of recapitalizing aging facilities, launching new construction and expanding our general operations,” Mason said. “This expansion also gave us more flexibility to work with New Mexico partners to hire full-time employees and supplemental labor support. We expect this trend to continue in FY2021, especially as we continue streamlining the process of subcontracting with LANL.”

Mason mentioned three small business subcontractors – Longenecker, TechSource and Merrick-SMSI JV – as being instrumental in helping LANL carry out its mission by providing personnel, equipment and expertise.

The largest amount of small-business spending in New Mexico went to “disadvantaged” businesses – those at least 51% owned by individuals socially and economically disadvantaged – and businesses owned by women. Business in each category received more than $140 million from LANL, according to their data. However, some businesses can qualify in more than one subcategory – economically disadvantaged and owned by women, for instance.

Of all the lab’s spending with businesses owned by women, 88% was spent in New Mexico, according to the report.

Of all the lab’s spending with Native American businesses, 95% was spent here, though the overall total is less than $3 million.

A LANL news release said the lab plans to put even more emphasis on small businesses as it “works toward aggressive goals in collaborating with more small businesses.”

The announcement highlights Freshies of New Mexico, a fruit grower in Velarde. Through the lab’s small-business program, the company was able to install equipment that monitors temperature, wind speed and direction, and soil moisture and chemistry.

The lab works with dozens of businesspeople in a wide variety of fields to develop and expand their businesses. Other examples are Georgia O’Keeffe Museum Innovations, a for-profit subsidiary of the Georgia O’Keeffe Museum in Santa Fe, which sought help in developing a crate with a suspension system to limit damage to shipped artworks; UbiQD, a Los Alamos firm that wanted to enhance the color purity of its quantum dot technology; and Taos-based ThermaSun, which benefited from the lab’s help in developing parts for a heat conversion device.

The economic data was released a month after Triad, the nonprofit entity which has managed LANL since late 2018, was dinged on its performance evaluation for falling short of small-business goals.

The NNSA’s annual review of LANL management said that Triad, and by extension LANL, failed to meet four of six small-business goals and “struggled with small business relationships.”

Asked about that in January, Mason emphasized the increase in money spent on small businesses.

“The most important (goal) is the overall fraction of our procurement that goes to small businesses, and we met that one,” he said, pointing to the $413 million that went to New Mexico small businesses.

But Mason acknowledged that the evaluation showed that there was room for improvement.

“What it points to is that we need to work harder to identify more capable small businesses in some of those subcategories,” he said.

LANL employs 12,367 people, according to the report, which was 326 more than in fiscal year 2019. About 43% of employees (5,269) live in Los Alamos County, 23% (2,896) reside in Santa Fe County, and 16% (1,986) live in Rio Arriba County.

Bernalillo County is home to 618 LANL employees, accounting for 5% of LANL’s workforce.

The annual payroll for LANL is $1.24 billion, up from $1.16 billion the previous year.

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