DOE has more than 50 major sites in 35 states where the department carries out its varied missions, including developing, maintaining, and securing the nation’s nuclear weapons capability, cleaning up the nuclear and hazardous wastes resulting from long-term weapons production, and conducting basic energy and scientific research and development. This work is overseen primarily by DOE’s largest program offices—the NNSA, the Office of Environmental Management, and the Office of Science—and is primarily carried out though facility management contracts. DOE has a workforce of 16,000 federal employees; the department relies on the more than 100,000 employees of its contractors to manage its facilities and achieve its missions. DOE’s contracts with small businesses occur in several different ways. First, small businesses receive direct contracts from a portion of DOE’s procurement outlays that are not awarded as facility management contracts. Second, small businesses may compete for and receive facility management contracts. Historically, small businesses have not performed these contracts, though in a few cases small businesses have won such contracts after DOE identified ways to limit the contract’s scope of work. Third, small businesses receive subcontracts from DOE’s prime contractors. In 2004, approximately 17.5 percent of facility management contract dollars went to small businesses as subcontracts. Subcontracts, however, do not count toward achieving DOE’s small business prime contracting goal. Advocacy responsibilities for small business contracting rest primarily with a small business office—usually called the Office of Small and Disadvantaged Business Utilization—at each executive-branch agency. In general, officials in these small business offices are responsible for negotiating an annual small business prime contracting goal with the Small Business Administration (SBA), establishing each agency’s small business policy and guidance, coordinating agencies’ small business outreach efforts, and monitoring small business performance with respect to the goal. Within DOE, the department’s Office of Procurement and Assistance Management and NNSA’s Office of Acquisition and Supply Management also play important supporting roles in promoting small business prime contracting. These offices establish overall department procurement policy and prepare more specific guidance to reflect contracting requirements consistent with federal acquisition regulations. These procurement offices also maintain data on DOE’s prime contracts, including annual obligations to small businesses, and work with the Small Business Office staff to monitor small business performance and implement small business policies. DOE’s program offices are responsible for identifying small business prime contracting opportunities and providing contracting oversight. The SBA calculates DOE’s annual small business prime contracting achievement using data from the Federal Procurement Data System–Next Generation, a governmentwide procurement database that is administered by the General Services Administration. DOE’s efforts to increase its prime contracts with small businesses have increased the department’s total expenditures on small business prime contracts since 2001. However, the increases were not sufficient to achieve the department’s small business prime contracting goal in 4 of the past 5 years. DOE’s approach to increasing its prime contracting with small businesses focused on three main areas: (1) identifying more contracting opportunities for small businesses, (2) expanding small business development and outreach activities to create a larger pool of qualified small businesses, and (3) improving program management and oversight. DOE’s effort to increase the opportunities for small businesses to win contracts with the department included restructuring or “breaking out” portions of projects historically conducted by the department’s facility management contractors and redirecting that work to small businesses, modifying procurement strategies to expand opportunities for small businesses, and continuing to emphasize the award of nonfacility management contracts to small businesses. To redirect portions of projects traditionally performed under facility management contracts, DOE’s Office of Environmental Management identified nine such projects that it believed could be reserved for competition among small businesses as prime contracts. These prime contracts, summarized in table 1, are collectively worth about $745 million, and many involve multiyear environmental cleanup, construction, and facility operations activities that are essential to the mission of this office. As of September 2005, the Office of Environmental Management had successfully awarded seven of these contracts and obligated about $266 million. In December 2005, this office awarded an eighth small business contract, the second at Paducah, Kentucky. In December 2005, the Office of Environmental Management cancelled the ninth contract, which involved the Fast Flux Test Facility procurement at Hanford, Washington, due to budgetary constraints and the need to focus resources on more important projects. In comparison with the Office of Environmental Management, NNSA and the Office of Science identified relatively fewer procurements that could be redirected from their facility management laboratory contracts and set aside for small businesses. NNSA and Office of Science procurement officials said that redirecting work from facility management contracts to small businesses was not a priority in their programs because removing mission-related work from the contractors managing the laboratories could diminish the department’s ability to ensure the work at these laboratories is effectively accomplished. However, these officials were trying to identify mission-related work that could be moved from facility management contracts to small business contracts when a compelling “business case” could be made for doing so. For example, in 2004 NNSA awarded a contract to a small business for design, construction, and integration services for radiation sensors. These services were previously provided under the Sandia National Laboratories facility management contract. This award has an overall value of $80 million, of which $71.5 million had been obligated through the end of fiscal year 2005. In addition, NNSA and the Office of Science recently collaborated with the Office of Environmental Management to develop a small business information technology contract to provide services at the three DOE facilities in Oak Ridge, Tennessee. DOE plans to award this approximately $130 million contract in fiscal year 2006. These information technology services are currently being performed by three large businesses as subcontractors to the facility management contractors at the Oak Ridge sites. Science is also considering breaking out select small business subcontracts from the Thomas Jefferson National Accelerator Facility contract and awarding these as prime contracts. To further expand opportunities for small businesses, DOE also modified procurement strategies. Its two efforts in this area were led by the Office of Environmental Management and NNSA. These two efforts were as follows: In 2004, the Office of Environmental Management established “indefinite delivery/indefinite quantity” contracts in which it preapproved 8 large and 14 small businesses to provide services on environmental cleanup and deactivation, demolition, and removal of facilities on an as-needed basis. These contracts authorize a maximum of $800 million in total contract task orders through 2009. Through fiscal year 2005, almost $24 million in task orders had been issued, all of which went to small businesses. Officials cited a variety of possible reasons for the limited use of this contract mechanism so far, including contract officers’ unfamiliarity with implementation procedures and security issues surrounding administration of the contracts. An NNSA initiative—known as the “tri-lab initiative”—involved combining procurements common to the Sandia, Lawrence Livermore, and Los Alamos national laboratories, such as facility security, maintenance services and computer hardware, and purchasing of goods and services from small business suppliers. According to NNSA, most of the targeted procurements were for support services, such as temporary staff, rather than direct mission laboratory work. The three laboratories initially estimated that as much as $187 million in procurements could be redirected to small businesses in fiscal year 2005, with a goal of $300 million by 2007. However, before NNSA could fully take advantage of any potential benefits, the initiative was canceled. According to NNSA officials, the cancellation was primarily due to congressional concerns regarding the potential impact on the department’s ability to ensure that the laboratories’ projects are effectively accomplished, as well as concerns that some small businesses could lose existing laboratory subcontracts if NNSA awarded the work as new prime contracts through the tri-lab initiative. Finally, DOE’s efforts to expand contracting opportunities included continuing to emphasize the importance of directing nonfacility management contracts to small businesses. DOE procurement officials said that nonfacility management contracts issued by the department are reserved for small businesses whenever possible. Exceptions would involve situations in which only a large business supplier was available, such as for utilities. Between fiscal years 2001 and 2004, the percentage of these contracts awarded to small businesses increased from 48.7 percent (753 out of 1,546 contracts) to 53.0 percent (831 out of 1,569 contracts). In fiscal year 2004, small businesses received 61 percent ($282 million) of the total dollars spent on these new nonfacility management contracts. DOE has attempted to increase its use of small businesses by increasing the pool of small businesses willing and able to provide goods and services to the department. This effort has involved a variety of business development and outreach activities, including establishing a small business advisory team with participation by small businesses, pairing large and small businesses as mentors and protégés to assist in developing small businesses’ capabilities, and periodically hosting small business conferences to discuss upcoming contracting opportunities and to help small businesses understand the intricacies of the federal procurement process. DOE contends that many of these activities will help to expand both prime contracts and subcontracts with small businesses. The extent to which these efforts contribute to DOE’s small business prime contracting achievements is generally unclear. For example, regarding the pairing of small and large businesses in DOE’s mentor- protégé program, since 2002 the number of business pairs has increased from 5 to 48, but only one participating small business has subsequently received a prime contract from DOE. Similarly, while attendance at DOE’s annual small business conference has increased since 2004, and the feedback DOE collects from participants is generally positive, DOE does not know the extent to which the conferences have led to small businesses receiving prime contracts.