AIKEN - Out of 34 U.S. Department of Energy sites included in a recent federal report on spending, the private contractor that runs Savannah River Site spent the smallest portion of its total 2004 budget with small businesses.
Westinghouse Savannah River Co. was provided a budget of $1.45 billion last year and spent $109.5 million, or 7.5 percent of it, with small companies, according to a report from the U.S. Government Accountability Office.
In contrast, the company that spent the most, CH2M Hill Hanford, which runs the Hanford Site in Washington, spent 30 percent of its $342 million budget, or $103.5 million, with small businesses, the report shows.
By law, federal agencies must spend a certain percentage of their budget with small businesses, a step that is supposed to create competition, efficiency and innovation.
The DOE, which is the largest civilian contracting agency within the federal government, typically requires its private contractors to spend at least half their subcontracting budgets with small businesses.
Westinghouse was more competitive with other DOE sites under the subcontracting category.
In 2004, it spent $188 million with subcontractors, and $109 million of that, or 58 percent, was spent with small businesses.
But while the company met the DOE's requirement, it and every other managing contractor erroneously omitted subcontract work from its goal, creating an inflated percentage of money paid to small businesses, the report released in May states.
"Misleading data has created the false impression that DOE is meeting its small business subcontracting goals, undermined the DOE's oversight of subcontracting efforts and generated mistrust among members of the small business community," the report states.
The report states that private contractors, including Westinghouse, did not include, among other expenditures, subcontract purchases from government agencies, nonprofits, utilities and lease agreements when calculating how much money was paid to small businesses.
The report didn't specify which expenditures in particular Westinghouse did not report, though stating it had excluded at least some such purchases.
Spokesman Will Callicott said the company's "subcontracting program is designed to conform with DOE policy, and with the terms of our contract.
"We would expect to continue to comply with whatever changes in customer guidance we may get," he said in a statement.
He also said Westinghouse excluded purchases from other government agencies and facility management contractors, which it said was consistent with DOE and Small Business Administration requirements, but did include expenditures with nonprofits.
He said Westinghouse does not include purchases from sources directed by DOE or mandated by law because there is no opportunity for small businesses to participate in those transactions.
According to the report, DOE officials were aware that contractors weren't following Small Business Administration guidelines as early as 2002, and clarified what kinds of purchases were supposed to be included among subcontractors.
"In March 2005, DOE issued additional guidance, but it is uncertain whether DOE will ensure that the guidance is followed," the report states.
In a written response to the report, Energy Secretary Samuel Bodman said his agency would reinforce small business reporting procedures but would continue to base the percentage on subcontracting budgets and not total budgets.
Reach Josh Gelinas at (803) 648-1395, ext. 113, or josh.gelinas@augustachronicle.com.
Agency Report
Westinghouse Savannah River Co. spent $109.5 million, or 7.5 percent, of its 2004 budget with small businesses, the least of the contractors in charge of 34 Department of Energy sites, according to the U.S. Government Accountability Office.