DOE changes hurt local businesses | Guest Opinion

During recent Hanford prime contract transitions, the Department of Energy (DOE) implemented several significant changes that dramatically altered the subcontracting landscape for local businesses.

Some of these changes will be very positive for our community, eventually, but in the near term the changes are impacting every local business that supports Hanford, and in some cases pushing the smallest businesses toward closure.

Local businesses are a key part of the Hanford workforce, and provide critical products and expert services for the cleanup mission through subcontracts with the prime contractors. Transitions are always challenging for these local businesses. The incoming contractors frequently have pre-selected subcontractors as members of their team, and when that happens, work is shifted to the pre-selected team members.

This is a routine part of transitions that have occurred every 10 years or so — winners and losers, it comes with the territory.

The recent transitions are different. DOE directed its new contractors to eliminate existing subcontracts involving staffing services, prior to January 25th, and to replace them with new performance-based managed-task subcontracts. DOE doesn’t appear to have considered the impact their abrupt changes would have on local businesses.

The contractors scrambled to get this done during the usual period of transition between incoming and outgoing contractors, and they were able to complete many of the more straightforward subcontract replacements. However, they didn’t have enough time to complete all of the replacements, and the more complex/specialized staffing services subcontracts will take several more months to replace.

DOE’s changes didn’t allow local businesses to continue working under the remaining staffing services subcontracts while the prime contractors finished working out their approach for replacing them. As a result, the prime contractors terminated the remaining staffing services subcontracts, and posted job openings for all of the jobs covered by those subcontracts.

The majority of subcontractor employees in those jobs saw the handwriting and accepted employment with the prime contractors so they could keep working. The prime contractors are now self-performing the previously subcontracted work, with the subcontractors’ former employees. This puts local businesses in an extremely difficult position: several months is too long to stay viable without an opportunity to compete for new work.

An additional, even more painful twist: this conversion from subcontracting to self-performance is only temporary. The prime contractors intend to again subcontract much of this work in the next several months, after they reconfigure for performance-based managed-task subcontracting. The former subcontractor employees will end up with 3 different employers and benefit programs over the course of 2021.

Everyone loses here, which is the sign of a bad plan.

The local business community appreciates and supports the planned increase in performance-based managed-task subcontracting, but we are extremely concerned about the process. A reasonable transition, such as allowing local businesses to continue working under their existing staffing services subcontracts during the change, could have avoided these harmful impacts.

This is clearly a challenging situation as DOE and the prime contractors seek to make cleanup more efficient — an effort we support, but it needs to be done in a way that doesn’t penalize those least able to bear it — the local businesses and their employees.

We have reached out to DOE in search of solutions, and anticipate partnering with them to find a win-win path forward.

This story was originally published March 1, 2021 at 12:34 PM.