Sandia Labs spending tops $1 billion, economic impact booms in FY18

By Michael Baker

Thursday, January 17, 2019

Economic Impact brochure cover

DEEP IMPACT — The 2018 Sandia National Laboratories Economic Impact brochure (PDF, 9MB) breaks down Sandia’s spending and spotlights its role in the economy.  (Image courtesy of Sandia National Laboratories)

Sandia spent nearly $1.3 billion in goods and services in fiscal year 2018, with spending on New Mexico companies up by $55 million compared to the previous year, according to the Labs’ latest economic impact report.

“We had a really good year and topping $1 billion with nearly half a billion for New Mexico businesses is a significant milestone,” said Jodi A. Maheras, supply chain director. “Sandia’s supply chain is built on a diverse supplier community to achieve our national security mission and further economic prosperity.”

Sandia spent more than $1.18 billion in subcontracts and $88 million in procurement card payments, for a total of $1.27 billion in goods and services from suppliers in fiscal year 2018, up about $93 million from the previous year. Combined subcontract and procurement card purchases to New Mexico businesses topped $475 million.

The 2018 data, reflecting actual payments made, is based on Sandia’s fiscal year from Oct. 1, 2017, to Sept. 30, 2018. The data is available with breakdowns of Sandia’s spending in the 2018 Sandia National Laboratories Economic Impact brochure, which spotlights the Labs’ role in the economy.

David Martinez points out feature of Astra supercomputer

BUSINESS IMPACT — Sandia engineer David J. Martinez, center, shows Westwind Computer Products Inc. President Steve Hull and CEO Frances Jaramillo aspects of the As­tra supercomputer. Westwind, based in Albuquerque, has partnered with Sandia since 1999.  (Photo by Rebecca Gustaf)

New Mexico businesses received more than $462 million in subcontracts, or 39 percent of the total subcontracting amount. New Mexico small businesses received more than $317 million, or 69 percent of payments to New Mexico companies.

U.S. small businesses, including those in New Mexico, received 55 percent, or $656 million, of all Sandia subcontract spending.

Compared with fiscal year 2017, subcontract spending was up more than $57 million with New Mexico businesses and up nearly $50 million with the state’s small companies, while procurement card purchases to New Mexico businesses were down over $2 million because of a switch to payments based on subcontracts rather than procurement cards. Total U.S. small business spending increased by more than $75 million.

“We continue to set and achieve ambitious small-business goals,” said Paul Sedillo, who manages small business programs. “This past fiscal year we increased spending in many major small business categories, including Woman-Owned Small Business, Historically Underutilized Business Zone (HUBZone) company, Small Disadvantaged Business, Veteran-Owned Small Business and Service-Disabled-Veteran-Owned Business.”

Small businesses, diverse suppliers wanted

Sandia supplies small and diverse business owners with information on doing business and seeks capable local suppliers through a variety of programs, such as public forums with suppliers and civic leaders to discuss subcontracting opportunities and listing opportunities on its website.

In October 2016, Sandia began hosting open houses to meet personally with business owners and representatives. During fiscal year 2018, more than 550 visitors from more than 360 companies attended, meeting with subcontract professionals, supplier diversity advocates, other Sandia personnel and members of the Labs’ partner, the New Mexico Procurement Technical Assistance Center.

In fiscal year 2018, Sandia added more than 460 new small businesses to its supplier base. Small businesses represent 65 percent of all Sandia suppliers.

Sandia’s overall economic impact in 2018:

  • About $1.95 billion was spent on labor and non-subcontract-related payments.
  • More than $1.18 billion went to subcontract-related payments.
  • More than $95.1 million went to the state of New Mexico for gross receipts tax.
  • About $88.1 million was spent through procurement card purchases.

The report demonstrates Sandia’s continued commitment to small business, Paul said. Sandia’s Supplier Diversity department oversees and negotiates small business subcontracting goals with the NNSA, which promotes use of small businesses, including those that are small disadvantaged, owned by women or veterans and service-disabled veterans, and small businesses in impoverished, HUBZone areas.

“Looking forward to fiscal year 2019, Sandia is committed to seeking, growing and partnering with the small business community,” Paul said. “Small businesses in our country, particularly here in New Mexico, have a major impact to Sandia and its mission. Our economy is stronger when small businesses are prospering, and Sandia is proud to be a part of those successes.”

Small business subcontract-related payments for fiscal year 2018 with breakouts for Sandia’s New Mexico and California labs:

National New Mexico California
Total small businesses $656,221,000 $317,325,000 $91,600,000
Small business (non-minority, non-woman, non-veteran owned) $70,521,000 $14,124,000 $33,508,000
Woman-owned small businesses $132,151,000 $93,419,000 $16,746,000
Businesses in impoverished areas (HUBZone) $68,623,000 $46,504,000 $0
Small disadvantaged business $173,392,000 $86,773,000 $26,889,000
Business owned or co-owned by socially and economically disadvantaged person 8(a) $26,234,000 $14,566,000 $188,000
Veteran-owned small businesses $106,753,000 $40,404,000 $8,256,000
Service-disabled, veteran-owned small businesses $78,547,000 $21,535,000 $6,013,000

Sandia also helps the state’s economy through the New Mexico Small Business Assistance program. In 2000, the state Legislature created the Laboratory Partnership with Small Business Tax Credit Act to help companies get technical support from the national labs. In 2017, the Sandia NMSBA provided $2.4 million in assistance to 188 small businesses in 21 New Mexico counties. Since 2000, Sandia has provided $36.4 million in assistance in all 33 counties.

Sandia job growth bolsters local economy, giving

Sandia spending on New Mexico labor topped $1 billion as hiring and the number of employees increased at the Labs. Sandia made 2,342 hires in fiscal year 2018, 350 more than in fiscal year 2017.

Those hires include regular and limited-term employees, students, postdoctoral researchers and faculty, bringing the total of Labs employees to 12,769, an increase of more than 500 since last fiscal year and 750 since fiscal year 2016.

The Labs will continue to grow, and Sandia’s population will likely top 13,000 this fiscal year, as Sandia anticipates hiring about 1,800 employees. Student positions could account for 700 to 800 additional hires, bringing the number of anticipated hires in fiscal year 2019 to more than 2,500.

Sandia employees gave more than $4.5 million in 2018 to nonprofits in New Mexico, California and the nation. Sandia also provided $1.4 million in corporate contributions to support the work of local nonprofits. The labs’ K-12 science, technology, engineering and math programs encouraged thousands of students to consider STEM careers. In addition to other community volunteer projects, Sandia gave more than 1,000 retired computers and accessories to more than 40 New Mexico schools, and employees donated 4,000 holiday gifts to children in need.

“Sandia is committed to our communities,” said Delfinia Salazar, senior manager for supply chain. “We value our existing relationships and will continue to grow those partnerships as we continue to be fully committed to maximizing business opportunities and making a difference to local and national economies.”