Sandia injects $3.76 billion into economy

By Michael J. Baker

Friday, January 29, 2021

Nation, state, small businesses benefit from Sandia purchasing

Driven by the purchasing of goods and services and payroll, Sandia injected an all-time high of more than $3.76 billion into the economy in fiscal year 2020.

Cover of the 2020 Sandia Economic Impact brochure
MAKING AN IMPACT — The fiscal year 2020 Economic Impact brochure breaks down Sandia’s spending and spotlights its role in local and national economies.

“It’s no secret that the second half of the year was tough on a lot of people and businesses, especially smaller companies, which is why we are extremely proud to be able to support local and state communities and companies through our business activities,” said Scott Aeilts, Sandia’s associate Labs director of Mission Services.

More than $1.4 billion was spent to purchase goods and services from suppliers, including nearly $482.6 million with New Mexico businesses and more than $349.7 million in subcontracts with the state’s small businesses.

“We will continue to build on our successes in developing partnerships with highly qualified, diverse suppliers that can contribute to our national security mission and help us return that investment to the communities, the states and the country that we serve,” Scott said.

In addition, the economic impact included nearly $1.67 billion in payroll from Oct. 1, 2019, to Sept. 30. Sandia added about 460 new positions last year, helping to raise the number of Sandia employees above 14,400.

Other highlights in the 2020 Sandia Economic Impact brochure include:

  • Sandia’s more than $3.76 billion in spending was an increase of more than $86.8 million compared to fiscal year 2019.
  • More than $1.4 billion was spent on goods and services — including about $1.33 billion in subcontract payments and roughly $72.5 million in procurement-card purchases.
  • Sandia paid nearly $100.3 million in corporate taxes, an all-time high of about $98 million being in gross receipt taxes to the state of New Mexico in fiscal year 2020.
  • The Labs spent nearly $2.26 billion on labor, including payroll, and other nonsubcontract related payments. That was up about $91.2 million from fiscal year 2019.

A history of strong commitments to small businesses

The data showcases Sandia’s long-standing commitment to small businesses, which received more than $792.9 million, or 59.5%, of the more than $1.33 billion spent on subcontract awards in fiscal year 2020. Subcontracting with all small businesses was up nearly $8.8 million compared to fiscal year 2019.

Judy Ortiz Rizek holds a printed circuit board
BUSINESS CIRCLE — Judy Ortiz Rizek is owner and president of The Circuit Shop in Albuquerque, a small, woman-owned business that contracts with Sandia. The company makes printed circuit boards for a variety of departments at the Labs and is International Traffic in Arms Regulations certified. (Photo by Randy Montoya.)

New Mexico businesses received nearly $473.1 million in subcontracts, or 35.5% of the total subcontracting amount. New Mexico small businesses received about 74% of those subcontract payments. With an additional $9.5 million in procurement-card purchases, Sandia spent about $482.6 million with New Mexico businesses in fiscal year 2020.

A run of strong years with New Mexico businesses helped to balance a minor dip in the state’s small business spending when compared to an exceptionally strong fiscal year 2019. Subcontract spending was down about $14.2 million with the state’s small businesses, although still above fiscal year 2018 and previous years. Since fiscal year 2016, Sandia’s contracting with New Mexico small businesses has increased by about $109.9 million.

“Fiscal year 2019 was a strong year bolstered by multiple large, one-time, New Mexico subcontracts, such as with contractors working on the Astra supercomputer,” said Paul Sedillo, Sandia small-business program manager.

“The COVID-19 pandemic was a blow to so many, especially small businesses, but the nearly $483 million spent by Sandia within the state of New Mexico last year helped the economy during a difficult time,” Paul said. “Spending in New Mexico remains strong, and that is a great thing.”

Sandia focuses on working with small businesses fitting the federal categories as small disadvantaged, women-owned, veteran-owned, service-disabled veteran owned, and small businesses in impoverished, HUBZone areas.

Helping small businesses grow

One of those small businesses is Hacienda Home Centers, with offices in Albuquerque and stores in Española and Las Vegas, New Mexico. The provider of maintenance, repair and operations products plus building materials is also in the process of opening a store, HHC Supply, near Kirtland Air Force Base that caters to businesses and government agencies.

Insert from Sandia's Economic Impact brochure
SPENDING DETAIL — The fiscal year 2020 Economic Impact Brochure breaks down Sandia spending among several categories.

“It’s been very easy to work with Sandia, from the contract administrators to the people making requests for materials,” said Joe Sanchez, vice president of Hacienda Home Centers.

“It’s been tough lately for small businesses,” he said. “The contract with Sandia has really helped us to continue to grow. It gives us confidence to expand.”

Hacienda, a HUBZone, veteran-owned small business, signed a contract with Sandia about five months ago after attending several small-business forums hosted by the Labs before the coronavirus pandemic, Sanchez said.

The drive continues for small and diverse suppliers

Sandia seeks out small businesses through a variety of programs, such as public forums attended by Hacienda, other suppliers and civic leaders to discuss subcontracting opportunities. In fiscal year 2020, Sandia launched a Mentor-Protégé Program for small businesses and recently named its first three protégés. Last fiscal year, 41 new contract opportunities offered the 5% New Mexico pricing preference. Contracting opportunities are listed on Sandia’s website.

For the past four years, Sandia has hosted small-business forums to meet with business owners and representatives. In fiscal year 2020, before the pandemic, Sandia hosted two such events attended by 129 suppliers that could meet with subcontract professionals, supplier diversity advocates, other Sandia personnel and representatives of a free New Mexico small business resource center, the New Mexico Procurement Technical Assistance Center. Sandia representatives attended 12 virtual small-business events last fiscal year.

“It is hard work and resiliency that make small businesses special,” Paul said. “That’s why Sandia is dedicated to working just as hard to ensure that small and diverse businesses have every opportunity to work with Sandia National Labs. Small businesses are vital to the Labs and our nation.”

In fiscal year 2020, Sandia added 548 new small businesses to its supplier base. In all, small businesses represent 70% of all Sandia suppliers.