At Princeton Plasma Physics Laboratory, buying small is a big win
When scientists at the U.S. Department of Energy’s Princeton Plasma Physics Laboratory (PPPL) needed metal flanges for a specialized piece of equipment, Principal Buyer Arlene White could have ordered them from a range of major manufacturers.
Instead, the $150,000 order went to Zenex Precision Products, a small, family-owned machine shop in Paterson, N.J.
The company’s price was competitive and the quality of the product was excellent. For White, equally important was the fact that the company has only a dozen or so employees and is located in an economically depressed community.
“We’ve bypassed major large companies to buy from them,” White said. “We will not pay a premium to do business with a small contractor. But buying small and local is just the right thing to do.”
The DOE, which funds PPPL and contracts with Princeton University to run it, agrees—and says that White is doing an exemplary job. Earlier this month, department officials honored White and PPPL with a “Special Recognition” award at its annual small business conference in Kansas City, Missouri. Under White’s guidance, the facility has exceeded all federal targets in awarding contracts to qualified bidders that are at a competitive disadvantage. Though that goal nationally in 2010 was that 23% of contracting dollars at each of DOE’s 17 facilities go to such businesses, PPPL went beyond with a total of 58.7% -- $14.5 million of the $24.7 million available. The numbers are for the fiscal year that ended Sept. 30, 2010.
Businesses eligible for preference include ones owned by women, Native Americans, veterans disabled during their military service, and some who are otherwise disadvantaged. The list also includes businesses, like Zenex, located in areas designated by the federal Small Business Administration (SBA) as “historically underutilized businesses” or HUBZones.
Other companies may qualify simply because they are small.
Among the PPPL contracting dollars awarded were: $2.64 million to women-owned companies; $1.57 million to businesses in HUBZones; $966,000 to enterprises owned by veterans who were disabled in their military service; and $1.67 million to other disadvantaged businesses.
Not only did the total contracted exceed the federal benchmark, so did the totals in each category. For instance, the awards to women-owned businesses made up 10.67% of PPPL’s total, while the federal goal was 8%. HUBZone awards were 6.38% of PPPL’s awards, versus a federal goal of 4% . And the service-disabled veteran awards’ total dollar amount came to 3.91% while the federal goal was 3%. The other disadvantaged companies garnered 6.76% of PPPL’s business, exceeding the federal goal of 6.5%. (Awards may be counted in more than one category.)
The facility is proud of its efforts.
“Princeton is in the nation’s service and this initiative promotes the nation’s infrastructure,” said Rodney Templon, PPPL’s director of procurement. A government contract at a fair price can mean economic survival for businesses trying to go up against global competitors and national big box chains.
To Zenex, for instance, the Princeton contracts—more than $1.2 million since 2007-- have meant keeping more workers on salary. “It’s a tough economy,” said company founder Zenon Wronski. “Paterson’s having a hard time like a lot of places. We might have had to lay people off without this business.”
According to White, her vendor list is full of companies like Zenex, from makers of high-tech equipment to purveyors of paper clips.
To find them, she uses the Central Contractors Registry system set up by the Small Business Administration. The database lists vendors that already have been vetted. But she also goes to regional Small Business Administration conferences, community events, and just about any place she’s likely to get a lead on a potential vendor.
“I do a lot of outreach, much matchmaking, but people find me too. I’m always finding business cards stuck in my office door,” she said.
Customer service is a hallmark of dealing with these select companies, Ms. White believes, which is why a new suite of blue upholstered sofas and chairs in the PPPL lobby came from A. Pomerantz, a Philadelphia furniture and carpet store that’s on her list of preferred vendors.
Though it is a $30 million company, A. Pomerantz qualifies because it is owned by Gary Maddox, a former Philadelphia Phillies baseball player who was disabled during the Vietnam war, said Robert Morris, the company’s director of government sales.
Pomerantz is a distributor for Steelcase, the nation’s largest supplier of office furniture.
Its location in central Philadelphia also qualifies as a HUBZone business. The company has received more than $1 million in PPPL contracts since 2008 and will likely get more, White said. “I got exactly what I wanted and at a good price too,” she added.
The SBA rules have also created a new class of middlemen. For instance, one small business that gets points for cleverness, she says, is Legacy Information Systems, run by Gaylord Neal from an office in Middletown, Del. It is classified as a disadvantaged business because of its ownership. Neal is one of three employees. Through an arrangement with Staples, the office supply giant, Legacy buys Staples products at a discount. It then uses that margin to sell customers goods at the same price they would pay as Staples business customers.
But Neal also offers a higher degree of service, he and White said. “A big store can’t always do that but we work really hard to keep our clients happy,” Neal said. In fact, said White, the lab bought its supplies from Staples before learning about Neal’s company. “We were just frustrated dealing with the big store. Now if we have a problem with an order, Mr. Neal’s on it immediately,” she said.
Princeton Plasma Physics Laboratory, a U.S. Department of Energy facility managed by Princeton University for the DOE Office of Science, collaborates with researchers across the globe to develop fusion as an energy source for the world, and conducts research along the broad frontier of plasma science and technology. PPPL also nurtures the national research enterprise in these fields, and educates the next generation of plasma and fusion scientists. Fusion is the process that powers the Sun and other stars. In the interior of stars, matter is converted into energy by the fusion, or joining, of the nuclei of light atoms to form heavier elements. http://www.pppl.gov