Chamber surveys subcontractors

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By Tris DeRoma

Sure, the Los Alamos National Laboratory just may be the 800-pound gorilla in the room when it comes to the town’s economy.

However, officials with the Los Alamos Chamber of Commerce are saying the picture is more complicated when it comes to a very important segment of the economy, subcontractors who have a major share of business with LANL.

A few weeks ago, during a forum hosted by the LACC, LANL announced that due to the economy and other forces beyond its control, it will be asking its subcontractors to share more of the overhead costs.

To many subcontractors attending the forum, it sounded like a death knell for not only them, but the Los Alamos economy as well, since the effect would surely be felt throughout the town’s small business economy that in turn relies on the subcontractors to support local businesses.

However, a recent survey of subcontractors taken by the Los Alamos Chamber of Commerce shows a more complicated picture, one that may hold a sliver of light at the end of the tunnel. 

According to Kevin Holsapple, the executive director of the Los Alamos Commerce and Development Corporation/Chamber of Commerce, the chamber takes these surveys annually, just to get a finger on the pulse of what’s going on in the local economy and to see what the organization might do to assist. 

Sometimes the chamber also does a survey after a major announcement made by the lab, like when it was announced that the NNSA was deferring the Chemistry Metallurgy Research Replacement facility for five years.

Holsapple admits that this survey, taken just before LANL’s announcement concerning subcontracting overhead is allocated and the news that there will be cost overruns concerning the new security system at TA-55, does add a new spin of unpredictability.

“My takeaway on this is that there’s a lot of uncertainty in respect to the business prospects of the subcontractors,” Holsapple said.

However, Holsapple also said that this month’s snapshot also reveals that the subcontractors are still supportive of the projects and mission of the lab, as well as LANL’s predictions for a better-than-predicted outcome when it comes to federal funding and support.

And that’s not to say the subcontractors are looking through rose-colored glasses when it comes to future partnerships with the lab.

The bulk of respondents have been involved in supporting lab operations for more than 10 years. While nearly 40 percent of the subcontractors have seen no change in the number of employees they have in FY 2012, just over 23 percent said their workforces have been cut by greater than 50 percent. And, perhaps more alarmingly, 45 percent are considering making reductions in staffing.

“They are also realistic, I think they realize their role in the chain of business with the lab, that they are also the first people LANL is going to look to when it wants to cut costs,” Holsapple said. “It’s part of their function to provide flexibility to the lab when it comes to budget fluctuations.” 

Holsapple also said people should realize that many of the subcontractors aren’t totally relying on LANL for their livelihood, that they have contracts and partnerships in the private sector, as well as other major contracts with other federal facilities throughout the nation.

In any case, Holsapple said, he sees the chamber playing a major role in subcontractor/LANL relations in helping the two parties sort out their differences in an effort to keep disruptions to Los Alamos’ local economy to a minimum.

“We think there is an important need to advocate on behalf of the lab and its big picture programs and budgets by the business community while at the same time helping the lab understand the situation faced by the subcontractors and the people that help them get the work done,” he  said.

Holsapple said the forums have proven successful, and the chamber is planning more for the future, no matter what type of budget LANL finds itself working with come January.

 “What we’re working on is planning a series of dialogue and communication sessions with this section of our membership and the lab,” Holsapple said.