Economic Impact: Sandia Labs spends $3.68B

By Michael J. Baker

Photography By Lonnie Anderson

Thursday, January 16, 2020

Small businesses, new hires are major players in FY2019 economic impact

economic impact brochure cover
ECONOMIC BOOM — The Labs’ fiscal year 2019 Economic Impact brochure breaks down Sandia’s spending and spotlights its role in local and national economies. (Cover design by Lloyd Wilson)

Sandia pumped an all-time high of nearly $3.68 billion into the economy in fiscal year 2019 by spending on goods, services, payroll, taxes and other payments, Labs Director James Peery announced during a news conference on Jan. 15.

“Sandia is proud of the past success but will not rest,” James said. “We will keep building on these successes and seeking partnerships with highly qualified, diverse suppliers that can contribute to Sandia’s national security mission and spur economic growth in New Mexico and across the country.”

A big part of the spending impact included $1.54 billion in payroll. Sandia added more than 1,100 new positions last year, helping to raise the number of Sandia employees above 14,000 for the first time.

The more than $1.41 billion spent to purchase goods and services from suppliers in fiscal year 2019 also played a significant role in the overall spending impact, said Scott Aeilts, associate Labs director for Mission Services, referencing the newly released 2019 Sandia Economic Impact brochure. Nearly $522 million was spent on New Mexico businesses, and the state’s small businesses received nearly $364 million in subcontract payments.

“These numbers continue to trend upward on a yearly basis and show Sandia’s continued commitment to small businesses and New Mexico,” Scott said. “As Sandia grows, we are able to return investment into the communities, the states and the country that we serve.”

Other economic impact highlights, based on data reflecting actual payments made during Sandia’s fiscal year from Oct. 1, 2018, to Sept. 30, 2019, include:

  • Sandia’s close to $3.68 billion in spending was an increase of nearly $363.5 million compared to fiscal year 2018.
  • The more than $1.41 billion spent on goods and services — about $1.32 billion in subcontract payments and roughly $90.2 million in procurement-card purchases — was up about $140.7 million from the previous year.
  • Sandia paid about $98.1 million in corporate taxes.
  • The Labs spent nearly $2.17 billion on labor (including payroll) and other non-subcontract related payments, up about $221.6 million from fiscal year 2018.

Committed to small business

The data released in January also showcases Sandia’s commitment to small businesses, which received nearly $784.2 million, roughly 59% of the more than $1.32 billion spent on subcontract awards in fiscal year 2019. 

contractors examine hot water pump
SMALL-BIZ FORWARD — nStone project manager Munene Kasina, left, and nStone President Donald Lincoln discuss a new hot water pump the small Albuquerque-based business helped install at Sandia.

New Mexico businesses received more than $509.4 million in subcontracts, about 39% of the total subcontracting amount. New Mexico small businesses received nearly $364 million, about 71% of subcontract payments to New Mexico companies.

Compared with fiscal year 2018, subcontract spending was up about $47.2 million with New Mexico businesses, with much of that increase coming from the state’s small companies. Total U.S. small business spending for fiscal year 2019 increased by nearly $127.9 million from the previous year.

“Small businesses are essential to Sandia’s success in accomplishing our national security mission,” said Delfinia Salazar, senior manager of supply chain integration. “We will continue to focus on developing those relationships in an effort to support economic growth in New Mexico and the nation.”

Symbiotic relationships

One New Mexico company benefiting from Sandia’s maintained focus on small businesses is Albuquerque-based nStone Corp., a consulting engineering firm that has supported Sandia since 2011.

“We’ve had a great continued relationship with Sandia,” said nStone President Donald Lincoln. “Sandia is very easy to work with. They bend over backward to be helpful, and they want us to be successful.”

nStone provides engineering services in the areas of facility maintenance management, environmental safety and health operations, construction projects, project management, quality assurance, real property maintenance and management and several other areas. 

“Our team has a strong history of support with Sandia and understands the challenges of working at both the New Mexico campus and the remote locations,” Lincoln said. “We are proud to support Sandia’s critical national defense mission now and in the future.”

Small and diverse suppliers

Sandia seeks out small businesses like nStone through a variety of programs, as well as hosting public forums with suppliers and civic leaders to discuss subcontracting opportunities and listing opportunities on its iSupplier Portal. The Labs launched a 5% pricing preference for New Mexico small businesses in fiscal year 2018 and developed a mentor-protégé program based on the DOE model for small businesses in fiscal year 2019.

“Small businesses, especially those right here in New Mexico, are what makes Sandia’s mission a success year after year,” said Paul Sedillo, Sandia’s small-business program manager. “Sandia recognizes the value of small, local and diverse businesses and continues to make a conscious effort to meet with local suppliers and increase spending in New Mexico.” 

small business spending table

For the past three years, Sandia has hosted small-business open houses to meet with business owners and representatives. In fiscal year 2019, Sandia hosted eight such events attended by 431 companies who met with subcontract professionals, supplier diversity advocates and other Sandia personnel, and learned about the New Mexico Procurement Technical Assistance Center, a free New Mexico small business resource center.

In fiscal year 2019, Sandia added more than 537 new small businesses to its supplier base. In all, small businesses represent 65% of Sandia suppliers.

Subcontract-related payments were up across multiple federal small business categories, including small disadvantaged, women-owned, veteran-owned, service-disabled veteran-owned and small businesses in impoverished, HUBZone areas.

“The Sandia small business team partners with a variety of agencies and national labs across the country to provide education on opportunities for local businesses to grow at Sandia, as well as within the industry as a whole,” Paul said. “Sandia had a lot of great opportunities in 2019 for small and diverse suppliers. Expect to see more great opportunities in 2020.”