See:
SHP 200: Principles of StarShip Design. (Chapter 3 - Propulsion Systems)
You did not put any/enough engines on your ships.
Drive Reactors are *NOT* engines. They only provide bonus movement, and you need at least one movement point worth of engine ports in order for the reactor to help.
We talked about this on email back in August, but that was a long time ago.
PS:
In that game, there are two huge empires, and two tiny ones.
I think I should suggest that the big empires partnership with their adjacent small empire. Should keep the game balanced, and let you try out some combined-fleet co-op action.