Summit Offers Insight on Military Contracts

Mon November 19, 2007 - National Edition
Giles Lambertson



Generals, commanders and private sector partners got down to business when they met in early November at the North Carolina Military Construction Summit in Fayetteville, N.C. The meeting was designed to answer two questions: How much military base work will there be in the state during the next few years and how can a small construction company get a piece of it?

By the end of the day, the short answers to the questions were evident: (1) Work is abundant and (2) chances are good that a company can land a contract if it can show itself able to do a job.

The summit was the handiwork of the N.C. Military Business Center and the N.C. Military Foundation, so the natural focus of the gathering was to connect contractors in North Carolina with the military establishment. Yet the gathering was not really about one state.

The volume of construction activity on the numerous North Carolina military bases is so large that out-of-state contractors were well represented at the summit and, in fact, will continue to dominate military construction contracts in North Carolina. Many of the North Carolina firms simply do not have the capacity to take on the ever-larger military base jobs.

Consequently, many small contractors in the state must seek business relationships with larger firms from out of state. Acknowledging this reality, the summit was designed to help foster just such relationships. A large part of the Nov. 5 meeting was devoted to telling small contractors how to link up as subcontractors with national peers in the industry, information that is valid in any state and any setting.

Plenty of Work

Department of Defense spending in North Carolina between now and 2013 is expected to be approximately $1 billion a year, a funding level that reflects the heavy military presence in the state. Situated up and down eastern North Carolina are U.S Army Airborne units at Fort Bragg, U.S. Marine Corps units at Camp Lejeune, Marine Corps Air Stations at Cherry Point and New River and Seymour-Johnson Air Force Base.

Fort Bragg was a major beneficiary of the 2005 national military base relocation and closure process, with the U.S. Army Forces Command headquarters and U.S. Army Reserve Command ending up at the Cumberland County installation. That move alone eventually will bring 8,000 new military personnel to the state. When the transition is complete, Fort Bragg will have more general officers than in any other Army location outside of the Pentagon in Arlington, Va.

“We have an obligation to care for these servicemen and women and their families. This covenant is why we’re here today,” said Brig. Gen. Arthur M. Bartell, deputy-commanding general of the XVIII Airborne Corps and Fort Bragg. He spoke to approximately 135 businessmen and -women at the summit who gathered at midday for a catered lunch in the entranceway hall of the Airborne & Special Operations Museum.

The downtown Fayetteville museum — closed to the public for the event — provided a dramatic backdrop for the summit. The museum’s sun-splashed atrium features a pair of life-sized mannequins in vintage and modern paratrooper gear descending under opened parachutes toward the concrete and marble floor below.

Tables for a catered meal were set up where those paratroopers would land were their flights ever to end. At a table adjacent to the one where Bartell was seated sat another general — Maj. Gen. Robert C. Dickerson, commanding general of Marine Corps Installations East, Camp Lejeune. Scattered throughout the room were numerous other ranking men in uniform and numerous aides in combat camouflage dress, all of whom lent the summit an appropriate martial air.

Bartell noted in his lunch remarks that Fayetteville is less crowded with military personnel than it would be if the 15,000 soldiers deployed in Afghanistan and Iraq were at their home base. He thanked the contractors and other business people for their professional support of this large and mobile military community.

“We value your expertise, your skills and your time,” he said.

But it was left to Maj. Gen. Merdith “Bo” Temple to spell out in some detail the work opportunities for contractors over the next half-dozen years. Temple is director of the Military Programs Directorate for the U.S. Army Corps of Engineers. In his keynote remarks that opened a series of slide and interactive presentations — before he left for St. Louis, Mo., to attend a national Small Business Administration meeting later that day — Temple set the tone of the summit, declaring that “this is a very dynamic time to be in our business. We’ve got plenty to do.”

He explained that the Corps’ international workload is dramatically greater than at any time in the last 40 years, with work spiking after the 2001 terrorist attacks. Coming to bear simultaneously upon the Corps are a trio of urgent responsibilities: closing and relocating military bases, transforming military forces into more modular units and meeting the immediate needs of an organization engaged on battlefields. It all adds up to “a huge wave of work in the next five years,” Temple said. “There’s plenty to do.”

The jump in construction activity at Fort Bragg alone is breathtaking. The average annual level of contracted work at the fort over the last 22 years was $108 million. That figure will zoom in fiscal year 2007 to $365 million, some $325 million of which already is under contract.

But the projected expenditure at Bragg in FY 2008 is $465 million; average annual spending at the installation over the next five years is expected to be about $300 million. By 2012, more than $2 billion will have been poured into the base for such diverse projects as new and rehabilitated housing for officers, enlisted personnel and families, an elementary school, various training centers, an “automated multipurpose machine gun range,” a hospital addition, vehicle maintenance shop, a sniper range and a chapel, to name a few.

Temple cautioned that funding remains the wild card. “Will Congress provide funds in a timely fashion? That is really the key.”

Wanted: Small Businesses

Various discussion leaders said during the course of the day that a looming concern is “construction resources.” Noted one uniformed presenter, “We’ll have to delay projects if we do not have the amount of skilled workers that we need.”

One of the manpower solutions is including small contracting firms in the mix of service providers. A goal of the Savannah District of the Corps of Engineers, which includes North Carolina, is that 38 percent of military construction program work will be awarded to small businesses. To that end, Corps administrators are involved in several initiatives, including participating in the summit.

Other outreach activities include:

• Soliciting small businesses to submit bids for projects that are a good fit for their company operations

• Encouraging small firms to team with a mentor to form joint venture alliances where that is feasible

• Advising small businesses on how to successfully submit proposals.

Temple noted that the average size of a Corps military contract has doubled in recent years to $30 million, which precludes many small contractors from competing for the work. But he assured the audience that “there will be plenty of opportunities for (small business) people to execute our program as well.”

As Sue Kranes, one of the presenters for the Naval Facilities Engineering Command, told the assembled businesspeople: “It is very, very important that if you are interested, you respond to the invitations to bid. We’ll help with your evaluation of how to proceed on the acquisitions… But the best way to get opportunities is to pair up with a large company. We’re not questioning capability; we’re looking at capacity.”

Conveying the same message were other military presenters including Rear Admiral Christopher J. Mossey, commander of Naval Facilities Atlantic, and Commander John Alberghini of the Naval Facilities Engineering Command.

One breakout session of the summit catered to subcontractors and specialty contractors. On the panel of prime contractor representatives were Joanna Harmon of the Whiting-Turner Contracting Company, headquartered in Baltimore, Md., Damon Jones of Daniels and Daniels Construction Company of Goldsboro, N.C., and Dube Putz of Diversified Mechanical of Durham, N.C.

Each counseled small business owners on how to navigate the bidding process to land a subcontract. Some of their counsel was pretty basic, suggesting that successful bids can hinge on extra effort and paying attention to details.

Jones said that trusting the system, having self-confidence and keeping communication lines open all the way through the bidding process is important.

“And do those site visits,” Harmon advised the roomful of small contractors, picking up on a suggestion of Jones. “This is one thing we are going to ask, did you do a site visit? There are some issues on a site that you might not be aware of unless you visit.”

She said small contractors should take initiative and be forthcoming as they work with potential prime contractors. “I can tell you I need to really know who you are and what your capabilities are. Bidding for contracts is a work in progress. Perseverance is a very good tool to have.”

Putz told the group that serendipity plays a role, too. He described how on one occasion he was leaving a work site on a military base when “a guy pulled out in front of me. I noticed the condition of his equipment and said to myself, ’This guy takes care of his tools.’”

He followed the workman and eventually was able to have a conversation with him. That chance encounter with a man who impressed Putz with his conscientious workplace habits was the start of a business relationship that in the last year earned the man $900,000 in subcontract work with Diversified Mechanical.

The summit also offered throughout the day an opportunity for contractors to meet with government contracting representatives and prime contractors in “speed networking” sessions. The representatives were scattered throughout the museum’s gallery of historical airborne deployments — under the wings of a C-47 or the blades of a UH-1 helicopter, both suspended from the ceiling, for example, or on a recreated street of a typical Normandy village during World War II.

The five-minute conversations were all business, however. Harmon, who was Whiting-Turner’s representative at a table next to a rifle display in the gallery, returned to Baltimore with 250 business cards. Her conversations with the contractors and the information on the cards will help guide her as she seeks to match up her company’s contracting needs in North Carolina with local contractors. Harmon — Whiting-Turner’s corporate small business liaison — called the summit an “absolute” success.

Ron Leeper agreed that it was a worthwhile venture. His company — Leeper Construction Company of Charlotte, N.C. — is a minority-owned general contracting and construction management firm. He attended the summit to see “what kind of opportunities there are in military contracting.”

By midday, Leeper said he already had some projects that he would follow up on. “I am really looking to partner with a larger firm that has military experience,” he said. “Having our company working with them might be a competitive advantage for them, too.”

Marcus Steven Morris wore two hats to the summit. He operates a small MCE Corporation office in Saint Pauls, N.C., south of Fayetteville. However, the office is just a branch of the $20 million-a-year Dublin, Calif., MCE organization. MCE successfully performed a contract at Fort Bragg some time ago and, upon completion, Morris preferred to stay in North Carolina and open the 10-person office. Downsized by choice, Morris was at the summit looking for a prime contractor with which he could partner.

“I like being a prime contractor but the new contracts are too large for my bonding capacity. So I need to see what I can do as a subcontractor,” Morris said. His office has no chance at $50 million to $100 million contracts for military base work. Something on the order of $1 million to $8 million would be ideal, he said.

“It gets to be heart breaking knowing you don’t have a chance to be a prime contractor on these jobs,” he said, during a break in the sessions. “I understand where the government is coming from, but there is a limiting factor when you’re not one of the big businesses.”

Yet Morris is philosophical, noting that competition is “what business is all about and North Carolina is a good place to do it.”

The meeting was the third annual summit sponsored by the Business Center and the Military Foundation. Each summit has varied in format and focus. The only regret that Scott Dorney, executive director of the Business Center, has is that the summits were not started two years sooner so they would be farther along in developing the military-contractor connection.

“We will be experiencing a bubble (of contract work) for the next three to five years. If we can sustain this progress in developing these relationships, it will be very, very significant,” he said. CEG