Print
Email
Print Edition Stories
Stuart Garfield
Wednesday, December 2, 2009
Small businesses get piece of defense deals in exchange for innovation
By Jackie Noblett
Companies born in the recession
MHT's Efrain Viscarolasaga: Soldier tech heads to Afghanistan
MHT's Galen Moore: Military snipers aid accuracy with iPhone
Infoscitex Corp. may not be one of the New England defense industry behemoths, but it seems to be holding its own in winning sought-after contracts.
The Waltham contract engineering shop’s recent successes include a $13 million U.S. Air Force warfighter performance research award and a five-year, $50 million Air Force aerospace research contract. While it expects to generate $26 million in revenue this year — barely 1 percent of the net sales booked by crosstown defense giant Raytheon Co. — company officials contend that having the right relationships is more important than size.
“You have to be able to speak the language, and therefore be involved in knowing what’s coming down the pipeline,” said Infoscitex CEO Stu Haber. “The more people that know you and know your capabilities, the more they will think of you when a contract is coming up.”
New England has long been a hub of activity among defense firms working on electronics, networking and other high-end military systems, yet a significant portion of U.S. Department of Defense dollars doled out to the region go to smaller suppliers working on components of systems or entire segments of a technology platform. As the military shifts its focus toward more high-tech and specialized warfare, experts predict that contractors will continue to rely heavily on the new technologies coming out of small and startup companies.
“Small businesses tend to be the sources of innovation in technology and large primes are always looking for potential partners,” said retired Brig. Gen. Donald Quenneville, executive director of Defense Technology Initiative, a regional trade group.
The federal government makes it a priority to incorporate small, minority and disadvantaged businesses into their procurement policies, and the Department of Defense is no exception. DOD contracting rules state that winners of contracts worth at least $550,000 must submit plans of how they will incorporate small businesses into the contract. It sets requirements that 37 percent of large contracts go to small businesses and that additional amounts go to women-owned, minority-owned and disadvantaged businesses. While there is no penalty for companies that miss that target, federal agencies do track and report prime contractors’ efforts in meeting that obligation.
At Hanscom Air Force Base in Bedford, officials estimate some $5 million per working day go to small businesses out of a $4.8 billion procurement budget, through both direct contracts to small businesses and subcontract work.
“We love competition because it provides better bang for the taxpayers’ buck,” said Hanscom’s small-business liaison, Bill Donaldson.
Yet some contracts are better suited to small businesses than others. “A lot of contracts that are of sizable girth, they can’t be primed by small businesses. In the electronics systems business, a few can be done by small businesses but not one can be done without using several small businesses,” Donaldson said.
Donaldson’s office is also charged with helping small businesses navigate the nuances of the federal procurement system and connect with larger businesses in collaborative environments. The DOD’s Northeast Regional Council also arranges “matchmaker” events twice a year for small businesses to meet with prime contractors and discuss how their technologies can complement the prime’s existing and future contracts. At the June matchmaker in Killington, Vt., several dozen defense and technology companies participated, including Raytheon, BAE Systems Inc., General Dynamics Corp.’s Bath Iron Works unit and Dynamics Research Corp.
Prime contractor Textron Systems, based in Wilmington, looks to find new suppliers at trade shows and other events when it is assembling a team to chase a new contract as well as to round out existing contracts, said spokesman Stephen Greene.
“We’re always focused on quality and on-time delivery, and suppliers can play a large role in that,” he said. “We’re encouraged to work with small businesses and we do so because we value the role of the supplier and their innovation.”
Infoscitex engineers spend a great deal of time on business development efforts, Haber said, meeting with government officials, peers and prime contractors to discuss technology developments and military priorities.
“It’s very much a teaming environment. … The companies you are competing with on Tuesday, you’re teaming with on Wednesday,” Haber said.
Comments
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
RSS Feeds
