Big-ticket military contracts unveiled in Aberdeen

Amid a contracting pullback, Army organizations new to Maryland could help ease the sting

December 02, 2010|By Jamie Smith Hopkins, The Baltimore Sun

The Army detailed more than $25 billion in contracts during a briefing at Aberdeen Proving Ground on Thursday, drawing hundreds of business leaders who are hoping to win a slice of defense contracting bounty that's shifting to the region.

One communications electronics contract alone is valued at just over $10 billion. Another, for software engineering support, is worth an estimated $7 billion.

These sorts of mega-contracts, once handled at Fort Monmouth, N.J., have come to Aberdeen in Harford County as part of a national military base realignment. Thursday's "advanced planning briefing," which drew a standing-room-only crowd, is one of the first tangible signs that private contractors orbiting the base could benefit in a big way.

"Ten billion would be among the largest electronics contracts awarded in the world in any given year," said Loren B. Thompson, a defense analyst at the Lexington Institute, a think tank in Arlington, Va.

The contract briefing not only demonstrates how the Defense Department's years-long asset reshuffling creates military winners and losers, but it also comes as contractors in Maryland and across the country face new uncertainties about how much money the government will be divvying up in a time of looming deficits.

Defense Secretary Robert M. Gates pledged in August to reduce spending on "service support" contracts by 10 percent a year over three years. And the money President Barack Obama requested for all federal agency contracting this fiscal year is down 4.8 percent from a year ago, said Ray Bjorklund, chief knowledge officer at FedSources, a McLean, Va.-based public-sector market research firm.

"That equates to $36 billion in one year that's not going to go into the coffers of contractors," Bjorklund said. "You've got to compete much more intelligently, much more aggressively, for fewer dollars."

For the contracting-dependent Baltimore-Washington area, that's a sobering thought.

The state government hopes to help Maryland firms better compete for a piece of the shrinking pie. Economic development officials are putting on their first "contract connections" conference for small businesses at the Silver Spring headquarters of the Food and Drug Administration this month. About 250 companies are expected to attend the event, which will end with 10-minute appointments between contractors and agencies — speed-dating for contractors.

"This is a way to help open the doors," said Lisa A. Swoboda, deputy director of the state Office of Military and Federal Affairs.

The Army communications and information-technology organizations in the process of moving to Aberdeen from New Jersey are coming at a good time for anxious contractors.

It's new procurement oomph for the area that should help buffer Maryland from pullbacks elsewhere, say Bjorklund and other military analysts.

To say contractors are interested would be an understatement. The briefing conference was sold out. Many of the 400 private-sector attendees were already aware of at least some of the eye-popping contracts scheduled to be awarded next year, but they wanted to network — and hear the newest details from senior leaders.

Contractors furiously scribbled notes — and occasionally muttered "wow" — as presenters laid out the facts: A five-year contract worth about $475 million for research and development in areas ranging from radar technologies to radio-frequency sensors. A three-year contract worth about $513 million for information-technology support. A multiyear $1 billion contract for "tactical biometrics systems" such as handheld identity detection equipment.

And, of course, the headliners: $10.2 billion and $7 billion, both over five years.

"Very small dollar amount," deadpanned Chuck Pizzutelli, the Army official who outlined the $10.2 billion request for hardware, software, engineering services and other work related to tactical command, control and communications systems.

He said the contract would probably be set up so businesses could bid on pieces of it, just the sort of intelligence the audience wanted to know. Only a few defense electronics contractors are large enough to effectively compete for a multibillion-dollar deal.

When small businesses can't go after contracts by themselves, their other way in is to hook up as subcontractors with larger firms. Getting a foot in that door was part of what drew companies to the briefing and to the small-business conference held at Aberdeen on Wednesday.

"There were business cards flying all over the place," said Edward Elgart, director of the Communications-Electronics Command Contracting Center, which handles much of the C4ISR contracting.

Randy Rippin, president of 40-person RTR Technologies in Aberdeen, brought lots of his cards to pass out. He's excited about the growth potential he sees as the national base realignment begins to bear fruit in Harford.

His company, which does modeling and simulations for "what-if" scenarios, has received as much as $1.6 million for a government project as a subcontractor. He'd like to think bigger. And he'd like to snag his firm's first deal with the Army. He's eyeing the $7 billion software-engineering contract, figuring RTR could be a good fit for a piece of it.

"That's a huge opportunity," Rippin said.

Clara M. Schuster can attest to the transforming power of Army contracting. Her Virginia-based firm, an electronic fabrication manufacturer, had 10 employees in 2005. Now, after landing a $245 million deal with two other firms in August, she employs nearly 70.

But $10.2 billion? Now there's a contract.

"I'm always astounded at the magnitude of the dollars," said Schuster, co-owner of Manufacturing Techniques Inc.

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