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Chasing public dollar

September 2nd, 2014 / By: / Feature, Management

Remember the Good Old Days? You offered a service; they signed up and sent the money.

0914_f4_1That was then. Today’s fabricators of marine products must be proactive in securing business. And if you’re seeking to procure accounts with the military and/or government sector, that business mantra spikes to a whole new level. This is not something a day of cold calls or odd hours at the computer can gain you. Prepare yourself for a calculated campaign, and to think outside the box. The bottom line: For some, those efforts pay off nicely; for others, not so much.

That’s the consensus of veterans in the business of supplying material for the U.S. Navy and Coast Guard and the nation’s first responders, be they medical units or the proverbial sheriff’s posse. Sharon Asmus, president of Minneapolis, Minn.-based Responder Gear Inc., connects with local fire and police departments and hospitals to fuel her ever-growing business that supports a corps of emergency responders who are first on the scene to help when emergencies and natural disasters strike. Her business is uber-successful because she responds to those first responders. Her products are expressly designed to fill the bill. “We design products according to their users’ demands, as they spell them out for us. They’ve been developed by the individuals who actually use them. These people field-test them and react to what they like or not: items used in their everyday operations, like bags. For instance, the Lake City, Minn., sheriff wanted the same gear bag in every vehicle, so everyone would have the same stuff. That way, it’s easier to refill the medical kits, too.

“Most recently,” she continues, “we outfitted the ambulances of North Memorial Hospital in Minneapolis—there are 200 of those ambulances, with three bags each. We worked with the medical director who oversees first responders, so they got exactly what they wanted. What they wanted was lighter weight, smaller bags. As a new feature, we incorporated business card-type windows for each section in the bag, noting what it holds, like a blood pressure cuff, because lots of them get lost onsite. The product sizes change every couple of years, so we revisit the bags. The director was really excited, so it’s win-win.”

Responder Gear recently supplied items for flood-victim relief—“a whole different type of gear because some of those EMTs can also be SWAT members,” she explains.

A moving target

Asmus develops new business by attending trade shows and calling on “diverse entities,” providing loaner bags for potential clients to assess efficiency and durability. Factors that influence securing the business don’t start with dollars, she says: “If price is a factor, they don’t buy from me,” adding “we manufacture in the U.S., not overseas. What they’re looking for is material that’s anti-microbial so that blood and pathogens wipe off; bags that function well and hold their products; items that are manufactured domestically; and finally, price. There are a couple of other players [as competitors], but they often do business offshore,” she adds.

How soon do these marketing efforts pay off? It’s a crap shoot. “It can be immediate, or they may have to wait for grant approval. Firefighters, who are often volunteers, are the least-funded group out there; it can take a long time. [Often, these volunteers will each buy their own bags.] In general, there’s
not enough funding, or there’s funding only on an annual basis, so it can take months till it’s approved.” The good news: “As we secure accounts with each community, they act as
referrals for others.”

Of course—you already know this—the demands are a moving target. “What they’re asking for is constantly changing, as new products must fit into medication bags,” Asmus says. “And it changes within the community, too, because firefighters’ needs are not the same as sheriffs’. It depends on the community, and that also changes over time, depending on leadership. They ask more of us.”

Katie Bradford, owner of Custom Marine Canvas of Noank, Conn., has been in business 29 years. She credits part of that successful run to three factors: location, location, location. She’s headquartered close to the Connecticut Coast Guard Academy, where its iconic tall ship, USCGC Eagle, is berthed, and sells primarily to the U.S. Coast Guard. Huge ships, like Eagle, require full deck awnings, for which Bradford employs Weathermax, manufactured by Safety Components of Greenville, S.C. “It’s dimension-stable, strong, lightweight, and chafe-resistant. It doesn’t shrink like acrylic does over this large expanse, and it can fold up small.”

0914_f4_2Business spreads, she says, by word of mouth: “They find us.” The approach, these days, has become “more straightforward. The use of credit cards makes it more precise and predictable. We go directly to the procurement officer, who generates a brown sheet [purchase order] and calls with credit card details when he places—or completes— the order. We may already have the specs, or we may
need measurements.”

The process can take years, depending on the budget, “or it can be very quick,” Bradford says, “like for the Eagle in 2012, when the finished product was needed in just two weeks. Generally it depends on what quarter they’re at in their budget. September 1st is the end of their fiscal year, so that generates a lot of requests. Also, submarines are in dry dock from May until August, so that’s when the work is done.”

Durability in demand

What drives orders? “Wear and tear on existing items,” she notes—“but it all goes along with the budget.” Speaking of wear and tear, she’s learned the hard way that the Coast Guard needs something sturdy so that helicopter landings won’t tear it up. “We’d used Shelter-rite for the prow, designed with graphics on it, and a helicopter came too close and shredded it.” Next round, “I learned to sew with vinyl substrate and then stitch on the graphics.

Bradford notes more demand for fabrics that are extra-durable and compliant—“lots of Seaman vinyl because it’s high-quality and it’s American-based. Also, there’s more demand for interior seating that’s breathable, for comfort—not vinyl.” Procedural changes have benefited her, too. “Now they’re using electronic communications—emails for estimates and questions, not phone calls, especially when a ship is out to sea and hard to reach.”

Business is steady. “There’s a whole new generation of Coast Guard vessels, and they’ll have needs. And as far as competition, by law, if the cost is over $3,000, it must go out for bids.” Not a cause for concern: “They always come back to us.”

Rexanne Metzger, owner of Davis Interiors Ltd. of Norfolk, Va., whose company has been in business 60 years, has counted on the U.S. Navy as a prime customer, fabricating curtains and chair covers for their ships. Yet these days she’s finding it rough sailing. “Since the sequester [budget cuts agreed to by the government to raise the debt ceiling], there’s been a budget shortage. Today, it’s all about price, not quality.”

For those wishing a piece of the government pie, she says: “It’s so hard—impossible, really—to break into. I’ve been doing it for so long. My advice is make cold calls, though it may be hard to find the right person, the procurement officer. Then, the timing all depends on the contract. It can take two days or six months.

“Another way,” she says, “is through the website fedbiz.com. They’re a private company acting as a government purchasing agent—a for-profit company that makes money off the government and charges an added percent of your fee.”

She also notes that a reverse auction is open to anyone
who signs up with a NACIS code (which shows what you
provide, from coffeemakers to ships’ curtains). “Everybody hates it because it eats into your profit. People will bid on
stuff who have no idea how to produce what they’re bidding on. In a reverse auction, I have to keep lowering my bid until I’m losing money.”

A lesson learned: “One mistake I made was that I didn’t diversify when I should have, because we had so much work. Now, we’re struggling. I have to give a presentation, and I’ll stress why we’re the best to perform: in business 60 years; employees with 25 years’ longevity, cross-trained; a small company with high standards of quality and attention to detail. We’re struggling, but I’m still out there, giving bids.”

Military contracts are difficult

“It’s very difficult to get into the military side of things,” agrees Tom Nelson, a partner of the Advanced Power and Energy Cluster (APC) of St. Paul, Minn.—a power and energy client of the Minnesota Defense Alliance, whose job is to devise military buys. “The reality is, it’s a shrinking market. Even 15 years ago, in places with Navy bases, like Norfolk or Honolulu, there were shops: not anymore. It’s becoming specialized, both the products and who supplies them.”

In addition, “Contacting the appropriate official is more and more difficult,” he adds, “because they’re wary of potential or alleged abuses of money over the years, so everything’s becoming highly influenced by legalese and lawyers. The best way,” he suggests, “is not to go directly to the government, but as a vendor to a prime organization or company that already has a contract: work with them. Find a way, as a secondary contractor, to assist them.

“If you’re close to a naval base, like Norfolk, San Diego or Pearl Harbor, talk to them—though it can be difficult to get onto base without clearance. You’ve got to find a way in, so start working with somebody around there. Once on base, contact the business liaison officer (get his contact information via phone or online). Often, in these areas, they have annual small business fairs. Go to them. Try to find contacts, connections or needs. Also, read periodicals, noting people who were recently awarded things or innovative solutions to use. Then contact them with an offer to assist in the fabrication aspect. Use a Google search in your area; it’s a needle in a haystack,” he admits, “but that’s the way. Check out SBIR (Small Business Innovation Research) and look through those. The federal government must set aside a percent of research dollars for small businesses, and there’s a fairly significant amount of money in this. One or two a year involve fabric for naval use. Within these agencies would be your contact. Also, talk to the small-business liaison officer at each base. He or she may be able to head you in the right direction or be aware of specific needs. The process creaks slowly, a multiyear process,” he warns, “so start down multiple paths and you may get traction.

“On the operational side, the requirements are becoming more and more complex— for instance, for products likely to be patented: restricted in who can supply them, like patented corrosion-resistant products, people who do their own sewing. It’s moving more and more toward that because they want fabric with more specific benefits—and that often means a pattern that’s unique and protected. So go back to your vendor, like Sunbrella. Talk to them: Have they got contacts that could help? Who’s buying? Often they’re pretty helpful,” Nelson finds.

Thus, what it boils down to, he restates, is:

  • Do an online search
  • Attend small-business fairs
  • Go back up the vendor chain

Start talking to people (“It’s amazing how networking helps”)
The good news: “The military budget for these items is not shrinking. It’s still massive, beyond comprehension. Very, very significant dollars are still being handed out. And priorities are fluid, year to year. No longer Afghanistan, but maintaining current assets, and getting the most bang for the buck. Therefore, they’re looking for energy efficiencies, a big deal (for instance on ships, energy light bulbs, paint that lasts longer). They seek innovations that make sense—so, do it differently and better to impact on the life of a product and its cost.

“The Rapid Innovation Fund in the military budget got started after earmarks got abused and Congress stepped in. Now these funds are public knowledge: The Pentagon and Department of Defense list high-priority issues they will fund to come up with solutions—a great way for them to get resolution to their major issues. But you’ve got to search these things out,” Nelson says. “It’s not easy. You’ve got to be innovative, always searching, figuring out how to do things differently, not the same old-same old: ‘How do I reinvent myself, take my strengths and be better at something different?’”

Carla Waldemar is a freelance writer from Minneapolis, Minn.

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