Cashing in on defense dollars

The federal government paid about $1.2 billion to 95 companies in the Boulder Valley for defense-related work during 2002 and 2003, representing about 40 percent of money paid for defense contracts to Colorado firms during that time, according to Input, a Reston, Va.-based consulting firm that helps companies sell to the government.

And that amount could be low because Input compiles data from the Federal Procurement Data Center, which does not include contracts less than $25,000 or list subcontractors.

For example, according to Input, Micro Analysis and Design Inc. made $21 million in defense contracts during 2002 and 2003. But President Ron Laughery said the number was more like $50 million.

The discrepancy is because the company has subcontracts with major defense companies Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co.

The 20-year-old, 95-employee Boulder company specializes in knowing how people interact with machines. It provides consulting services and software products related to what it calls human-systems integration, human-factors engineering, computer simulation and modeling and custom-software development.

One project Micro Analysis is working on is the Future Force Warrior program for the U.S. Army Soldier Systems Center in Natick, Mass.

Micro Analysis is helping design a uniform that will better protect and improve the effectiveness of future soldiers. The helmet has 3-D audio and visual sensors; the uniform has an “exoskeleton” for advanced strength enabling the wearer the ability to carry up to 200 pounds; a compact computer is worn on an armored belt around the waist. The fabric includes a sensor array to detect weapons of mass destruction, friendly or enemy lasers or even weather. It even has a system that delivers nutrients through a soldier’s skin.

Even with its reputation, Micro Analysis has to be aggressive when seeking contracts.

“One never waits for the customer to come to you,” Laughery said. “We go to conferences and have a lot of contacts and good relationships with the Army, Navy, Air Force, DoD (Department of Defense), DARPA (Defense Advanced Research Projects Agency).”

Applied Technologies, on the other hand, made a bit less that the $815,000 Input states. Herb Zimmerman, the president of the 25-year-old Longmont-based company, said in 2002, $127,000 of its total sales of $900,000 came from defense contracts, and out of its 2003 total sales of $1.7 million, $453,000 was defense-related.

Zimmerman said getting a defense contract is like selling anything — it takes a product, placement and persistence. “If you can find the right person who’s looking for something and convince them you can help them out that’s a big step forward,´ said the president of the nine-employee Longmont-based company.

“We will try anything,” Zimmerman said. The company, which designs and develops high-quality environmental monitoring equipment, has responded to government requests for proposals, subcontracts to Boulder-based Ball Aerospace and Technologies Inc. and has been awarded numerous Small Business Innovation Research grants.

The Department of Defense Small Business Innovation Research program funds early-stage research and development at small technology companies. The program provides access to the Army, Navy, Air Force, Missile Defense Agency, Defense Advanced Research Projects Agency, Chemical Biological Defense, Special Operations Command, Defense Threat Reduction Agency, National Imagery and Mapping Agency and the Office of Secretary of Defense.

Companies apply first for a phase I award of up to $100,000 to test the scientific, technical and commercial merit of a particular concept. If phase I proves successful, the company may be invited to apply for a two-year phase II award of up to $750,000 to further develop the concept, usually to the prototype stage. In phase III, small companies are expected to obtain funding from the private sector and or government sources to develop the concept into a product for sale in private sector and/or military markets.

Applied Technologies has completed seven phase I and four phase II awards, Zimmerman said.

Boulder-based Astralux Inc. also has relied on Small Business Innovation Research funding, said Randy Treece, vice president and general manager. The 11-year-old six-employee company conducts research and development on high-temperature, high-power semiconductors made of silicon carbide and gallium nitride for use in electronic devices such as radar systems and base stations for telecommunications.

Treece said the government gets a real bargain at small firms like his.

“There is an Army and Navy research lab or two,” Treece said. “But the really new ideas are coming out of little companies like ours. It’s much cheaper to have us do it than for the government to do it.”

“We can have $100,000 for a contract that’s well under 1,000 hours of work and for that work, the government will get good research. Then it can decide whether to drop $500,000 to $750,000 on it.”

Since it was founded in 1988, Lafayette-based Composite Technology Development Inc. has had 25 phase Is, 15 phase IIs and is putting together its first phase III Small Business Innovation Research proposal, said Vice President Mike Tupper.

“Our goal, through the SBIR, is to develop new products the meet the needs of the sponsor of the SBIR, like the Air Force, but also to develop non-SBIR supported products for government, industrial and commercial customers. The SBIR is seed funding for doing some pretty high-risk high-payoff development.”

For its first decade in business the 22-employee company focused almost entirely on research.

But in 1999 it developed TEMBO, an elastic memory composite “that has catapulted the growth of our company,” Tupper said.

TEMBO has brought Composite Technology to the attention of NASA, Tupper said. “The neat thing about TEMBO is it is a shaped memory material. You can apply heat and get it to change shape.”

A space structure, for example, could be built of TEMBO on Earth, heated up and folded and brought to a space station or another planet. When heated again, the TEMBO unfolds into the structure originally assembled.

“It simplifies things,” Tupper said. “It’s more lightweight, more robust, more reliable.” Other uses include medical applications and sporting goods applications.

According to Input, Composite Technologies garnered $961,000 in defense dollars in 2002 and 3003, but Tupper would not disclose financial information.

Getting into the defense game isn’t hard but takes persistence, said Tom Cisti, vice president for consulting with Input’s consulting arm that helps technology vendors secure government contracts.

Cisti highly recommends FedBizOpps as a good way to find “prime” or major contractors in the federal government marketplace. “You use FedBizOpps to see who is bidding on major acquisitions,” he said. “You say, ‘I can supply to people like that.’ It’s a way you can get your feet wet as a supplier.”

Another inroad on what Cisti called “a merry tour” is the Department of Defense’s Office of Small and Disadvantaged Business Utilization. It has programs that “help people enter the various agency marketplaces,” he said.

The programs include Mentor-Prot?g?; Small Business Innovation Research and Small Business Technology Transfer; Indian Incentive Program; Women-Owned Small Business; Historically Black Colleges and Universities, Hispanic Serving Institutions, Tribal Colleges and Universities and other minority institutions of higher education; Comprehensive Subcontracting Plan Test; Regional Councils for Small Business Education and Advocacy; Veteran-Owned Small Business; and HUBZones.

The Small Business Administration also has programs to help small business find out about defense contracts, Cisti said.

The General Services Administration Federal Supply Service is another place to look, Cisti said.

The Web site lists products and services for federal customers. What small companies need to do is get on the GSA schedule related to their product or service. Once listed, government agencies can purchase from them directly.

By putting plenty of government contracting information on the Internet, “the government has tried to make it easier for people to get into it,” Cisti said. But although small businesses can find their way around the defense spending labyrinth by themselves, Input is happy to help them maneuver, for a fee, Cisti said, through its subscription-based services and consulting services.

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