Small business contracts way up at Wright-Patterson AFB

By BARRIE BARBER | Dayton Daily News, Ohio | Published: November 1, 2015

DAYTON, Ohio (Tribune News Service) — Air Force Materiel Command had a surge in spending on small business contracts, rising nearly 30 percent in the Dayton area and 33 percent in Ohio since 2013, figures released to the Dayton Daily News show.

The Wright-Patterson-headquartered command has spent nearly a billion dollars more —- jumping to $4.6 billion in fiscal 2015 from $3.6 billion in 2013 with small businesses nationally, buttressing local defense spending even while Pentagon budget cuts have reduced the number of military troops and weapons over time. AFMC also spent more on small business as a percentage of its budget, rising to 14.1 percent versus 10.8 percent over the same time.

The "significant increase" in contracts shows "there is a very large small business market out there," said Farris Welsh, director of AFMC's small business office.

"I believe that we can get a bit more flexibility with small business," she said. "Most small businesses are not quite as bureaucratic as large businesses and the government. And we get really good rates."

The trend follows a fiscal 2014 Department of Defense Office of Economic Adjustment analysis that showed federal spending on defense contracts and payroll rose to $2.9 billion in 2014 versus $2.6 billion the year prior in Montgomery and Greene counties even as defense spending in Ohio and the nation dropped.

Loren B. Thompson, a Virginia-based defense analyst and industry consultant, said small businesses as defense suppliers have "significant advantages," especially in technical services.

"First, they tend to have a less expensive cost structure than big contractors like Boeing and Lockheed," he said in an email. "Second, they are more focused. Third, they are more agile. And fourth, during a period of rapid technological change, they sometimes have unique skills — for example, in cyber security."

AFMC spending on Dayton area small business contracts reached $223.2 million in fiscal 2015, climbing from $171.9 million in 2013, figures show.

Communities bordering the base also have benefited: In Fairborn, AFMC spent $46.8 million in both fiscal 2015 and 2014, a jump from $40.4 million, or 15.6 percent in 2013.

In Beavercreek, spending reached nearly $34.8 million last year, a 136.3 percent jump from $14.7 million two years prior, according to AFMC figures.

Centerville saw the most dramatic percentage hike based on $10.7 million in AFMC contracts in fiscal 2015, compared to almost $159,000 two years prior — up more than 6,600 percent.

Xenia contractors captured $5.2 million in deals last fiscal year compared to $2.2 million in 2013, nearly a 130 percent jump.

Statewide, Ohio small businesses captured $387.3 million compared to $291.1 million in fiscal 2013, a 129 percent hike, AFMC figures show.

AFMC totals include all subordinate organizations, including the Air Force's Life Cycle Management Center and Research Laboratory, both headquartered at Wright-Patterson. The newspaper reported earlier this month small business contract spending has risen substantially at AFRL, too.

In the most recent fiscal year, the laboratory spent $216.5 million combined in Montgomery and Greene counties — the two counties Wright-Patterson spans — compared to $202.3 million in 2014 and $165.8 million the prior year, AFRL figures showed.

The lab has given a greater number of contracts to local businesses partly to bring contractors closer to researchers and scientists, said Maurice McDonald, Dayton Development Coalition executive vice president of aerospace and defense. At Wright-Patterson, AFRL has four directorates — Aerospace Systems, Human Effectiveness, Materials and Manufacturing, and Sensors.

"AFRL has continued to increase their spending in Ohio and most of that is spent in our region," McDonald said. "They want their researchers and scientists to have the opportunity to communicate with their contractor workforce."

A National Air and Space Intelligence Center eight-year, $960 million contract has brought additional technical, skilled jobs and defense dollars to the area, officials say. Three companies compete for work under the deal. So far, AFMC has awarded $88.2 million, including $24.2 million to Integrity Applications, Inc.; $44.9 million to Invertix Corp.; and $19.1 million to Radiance Technologies, according to NASIC spokeswoman Michelle Martz.

The contract was the reason Integrity Applications, based in Chantilly, Va., opened an office in Beavercreek with about 80 employees and the company looks to hire 50 more by the end of the year, Michael P. Ronanye, the company's area director of operations, told the newspaper this month.

Area contractors also have captured work under a General Accounting Office contract dubbed One Acquisition Solution for Integrated Solutions.

Much of the defense contract spending in the Miami Valley has targeted engineering and information technology support, software development, and sensor research, said Rick Little, chairman of the Dayton Region Manufacturers Association and president of Starwin Industries, a parts manufacturing defense contractor.

So-called "collider" gatherings that bring AFRL officials face-to-face with businesses have helped, Little said.

"I think we're starting to get some traction with those," he said. "The base is trying pretty hard to work with the local contractors."

Wright Brothers Institute, based in Riverside, stated the meet-ups in November to "connect, collide and collaborate" and break down barriers between the Air Force and contractors, said Candace Dalmagne-Rouge, WBI small business hub director.

"The Air Force finds attractive in working with small business that they have speed, flexibility and agility," she said. "The hub was set up as a way really to help tech-driven business growth, strengthen the Air Force industrial base and to commercialize technologies for new market opportunities."

©2015 the Dayton Daily News (Dayton, Ohio)
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