Traditionally, the Department of Defense (DOD) and its attendant services have been viewed as a kind of ivory tower in terms of manufacturing opportunities. Government contracts are seen as exceedingly difficult to obtain. Competition is cutthroat. The government requires contractors to jump through endless hoops, with no guarantee of success, even after months of work.
The reality, though, while undeniably tough, is not quite as terrible as some might think, especially in the realm of electronics manufacture. For one thing, the military is well aware that competition breeds innovation and excellence. It therefore makes a conscious effort to remain open to new ideas and processes, with an eye toward remaining the most efficient and effective organization it can be.
For another, the military services, like all the federal government, are required by the Small Business Act-first passed in the early 1950s and regularly updated in the years since-to farm out a certain percentage of work to smaller companies. The idea is to foster innovation and prevent the work from being monopolized by a handful of megacorporations.
Finally, in recent years, the military has been systematically doing away with its former dependence on it own military specifications, or MIL-Specs. Back in the 1990s Defense Secretary William J. Perry wrote a memorandum titled "Specifications & Standards-A New Way of Doing Business," which directed the military to change its ways. Specifically, it was recognized that many commercially available systems and components perform as well as their military counterparts. By using commercial products and standards, the military could both cut costs and avoid finding itself in a situation where the commercial technology world had left it behind.
The result is that today, a printed circuit board (PCB) or piece of electronic equipment need only meet a set of process requirements, as opposed to specific guidelines as to how exactly it should be assembled. In other words, manufacturers can be innovative in solving assembly challenges, without having to worry about meeting a set of military standards.
"We're trying to make things easier for suppliers," says Linda College, chief of the Technical Industrial Liaison Office at the Army's Communications-Electronics Command (CECOM, Fort Monmouth, NJ).
"If there is a complimentary commercial process that meets or exceeds process needs, then it is acceptable," agrees Kevin Loesch, chief of the Small and Disadvantaged Business Utilization Office (SADBU), also at CECOM.
This is not to say that manufacturing a missile guidance system for, say, the Air Force is identical to assembling a garage door opener. Clearly, there are different standards that need to be met given the environment in which military equipment is expected to operate.
"The industry standard for a certain chip may by a failure rate of one in 1,000," explains retired Vice Adm. Herb Browne, president and CEO of the Armed Forces Communications and Electronics Association (AFCEA, Fairfax, VA). "Marketwise, it doesn't make sense to get better than that. When a chip fails, it can be thrown out...But start putting thousands of chips in a single satellite, and you get a very different situation. Once it's in orbit, a satellite isn't going to make it into a dealership to have a component replaced."
Robert W. Harrison, director of business development at Sechan Electronics Inc. (Lititz, PA), which manufacturers everything from missile launch systems to submarine communications equipment, adds that military electronics also need to be more rugged than those used in the civilian sector. The reasons for this are obvious. Because of the environment in which the war fighter has to operate, all equipment has to be ready to endure dust, moisture and vibration, not to mention extreme temperatures, shock and changes in atmospheric pressure. It also needs to be able to stand up to these extremes over long periods of use, due to the fact it might be put into service in some far-flung corner of the world.
"We have equipment in service over in Iraq right now. It needs to be reliable," Harrison says. "We've got to make sure [our products] can stand the test of time."
With this in mind, one of the greatest challenges for electronics manufacturers making the switch to defense work is the need to build products that meet the rigorous electrical and environmental testing requirements of the military. The basic assembly processes are not so different from those in the civilian sector. But they must be executed in such a way that the resulting products are capable of enduring strenuous thermal and vibration testing-just to name a couple-programs that can take days or even weeks to complete.
In addition, whatever the component, the Army, Navy, Air Force and Marine Corps are rarely satisfied with very good: What the services want is perfection.
"Reliability is one of the things the military is very concerned about," says Gary Cox, president of NavCom Defense Electronics Inc. (Warner Robins, GA). "It can be a very different attitude. Commercial industry may be happy if 99 out of 100 units are good. It might not make sense economically to do any better. For the military, though, that's not good enough."
Not surprisingly, given the specialized nature of many military requirements, another characteristic of defense-specific work is low-volume, high-mix production. "To us, 300 of something is big," says Harrison.
Cox agrees. "Some components are purchased in large quantities, but these are mostly smaller parts," he says. Even then, he warns that it can sometimes be tough negotiating large enough orders to make a contract worth the effort. These days the different branches of the military are being asked to do more with less. This means fewer replacement parts on the shelf than in the past, when defense budgets were more flush and the services were not as busy as they are at present.
Landing the Job
Of course, being capable of doing the work is just one part of the equation. You've got to win the contracts if you ever want to get paid-no small task when dealing with guys throwing around tens or even hundreds of millions of dollars and buying things like aircraft carriers and Patriot missiles. Still, while difficult, the job is not impossible.
Again, the government is required by law to buy a certain percentage of its equipment from smaller businesses, and the DOD and each of the services maintain their own central SADBU offices specifically to facilitate this process. The services also maintain SADBU offices and specialists at each of their individual acquisition and support commands, like Loesch's office at CECOM. The Air Force, for example, has a small business office as part of its Aeronautical Systems Center (ASC) at Wright-Patterson Air Force Base (Dayton, OH). The Navy has a similar office at its Naval Air Systems Command (NAVAIR) in Patuxent River, MD. These are just a couple of examples of the many offices dispersed throughout the military.
Smaller companies can also contact the government's Small Business Administration for advice and information on how to take advantage of commercial opportunities with both the defense sector and the federal government as a whole.
Then there is the Internet, created by Uncle Sam for the express purpose of communicating this kind of information. In fact, manufacturers can learn about commercial opportunities on a number of sites devoted to acquisitions for the various military branches and the federal government as a whole.
First and foremost among these is the Federal Business Opportunities site, www.FedBizOpps.gov, the point-of-entry for federal government procurement opportunities over $25,000. Using this site, government buyers are able to publicize business opportunities directly. Commercial vendors can then search and monitor opportunities among these listings.
Beyond that, military-specific opportunities can be found through Web sites for organizations like the DOD's office of acquisition, technology and logistics (www.acq.osd.mil); the U.S. Small Business Administration (SBA, www.sba.gov); the Navy's office of research, development and acquisition (www.hq.navy.mil/RDA); the Air Force Material Command (www.afmc.wpafb.af.mil); or the Army's acquisition corps (http://asc.army.mil). Each of these sites offers contacts, background information, lists of solicitations and guides to opportunities like the Mentor-Protégé program, which pairs experienced contractors with newcomers to the government contracting world.
Loesch also recommends visiting www.sellingtoarmy.info, the Web site of the Army's main SADBU office. This site offers a wealth of information, including everything from fact sheets to a breakdown of the Army's command structure to a virtual tour of the Pentagon.
And these sites are just the tip of the iceberg. Search under "SADBU" and the name of the service branch you are interested in doing business with to find the right point of contact. You can do the same thing with the word "acquisition." Whatever site you find, there will inevitably be a variety of links. As a result, opening just one can offer a porthole into the defense establishment as a whole. Click to your heart's content.
Note that there are two very different ways of selling manufactured goods to the military. One is by registering a product with the U.S. General Services Administration (GSA, www.gsa.gov, Washington). By doing this, a company establishes a price for a given item-basically negotiates a set contract-whereby any government agency can purchase that product. The other is by winning a specific contract in response to a military solicitation of bids.
The latter, of course, can be extremely competitive and requires meeting a whole host of military conditions. In fact, just making sense of the various conditions-dozens of pages of them-is enough to deter most manufacturers.
The former, however, is no piece of cake either. The GSA process can be extremely complicated, expensive and time consuming-taking weeks and even months to complete. In fact, there are organizations out there that make their living shepherding different companies through the many steps and forms involved.
"To learn from the ground floor, I think that would be relatively tough," Cox says of dealing with military contracts. "If you know how to do it, it's pretty simple...But you have to know how to speak the lingo, read the solicitations."
"It's a tough hurdle," agrees Harrison. "You have to understand the defense mentality." He notes that many of the players in the military electronics business are former service members who transitioned from the military to the business world. "Most people in defense are from defense," Harrison says.
Cox notes that one way to bridge this divide is to bring someone into the company with military experience, someone who knows the ropes. He warns, though, not to just hire the first person who walks through the door in a uniform. Military acquisitions is a complicated process requiring a specific skill set. Just because someone has been flying a Blackhawk helicopter, that doesn't mean he knows what it takes to sell the Army an airborne night-vision system.
Another way manufacturers can test the military waters is to find business as a subcontractor to a larger prime contractor, like General Dynamics (Falls Church, VA) or Lockheed Martin Corp. (Bethesda, MD). The advantage to this approach is that the prime contractor is in charge of interpreting and then meeting the military's myriad contractual requirements. As subcontractor, all you need to do is keep the prime happy.
Unfortunately, doing so can be just as difficult, if not more so, than satisfying the military brass. The major military contractors are extremely picky about who they work with. They will want to see a track record of past performance. They have no qualms about going over the facilities and processes of their subcontractors in minute detail to be sure the product they receive is of the highest quality.
Then there are all those other firms out their fighting for that same business. Cox notes that the larger defense contractors, in particular, will often have longstanding relationships with a select number of existing suppliers, organizations with which they feel comfortable. It can take a lot of persuading to convince these people to take a chance on someone new, or even get the opportunity to make a bid.
"There's thousands of other guys like you," says Harrison. "You have to separate yourself and show you have something to offer to be the one they go with."
To begin making the necessary connections to facilitate this process, a company can contact a SADBU specialist, or the DOD or SBA. The latter two options can be especially fruitful, because both organizations offer a directory of subcontractor opportunities on-line, organized by state.
Another way is by attending a defense industry conference or trade show-and there are plenty to choose from. AFCEA, for example, organizes a number of events, including MILCOM, which is co-sponsored by the Institute of Electrical and Electronics Engineers (IEEE, New York), and the Western Conference and Exposition, co-sponsored by the U.S. Naval Institute. The National Defense Industrial Association (NDIA, Arlington, VA) and the Association of the United States Army (AUSA, Arlington, VA) also sponsor events, like the AUSA's Annual Meeting and Exposition held in the fall.
Again, the process is a tough one. You will be up against a lot of other companies, many of which will have a lot of experience in defense work. But every year there are manufacturers that make the transition, and the rewards can be highly profitable. Remember, the DOD spends billions of dollars each year, much of it on high-tech. Do some surfing. Make some calls. Shake some hands. Get to know the right people, and you may soon be getting your own piece of that lucrative pie.