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Tactical advantages in the military market

Features | October 1, 2019 | By:

Department of Defense contracts can be lucrative, but it takes work  to get in—and to stay in.

by Jeff Moravec

Any company in the specialty fabrics industry would be interested in doing business with a client that has a budget of more than $700 billion, right?

You’d think so. But big numbers can come with big challenges, especially when the budget belongs to a government: in this case, as you may have guessed, the U.S. Department of Defense (DoD).

While many specialty fabrics suppliers and fabricators regularly do business with the military through the DoD, including some who count on it for a significant portion of their income, figuring out where to start—and how to get in the door with a new product—can be a tough task. But it is possible.

Printed webbing, binding tape and loop products shown here are produced by MMI Textiles. Company president Amy Bircher says that while the military branches select suppliers based on price, they also expect that a high quality product will be delivered on time. Photo: MMI Textiles Inc.

“It can be daunting to the uninitiated,” says Ron Houle, founder and president of Pivot Step Consultants LLC, a Burke, Va., firm that helps companies that want to work with the military. Houle will speak at IFAI Expo on “Making (Some) Sense of the DoD Budget.” 

“Just take a cursory look at the defense acquisition regulations,” Houle says. “It’s hundreds and hundreds of pages. Left to your own devices, even with a great product you want to get into the hands of the military, you’d be hard-pressed to know where to start, who to see, where to go and how to manage your expectations.”

There are people like Houle who make a living helping companies understand the complexities of the process and assisting them in navigating through it. The U.S. government also supplies resources to help (see sidebar on page 37). But Houle and other experts in defense procurement say prospective military vendors need to pay attention to a few considerations before investing in research and development for a new fabric or end product.

UTS Systems produces shelters that can be used as tactical operations centers and are designed for rapid set-up and teardown. A key feature of military shelters is that they can be easily and quickly set up by troops in the field, according to UTS Systems director Tom Eggers. Photo: UTS Systems.

A few basic principles

As with the commercial market, the ability to work with the military successfully involves a few basic principles. Price is one, according to Amy Bircher, president of MMI Textiles Inc., an industrial fabric supplier in Westlake, Ohio, that provides military spec fabric, webbing, fastening systems and other trims to manufacturers that sell to the armed forces. “The military is going to buy on price—it’s taxpayer dollars,” she says. “After that, it comes down to delivery. They have to trust that they’re going to get what you promised.

“When contracts get awarded, soldiers need to have the products,” Bircher continues. “We’ve grown our business so much with the military simply because we do a good job providing high-quality products in a timely fashion. Our manufacturers know they’re going
to get the product.” 

“You have to make sure you are very competitive in all aspects of the sale, not just in price,” adds Edward Silva, vice president of sales and marketing for Engineered Polymer Technologies (EPT), Hillside, N.J., which makes coated fabrics used for shelters, tarps, berm liners and other applications. “There are no sole sources for products in our industry, so you have to be aggressive to get and keep the business.”

Engineered Polymer Technologies (EPT) develops and manufactures an extensive line of military coated fabrics, such as the fabric used in the tarp shown here. Edward Silva, EPT vice president of sales and marketing, says that the military demand for coated fabrics is dependent on the number of “boots on the ground” at any time. Photo: EPT.

In addition, while it may sound obvious, says Houle, “you need to be manufacturing products for which there is a demand. If you think you have a better boot, or a better rucksack, shelter or tent—items from the fabric industry that are widely used—know that most all branches of the military are looking for better products. But it needs to be a product that is in demand and can add value.”

The first mistake many companies make is having a great product that fails to elicit enthusiasm from the military branches, he says.

“Remember back in the 1960s and 1970s when we used to talk about picture phones and how cool that would be? That was a great idea, but nobody really saw enough added value in the added technology to pay more to have it,” Houle says. “There are a lot of examples like that out there.”

Silva recommends that companies find a niche they can uniquely fulfill. That requires doing some research. “Maybe there’s an opportunity to bid on something that the bigger companies don’t qualify for under the contracts set aside for small businesses,” he says. “Maybe you offer something unique. They’re looking for industry to come to them with solutions. But you have to pick up the phone, or take the trip, and make the effort.” 

War and peace

Tom Eggers, director of UTS Systems in Fort Walton Beach, Fla., which sells shelters and accessories to the military, says that procurement comes in spurts, the challenge being that when a service branch or a unit within one needs a particular product, it needs that product right away. “Unless you have an existing product line and an existing supply chain, it’s ‘hurry up and wait’ and sometimes that’s difficult,” Eggers says.

Silva agrees that geopolitical shifts result in ebbs and flows for the suppliers in the military market. “I’ve been in this business for 32 years, back to the first Gulf War, when plants were sold out for a year,” he says. “That’s great, but what do you do when the conflict is over? I’m not a war hawk by any means, but those are the facts.”

MultiCam® printed narrow fabrics from MMI Textiles uses the company’s recently patented CTEdge™ technology, which gives the edge of fabrics a more concealed look because it is woven with different color threads. Photo: MMI Textiles Inc.

Does the actual size of the defense budget matter? Yes and no. The demand for many coated fabric products is dependent on the number of boots on the ground, Silva says.

“At least one, if not two generations grew accustomed to boots on the ground, both before 9/11 and after,” he adds. “But the more troops get pulled out, the less demand there is for the types of products we’re involved in.”

At the same time, according to Bircher, “a lot of our products are sustainable. The administration [in Washington] has no bearing because many of our products are used at training bases, in times of war or peace. It all depends on what a particular contractor may be doing.” 

In addition, says Houle, the opportunities are often dependent on what is in the budget, not just how large it might be. “Some of the big numbers in the [proposed] fiscal year 2020 budget didn’t change that much,” he explains. “But what we’re seeing is a vastly different allocation of what’s turning out to be basically the same level of resources. What that means is there are new priorities, so that will create winners and losers, more than there has been in a very long time.”

For example, he says, the budget for the U.S. Army—by far the largest branch as measured by personnel—has shifted resources to its top modernization priorities. “You may not see the shift just by looking at big, raw numbers. However, if you know where and how to look, and more importantly how to interpret the budget allocations you are seeing, you can discern enormous changes for FY 2020. Without a more nuanced approach, you can lose sight of the strategic direction that’s being pursued in building next year’s budget.”

Shelter Structures Inc., Philadelphia, Pa., built this fabric structure in Florida to meet a 156 mph wind load requirement.

Diverse approach

One question companies that serve the military market must answer is just how much of their business will be dedicated to what amounts to a single customer. HLC Industries, Bala Cynwyd, Pa., provides fabric to the military for parachutes and body armor—and also offers a broad range of fabric solutions for commercial and industrial applications. “A third of our business is military,” says Peter Raneri, HLC Industries’ vice president of sales and business development. “We’ve never wanted to be 100 percent dependent on the military, because when the military drops off, what do you do? You scramble around, wondering how you’re going to fill the void.”

When Silva joined EPT in 2010, half of its business was dependent on the military, he says. “Granted, there were some conflicts then, but the effort was made to drop that number down below 20 percent, while still growing our entire business,” Silva explains. “We didn’t want to walk away from the military; we just wanted to work very hard to significantly increase our commercial businesses. You should never allow a large portion of your business to be dependent on any one customer, or one product for that matter.”

There can, of course, be some challenges working with military contracts. Gregory Jones, vice president of Shelter Structures Inc., Philadelphia, Pa., describes the process for tension fabric structure (TFS) projects: “The typical contract vehicle is a ‘firm fixed price’ contract at a site where there is incomplete information about subsurface features, soil quality or other features that can impact the erection process,” Jones says. “This means that vendors often bid a job with incomplete information and little or no ability to claw back any cost overruns. Therefore, it’s a balancing act between how much to spend on pre-bid research for a job that may only gross $500,000 versus adding a contingency that prices you out of the competition.”

For the actual installation process, adds Jones, crew members must pass a rigorous background check and undergo daily security processing to get access to the site. “The background checks can limit your pool of qualified erectors,” he says, “and the daily processing can often add many hours of unproductive time to your labor cost that still must be borne by the TFS supplier.”

Jones says that anyone interested in working with the military should become familiar with Defense Federal Acquisition Regulations (DFARS) that govern the end users and contracting officers. “The DFARS dictate the contract vehicles available, and familiarity with federal government budgeting process helps firms develop the best possible contract terms to fit both parties’ needs,” he says. 

“The government is a large bureaucracy, and understanding the requirements under which their representatives must operate helps companies to plan their pursuit/capture strategies and annual sales funnel,” Jones adds. Jones will speak at IFAI Expo on “Helping the DoD Understand Tension Fabric Structures.”

Fabric structures at Robins Air Force Base in Georgia provided an economical storage solution that included a ventilation system and 18-foot-square roll-up doors for forklift access. Photos: Shelter Structures Inc.

Looking for innovation

Finally, an emphasis on innovation is important when researching military contracts. According to Silva, the service branches are “constantly looking for the latest and greatest. 

“You go back 30 or 40 years, it was the other way around,” he explains. “The military would invest billions in design and develop new products, and 10 years later it would be available to commercial markets. Today it’s the opposite, especially for war fighters’ needs. The DoD is looking for the industry to come to them and say, ‘I have a new product that meets a need, or improves the performance for an existing application.’ If this innovation saves the DoD money, they will share the savings with the vendors—just call and ask.”

Outside of innovations in smart textiles, some established manufacturers aren’t doing much “next generation” work, Silva says. 

“Complacency is never acceptable,” he says. “In a lot of places, tents and covers are still made the same way they were 30 years ago. They’re overlooking the fact that the military invests a lot of money in new product development. The industry can be the recipient of that investment and drive that development.”

Bircher says MMI is focusing on improving fire-retardant fabrics. In addition, six years ago the company invested heavily to create the capability to digitally print textiles that meet infrared technology. Work is also being done to improve tensile strength, while providing lighter and more durable solutions.

Bircher is especially proud that MMI was recently awarded a patent for its CTEdge™ webbing, which gives the edge of its fabric a more concealed look because it is woven with different color threads. 

“You don’t have what looks like a white edge,” Bircher says. “It allows the edge to blend in much more with military-colored fabric behind it. Before, soldiers were taking black Sharpies and coloring the edge so it didn’t look like it was white.

“Sometimes it takes doing more than ‘me-too’ military spec products to succeed in this business,” she says. 

Jeff Moravec is a freelance writer from Minneapolis, Minn. 

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