Understanding the Scope, Process of the Federal Marketplace in Kitsap

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FEDERAL CONTRACTING – Steve Shapro

Because of the presence of large Navy bases in our local area, Federal contracts are an important part of our local economy.   During the last Fiscal Year ending 30 September, over $172 million in contracts were awarded to companies with Kitsap County addresses by Government agencies and the military services.   Local businesses need to understand this marketplace if they are to compete successfully for these Federal contract dollars.

Of the $172 million awarded to county businesses, about $64 million was awarded to local businesses supplying parts and equipment to the military and Federal agencies. This includes Safe Boats International, which manufactures small craft for the Navy, Coast Guard and foreign military sales. It also includes suppliers such as KLB Enterprises of Silverdale and Westbay Auto Parts of Bremerton, which source repair parts and equipment for the Navy and the Defense Logistics Agency.

About $43 million was awarded for construction and repair of facilities. Firms such as Triton Marine Construction of Bremerton repair piers and do waterfront work in Hawaii and Pennsylvania. Others, such as Vet Industrial of Bremerton tend to work construction projects on local bases. Another $33 million was awarded to local firms providing technical advice, IT support and other consulting services, both locally and on behalf of program offices located around the country.   These companies include Applied Technical Systems of Silverdale, and Paladin Data Systems of Poulsbo. Skookum Educational Programs of Bremerton, which provides employment for disabled workers, was awarded nearly $56 million last year to provide facilities and public works services for the Departments of Defense, Energy, and Veterans Affairs at locations around the country.

In total, over 70 firms in Kitsap County were awarded Federal contracts last year. Of these firms, ten received over $1 million in total contract awards.   Many of the businesses receiving the larger Federal contracts tend to specialize in Federal work and develop expertise in working with the complicated Federal procurement system.   Knowing which Kitsap County businesses receive prime contracts is important to firms seeking a market for their supplies and services in the Federal sector. It may not be possible for every business to compete as a prime contractor, but there are opportunities as a supplier, subcontractor or teaming partner.

It’s also significant that nearly 90 contracting offices nationwide awarded the $172 million in contracts to local businesses.   Very few of them were located in the county. In fact, of the 21 contracting offices awarding more than $1 million to local businesses, 18 were located outside the state. In some cases, supply chains for equipment, supplies and services are managed centrally for economies and efficiencies. If you are a grocery supplier, there’s very little return in marketing your products at the local base since the Defense Department’s supply chain for food products is managed centrally from Philadelphia. To market your company’s products or services, you may have to look further than the base or Federal facility just down the road.

Of the contracts awarded to local businesses, only about 20% of the work (buildings built, facilities maintained, service provided, parts supplied or equipment manufactured) was done in the county.   About half the contract dollars were for work done outside Washington by Kitsap County firms in other states, at bases and facilities located across the nation. This tells us that local businesses are competing and winning work in a national marketplace. Conversely, just as our local businesses are awarded work in other states, prime contractors from outside the area successfully compete for work at local bases and facilities. The large Navy presence on the peninsula and the opportunities for big dollar contracts attract prime contractors from across the country.

About $181 million was awarded for work to be performed in Kitsap County to firms from outside the county. Some, like Washington Patriot Construction of Gig Harbor or Notkin Engineering of Seattle, are located in the Puget Sound region. Others are large national corporations such as Mantech Systems Engineering, Trane, or BAE Systems Technology. EHW Constructors, the joint venture awarded the construction contract for the $715 million, multi-year Explosive Handling Wharf II project at Bangor, includes Skanska USA, American Bridge Company, and Nova Group. Chugach Federal Solutions, an Alaska Native Corporation from Anchorage, was awarded the contract to provide tens of millions of dollars of public works and base operating services at West Sound Navy bases.

Local firms that have a good understanding of the workings of the local, Federal marketplace are better positioned to use their company’s resources to target the best business opportunities.   Knowing the marketplace, they can decide if is better to seek prime contract awards or pursue opportunities as a supplier, teaming partner or subcontractor.

Click here to read more about government contracting. Visit KEDA’s PTAC page for additional resources.

The data to develop the information in this article was obtained from USASpending.gov. For additional information and insights based on the data, or if you have questions about the Government contracts marketplace, please see www.seabeckresearch.com.

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