The Rauch Report – By Bill Rauch
As our local governments gaze afar, dreaming of businesses they could attract to the Beaufort area, their economic development efforts neglect the elephant that is already in the room – and growing: the U.S. Department of Defense.
Beaufort’s businesses are getting the back end business, but — despite their proximity to the work — very little of the front end of the government spending on Beaufort’s bases, an analysis of government documents shows.
Of the $2.29 billion the state’s military facilities spend in South Carolina, $173 million or just 6.3 percent is spent with contractors in Beaufort and Jasper Counties, Moore School of Business Research Economist Joseph C. Von Nessen said last week. Yet three of the state’s ten military facilities are located in Beaufort County.
This is not the way it always was. As we celebrate Parris Island’s 100th anniversary, it is an appropriate time to recall that Beaufort and Port Royal were once “company towns” for the Air Station and Parris Island. But a look at the data indicates the Charleston area, especially Summerville, is now the military contracting epicenter of South Carolina.
There are some exceptions. Neal’s Construction on Robert Smalls Parkway, described in government documents as a small business with 7 employees, booked about $7 million in federal contracts in Fiscal Years ’14 and ’15. The contracts were mostly sole-sourced for constructing a building for the Recruit Depot at Parris Island. Vetronics in Hilton Head shows up in government documents as getting about $1.5 million in subcontracted government work in FY’14 and FY’15, mostly in the area of manufacturing electronic components for armored vehicles.
After those two Beaufort County businesses, according to the government’s documents, come a smattering of smaller expenditures at Grayco, Mitchell Brothers Construction, and J.D Inc. of Hilton Head, a small business operated out of Beaufort that supplied the Department of Defense with about $47,000 worth of paint in the last two fiscal years. Rick McElveen of Lady’s Island built the government a boat for $16,000 the government’s public documents also indicate.
Meanwhile last year, for example, the Navy announced that it would spend $240 million over the next three years to build a new F-35B hangar facility at the Air Station. As a part of that announcement the Navy listed the five contracting firms it had selected to share the responsibility for constructing the facility. None of the five are from the Lowcountry. The job is going on now and the construction trucks are lined up at daybreak out on Hwy. 21. But little of the hanger construction sub-contracted work is being done by Beaufort County-based firms either, according to Joe Rozier in the Marine Corps Office of Small Business Programs. “The subs are from all over,” he says. “Green Pond, North Charleston, Goose Creek, and as far away as Milwaukee. A few are from Beaufort.”
Earlier this year Dr. Von Nessen produced a report entitled, “The Economic Impact of South Carolina’s Military Community.” The report concludes that The Air Station, Parris Island and the Naval Hospital contribute $1.498 billion to the Beaufort and Jasper County economies. This contribution, the report says, is in the form of back end spending: the retail sales and services purchased by the active duty and civilian employees who work at the three facilities.
The report also says there are “more than 600 military contractors” in South Carolina. However it gives scant notice to the value of the military contracts held by Beaufort and Jasper County firms.
Perceiving the lost opportunity of getting the front end work, the Beaufort Regional Chamber of Commerce this past April hosted its first-ever “Procurement Workshop.” The event brought the Chamber’s members into contact with representatives of the military facilities, the municipalities, the county and the school district who buy the goods the various government offices need. The workshop was “to help our members come to understand the process,” Chamber spokesman Jaime Dailey-Vergara explained last week.
As we watch our elected officials go on field trips and return starry-eyed about the riches elsewhere, and wringing their hands about the lack of opportunities there are here to keep Beaufort’s best and brightest from going to Charleston or Atlanta or Charlotte to find good work, we wonder do they not see the elephant in the room? Those whose families have been in Beaufort for generations, did their elders not tell them of the “company town” days?
There’s an ideology attendant to economic development at the local level. Conservatives are more likely to view it as a Chamber of Commerce function. Liberals are more likely to see economic development as a government responsibility. But since the group we have in place at the moment wants to get the government into it, they would do well not to ignore the present and prospective needs that exist at the local bases, and use their efforts to help local businesses get matched up with those opportunities.
Let Silicon Valley be Silicon Valley. Let’s start by wresting our old “company town” title back from Summerville.
How to apply for a military contract
The opportunities come in all shapes and sizes… from being a music director to printing t-shirts and note pads to building and maintaining buildings and boats.
“The 5 P’s,” according to Anthony Skinner, deputy director of the Regional Contracting Office based at Parris Island, are the basis for a successful bid: “profile, proposal, past performance, price and perseverance.”
Go to this website, www.fbo.gov , where you will find the list the government contracts over $25,000 that are currently up for bid at Parris Island and the Air Station. To access the Parris Island information, enter M00263 into the keyword box. For solicitation opportunities at MCAS-Beaufort enter M60169.
Those seeing an opportunity for their business to obtain a military contract must register before bidding. To register, go to www.sam.gov. Registrants will be asked to classify the services their business can provide in accordance with the North American Industry Classification System. There are also advantages given in the form of set asides to women-owned businesses, service disabled veteran owned businesses, hub-zone small businesses and small disadvantaged businesses. Registered businesses may bid on contracts, and they may also be contacted by procurement officers or contractors — both of whom have access to the lists — who are looking for qualified contractors and sub-contractors.
Finally, bidders must also register at www.wawf.eb.mil. This is the site contractors use to submit invoices and receive payments.
Contracting opportunities valued at less than $25,000 at Parris Island are posted on the “bid board” at the Regional Contracting Office board on Parris Island. They are not posted online. Procurement opportunities valued at less than $25,000 at MCAS-Beaufort are posted at http://www.mcieast.marines.mil/StaffOffices/Contracting/DeterminationandFindings.aspx.
If the provisions of the contract require contractors to do work within the gates of Parris Island or the Air Station, successful bidders will want to check the backgrounds of their employees ahead of time as the Marine Corps facilities use The National Criminal Investigative Service to screen any individual doing work on the bases. “Anyone on the Terrorist Watch List, of uncertain immigration or citizenship status, who is the subject of an outstanding arrest warrant, who has previously submitted false or fraudulent information on an federal employment application, who has been previously barred from coming on a US military base, who is on prisoner release or parole, who is a registered sex offender, or who has in the past 5 years been convicted of a felony or drug-related crime will not be given access to the facility.”
For a look at what government contracts have been executed, for how much and who go the job, go to www.usaspending.gov.
Efforts to gain similar procurement information from public affairs at the Naval Hospital were unsuccessful.
A reporter, publisher, ghostwriter and author, Bill Rauch was the mayor of Beaufort from 1999-2008. Bill can be reached at TheRauchReport@gmail.com.
