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News Index
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Crowding the Base: After Hanscom's Survival, Funding Challenges Loom for Contractors in '06
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By Dianne Claydon
Hanscom Air Force Base’s survival was one of the biggest technology-business stories of the year: The base dodged a bullet when the federal Base Realignment and Closure Commission, or BRAC, kept it open. More than 5,900 base staff and thousands of defense contractors — not to mention local political leaders — breathed a collective sigh of relief.
Yet looking ahead, local defense suppliers and contractors that provide engineering and consulting support to Hanscom will face a new challenge in 2006 as the U.S. Air Force Electronic Systems Center, or ESC, revamps its bidding process.
“The truth of the matter is, we expect there will be fewer contractors than we currently have,” said Chuck Paone, spokesman for ESC, which is headquartered at Hanscom and administers contracts to companies nationwide. Further, he said, he doesn’t foresee an increase in contract dollars for 2006.
“I don’t see any trigger for job growth or revenue growth as it stands, at least not for ESC or Hanscom. I don’t see a great triggering mechanism right now,” Paone said.
And if that isn’t enough, Paone also said that companies will now vie for ESC contracts under three new categories — a process that could leave some funded companies in the cold.
“The whole enchilada is being recompeted in ’06. So in dollar terms, supporting companies may not just keep getting individual task orders,” Paone said. “It’s a whole new process with new categories, and it offers up the possibility that existing contractors get more work or less work,” he said.
Leading up to the decision to keep the bases open, defense executives, economists and politicians formed an alliance coordinated by Christopher Anderson, president of the Massachusetts High Technology Council. Known as the Mass Defense Technology Initiative, directed by Al MacDonald and co-chaired by U.S. Sen. Edward Kennedy and Gov. Mitt Romney, the group was formed to lobby for the defense industry and bases after the BRAC process.
Last year, Massachusetts-based companies represented 20 percent to 25 percent of the roughly $3.3 billion in contracts awarded by the ESC, which employs about 1,500 military and civilian staff directly and 1,316 contractors.
Estimates by the University of Massachusetts Donahue Institute show that some 10,000 secondary jobs with a total payroll of $708.9 million are likely created in Massachusetts based on the base’s 2003 procurements of $957 million, and that Hanscom’s vendors generate about $1.1 billion annually.
The total impact could reach about $3 billion if all direct and indirect payroll, vendor output, and spending by those with secondary and base jobs are included. Those expenditures would include purchases of homes, food, clothing, construction, education, financial services, entertainment, cars and other goods and services.
Contractors eye bid options
Jim Regan, chief executive of Dynamics Research Corp., a 50-year-old engineering and information technology company, said he believes his firm expects a smaller contract with ESC in 2006 compared with last year’s approximate $31 million — which was about 10 percent of the firm’s 2005 revenue. At the same time, he said that he expects his company to grow and possibly add new jobs. Regan said the changes to ESC’s bidding process might result in more awards to smaller businesses — and that larger companies such as DRC could become sub-contractors to them. “There is opportunity for growth in our industry,” Regan said.
In the past, ESC applications were under one umbrella, Paone said. Soon applicants will choose from three categories: engineering support, acquisition su
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Defense Sector Winning the Recession Battle (12/19/08)
Groups Call for Mass. IT Security Center (11/14/08)
Video: May 16 Breakfast with Congresswoman Tsongas at Mercury Computer Systems (7/7/08)
Governor Makes Case for Cyber Command at Hanscom (5/22/08)
Regional Effort Needed to Attract Cyberspace Command (4/25/08)
General Quenneville Tapped to Lead Regions Defense Voice (1/25/08)
Hanscom Could Be Site of Cyber Command Center (3/20/08)
Bay State Officials Target Air Force Cyber R&D Dollars (1/4/08)
Natick Labs: Business, Military Putting Their Brains Together (11/27/07)
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