Month: December 2010

Companies that manufacture batteries for the U.S. Defense Department are experiencing some good times.  In 2010, the Defense Logistics Agency purchased  $127.59 million worth of batteries, 14.4% more than in 2009.  Currently, the military purchases 7,208 different types of batteries from 226 companies.

At BidLink, we have been mining over 500 million records of defense industry data looking for trends of interest for defense contractors,  and are finding that there is money to be made supplying seemingly common items.  While attention is generally directed toward big ticket buys like aircraft and weapons systems, the Department of Defense (DOD) is spending quite a bit of money on replacement parts called spares. We draw attention to this because there is opportunity for U.S. companies, who might be struggling during the Great Recession.  With retail sales in decline, the DOD can provide some stability for vendors. This week, we focus on the battery industry.

With portable technology as the foundation of the modern military, batteries have become an essential, recurring need.  From AAA to D, fuel cells to rechargeable, the defense department runs on batteries.  We examined several supply classes (FSC) for this study:

TOP SUPPLIERS

The leader in battery sales by number of contracts is Exide Technologies with 2,468.  Exide technologies is a for profit corporation located in Milton, Georgia and manufactures batteries as well as motor vehicle supplies.  They have over 1,500 employees and  annual sales of approximately $2.4 Billion. They were followed closely by Enersys Energy Products with 1,924 contracts.

As for sales volume, Enersys Energy Products is the clear leader with almost $32 Million in annual battery sales to the Defense Department for 2010.  Their most popular item by far was a storage battery used on vehicles including COUGAR and MRAP, National Stock Number 6140-01-485-1472, of which they sold 1,830 to DOD at  $305 each.  Most of their sales were through long term contracts, where the defense department agrees to purchase a quantity over time.  Once won by competitive bid, these contracts can sometimes last for years. The defense department issues periodic delivery orders against the contract when they need more supplies.  Armed with the right information, prudent contractors can win these contracts for themselves.

BidLink.net is a provider of defense industry information for contractors worldwide.  This data includes millions of defense contracts, procurement history, part numbers and vendor details.  This unique combination of resources allows BidLink to monitor and extract important information for the defense contracting industry.  BidLink.net, based in Washington, D.C., provides bid consolidation, searching and notification services, as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

Tweet

The U.S. Defense Department has been steadily increasing its purchases of fasteners and hardware.  At BidLink, we have studied government buying activity for screws, bolts, studs, nuts, washers, nails & rivets over the past five years and found that hardware is a growth industry.  In 2009, the Defense Logistics Agency, the primary procurement arm of the Defense Department purchased $233 Million worth of fasteners.

Although all of the numbers are not in yet, we predict 2010 will be down slightly, closer to $200 million.  Even in the face of major cuts to defense spending, purchases for fasteners are still strong.   Recent austerity measures at the defense department are slashing major purchases of new systems. This creates a growing need to support existing equipment with replacement parts.  As we study various industries, we are seeing a familiar pattern.  U.S. companies that make common items like batteries, safety equipment, electric motors, and hardware can make a lot of money selling to the government.

An analysis of the competition in this industry reveals that Herndon Products has won the most contracts with almost 6,000 in 2009.   The company supplied 3,310 different types of items to the defense department in that year.  The most popular was a National Stock Number 5310-01-097-8010, NUT,PLAIN,ASSEMBLED with 49 delivery orders in 2009.  These purchases were made through a long-term contract (see delivery order) , where once they win the bid, the defense department requests regular orders against the contract.   The above delivery order  for $9,126.02 is #575 against the master contract.  These types of contracts can last many years, but when they expire, prudent contractors can win them.

By sales, the winner is Columbia Nut and Bolt, with almost $17 Million in 2009.  Their headquarters is in Moonachie, New Jersey.   They are a wholesaler of hardware 500-750 employees, which primarily sells to the government. They are followed closely by Herndon Products with nearly $16 Million.

The Defense Logistics Agency buys over 185,000 different kinds of fasteners, screws, nuts, bolts and rivets.  The total number of contracts in 2009 jumped 15% over the 2008 tally to 51,150.

BidLink.net is an aggregator of defense industry information for contractors worldwide.  This data includes millions of defense contracts, procurement history, part numbers and vendor details.  This unique combination of resources allows BidLink to monitor and extract important information for the defense contracting industry.  BidLink.net, based in Washington, D.C., provides bid consolidation, searching and notification services, as well as part number (NSN) lookup services to many military activities and thousands of private companies around the world.

(Exculsive article to the American Fastener Journal)

Tweet