Author: tomg

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)

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Pentagon demand for electric motors has been stable over the last five years, with Defense Logistics Agency (DLA) annual purchasing at around $26 Million.  Many industries studied by BidLink have shown the same pattern of a significant increase in sales from 2006-2007, then stabilization.  In September 2010, defense secretary Robert Gates called for $100 Billion in cuts to the Defense Department budget over the next five years.  Fortunately for companies that make replacement parts, this means more business as many of these cuts could affect large projects like the F35 aircraft, while not affecting the process of repairing and restocking, and technologically upgrading the military.   The Defense department has expressed their commitment to cut waste without reducing capabilities.

We examined the competition in this industry for FY 2009, since at the time of this article, 2010 had not yet ended.  Honeywell International (CAGE code 70210) is the clear leader by number of contracts, winning 450% more than the second place holder, Arc Systems (67245).

This follows a similar pattern that we have seen in other industries analyzed by BidLink.  It seems that each industry has a clear leader, winning significantly more contracts than the other competitors.  Much of this business comes from long term contracts, which are periodically re-awarded.   Opportunity exists for savvy competitors.

By sales volume, Honeywell (70210) almost tripled the sales of GE Avation Systems (81039) in 2009. The other eight competitors were almost evenly matched.  The largest contract for 2009 was 296 AC Control Motors, NSN: 6105-00-938-8503 at $6.102.17 each for a total contract value of $1,806,242.32 (see contract).

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.

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It’s  been a while since we published an update of new features.  We have been working quietly on a few upgrades that let you do more with BidLink..net.  In a few weeks, we will be releasing this new upgrade, but you can get a sneak preview by clicking here, or going to test.bidlink.net.

Don’t worry, we haven’t changed the site so much that you will not recognize it.  Most of the changes are improvements to existing features, and we’ve added a few new features too.

Information Center

A new addition to BidLink is the information center.  This is your one-stop shopping for help, reference, videos and information.  It even has a vast resource of DOD documents and specifications, just a click away.  You can get to it almost anywhere on the site, by clicking on the icon wherever you see it, or clicking on areas with a highlighted background.   It’s also in the left navigation under Help and Information.  Feel free to explore it’s greatness.  There is a video describing the information center here.

New Bid Search

The bid search underwent a major overhaul.  The interface has been simplified, although it is even more powerful.  It provides easy access to “not” searches, which help you to refine your results by removing unwanted bids before you see them.  This can save quite a bit of time.  More help on the New Bid Search is here.

Quick Search

We have added the quick search to more areas of the site, and fixed some bugs.  It can now search more databases, including Mil-Specs.  Unlike before, where BidLink would send a request to the Government for a mil-spec, we now serve them from our own network.  BidLink has almost 200,000 mil-spec documents, comprising much of the DOD’s library.  A video on the Quick Search is here.

Beyond features, there’s more data.  Lots more.  We now host a library of contract actions, which are procurement history that doesn’t fall under DOD’s NIIN based indexing system.  These may include GSA contracts, DD350 and more.  Look for contract actions when you search a company in the vendor lookup tool. We have also added more procurement history from hard to get sources like Navy and TACOM.

We’ve expanded our vendor data area with more information on companies and their activity.  NSN lookup has more part numbers, including replaced NSNs.  Forecast data offers the DOD’s predictions on future buying activity; ML-C tells you the unit price in case there is no procurement history.  NSN status has also been added.

We hope you enjoy the new BidLink.net, and value your comments.  The next few weeks will be polishing the new system .   If you find any bugs, or have suggestions, use the contact area in the information center to drop us a note.

-Tom Gerbe

BidLink Development Staff

We examined buying activity from the Federal Procurement Data System, in order to obtain a list of the top five defense contractors.  After reviewing the federal budget, DLA buying activity, and many other sources, we found discrepancies in the data that encouraged us to perform a complete analysis of all purchases in the FPDS.  BidLink.net keeps up to date records of all FPDS transactions.  Below is a list of 21 agencies operating under the Department of Defense who have reported consolidated data on their contractors by dollar value for the fiscal year 2009.  The charts below show the top five contractors by dollar value for each agency.

2009 Top Contractors

Federal

Company	Total actions	Total dollars
Lockheed Martin Corporation	21,174	$38,512,401,433.23
The Boeing Company	11,468	$21,956,065,368.89
Northrop Grumman Corporation	22,009	$19,654,882,647.82
General Dynamics Corporation	17,988	$16,432,366,120.40
Raytheon Company	10,480	$16,106,903,431.28

Department of Defense

Company	Total actions	Total dollars
Lockheed Martin Corporation	17,762	$31,348,453,590.56
The Boeing Company	10,799	$20,604,690,106.84
Northrop Grumman Corporation	19,627	$18,293,375,394.47
General Dynamics Corporation	16,261	$15,662,063,160.18
Raytheon Company	9,697	$15,332,423,921.76

Department of the Navy

Company	Total actions	Total dollars
Lockheed Martin Corporation	4,610	$12,420,762,609.78
Northrop Grumman Corporation	9,844	$8,668,835,819.63
General Dynamics Corporation	6,396	$8,005,594,096.52
Raytheon Company	2,656	$5,095,808,653.19
The Boeing Company	1,607	$4,993,553,179.45

Department of the Army

Company	Total actions	Total dollars
General Dynamics Corporation	4,268	$6,520,702,472.61
Raytheon Company	3,036	$6,386,829,395.31
Oshkosh Truck Corporation	613	$6,002,056,462.20
The Boeing Company	1,272	$5,199,869,571.68
KBR  Inc.	677	$4,637,091,616.01

Department of the Air Force

Company	Total actions	Total dollars
Lockheed Martin Corporation	4,992	$12,721,684,392.24
The Boeing Company	3,094	$8,328,512,802.70
Northrop Grumman Corporation	4,381	$5,697,914,434.55
L-3 Communications Holdings  Inc.	2,415	$2,506,614,057.32
Raytheon Company	2,261	$2,364,176,372.56

Tricare Management Activity (TMA)

Company	Total actions	Total dollars
Humana Inc.	257	$3,389,680,098.90
Health Net  Inc.	136	$2,818,236,858.39
Triwest Healthcare Alliance Corp.	128	$2,650,851,737.67
Anthem Health Of Indiana Inc.	1	$750,304,988.85
Sierra Military Health Services LLC	1	$527,348,655.04

Defense Threat Reduction Agency (DTRA)

Company	Total actions	Total dollars
SAIC Inc.	179	$131,231,178.89
Raytheon Company	78	$123,228,271.33
Northrop Grumman Corporation	61	$74,314,286.05
Bechtel Group Inc.	37	$70,181,269.80
Applied Research Associates Inc.	168	$48,317,931.00

Defense Contract Management Agency (DCMA)

Company	Total actions	Total dollars
L-3 Communications Holdings Inc.	423	$160,727,353.44
United Technologies Corporation	336	$127,187,015.51
Rolls-Royce Group PLC	139	$96,846,374.23
Northrop Grumman Corporation	574	$29,925,319.56
Raytheon Company	309	$19,705,598.28

Defense Microelectronics Activity (DMEA)

Company	Total actions	Total dollars
Northrop Grumman Corporation	107	$166,653,880.00
Raytheon Company	108	$128,127,696.00
BAE Systems PLC	38	$61,856,490.00
Lockheed Martin Corporation	41	$33,815,997.00
General Dynamics Corporation	26	$21,897,026.00

USTRANSCOM

Company	Total actions	Total dollars
FedEx Corporation	1,198	$1,506,090,850.42
Evergreen International Airlines Inc.	1,137	$1,322,675,791.37
United Parcel Service Inc.	464	$305,502,933.10
American Auto Logistics LP	18	$202,080,529.00
EP Investments LLC	50	$140,092,877.72

Defense Advanced Research Projects Agency (DARPA)

Company	Total actions	Total dollars
Lockheed Martin Corporation	52	$160,110,727.00
SAIC Inc.	53	$63,866,621.03
Raytheon Company	33	$41,592,859.63
General Atomic Technologies Corporation	13	$39,645,859.00
Hopkins Johns University	59	$38,422,044.00

Defense Information Systems Agency (DISA)

Company	Total actions	Total dollars
SAIC Inc.	573	$383,239,379.39
Northrop Grumman Corporation	670	$317,452,963.16
Apptis Inc.	400	$263,178,140.07
Artel Inc.	232	$261,362,109.11
Computer Sciences Corporation	339	$198,826,087.16

Defense Logistics Agency

Company	Total actions	Total dollars
Agility	24,090	$1,913,213,109.55
Royal Dutch Shell PLC	12	$1,893,210,329.86
The Bahrain Petroleum Company B.S.C.	6	$1,754,451,969.04
BP P.L.C.	28	$1,684,285,999.43
Amerisourcebergen Corporation	64,715	$1,258,838,905.31

Defense Security Cooperation Agency

Company	Total actions	Total dollars
Charles E Collier	14	$8,163,431.67
Integrated Resource Technologies	14	$7,707,247.09
Information Gateways  Inc.	3	$6,598,800.00
Events Unlimited Inc.	53	$4,736,407.84
Culmen International LLC	17	$3,700,905.00

Defense Commissary Agency (DECA)

Company	Total actions	Total dollars
Kraft Foods Inc.	52,672	$462,530,049.60
Tyson Foods Inc.	57,473	$399,900,586.39
The Procter & Gamble Company	6,453	$312,987,601.32
PepsiCo Inc.	22,856	$210,064,462.15
General Mills Inc.	13,757	$207,429,487.40

Defense Finance and Accounting Service (DFAS)

Company	Total actions	Total dollars
Lockheed Martin Corporation	123	$59,849,620.17
Computer Sciences Corporation	40	$46,039,582.90
Electronic Data Systems Corporation	62	$42,525,030.67
Booz Allen Hamilton Inc.	108	$27,565,533.00
PricewaterhouseCoopers LLP	16	$17,582,793.93

Defense Media Center (DMC)

Company	Total actions	Total dollars
Innovative Technologies Inc.	27	$17,319,763.74
Taft Broadcasting Company LLC	18	$7,967,929.16
Towne Group Inc.	7	$5,999,071.46
Omnitec Solutions Inc.	22	$4,656,841.63
Film House Inc.	16	$3,499,993.38

Department of Defense Education Activity (DODEA)

Company	Total actions	Total dollars
SKE Technischer Service GMBH	54	$27,755,917.30
Dell Inc.	46	$22,655,101.06
Pearson PLC	650	$17,574,464.41
Audax Reisen Gesellschaft Mit Beschraenkter Haftung	81	$11,935,032.08
Town of Lincoln	2	$10,192,190.00

Washington Headquarters Services (WHS)

Company	Total actions	Total dollars
Hensel Phelps Construction Co.	12	$208,627,478.00
General Dynamics Corporation	21	$73,953,096.26
Catapult Technology Ltd.	7	$19,756,695.64
Scitor Corporation	32	$19,057,261.13
Dmjm/Parsons A Joint Venture	10	$16,246,022.72

Uniformed Services University of the Health Sciences (USUHS)

Company	Total actions	Total dollars
The Henry M Jackson Foundation for the Advancement of Milita	56	$17,422,548.16
Onconova Therapeutics Inc.	1	$4,274,446.00
Corbin Company	343	$3,482,840.02
Concurrent Technologies Corporation	4	$1,022,000.00
World Wide Technology Holding Co. Inc.	1	$966,782.78

Missile Defense Agency (MDA)

Company	Total actions	Total dollars
The Boeing Company	44	$1,663,936,105.00
Lockheed Martin Corporation	262	$1,326,609,630.63
Raytheon Company	209	$978,990,087.97
Northrop Grumman Corporation	669	$681,660,706.67
Computer Sciences Corporation	137	$214,351,162.60

U.S. Special Operations Command (USSOCOM)

Company	Total actions	Total dollars
L-3 Communications Holdings Inc.	3,553	$781,680,577.20
The Boeing Company	82	$114,830,024.25
M A Federal Inc.	157	$105,376,236.89
ITT Corporation	49	$102,623,504.53
Raytheon Company	142	$91,306,439.18

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With the Pentagon preparing for spending cuts, BidLink is looking for opportunities for American companies to prosper.  Declines in spending on new weapons systems means more replacement parts for aging equipment.  Many are common items, which can be made by companies who might be struggling due to softening consumer demand.

If you’re in the business of making bushings, rings, shims or spacers for the defense department, business is good.  Purchasing activity for these items from federal supply class (FSC) 5365 have been stable even through the depths of the great recession.

Looking at spending in this area over the past four years, we see relatively stable purchasing volume.  This is what we often find when analyzing the manufacture of what are commonly known in the military as “spares”.  The dramatic increase from 2006 likely relates to a transfer of buying activity from the old DOD procurement system to BSM (Business System Modernization).  An analysis of projected buying activity for 2011 shows that DOD is planning to purchase approximately $30,000,000 worth of bushings, rings, shims and spacers.

In an analysis of the industries top players by sales volume, GE Aviation (99207) leads, but also holds the third place spot (CAGE 07482). Their top contract from 2009 for this supply class was for 127  ring, bearing seals (NSN 5365-00-042-7344) at $1,384.70 each, totaling $175,856 (see contract).

A breakdown of the top 10 defense suppliers in 2009, looking at total sales in dollars.

We also looked at the most popular items purchased within this supply class.

Stock Number	Contracts	Item Name	Cage	Company
5365-01-246-8281	380	SUPPORT ASSEMBLY	02769	LOCKHEED MARTIN
5365-00-511-3133	272	SPACER,RING	73030	HAMILTON SUNDSTRAND
5365-00-310-5808	213	BUSHING,TAPERED	73030	HAMILTON SUNDSTRAND
5365-01-144-7377	162	SPACER,SLEEVE	45152	OSHKOSH
5365-01-223-3631	158	SPACER,SLEEVE	78286	SIKORSKY AIRCRAFT
5365-01-223-3628	141	SPACER,SLEEVE	78286	SIKORSKY AIRCRAFT
5365-01-471-8147	135	RING,BALL JOINT	45152	OSHKOSH
5365-00-550-5070	131	SPACER,RING	73030	HAMILTON SUNDSTRAND
5365-01-180-2369	127	PLUG,MACHINE THREAD	78500	MERITOR HEAVY VEHICLE
5365-01-246-9548	122	SHIM	78286	SIKORSKY AIRCRAFT

This information was discovered using BidLink.net’s comprehensive database of DLA procurement history for 2009. It also includes analysis from the NSN database and the central contractor registry. For 14 days of free access to BidLink.net, click here.

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