Category: Industry News

The military and commercial world spends countless hours seeking out competitors. Whether it’s looking for a lower price/alternative manufacturer, an obsolete part no longer available, or if you’re a parts supplier / parts manufacturer your needs may be different. We get questions like: How many does the US Military buy and for how much? Is the military buying my competitors product?

Someone producing or selling an item with similar salient characteristics can be defined as a competitor. Searching for a competitor may result in finding a better product/price and perhaps other benefits such as a newer version – longer lifetime or lower failure rate. So the deeper you look, trolling through more data the better your answer will be.

If your research begins with Federal government procurement websites such as FBO or USA Spending that’s a good start but not nearly complete. Countless federal acquisition systems exist and should also be reviewed for a more accurate answer. This article quickly touches the kind of data found in using acquisition methods such as GSA Schedules and Blanket Purchase Agreement or BPAs.

Government sales and detail purchase data may or may not be reported to the various public government websites so FOIA requests with all the government purchasing departments may be necessary to find your answers.

Here is one example showing a National Stock Number (NSN) item purchased by DoD and various government departments over the past 18 years. The NSN in question was 3540-00-344-8642 it’s an item used in shipping departments to carry and dispense steel strapping coil used for securing wood crates and similar items, it’s a simple hand truck. Several questions were answered.

Using the BidLink, we were able to quickly determine that this NSN 3540-00-344-8642 item name “Hand Truck, Strapping Coil” has been purchased every year with varying quantities to various government departments supplied by only a handful of companies. The most recent sales have been through GSA schedule and BPA contracts. Specifically GS-07F-DA222 and GS-02F-0125U found under GSA Schedule categories 51 V Hardware Superstore and 81 I B Shipping, Packaging and packing supplies. Most recent prices ranged from $188 to $225 each.

The two sellers of this NSN currently provide product from different manufacturers specifically Universal and USP.

Caprice electronics and Complete packaging & shipping supplies are the two most recent suppliers selling the majority of this item.

If you were to guess which company sells more of this NSN, a Hand truck an item used in the shipping department – Well if you guessed “Complete packaging & shipping supplies” you would have been wrong it’s Caprice Electronics and the data shows that.  So when trying to find competitors look at much data as you can.

BidLink’s Market Research tool and exclusive data has been used by DoD and Commercial industries for the past 18 years. – Jim

Comments? Contact Jim at jimnews@bidlink.net

www.bidlink.net – 866-226-4488

Government sponsored trade shows are B2G events that bring together buyers and sellers.  On the surface, it sounds like a great idea to increase competition for Government business. However, many companies are finding that the leads generated from these shows do not turn into business.

B2G shows are often packed with buyers, who process requisitions from managers and end users.  Their job is to solicit items and services, ensure competition where possible, and make sure the procurement adheres to the FAR.  Buyers can invite new companies into a procurement, but they do not decide what products and services are needed by the Government.

SPY PHONE BOX

At a recent trade show, the booth next to us at BidLink was a company selling a secret spy-phone signal blocking box, for top secret conference rooms.  It was basically a cone-of-silence for cell phones, with radio signal blocking, sound deadening and speakers that generate white noise.  Secret agents could put their phones in the box, close it, and have private conversation without the prying ears of spies. People in secret meetings can honestly say, “Honey, the phone never rang. I swear”.  It was a great idea, that will never gain traction at the typical B2G show.  This is because buyers, the most common attendees at B2G shows are not the folks who would make a decision that the Government needs a few secret spy-phone blocking boxes.  Program managers and other higher-ups have this authority, but it’s simply not the buyer’s job to decide what the Government needs.

A few booths down, there was a company selling industrial supplies. He had a catalog of over 10,000 items; everything from generators, to wash buckets, to paint, to industrial toilet paper.  B2G Shows are perfect for this type of company.  Drive around any military base and you will see hosing units, stores offices, and lots of people.  These people need every day things, and the Government buys lots of them.  A vendor selling commonly purchased items could forge a new relationship with many buyers at a B2G show.  Especially if they are 8a or small business.  Buyers love to bolster their set asides.

BETTER NETWORKING

We see lots of companies selling IT solutions at these shows.  They sell innovative solutions to Government problems, including staffing, supply chain, and even BidLink, who provides a tool for sourcing, pricing, and finding out almost anything about an NSN.  These services do not have a clearly defined market in the Military, but they provide efficiency that could save the Government money and time.

If you are trying to introduce something new to the Government, you may find it difficult to get any traction from a Government trade show.  This is because most of the attendees at these shows are either buyers, who only buy items that are requisitioned, or end users with no buying authority. We have met with very few program managers at these shows.  Program managers have the authority to decide if a new product or service could be of use to their group.

The idea of getting business and Government together make sense. Companies have difficulty reaching the right contacts in Government, so hosting meetups is a great idea. The disconnect is that sometimes these shows are filled with people who alone, cannot make the decision to buy your new product or service.

What might improve these trade shows would be for program managers as well as several of their personnel to attend the show together.  Often the program manager might not directly use the product or service, but has the authority to decide if it should be purchased. Program managers roaming a trade show with a couple of end users, who can evaluate the service would provide a powerful combination.  Combining the need to buy (end user) with the purchasing authority (program manager) allows companies with new ideas for the Government to showcase their wares to folks who may actually buy what they offer.

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 search and notification services, competition analysis as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

For the news and tools to compete in the defense industry, go to www.bidlink.net.

By Tom Gerbe,  Defense Industry Analyst.

By Tom Gerbe – Defense Industry Analyst – BidLink.net

The U.S. Defense Department has over 57,000 open solicitations that have gone unanswered.  Among these items are cable assemblies that could be produced by informed manufacturers.  As a data analyst for BidLink.net I have been combing through opportunities for readers of “Wire and Cable Technology” and have located a number of big ticket items for which the Government cannot find suppliers.

Many defense contractors aggressively compete for the lowest price in order to win bids, fighting against anywhere from two to twenty companies on each solicitation.  There is an easier way — find bids for which there is no competition. One way to accomplish this is to find unanswered bids.  In some cases current suppliers no longer manufacture a part for which there is still a need.  In the examples below, there are several items which were designated as “small business” meaning that the defense department is required to purchase the part from a company under a certain size.  A large company may have supplied the item in the past, but now it must go to a small business. This can spell opportunity for contractors who are paying attention. 

Below are a list of solicitations from the Defense Department that are past the closing date but remain unanswered. Expired bids can be researched using the Quick Search at BidLink.net.

The prices above span a wide range, likely due to the lack of competition for these items.  If the part is a critical item and there is only one company that can supply it, the Government will pay any reasonable price to obtain the part.  This is reflected in the procurement history for the items above.

When a bid goes unanswered, it stays open even after the closing date.  Over time, thousands of these unanswered bids remain in the system waiting for someone to respond with a quote.  In some cases aircraft can remain grounded and equipment can go unused because the Government cannot find a qualified supplier.  If you have not made an item for the Government before you may have to submit a Source Approval Request (SAR) to the agency in order to receive approval to sell the part to the Government.

Due to the sequester, the defense budget is shrinking causing companies to find new ways to compete.  Locating solicitations for which there is no current supplier become a treasure trove for companies that know how to locate this business.

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 search and notification services, competition analysis as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

For the news and tools to compete in the defense industry, go to www.bidlink.net.

By Tom Gerbe – Defense Information Analyst – BidLink.net

Small businesses have an uphill battle when trying to compete with big companies for defense contracts. Government officials know that small business participation not only helps local economies, but increases competition therefore reducing costs for the military.  Undersecretary of Defense, Dr. Ashton Carter recently stated that, “Real competition is the single most powerful tool available to the department to drive productivity”.  A number of initiatives are in place to promote “Real Competition”.

Twelve memoranda have been issued over the last three years from the president on down, outlining rules and methods for increasing competition in defense contracting.  All of this is designed to deliver better value to the taxpayer and warfighter by improving the way the department does business.  At a time when all departments are cutting expenses to reduce the deficit, program managers throughout DOD have a real motivation to act on these initiatives.

PROMOTE REAL COMPETITION

The following are recommendations from Dr. Ashton Carter on how to promote competition:

• Present a competitive strategy at each program milestone
• Remove obstacles to competition
• Allow a reasonable time to bid
• Require non-certified cost and pricing data on single offers
• Require open system architectures and set rules for acquisition of technical data
• Increase dynamic small business role in defense marketplace

Government buyers have a responsibility to promote competition wherever possible.  If you know the rules, they can be convinced to un-bundle contracts, consider alternative suppliers and even set-aside contracts exclusively for small business.  The key is understanding the Federal Acquisition Regulations (FAR) and how they can be used to benefit your company.

BUNDLED CONTRACTS

In some cases, your company may produce a part which is often included in larger, long-term contracts. The Small Business Reauthorization Act of 1997 defines contract bundling as “consolidating two or more procurement requirements for goods or services previously provided or performed under separate, smaller contracts into a solicitation of offers for a single contract that is unlikely to be suitable for award to a small business concern.”

The act requires that each federal agency, to the maximum extent practicable:

1. structure contracting requirements to facilitate competition by and among small business concerns, taking all reasonable steps to eliminate obstacles to their participation; and
2. avoid unnecessary and unjustified bundling of contract requirements that may preclude small business participation in procurements as prime contractors.

In some cases, requirements are bundled together for years even though buyers are supposed to re-evaluate the market on a periodic basis.  At the time of the initial requirement by the Government there may have been only one supplier for a part, while years later a number of small business may be able to compete.  As a potential bidder on a contract, it is your responsibility to advise the buyer that you would like to compete for this business.  If you are successful, buyers may un-bundle a long-term contract for many items and solicit them separately in order to promote more small business competition.  The Government is required to justify contract bundling and this justification can be challenged by a prospective bidder.

COMPETITION ADVOCATE

When all else fails, each program provides a competition advocate.  According to FAR 6.502 Competition advocates are responsible for  promoting the acquisition of commercial items, promoting full and open competition, challenging requirements that are not stated in terms of functions to be performed. They are also responsible for challenging barriers to the acquisition of commercial items and full and open competition such as unnecessarily restrictive statements of work, unnecessarily detailed specifications, and unnecessarily burdensome contract clauses.  A memorandum from the Office of the Undersecretary of Defense states a commitment to, “Reinvigorate and expand the role of the competition advocate and reinforce the importance of competition to everyone involved in the acquisition process”.

We encourage you to study the Federal Acquisition Regulations and learn your rights as a contractor.  Many initiatives have been put in place to help small contractors compete.   Understanding the rules is the first step toward bringing Government business to your business.

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 search and notification services, competition analysis as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

For the news and tools to compete in the defense industry, go to www.bidlink.net.

By Tom Gerbe – Defense Information Analyst – BidLink.net

Ahead of the sequester, the Defense Department has already implemented significant cuts in defense spending. Defense spending dropped $15.1 Billion from FY 2011 to 2012 and this is before the eight percent across the board cuts are implemented starting March 1.  Unlike the sequester, the reduction of spending in 2012 was not evenly distributed through the top four major procurement agencies.  Data from the procurement history database at BidLink.net shows that the departments of the Army and Navy saw a reduction of $ 18.5 billion and $ 9.9 Billion respectively, while the Air Force and Defense Logistics Agency saw increases of $4.1 Billion and $7 Billion.

A significant increase in spending for airframe structural components (Federal Supply Class 1560) was noticed, rising $3.3 Billion, $4.8B and $5.5B for 2010, 2011 and 2012.  Many large contracts were awarded to prime contractors including Boeing (NYSE: BA), Lockheed Martin (NYSE: LMT), EADS North America, McDonNell Douglass, Northrop Grumman (NYSE: NOC) and MD Helicopter.  Boeing received the largest contract for this supply class in 2012, through a modification to contract number N0001909C0022 for the purchase of eleven P-8A Multi-Mission Maritime Aircraft.  This modification for $1.9 Billion was issued in September of 2012 to be completed by May 2015.  Eighty Six percent of this contract will be executed in the United States in areas including Seattle, Washington; Baltimore, Maryland;  McKinney, Texas; Greenlawn and North Amityville, New York.

There was a surge of spending in the third quarter of 2012, followed by a twenty two percent drop in the fourth quarter according to the Bureau of Economic Analysis.  Some of the quarterly decline is a cyclical drop due to the fiscal year ending in September, but much of the annual drop is a decrease in spending.  This reduction in defense spending is primary cause of the almost 1.3% decline in GDP.

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 search and notification services, competition analysis  as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

For the news and tools to compete in the defense industry, go to www.bidlink.net.

By Tom Gerbe – Defense Information Analyst – BidLink.net

I have spent the last year sifting through about sixty million records of Government contract data from hundreds of different sources in an attempt to build a more comprehensive database of Defense Department buying activity.  At BidLink, we consolidate information from many sources because often times a single source does not offer a complete picture.  In some cases agencies will refuse to disclose pricing, some Government sources are missing huge swaths of data and some provide inaccurate information. By comparing data from many sources we are able to paint a more accurate picture of Government buying activity.

This data overhaul was finished just in time for the Top 10 Fastener Defense contractors of 2012.  Looking at fastener buying activity by the Defense Department over the past four years we can clearly see a significant decline.  This is due to  the Government’s reduction in overall defense spending which started in 2009.  According to the Bureau of Economic Analysis, the Pentagon cut defense spending by a staggering 22% in the fourth quarter of 2012.  Some of the quarterly decline is a cyclical drop due to the fiscal year ending in September, but much of the annual drop is a decrease in spending.  This reduction in defense spending is primary cause of the almost 1.3% decline in GDP.

An analysis of the competitive climate reveals that Herndon Products, Inc. is still the top fastener supplier to the Department of Defense (DOD) with a significant lead over the second place contender.  Herndon Products based in O’Fallon Missouri generates $42 Million in revenue with approximately 85 employees.  The Small Business Size Standard for Hardware Merchant Wholesalers, naics code 423710 is 100 employees.  This is the threshold for small business designation which provides a competitive advantage over large companies.  

The largest fastener contract won by Herndon Products is long term contract # SPM5AZ09D0004, which was awarded on 10/20/2008; It covers an array of bolts, screws, rings, nuts and washers.  There were fourteen competitive bids for this contract.  Not unexpectedly, many of the top companies are aerospace suppliers including Raytheon, a new addition to the top 10 list.

Examining total sales,  Herndon Products (CAGE code: 3G1W3) is in the number one spot with almost $12 Million in contracts to the Defense Logistics Agency (DLA). Columbia Nut and Bolt has been displaced by Wesco Aircraft Hardware as the second place winner with just over $7 Million in sales.

Adept Fasteners moved up four spaces to the #6 position from last year.  New to the list for 2012 are Goodrich Corporation, Dialogic Fasteners and Sikorsky Aircraft.  In 2011, the top contractor sold $13.8 Million in fasteners to DOD while the #10 position earned $3.6 million, as compared to $11.8 Million and $2.7 Million in 2012.

Although the decline in defense spending is dramatic, some of this is in preparation for the upcoming sequester which was supposed to take effect in January 2013.  This could mean stabilization in defense spending going forward. While discussing the Pentagon’s effect on GDP in an e-mail release, Paul Ashworth from Capital Economics called it “The best-looking contraction in US GDP you’ll ever see”, expecting that this may be a one-time blip due to the impending belt tightening.

Another reason according to Michael O’Hanlon at the Brookings Institution is that Congress was late in setting the defense budget for 2012.  The budget was finally pieced together through continuing resolutions passed in the winter.  For a significant part of the year, the Pentagon did not know exactly how much it could spend.  

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 search and notification services, procurement history as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

This article was written exclusively for Fastener Journal.  Comments? Send them to news@bidlink.net.

by Tom Gerbe – Defense Information Analyst – BidLink.net

With the fiscal cliff rapidly approaching, defense contractors will need to become more competitive as defense budgets shrink.  BidLink recently analyzed defense spending by competition from 2003-2012 and discovered that almost half of the contracts awarded from the Defense Department were not competed.

This pattern varied by industry with makers of large systems including aircraft dominating markets, while manufacturers of clothing, refrigeration equipment and replacement parts experience a more competitive environment.

Competitive initiatives taking hold

The Defense Department is committed to increasing competition by delivering more contracts to small businesses.