Small businesses got a huge boost from the Air Force last fiscal year, but uncertainty in the federal budget means no one is too sure yet if the trend will continue.
Spending on small businesses by the Air Force Materiel Command reached a record $5.4 billion nationally in the 2016 fiscal year, which provided a nice influx for some local companies.
“That is the most we have ever spent on small businesses, ever, and it’s almost a billion dollars more than we spent” the prior year, said Farris Welsh, AFMC small business director.
Of that $5.4 billion, about 9 percent — or $494.8 million — was spent in Ohio, nearly all of it spent on firms with defense contracts in Montgomery and Greene counties, figures show.
Since fiscal year 2013, AFMC spending on small businesses nationwide rose nearly 50 percent and jumped nearly 70 percent in Ohio, Air Force figures show.
The emphasis on smaller firms was no accident. Officials say smaller companies can be more innovative and move quicker on some tasks. Among the targets were businesses in urban hub zones, those owned by women and small businesses owned by disabled veterans, according to Air Force documents.
Whether the emphasis continues — or how much money will be allotted — isn’t known yet. The Trump administration could boost defense spending as much as $54 billion in fiscal year 2018 and at least $20 billion this year, reports said Monday. But where that might be spent and how it could impact spending on small businesses isn’t detailed.
With the federal government under a continuing resolution that kept spending levels in place after the fiscal year started Oct. 1, the government faces a late April deadline to pass a budget before funding runs out.
“Until they do that, we’re kind of in limbo,” Welsh said.
More agility sought
Manufacturing, research and development and engineering services were key investment areas, officials said.
Welsh said AFMC launched more community outreach and showed businesses how to find and apply for contracts.
The Air Force Research Laboratory has posted similar hikes in small business spending. Figures show a rise in spending from $890.5 million in fiscal year 2013, to $1.3 billion last fiscal year.
The Dayton region snared virtually all the AFRL small business spending in Ohio, receiving $258.3 million in fiscal year 2016, compared with $169.1 million three years earlier.
“It has been steadily increasing,” William E. Harrison, AFRL small business director, said of the emphasis on working with smaller firms. “Small businesses have a lot of great innovation (and) they can be more agile. Sometimes in the innovation space, they are the cutting edge of innovation and connecting them with our solicitations, our announcements is key and that’s what’s driving the numbers up.”
In recent years, AFRL has emphasized developing and funding dual-use technologies that could be spun off in the commercial market while meeting the demands of warfighters.
Small business innovative research funds are part of that push, Harrison said. “We have really tough, vexing problems that we really like innovative companies to work with us with.”
Joseph Sciabica, president of Beavercreek-based Universal Technology Corp. and a former AFRL director, said generally the science and research agency looks to small businesses for new and fresh perspectives to solve problems.
“Small business, especially those that are working with the (Defense Department), have some good insights into the areas that the defense systems and platforms have to operate in,” he said. “It has to work every time.”
Air Force small business contracts are the “lifeblood” of companies like UTC, Sciabica said. AFMC listed UTC as the second highest contract recipient at $37.6 million in fiscal year 2016 based on vendor location. The 240-employee company has added about 30 workers the past three years.
Sawdey Solution Services Inc. of Beavercreek also credits Air Force small business contracts with helping it grow from 100 employees four years ago to 350 now.
“We’ve really broadened our footprint over the last couple of years,” company President Connie Sawdey said. “I think all of the services have been putting a significant focus on meeting their small business goals and we have been lucky to be in the right place at the right time.”
With contracts in 22 states, the company provides consulting and management services, such as engineering and cyber security.
AFMC listed Sawdey Solution Services within the top five for small business vendors with $22.3 million in contracts last fiscal year.
Deborah Gross, executive director of the Dayton Area Defense Contractors Association, said her organization has reached out to technology companies that would be a good fit in the defense industry.
“Many times the advancement and technologies being made in those areas are being made by small businesses,” she said.
Gross said the federal government must do more to speed up acquisitions to help businesses that win contracts, however.
“It can be a very long process just to figure out who to talk to,” she said.
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