Doing Business With Uncle Sam

For some distributors, the U.S. military is just another customer—but a very important one.

GAWDA members are a vital component of the everyday business of the U.S. military—and even, in some cases, the out-of-the-ordinary business. Distributors from coast to coast are involved in supplying gases, hardgoods, service and training to military bases, defense contractors and other military- and government-related entities. Many are contributing to projects that are saving the lives of American military servicepeople around the globe. All of them play an integral role in the business of keeping our nation’s defense strong.

Rob Stoody and the USS Crommelin, one of the Navy's long hull guided missile frigates

Aiding America’s Defense
GAWDA members do business with an array of military-related customers, for a variety of purposes. Anywhere the U.S. military is operating, a GAWDA member probably is playing a role.

BOC Gases (Murray Hill, NJ) has three main government customers: NASA, VA hospitals and the Defense Energy Supply Center (DESC). “The DESC negotiates deals for Air Force bases around the country,” explains Public Relations Manager Kristina Schurr. “BOC supplies the DESC with aviators’ breathing oxygen and some nitrogen for filling tires.” The company also delivers bulk medical-grade oxygen to 30 VA hospitals around the country, and sells bulk oxygen and nitrogen to NASA for use in rocket testing at Stennis Air Force Base in Mississippi. The oxygen is used as part of the rocket fuel, while the nitrogen is used to purge the engines.

San Diego-based Stoody Industrial & Welding Supply provides compressed gases to the U.S. Navy in the Southwest. “When a Navy ship shoots a missile, it takes a gas, and when they weld on board, it takes a gas,” says Vice President Robert A. Stoody. “The fact that we’re supporting them with a variety of gases is something we’re very proud of.” Stoody recently developed a program to assist Navy personnel with preventive maintenance of air cylinders and masks on board the ships. “We studied the requirements for preventive maintenance on Navy ships and met several times with government officials who flew in from back East,” he says. “We created a catalog that describes all the services we offer, so now if a Navy crewman is on board and he’s not sure exactly what service a compressed air cylinder needs on it, he can open our catalog and use that as a tool.”

Brian Bramhall

South Jersey Welding Supply Inside Sales Rep Brian Bramhall

Norfolk, Virginia, is “home of the world’s largest Naval base,” says Ed Stilwell, general manager – eastern region for Arcet Equipment Company (Norfolk, VA), and it’s a designation that has proven a big advantage for Arcet. “In this area, the Navy is a big part of the economy,” Stilwell says. “We work with the Norfolk Naval Shipyard, support facilities at Norfolk Naval Station, facilities at Oceana Naval Air Station, and with individual ships. In Hampton, Virginia, we do business with Langley Air Force Base, as well as the NASA facility at Langley.” The company’s association with the Navy goes back at least four decades, and Arcet provides both welding equipment and gases. Some of that business comes from ongoing contracts, but facilities also buy on an as-needed basis. “With the big contracts, it’s a formal bid process,” says Stilwell. “But the smaller facilities often have a little more flexibility, and they can spot buy on their own.”

Aaron Campbell, general manager for AWI/Arkansas Welding Supply (Hot Springs, AR), also has experience with different types of military-related purchases. The company has worked for many years with the Arkansas Air National Guard and the Army Corps of Engineers. “We supply welding equipment and industrial supplies to the local Air National Guard post, and we sell gases and hardgoods to a couple of the Corps of Engineers power plants,” says Campbell. “We also had a large contract to provide welding rods and other supplies to an outside contractor at an arsenal.” One of the company’s other customers, while not actually a government agency, is an aircraft manufacturing facility that provides parts for aircraft involved in military operations. “We provide a hard-surfacing powder they use to put on the bottom of the landing skids for one of the fighting helicopters,” says Campbell.

Michael Carberry

Captain Michael Carberry (right), principal engineer at BOC Gases, checks out the work in Thar Thar.

Airweld Inc. (Farmingdale, NY) has a long relationship with a Farmingdale-based defense contractor, and in November 2005, the company entered into an agreement to provide liquid nitrogen to the defense contractor for use in a program to design roadside bomb detection equipment. “This is an extensive program that’s going to run two to three years,” says President Christopher Leahy. “We spent four days installing two 3,000 psi nitrogen tanks and piping the plant with insulated jacketed pipe.” The nitrogen will be used as part of the testing process as the equipment is subjected to extreme environments to test how it will hold up in the field.

Blanks Welding Supply (Fort Worth, TX) has been supplying the Texas Air National Guard and a local battalion of the U.S. Marine Corps with welding equipment and gases for over 15 years. “When they need supplies for maintenance on their equipment, they call us and we take care of them,” says President Larry Sharp. “Most U.S. government agencies, especially the military, own their own cylinders, and most of the time we pick up their cylinders and get them filled, and then return them.” The company also has provided safety training on oxyacetylene torches. “But most of the personnel who contact us are pretty well experienced with using welding supplies already,” says Sharp.

Training and service are components of Earlbeck Gases & Technologies’ (Baltimore, MD) relationship with local military operations. The company works with every branch of the military due to its proximity to Washington, D.C. Earlbeck Gases & Technologies is under contract with several branches to provide both goods and services, and those services include both repair services and technical support, including welder training and certification. “The relationship between this company and the facilities around here easily goes back four decades,” says President Jim Earlbeck. “Because of that long association, we noticed that the military had a pattern of not immediately repairing their equipment if they could do without it at that particular time. But as soon as it was needed again, it became an emergency situation. So we approached the facilities and suggested setting up preventive maintenance programs, so that we’d be on site on a regular basis or available within a specified time period. That’s been a great piece of business for us, and solved a lot of problems for them.” The company works with welders—usually contract employees—at the military facilities, training them to enhance their skills, and also provides engineering consulting. “A lot of times they’re building things just so they can blow them up!” says Earlbeck. “If they have a large project, often they’ll come to us for expertise.”

Just Your Average Customer…
What’s it like doing business with Uncle Sam? In many ways, some distributors say, working with military customers is very much like doing business with any industrial customer.

Ian Phillips

Airgas East Account Manager Ian Phillips dismounts his Humvee and goes on foot patrol.

“For us, the National Guard really is no different than any other customer,” says Campbell. “They call in and order, and we deliver, or a salesperson visits them, and they give him an order for gases or hardgoods. They are driven by price on the front end, but price becomes less important when we can justify it by the service we provide.”

“The process is pretty much the same,” agrees Stilwell. “It’s a mix of charging product to accounts with 30-day terms and people coming in with credit cards. We have salespeople who make calls on military facilities, just like they do on civilian facilities. We get to know the people involved, and they get to know us.”

“It’s very similar to the way private industry works,” says Earlbeck, “meaning sometimes you have a customer where all he does is buy from you on bid, and he’ll use you if you happen to be able to provide him with the lowest possible price. The government has those types of purchases. However, also like private industry, if your sales staff is able to get access to the end-user, then you can help influence and guide that purchasing decision. So if a distributor is looking at government sales, they need to decide which they’re going to be—the low price provider or the full-service, high-value provider—and work their business plan accordingly.”

…With a Few Differences

John Floyd

ESAB Quality Technician (Florence) John S. Floyd served with the Military Police in New Orleans last fall after Hurricane Katrina.

However, distributors note that there also are a lot of ways in which the military can differ from other customers. One of the most obvious is the bureaucracy involved. “The amount of paperwork to do business with the government is huge compared to commercial sales,” says Earlbeck. “And although you know you’re going to get paid by the U.S. government, the question always is, when? You might have the right equipment on site at the right date, but because the 300-page report their inspector filed had one page out of place, it could be held up for months. The government also has a nasty way of moving people around. It is not unusual, when you call someone to find out the status of a payment, to discover that they have moved on and you have to start all over again.” The good news, Earlbeck observes, is that on routine buys, the military is using credit cards more and more frequently—just like in private industry.

“They do business in a military way, and it’s not the public way of doing business,” says Sharp. “With the military, they call and get the prices, and then they’ve got to get the OK on it, and then they’ve got to get whoever’s permission to use their credit card to do it. There are a lot more steps involved. You have to be patient with them.”

The defense contractor AWI/Arkansas Welding Supply worked with on a one-time contract four years ago continues to request new paperwork every year. “Once you sell that product, you’re not done with it,” Campbell says. “We sold them $20,000 worth of consumable items, and every year until they’ve used that up completely they have to renew their certifications, so we have to get them new MSDS’s.”

Get on the List

Interested in pursuing government contracts? Before you can do so, you must be registered with the Central Contractor Registration (CCR), which serves as the primary vendor database for the U.S. federal government. Potential vendors are required to complete a one-time registration, and then update or renew that registration at least once annually to maintain active status in the registry. Companies now can register online at the CCR Web site, www.ccr.gov. The Web site also provides a handbook for vendors and a list of Frequently Asked Questions, among other resources.

“It was probably a three-hour process for us to fill out all the paperwork when we registered for CCR four years ago,” says AWI/Arkansas Welding Supply (Hot Springs, AR) General Manager Aaron Campbell. “You tell them all the different things you sell and can service. Government agencies then can search the registry by what they’re looking for, and up pops a list of vendors they can quote from.”

Campbell says registering with CCR has given AWI/Arkansas Welding Supply many opportunities to quote on contracts. However, it hasn’t resulted in a great deal of new business, because many of the places requesting quotes are based far away from Hot Springs and solicit quotes from all corners of the nation, even the world.

Although the company hasn’t seen a significant increase in business as a result of its CCR registration, Campbell says there are advantages. “Even though the quotes are all low-margin quotes and there’s a lot of time involved in them, the one contract we did win was a huge volume. If you isolate that particular order, at face value you’d probably say it wasn’t worthwhile. But when you look at the big picture and compare what that contract offered in terms of volume and standing with our vendors, it was a big help to us.”

For manufacturers, another important acronym is QPL, which stands for Qualified Products List. A QPL is a list of products that the military or other agencies have tested to determine which suppliers comply with specification requirements. Getting on a QPL requires not only product testing, but also facilities inspection. For many manufacturers, QPL designation goes way back—for instance, Arcos Industries (Mt. Carmel, PA) received one of the first-ever Qualified Product Listings from the Navy back in 1939.

“Trying to get on a QPL today is almost like a lottery,” says Stan Merrick, director of marketing for Techalloy (Baltimore, MD), whose products also have been included on the Navy QPL for many years. “The government has fewer people dedicated to vendor qualification today than they did in past decades, so the process takes much longer. But it’s an important designation. We sell a lot of product to the military each year through our distributors.”

Another difference distributors come up against is that the importance assigned to particular military projects often is extremely high, so the urgency involved is comparably high. Airweld Inc. realized that the demand would be great from the defense contractor designing roadside bomb detection equipment. “Roadside bombs are the number one killer used by enemy insurgents in Iraq,” says Leahy. “When we were installing the bulk tanks, we literally worked around the clock, and my bulk technicians sacrificed a lot of their personal time. We realized that any delay in the process might mean someone else getting injured or killed out in the field. We pulled out all the stops to get the work done.” The company continues to be on call 24 hours a day, seven days a week with regard to the project.

“All of the projects at Aberdeen Proving Ground have a high level of importance assigned to them,” says Earlbeck. “For instance, the armor changes that were made on Humvees a couple of years ago were developed and tested at Aberdeen. Typically, whatever they’re working on, if you haven’t read about it in the paper today, you will in the future. As a result, when they call, if a piece of equipment is down, they don’t need it fixed tomorrow or next week—they need it back on line today.” For this reason, many of Earlbeck Gases & Technologies’ contracts have a clause built in that they will respond within 24 hours or provide a loaner.

Arcet Equipment Company has found it’s important to have an inventory the Navy can tap when they need it, without a lot of wait. “Often a ship is getting ready to go out to sea, and they’ve waited until the last minute to buy supplies they need before they deploy,” says Stilwell. “There’s no time to order the supplies, so either we have them on hand, or the ship doesn’t get them.”

Security, naturally, has always been a concern when supplying the military, and given current world events, security has tightened even further. “It’s not uncommon for us to be on site in a classified or highly secured area, and our people have to have the right clearance for that,” says Earlbeck. “Typically, they’re under full escort at the time, and there are background checks on all of our staff members who go on site.”

“Access to the bases is more tightly controlled now,” says Stilwell. “The background check on our personnel who have to go on base to deliver supplies and work on equipment is tighter than it has been in the past. It takes longer to get a new person’s authorization.”

Another change Stilwell has observed in how the military operates comes as a result of advances in technology. “Due to the Internet, when the military puts out contracts for bid, they have a huge pool of potential vendors that they did not have in the past,” he says. “There’s much more competition for the job.”

Important Work
When it comes to working with the military, GAWDA members take pride in the goods and services they’re able to provide. The welding and gases industry contributes at all levels of military operations, and the results of those efforts can be found all over the world, saving lives and contributing to national and international security.

As Leahy observes, “When we look at the military and defense work we do—whether our products are protecting our soldiers or just helping to build a widget for the Army or any other branch of the Armed Forces—we can’t lose sight of the fact that we live in a free country because of the people who are going to use these products. What we as distributors do is important beyond our world in the welding and gases industry. It’s very important work, and every employee involved should be proud.”

Long may that important work continue.

10 Steps to Winning DoD Contracts

The Department of Defense (DoD) Office of Small Business Programs offers the following tips for companies who want to take advantage of DoD contracting opportunities:

  1. Identify Your Product or Service. Know the Federal Supply Class or Service FSC/SVC codes and North American Industry Classification System (NAICS) codes.
  2. Register Your Business. Obtain a Data Universal Number System (DUNS) number and register with Central Contractor Registration (CCR/PRO-Net).
  3. Identify Your Target Market within DoD. The DoD Directorate for Information Operations and Reports produces a report (ST28) of products and services purchased each fiscal year by the DoD, sorted by FSC/SVC code.
  4. Identify Current DoD Procurement Opportunities. Check the Federal Business Opportunities Web site (http://www.fedbizopps.gov) to identify DoD and other federal procurement opportunities.
  5. Familiarize Yourself with DoD Contracting Procedures. Be familiar with Federal Acquisition Regulations (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS).
  6. Investigate Federal Supply Schedule (FSS) Contracts. Many DoD purchases are, in fact, orders on FSS contracts. Contact the General Services Administration (GSA) for information on how to obtain an FSS contract.
  7. Seek Additional Assistance. Other important resources include Procurement Technical Assistance Centers, which provide small business concerns with information at minimal or no cost on how to do business with the DoD, and DefenseLink (http://www.defenselink.mil), which provides links to the homepages of every DoD activity.
  8. Explore Subcontracting Opportunities. Download the list of Subcontracting Opportunities with DoD Prime Contractors (http://www.acq.osd.mil/osbp/doing_business/subdir-2005-11.pdf), which lists all major DoD prime contractors by state, or view notices posted by contractors at the Small Business Administration’s SUB-Net (http://web.sba.gov/subnet).
  9. Investigate DoD Small Business Programs. Information on such programs is available on the DoD Office of Small Business Programs Web site.
  10. Market Your Firm Well. Present your capabilities directly to the DoD activities that buy your products or services.


For more information, visit the DoD Office of Small Business Programs Web site at http://www.acq.osd.mil/osbp.


Gases and Welding Distributors Association