PTAC Office To Foster Government Contracts

May 27, 2008
| By Pete Daly |
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GRAND RAPIDS — A new Procurement Technical Assistance Center, or PTAC, office will open within weeks in Grand Rapids, according to a state official who spoke last week at a meeting of the Association for Corporate Growth.

The meeting was focused on new opportunities for West Michigan businesses in activities under way within the U.S. Department of Defense and Homeland Security.

Business executives at the breakfast meeting at the University Club also learned that "smart cards" are becoming a major technology tool in both government and business, and they heard from the owner of a Grand Rapids company that is growing because of government business.

Rosalyn Jones, market researcher for the Michigan Defense Contract Coordination Center (DC3), a division of the Michigan Economic Development Corp., said a satellite office administered by the regional PTAC office in Muskegon would be opening in Grand Rapids to help local companies compete for contracts let by the Department of Defense and Homeland Security. The new PTAC office will be located at The Right Place Inc., a regional nonprofit economic development organization with headquarters in downtown Grand Rapids.

Jones was not sure when the office would open. However, Bradley M. Lott, director of the DC3, later told the Business Journal that an individual would soon be hired for the satellite office and it would probably open in June.

Lott said the new hire will be full time and "likely" a local person, "able to address the needs of about one thousand companies that are in need of a PTAC contact." That individual will focus on companies in Kent and Ottawa counties, he added.

PTACs are located in every state; Michigan has a network of about a dozen. They are not-for-profit organizations organized in the 1980s and funded by the Defense Logistics Agency, the MEDC and local funding partners such as the Chamber of Commerce or regional economic development corporations. PTACs offer marketing, consulting and classes for business owners and managers who are interested in being government contractors.

The Muskegon regional PTAC is hosted by the Muskegon Area First, and serves about 14 West Michigan counties. The Muskegon region also has a satellite office in Big Rapids, and there is a PTAC office in Kalamazoo, but there has never been one in Grand Rapids.

"That struck me the first time I made the rounds," said Lott, who was hired last year to head the PTAC offices in Michigan. "We've got this huge metropolitan area here with all these companies, and nobody over here."

The two-person Muskegon regional office had been working with companies in Grand Rapids but was stretched thin.

Lott said every million dollars of new money from defense or Homeland Security contracts creates about 20 new jobs in Michigan.

Jones said at the ACG meeting that the PTACs had helped Michigan companies double the total value of government contracts in the first half of the current FY08 federal fiscal year, which ends Sept. 30, compared to the same period last year.

Lott, a retired U.S. Marine Corps major general, said last summer when he was hired that the PTACs in Michigan would attempt to double the value of contracts obtained in FY08 compared to FY07, when the total value was about $315 million.

Lott was asked by the Business Journal if that track record for the first half of FY08 would carry through to the end of the year.

"I think these PTACs are going to dazzle us all, and it will be closer to $800 million dollars for FY08," he said.

In addition to Jones, other speakers at the ACG meeting were Thomas Hines and Jonathan Borisch.

Hines is one of the most experienced professionals in security technology in Michigan. His 28-year career in the security industry has ranged from systems design and integration to security consulting to high-tech product development, manufacturing and distribution. He has launched two previous security-technology companies and holds patents and patents-pending.

Hines spoke about some of the evolving technologies that are beginning to expand beyond business applications to Homeland Security. One such technology is the so-called "smart cards" — essentially a computer chip embedded in a card similar in size and appearance to a credit card that contains key data about an individual and has the ability to serve as an access card for opening doors. Security will be an issue with smart cards because of the amount of data they can contain.

Smart cards "have more computing power than the original PCs," said Hines, adding that smart cards "are where we are going." He noted that the U.S. government is planning to issue them to some of its employees, perhaps even to all members of the military, but he predicted use of smart cards will spread through business, too. Hines predicted that within five to seven years, most Americans will carry a smart card.

Regarding doing business with the government, Hines said many companies formed divisions focused on Homeland Security business when the federal government created that branch in the wake of the Sept. 11 terrorist attacks on America. But Hines noted that in general, most of those companies do not themselves manufacture the Homeland Security products they are selling. His implication is that the opportunities for Michigan manufacturers lay in sub-contracts with the major companies involved in Homeland Security.

The same holds true for business stemming from Department of Defense spending.

Borisch, founder and owner of Borisch Manufacturing Corp. in Kentwood, talked about the recent dramatic growth of his $85 million company, which was launched in 1994. Most of its business is with the aerospace industry, but a growing segment is in production of electrical and other components for the "major prime" contractors involved in tanks and other armored vehicle production for the Department of Defense.

Borisch said fulfilling direct contracts with the government is challenging, and that his company does very little of that business.

"Usually, the low bidder gets (the direct contract with the government) — and usually loses money on it," he said, eliciting chuckles from the crowd.

Another avenue of business related to U.S. government spending is in contracts with foreign military organizations that receive funding from the U.S. government but are required to spend that money on purchases from American companies inside the U.S.

Borisch Manufacturing is a privately held, low-profile organization that relies on its internal emphasis on employee involvement for its success, according to Borisch. He compared himself to a farmer, depending on God alone to bring rain for the crops.

Borisch has a soft-spoken, unassuming personality and a dry wit. His deadpan humor got laughs from the audience several times, such as when he explained how Borisch Manufacturing is a small, basic company without frills or marketing hype. He himself is frequently on the road, representing the company in pursuit of new contracts.

"You're looking at the marketing guy," said Borisch. Then he added, "Obviously, I'm not a marketing guy."

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