Tactical Gear Sewing

It won’t make headlines, but the landscape for defense suppliers just changed. DoD acquisitions generally fall under the Berry Amendment or Buy American Act. These guidelines require 100% of raw components and manufacturing labor to be derived in the U.S. However, the rules are different now. A recent determination made by the Administrator for Federal Procurement Policy ruled that the Buy American Act “component test” is inapplicable to acquisitions of commercially available off-the-shelf items (COTS).

What does this mean???

The raw materials that go into certain finished products don’t have to be Made in the USA. This is a huge shift in policy. I’m sure a lot of analysis went into this. It’s a very fine balancing act supporting the current needs of our country while still adhering to the principle of self-defense. The reality today (which I am very well aware of) is that it is very difficult to make a 100% Made in USA product. There is simply not a strong enough textile base in this country anymore. Across the entire spectrum of textile components (fabric, velcro, fasteners, molded plastics, thread, etc), there is only a tiny fraction of suppliers there once was. My frustration grows day by day as more businesses exit textiles and smart people leave the industry for good.  

The Dept of Defense is certainly recognizing this and clearly is frustrated by how difficult it is to buy items that otherwise are common in the marketplace. In these times of global threats, our military can’t go without the supplies they need. And they need them fast too.

Back to my world…When I am presented with an opportunity to make an item, often the biggest challenge is not making the item (we can sew as well or better than anywhere on this globe), but sourcing the components. Leave the price differences aside. The bigger effect of  a ravaged textile base is fewer choices, higher minimums, and longer lead times. You can’t find what you need or get it when your customer has to have it. This doesn’t work well for government entities that like to take a long time to make decisions.  When the decisions are finally made, they need it yesterday. No one will solve the bureaucracy issue. Instead, more frequently than not,  I get to explain the bad news and look like the bad guy.  

It’s important to remember that the ruling applies to off-the-shelf items only, not the significant amount of items that are made custom for our U.S. military. So we’re only talking about a smaller segment of the DoD budget. Selfishly and from a short-term perspective, this creates more opportunities as a finished product manufacturer. However, long term it’s going to make things even more difficult for our  manufacturing supply base, and for me, making the custom items. That’s not good news for our country.  

Obviously, there’s not a perfect decision. Soldiers can’t go without.  While long term, we need to ensure we have the manufacturing base to defend ourselves against the growing threats of this world.

I’d love to hear what you think.

Thanks to my friends at CustomGearReport.com for alerting me to this informative video.

http://www.youtube.com/watch?v=uqfa04eYW4w

If only I could be a fly on the wall at the DSCP, Natick, and other hubs of Department of Defense procurement. For reasons that are unclear to me and plenty of others in the industry, there have been several delays in awards of contracts. I know of several companies that have had an excruciating wait to hear on these contracts.

I don’t expect that the contracting officers care, but there is a lot of cost and pain for those companies in wait. How do I hold capacity in my plant for an indefinite time? While other work slows down, can I afford to keep my staff at high levels waiting for a contract? Can I afford to let them go and not have them when I do get the award? How will I deal with an expedited delivery that will inevitably be demanded because the government has waited so long? These are the questions that business owners and managers struggle with. With the slow down in the consumer and commercial markets, now would be a great time for a steady stream of government work in our factories. But many people are waiting. You have to wonder if some of them will be able to hang on long enough?

The tetonic plates of the Midwest shifted yesterday. No there wasn’t an earthquake. Rather, there was a very big announcement in the tactical nylon gear industry. ATK has announced the purchase of Eagle Industries. Eagle has been a solid manufacturer of soft goods to the government as well as an OEM supplier for others in the industry. There will be a lot of eyes focused on how this change in ownership will effect their position in the market. Will it be business as usual or soemthing entirely different. I, for one, will be watching.

I have good news for our President. He voiced yesterday concerns about cost overruns on defense items. Well, the government is also saving money in their spending by their implicit “hands off” approach to enforcing Made in the USA standards.

If you’ve ever had the pleasure of reading a government solicitation, they are usually a minimum of 25-30 pages long. Primarily because the document will reference a whole laundry list of applicable rules (or FARS as they call them). These FARS would cure anyone’s insomnia and are probably only read by some low-level attornies who are forced to by their bosses. Long and short, in many cases, they state whatever you’re going to provide to us, has to be made in the USA. That’s not true for all government purchases (e.g GSA), but most of the ones I work on.

I’ve participated in many, many bids over the years. Because it is a public process, we are able to see the winning bid amount on almost every contract award. I can not tell you how frequently I am stunned by the price and they don’t even raise an eyebrow from the contracting officer.  Over an over, contracts are awarded to unknown entities whose price is 20% or more less than the next closest price. In the business world, these quotes are classified as outliers. Most seasoned purchasing agents would conduct some research in such case. There’s usually a reason why they’re so much less. But that doesn’t happen in most government procurement offices.  

Do they really believe they are getting Made in USA product? Of course not. ”It’s not our job to verify the source of the product, we only ask the vendor to confirm that they are meeting the requirements of the contract.”

Are you kidding me? That can’t possibly be the standard, but I’m sorry to say, this is the case in many, many situations.

Something needs to change. Our government either needs to stand up and say we really don’t want Made in USA, but we really want the lowest price. Or they need to put some teeth into auditing the claims of these suppliers who know the game and are bastardizing the system. It takes 5 minutes on Google to determine if a company has a factory, a workforce, or any experience providing such an item. This is a small playlot that we contract sewers play in these days. Why come I haven’t heard of these entities that keep winning these bids with prices that flat out aren’t possible using USA labor and materiasls. 

So Mr. President, I promise you that you are saving quite a bit of money on your purchases. Made in China worked for Walmart, and it’s apparently working for the government too. It’s time for someone to stand up and support those of us who play by the rules, employ hard-working people in America, pay our taxes, licenses, fees, and the rest that is piled on. Or change the rules and let everyone play the same game. I can import too. This wink-wink scenario is growing old and costing Americans jobs.