Beltsville-based company counts on its U.S. location to win federal

Daily Record, The (Baltimore), Apr 2, 2004 by Kathleen Johnston Jarboe

Germans might make Spherix Inc.'s new low-calorie sweetener called tagatose. But Spherix's chief executive prefers to focus on the U.S. location of its call centers, which make up the other half of the dual-focus company.

As Thomas W. Gantt stands at the corner of what he likes to call a sea - a wide open floor of close to 300 cubicles in Cumberland where Spherix phone specialists work - he tells an aide for U.S. Sen. Paul S. Sarbanes his chief competitor to win a major federal parks reservation contract is Canadian.

The conversation takes just a moment during the grand opening of the center. Reporters with television cameras are wandering its halls. Blue and yellow welcome signs hang on the walls. No jeans was the word to employees.

But the moment represents the business savvy that led Spherix to place its hopes in Gantt last August.

In a world of buy American, Gantt thinks it's an advantage to be from the home team.

And the Beltsville-based company needs an edge to win the federal parks contract worth more than $10 million a year.

The government already dealt the company a blow when it initially awarded the work to the Toronto-based ReserveAmerica Holdings Inc. without a bid.

Believe me, I'll tell the [senator] of the importance of Spherix here in Cumberland, said Tim Magrath from Sarbanes' Cumberland office.

It's a small victory. Magrath later says the senator can't do much more than write letters urging a level playing field.

But a level playing field is exactly what Gantt wants - besides just getting the coveted federal contract altogether. He doesn't mention the Toronto-based firm's three call centers are in California, New York and Wisconsin or that the firm is a subsidiary of New York-based InterActiveCorp.

A lot of my role now is [public relations], Gantt said, a former turnaround consultant for troubled government contractors. But it is also to finally reward investors for their years of patience.

Most people think the way to jumpstart Spherix's revenues is to turn its revolutionary low-calorie sugar products tagatose and naturlose into the money-maker for which investors have been waiting.

If tagatose can displace even a tiny percent of the world's sugar, it is huge, said Lincoln A. Werden, an analyst at HG Wellington & Co. in New York. Werden estimates the world consumes 100 billion pounds of sugar a year.

Call centers sweeter still

But Gantt has additional ideas. From that favorite spot looking out at the Cumberland call center, he's looking at the most profitable but least noticed division of Spherix - a business where people answer calls for private businesses and the government without ever letting callers know they work for the Beltsville-based company.

The anonymity of call centers has prompted many corporations to ship the jobs overseas to lower-wage countries.

The Philippines alone has seen its base of call center seats providing offshore support increase from under 1,000 in 2000 to more than 6,000 in 2002, according to Forrester Research Inc.

But Gantt thinks there's room to more than double its revenue to $50 million annually and become the top campsite reservation provider in the United States - while still staying in the United States.

In fact he thinks it's a chief way to beat Canadian ReserveAmerica, which now claims that spot.

Tiny plastic flags dot the corners of each cubicle to represent what state each phone specialist serves. U.S. flags mark the desks working on federal contracts.

We would not at all ever consider moving our call centers to India to save money, he says. I want everyone to know we're an American company.

The issue almost borders on a moral question to Gantt.

I just don't think that's the right way to do it, says the man whose biggest hobby is collecting and driving Corvettes - one of the first American sports cars.

Winning the federal contract to run all of its campsite reservations is key to pushing that division forward. Spherix's present contract with the National Park Service accounts for close to one-third of its reservation business revenue.

The work is now split between Spherix and ReserveAmerica, but the government wants to combine the operations. Last year it unilaterally gave the work to ReserveAmerica without a bidding process.

Spherix spent $500,000 in legal fees protesting the decision and returning the contract to a competitive bidding process. The company could lose about 100 jobs if it loses the contract, Gantt estimates.

If the government really looks at it fairly they'll see we have the best solution, we have the cheapest price, and we can handle it, he said.

Still Gantt has other aces up his sleeve if the federal contract falls through - the states.

'Patriotic work ethic'

Park manager conferences, phone calls, press releases, system launches. Gantt encourages his business developers to use all those venues to get Spherix's ReserveWorld system before customers' eyes.

The effort helped Spherix score contracts to serve Ohio and Georgia in the last year. The company gained another four states after acquiring a South Dakota reservation firm this month to push that total to 11.