Wisconsin businesses securing more federal contracts

Daily Reporter (Milwaukee), Apr 10, 2007 by Sean Ryan

The growing amount of federal contracts going to Wisconsin businesses is mostly because of the Department of Defense.

In 2005, Wisconsin companies received $3.3 billion in federal contracts, ranking 37th among the 50 states and surpassing Michigan, Illinois, Iowa and Minnesota, according to the Wisconsin Procurement Institute. Defense contracts accounted for 77 percent of the total dollars, compared to 45 percent in 1999.

"We've always been strong in defense," said Aina Vilunsons, executive director of the Wisconsin Procurement Institute. "You've got a number of players that are showing a large increase."

The increase in DOD contracts from $1.7 billion in 2004 to $2.5 billion in 2005 helped Wisconsin break the 40th ranking among states for the first time in a long while, Vilunsons said.

Both companies receiving the Governor's Award for Federal Procurement, which was created this year, are defense contractors.

Milwaukee-based Astronautics Corp. of America received the governor's Federal Procurement Award for large businesses. The company makes operations consoles for frigates and submarines, and computers, displays, controls and navigation components for airplanes and tanks. Sources from the company were not available for comment.

McNally Industries, which won the procurement award for small businesses, has been around for 67 years but has grown between 25 and 30 percent a year over the past five years, said Don Erickson, senior vice president of marketing. The Grantsburg-based company in 2005 spent $3.1 million updating its equipment and increased its employment from 70 to 105 employees.

"We'll probably need to add between 10 and 15 people next year," he said. "The future looks very bright."

McNally has a long-term contract with the U.S. Navy to replace the Mark 6 ammo hoist in the fleet's destroyers and 23 cruisers over the next decade. It has made $100 million on Mark 6 contracts since 1987. It has a contract with the Army to engineer helicopter components, and makes $6 million in revenue a year by manufacturing parts for the Bushmaster Chain Gun.

"Virtually every land combat vehicle in the fleet has got a Bushmaster chain gun on it," Erickson said. "We manufacture about 15 of the most complicated components in the gun."

Despite the recent increases, Erickson said McNally's contracts aren't impacted by conflicts like the war in Iraq. McNally's contracts are to service and modernize existing equipment, not to create new gear.

"The world conflicts have minimal impact on our business," he said.

The Department of Commerce, which gave McNally $335,000 in tax credits to help with its 2005 expansion, isn't specifically targeting the defense industry, said Secretary Mary Burke. The amount of money the state receives from the federal government is going up across the board, she said.

"It's a very significant part of our economy, so I think it's important that whether it's federal contracts or entitlement dollars, that we go after that," Burke said. "Certainly (defense contracts) help us and we have some companies that are strong in that area."

The Wisconsin Procurement Institute has organized a meeting on Thursday between construction contractors and Congressman Ron Kind so the businesses can ask him for help securing more federal contracts. The meeting will be at Fort McCoy, which is in the midst of an extensive remodeling and renovation. It also organized a B2Gconnect program that sends procurement experts from larger contractors to give small businesses tips on how to land federal contracts.