For some distributors, the U.S. military is just another customer—but a very important one.
MHEDA members are a vital component of the business of the U.S. military and the federal government. Distributors from coast to coast are involved in supplying equipment and service to military bases, defense contractors and other military and government-related entities. All of them play an integral role in the business of keeping our nation’s defense strong.
Aiding America’s Defense
MHEDA members do business with an array of military and government customers, for a variety of purposes. Anywhere the U.S. military is operating, MHEDA members are likely playing a role.
Supplies & Services, Inc. (San Juan, PR) at one time had a contract with Puerto Rico’s Roosevelt Roads Naval Base, working with forklifts and overhead cranes, which the Navy used to set up heavy targets for its ordnance training operations on Viaquez, an island just off the coast of Puerto Rico. “Then they closed Viaquez down, and the Navy pulled out,” says Operations Manager Mark Gilbert. “Obviously, that affected us.” Luckily for Supplies & Services, however, when the naval base shut down, much of its equipment was transferred to Fort Buchanan, an Army installation in San Juan. Thanks to Supplies & Services’ relationship with Roosevelt Roads, the company was able to secure a new contract with Fort Buchanan five years ago to provide maintenance for the base commissary’s fleet of Yale forklifts.
“We do turnkey warehouse systems for storage or distribution centers, primarily for the military,” says Mark Juelich, director of American Warehouse Systems, a division of Toyota-Lift of Minnesota (Minneapolis, MN). “We sell all over the world. If the federal government is there, we sell to them.” About 90 percent of the company’s business is with the government, with the Department of Defense as its biggest customer and the Air Force the largest segment of its defense business. Currently, American Warehouse Systems is designing the Airborne Rangers distribution center from which surgical units are sent to troops overseas.
Sunbelt Industrial Trucks (Dallas, TX) regularly monitors government procurement sites, and the company recently began selling forklifts to the Army installation at Fort Hood. “Fort Hood is probably 120 miles down the road from us, so it’s a little farther away than we can service,” says CEO Warren Cornil. “Often the Army wants to do its own service.”
Cardinal Carryor (Louisville, KY) provides service to Fort Knox and equipment to the Blue Grass Army Depot in Lexington, Kentucky. “We’ve sold everything: forklifts, racks, vertical carousels and docks,” says President Michael Brumleve. The company also does some work with government contractors, including one that does much of the subcontract work for the FAA regarding security issues at airports.
“The government is a pretty big chunk of our business,” says Richard Sinclair, president/CEO of Jefferds Corporation (St. Albans, WV). Jefferds’ government work is primarily with federal prisons, but the company also does some work with National Guard and Army Reserve facilities. In most cases, Jefferds Corporation services forklifts the facilities have purchased via a separate contract. “A typical government installation generally doesn’t have the personnel to service the equipment, so they want to have a PM arrangement set up where somebody comes in and ensures that the forklift is safe for use,” says Sinclair. Jefferds Corporation regularly services equipment at a women’s prison in Alderson, West Virginia, the Army installation at Fort Campbell, Kentucky, and the Mine Safety and Health Administration, headquartered in Beckley, West Virginia, among other facilities. The company recently also received a contract to install new doors on the hangars at the Army Air National Guard facility in Martinsburg, West Virginia. “They’re upgrading from C-130s to C-5 aircraft, which is the largest aircraft the military uses, so there’s a huge conversion underway in the size of the hangar,” says Sinclair.
CFE Equipment Corporation‘s location in Norfolk, Virginia, naturally lends itself to work with the Navy. “We do business with the Norfolk Naval Shipyard in Portsmouth and the Naval operations base in Norfolk,” says Assistant General Manager Sherry Williams. CFE primarily rents forklifts to the Navy, with an average of 10 to 12 on contract at any one time. “When the ships come in from overseas, they come into the ports in Norfolk, and then the forklifts are used on board the ships,” says Williams. “But the forklifts don’t travel on the ships. They usually stay here on the bases.”
Just Your Average Customer…
What’s it like doing business with Uncle Sam? In some ways, distributors say, working with military customers is very much like doing business with any other customer.
“It’s pretty routine business,” says Sinclair. “Once you know what to look for in the federal government’s contract language, it’s not all that onerous.”
“It’s almost impossible to get a contract,” says Brumleve. “But once you do, it’s just like any other sales job, making a call and at some point getting hold of the right contact.”
…With a Few Differences
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. “As you can imagine, with any government contract, there is a lot of paperwork we must comply with,” says Gilbert. “But if you can get through all the bureaucracy and red tape, the payoff is pretty good. We get a lot of business from the Army, and they pay on time. They’re one of our best customers.”
“We have to be meticulous on a legal level with government contracts,” notes Brumleve. “It can cost a lot of money to do government business because there are so many laws that have to be adhered to. I hired an attorney just to go over all the details. We have to cross every T and dot every I in triplicate.”
Security is also an increasingly important concern in a post-9/11 world. The Army required background checks of all of Gilbert’s employees before the company could begin work at Fort Buchanan, while Jefferds Corporation quickly realized that “security” takes on a whole new meaning when working with federal prisons. “When our employees go into a maximum security prison, they have to go through the whole shakedown process,” says Sinclair. “We don’t go into the compound itself, but typically they’ll bring the truck into a guarded area and perform a very thorough inspection to make sure we don’t have anybody else inside.”
Sometimes material handling distributors work directly with local military or government installations, but other times military contracts go through the General Services Administration (GSA), which acquires products and services on behalf of federal agencies. Sunbelt Industrial Trucks found out only after the company had put together a bid that its contract with Fort Hood was through the GSA, and Sunbelt was not GSA-certified. “We had to involve another dealer, Lift Services in Tuscumbia, Alabama, because they’re the authorized GSA government rep for Komatsu,” says Cornil. “We ended up splitting the deal with Lift Services.”
“Government people prefer to deal through a GSA contract because it eliminates an enormous amount of red tape,” says Brumleve. “If you tell a government employee that you have a GSA contract, 50 percent of the battle is done.”
Getting a government contract can be a long, drawn-out process. “It literally can take years to get a contract for one product,” says Juelich. “It’s not just bidding on a job and getting awarded a job. There is no easy, one-minute answer to how to get that contract. You can even hire people to get contracts for you.” American Warehouse Systems’ contract with the GSA designates the company as the sole provider of turnkey systems to the government. “Dealers who are trying to get into the government market can come to us and sell under our GSA contract,” says Juelich. “We have a network of about 30 dealers across the country that we work with on government contracts.”
Another aspect to keep in mind when it comes to pursuing government contracts is that price is a major factor. “You have to be very competitive price-wise when you’re dealing with the government,” notes Williams. Agrees Cornil, “The low bid wins. It’s not really a relationship, per se.”
By contrast, Brumleve describes the government as “a very interesting anomaly. It’s very difficult to get in, but if you do get in and do an excellent job, they’ll hardly ever get rid of you because it’s so incredibly difficult to get a contractor approved. If you’re not causing any waves, they don’t care as much about how much it costs. Working with the military is a wonderful opportunity, but you have to be 100 percent committed to it.”
Supporting Servicemen and Women
When it comes to working with the military, MHEDA members take pride in the goods and services they’re able to provide. The material handling industry contributes at all levels of military operations, and the results of those efforts can be found all over the world, supporting the efforts of our servicemen and women.
Gilbert echoes the sentiments of many MHEDA members when he says, “We’re very pro-military at Supplies & Services, Inc. We’re happy to support our fighting men and women. It’s good for us and it’s good for them.”
Long may that good work continue.