Johnstown, Pa.-area businesses Friday announced about $157 million in federal contract awards that were made in a competitive environment where federal spending is under a microscope and the phrase “budget sequestration” is still a looming concern.
Concurrent Technologies Corp., a nonprofit research and development firm, secured more than $28.2 million in separate contracts with the Office of Naval Research, USDA Forest Service and the Army Space and Missile Defense Command. It also was awarded two “indefinite delivery, indefinite quantity” contracts with the General Services Administration and the Navy, meaning those companies that are awarded the contract will later compete for tasks issued during a set time period.
“A number of these awards are ‘follow-ons’ or options extended on existing contracts,” said Edward Sheehan, CEO of Concurrent, an international company with locations in Johnstown, Pittsburgh and Indiana, Pa. Concurrent was founded in Johnstown. “That is excellent for job retention.”
“The budget for projects like this has been declining,” Mr. Sheehan said. “It’s more competitive, and the pie is smaller.”
Speaking Friday morning at the 24th Annual Showcase for Commerce event, which connects businesses and universities with government contracting opportunities, Sen. Jack Reed, D-R.I., cautioned that times have changed since 2013 when automatic federal budget cuts, known as sequestration, slashed spending across the board. The pullback means more businesses are competing for a smaller pool of projects.
“You not only have to be on time, but now you have to be ahead of schedule,” said Mr. Reed. “You not only have to be on budget, but continuing to find ways to bring your budget down.”
Mr. Reed said “tough choices” will have to be made in the spring during the next round of budget negotiations.
According to Deltek, a Herndon, Va.-based firm that analyzes the government contracting market, the president’s fiscal year 2014 budget request shows a decline in spending from $647 billion in FY 2013 to $608 billion in FY 2015.
Other announced contracts:
• Johnstown-based JWF Defense Systems was awarded a seven-year $35 million contract from General Dynamics to supply vehicle frames for a military vehicle program. It’s part of a $562 million contract from the U.S. Special Operation Command to build a fleet of fast, lightweight combat vehicles.
“A contract like this doesn’t happen overnight,” said William Polacek, CEO for JWF. “We started on this road in 2012 … This is a step in a long road that will bring a lot of jobs to Johnstown, not just for my organization, but for suppliers near Johnstown.”
Mr. Polacek said the company plans to hire five to six people this year and 35 to 40 over the term of the contract.
• Martin-Baker America, a London-based manufacturer of ejection seats and other safety equipment with a location in Johnstown, received a two-year, $4 million extension of an existing contract to provide ejection spare parts for the U.S. The company also received a three-year, $2.8 million contract for spare drogue parachute canisters.
• Ebensburg-based L. Robert Kimball has been hired by the Pennsylvania Department of General Services to design a new state police department headquarters in Erie for $850,000.
• Kongsberg, an international technology company, won an $86 million contract from the Army to build new and repair existing M153 Common Remotely Operated Weapon Station at its Johnstown facility. The facility has produced over 10,000 CROW systems since 2007.
Despite the good news, the contracting sector will be keeping its eyes on Washington.
“There is a concern about the impact of sequestration on defense and other areas of the government,” Sen. Bob Casey D-Pa., told the crowd. “I think there was a disbelief prior to sequestration that this wouldn’t happen. It hadn’t been seen before.
”Now that it’s happened, there’s a greater awareness of the real impact it has. That should awaken a real concern about avoiding it in the future.”
Stephanie Ritenbaugh: firstname.lastname@example.org or 412-263-4910.