08 February 2010: Jamestown Sun
By Mike Nowatzki
During his nearly 30 years in the defense contracting business, Tim Pribula has seen the ups and downs of military spending, depending on who’s in office and whether the nation is at war.
But the current economic slump doesn’t appear to be slowing down his company, American Defense Industries in Grand Forks.
“As far as the recession, that really hasn’t affected us at all,” Pribula said. “In fact, in the last year, we have grown probably 30 percent.”
A study released last week by the International Institute for Strategic Studies, a London-based think tank, found that overall spending on soldiers, weapons and war has been largely unaffected by the recession, The Associated Press reported.
A Forum review of Department of Defense contracts awarded to North Dakota vendors found the flow of defense dollars to the state has remained strong since taking a leap after the 9/11 terrorist attacks and the U.S. military action that followed.
In the seven years prior to the 2001 attacks, North Dakota vendors took in an average of $76.4 million in DOD contracts annually.
In the eight years since, the annual average has jumped to $122.9 million, an increase of more than 60 percent, according to the Federal Procurement Data System, which tracks federal contract awards.
Those figures don’t include contracts awarded by the U.S. Army Corps of Engineers, which are often for civilian work such as infrastructure upgrades and flood control projects.
North Dakota’s largest recipient of DOD contracts over the past five years was RMR Joint Venture, a team of three general contractors from Minot that received more than $243 million to replace family housing at Minot Air Force Base.
The list of DOD contract recipients is top-heavy with vendors in the areas of construction, utilities and food – basic services that keep the military running here at home.
But also peppering the list are a number of companies that play unique roles in making sure the military has the equipment and tools it needs.
President Barack Obama’s proposed budget for fiscal year 2011, released last week, provides $548.9 billion for the Department of Defense, a 3.4 percent increase over the 2010 budget, according to the White House.
That’s potentially a good thing for businesses such as West Fargo’s Mid-America Aviation, which repairs and overhauls parts for military aircraft, said Randall Herman, chief operating officer.
“There’s more water in the bucket, so more people can get wet,” he said.
Saving aging aircraft
If Arizona’s Davis-Monthan Air Force Base is the graveyard for U.S. military aircraft, then West Fargo’s Mid-America Aviation Inc. could be considered one of the hospitals that keep older aircraft flying.
When manufacturers stop supporting their older aircraft, the military looks to Mid-America’s team of 32 employees to refurbish parts from the aircraft.
The company is a licensed Federal Aviation Administration repair station and military servicing facility.
Defense-related work makes up “95 to 98 percent of our business,” said president and CEO Tom Kenville, who moved the firm to North Dakota from Long Island, N.Y., in 1992.
The company has landed more than $40 million in Department of Defense contracts since October 2004. Currently, it’s overhauling wing flap motors for the nation’s fleet of KC-135 Stratotankers.
The parts undergo a thorough cleaning, meticulous inspection and, if necessary, repairs and testing, with each step carefully documented.
“Traceability is really important,” Herman said.
Mid-America Aviation completed a five-year contract in May, and Kenville is optimistic about its future, given the military’s aging aircraft fleet.
The recession hasn’t negatively affected the DOD-driven business, he said.
“We tell our employees to quit watching TV, quit reading the papers, come to work and give us a good job and life will be just fine,” he said.
Electric motorcars
The days of generals zipping across military bases in noisy, gas-powered jeeps may be numbered, if this Fargo-based Global Electric Motorcars LLC has anything to say about it.
The company has received more than $9.5 million in Department of Defense contracts since 2003.
The company’s Web site describes why: “Military bases, garrisons, and installations find that GEM battery-electric vehicles are an ideal solution for a variety of base transportation needs. GEM cars help you achieve the 20 percent fuel reduction directive as required by Executive Order 13149 because they are electric and require no fuel.”
GEM’s parent company, Chrysler Group LLC, declined to comment on specific work it does for the DOD, instead issuing a statement through spokesman Nick Cappa.
“We have been working with the DOD since 2003, and as fuel efficiency and reducing emissions have become increasingly important, our customers, including the DOD, have found more and more uses for GEM vehicles in their daily operations,” it stated.
Producing vehicle parts
Inside in a tan steel building along U.S. Highway 2 west of Grand Forks, American Defense Industries workers produce the parts that keep Hum-Vees and other military vehicles humming along safely.
The metalworking business makes parts for trucks, tanks and Hum-Vees, including armor plating kits, seats, doors, hoods, truck boxes and trailers, said Tim Pribula, president and CEO.
“We’re almost 100 percent defense contracting,” he said.
Since Pribula left Pribbs Steel and Manufacturing Inc. to found ADI in 2004, the company has received more than $8.5 million in Department of Defense contracts, according to the Federal Procurement Data System. However, Pribula said the total is closer to $13 million.
The company has grown from 12 to 50 employees since it started. It recently expanded with a roughly 25,000-square-foot addition, bringing its total square footage to 58,000, he said.
ADI completed about 400 contracts last year and is on pace for 400 to 500 this year, Pribula said.
“Going forward, we have a huge backlog,” he said.
Symbol of diversity
What started in 1990 as a manufacturer of cables and wire harnesses for military weapons systems has blossomed into a diverse business that garnered $65.7 million in DOD contracts for Mandaree Enterprise Corp. over the past five years, more than any other non-construction contractor in the state.
Located on the Fort Berthold Reservation in western North Dakota, Mandaree Enterprise is owned by the Three Affiliated Tribes.
In addition to making cables and wire harnesses, the business conducts research and development in power technologies such as wind, solar and hydrogen and in anti-corrosion surfaces for aircraft, said Clarence O’Berry, president and CEO.
The company has worked to obtain several small business statuses, allowing it to reap the rewards of big contracts that require a share of the work to be subcontracted, he said.
“As a result of leveraging those small business initiatives, we focus on large business, federal government and DOD, and the beauty of those three targets is they buy everything. They buy toothpaste, toilet paper, cars, launch things into space. You can’t name an industry I can’t figure out an angle on,” O’Berry said.
DOD contracts comprise about half of Mandaree Enterprise Corp.’s overall contract work, he said.
“Even though nationwide the economy looks pretty bad and has affected a lot of folks, it has little impact on what we do,” he said.
