By COREY DAVIS
Staff Writer, Rocky Mount Telegram
Friday, March 16, 2018
With cutbacks in the federal defense budget, small businesses dependent on military contracts must find different ways to bring in revenue.
A strategy created last year called the North Carolina Defense Industry Diversification Initiative has been implemented to help the state’s defense-reliant industries expand beyond their military contracts.
The initiative is funded through a grant from the U.S. Department of Defense Office of Economic Adjustment. The North Carolina Defense Industry Diversification Initiative is managed through a partnership by the N.C. Department of Military and Veterans Affairs and N.C. State University’s Industry Expansion Solutions, a unit of N.C. State University, which helps organizations or companies grow, innovate and prosper, according to the organization’s website.
The initiative was highlighted during the first of several town hall meetings across the state on Wednesday at the Gateway Technology Center on the campus of N.C. Wesleyan College. The event was titled “Prime and Ready: NC DIDI Eastern Defense Contractors and Suppliers Town Hall.”
The forum included information about resources specific to stakeholders in Eastern and Northeastern North Carolina. The attendance included leading Department of Defense contracting companies, economic development officers and procurement experts, who discussed solutions to the challenges faced by businesses that contract or subcontract with the U.S. Department of Defense.
The forum highlighted an update of companies that have taken part in the initiative’s Commercialization Pilot Project, which allows defense-connected clients to receive an assessment of their growth potential.
“A lot of these small businesses are working every day to manufacture and supply services,” said Michael Mullins, regional manager for the military segment of N.C. State’s Industry Expansion Solutions. “They don’t have the time, resources and the ability to go out there to identify alternative markets and how to take what they’re currently manufacturing and adjust it slightly into a different market.”
Babington Technology in Rocky Mount, a metal fabrication company, is one of 10 Department of Defense-certified contractor companies in the pilot program. Babington has operated in Rocky Mount since acquiring a manufacturing facility in 2006.
Babington’s products have attracted military buyers since the early 1990s, which includes the development of clean-burning fuel for military applications such as cooking hot meals for soldiers.
The pilot program criteria include being a prime defense contractor or subcontractor being affected by defense budget reductions and having at least 10 percent business revenue derived from Department of Defense contracts with at least a 5 percent decrease in sales, production or employment due to a reduction in defense contracts. All of this has to have happened in the past two years.
Austin Bachman, director of sales, marketing and business at Babington Technology, said the economic downturn and sequestration has affected the company over the years, which has resulted in some loss in employment. He said Babington is in the early stages of the program, but he believes the program will help the company be able to have the opportunity to diversify and obtain projects in the commercial sector.
“Disaster relief and humanitarian relief equipment is definitely one area we’re looking at to diversify,” Babington said. “What they’re doing is going to help us identify those markets that make the best sense for us to pursue.”