As Small Business Week draws to a close, there’s no question about the great importance of small businesses in Colorado Springs and their ties to another major economic driver: defense.
Small businesses contribute 65 percent of new jobs in the U.S., and defense activity produces $27 billion for the state economy — small business contracts with local military bases mean big money and bigger impact.
Schriever Air Force Base
Small businesses receive 90 percent of the contracts at Schriever Air Force Base — and the small base packs an outsized economic punch for the Colorado Springs small-business community.
“When you look at our economic impact, we’re up there with Peterson [Air Force Base] and the Air Force Academy,” said Col. Deanna Burt, commander of the 50th Space Wing.
According to numbers from Schriever, the base brings $1.2 billion annually to the local economy in terms of jobs, construction projects, services, as well as equipment and supplies.
The Air Force base, home to the Global Positioning System, Missile Defense Agency and satellite command and control systems, relies heavily on contractors, she said.
And that reliance means small businesses get a big portion of the work, thanks to a Department of Defense directive that sets goals for bases to use smaller companies in their work. Schriever spends $135 million on outside contractors a year. Of that, $61.4 million goes to small businesses.
“We have goals, and while I say I don’t care about goals — that’s not why we do this — I’m also proud to say Schriever has met its goals for the past three years,” said Paul Aldrich, 50th Space Wing director of small business programs.
The Air Force breaks up the goals by the size of the base and the work performed there, he said. For 2016, Schriever is supposed to grant 48.6 percent of its contract dollars to small businesses.
“It can get complicated,” Aldrich said. “What’s a small business? In some cases, the Small Business Administration says it’s about the number of employees, but in a lot of the cases we see here, it’s about the size of its revenue.”
His main goal, he says, is to help more small businesses get work at Schriever. But his efforts don’t stop there. He works with his counterparts at Peterson Air Force Base and the Air Force Academy to educate business owners about opportunities with the Air Force.
“We work with the PTAC [Colorado Procurement Technical Assistance Center],” he said. “And we get together once a month to let people know what we have and how we can connect. It started in an office at Peterson, but we were having to turn people away, so it’s at Colorado Technical University now.”
Aldrich says his favorite part of the job is making connections between businesses and making sure small businesses get a fair share of the economic boon that the military base brings with it.
Air Force Space Command bases in Colorado are at Buckley Air Force Base, Peterson AFB, Schriever AFB and Cheyenne Mountain Air Force Station.
So far, for fiscal year 2016, $267 million has gone toward small business across bases. And last year, $636 million went to small business, according to Lori Houghton, AFSPC director of small business.
“A lot of spending is during third and fourth quarters of the fiscal year, so I expect to exceed last year’s amount,” she said.
So far, Peterson Air Force Base has obligated $32 million to small business, representing 75 percent of its available contract dollars. Last year, it obligated $108 million to small business, representing 52 percent of available contract dollars.
Throughout the contracting process, AFSPC Small Business conducts market research to identify capable companies to provide services from janitorial to monitoring satellites.
“Some companies know how to do business with government and some don’t, so it’s very focused research,” she said.
Small businesses continue to add more new jobs than large businesses and have contributed to most job growth, Houghton said.
“There is no segment of society that small business can’t play a role in,” she said. “If you want employment numbers to better, hire small businesses.”
Small businesses also produce more patents and tend to be more agile, she said.
“The owner or president of the company tends to be more accessible, allowing small businesses to make changes quickly,” Houghton said.
AFSPC Small Business sets up a booth at the Space Symposium every year and attends the joint meeting at CTU every month.
“It’s a very dynamic program and our personnel work very closely with our contractors and end users,” she said.
A sampling of Colorado Springs small businesses with military contracts includes Intecon, which provides support to U.S. Northern Command and North American Aerospace Defense Command; Pate Construction, which provides support to Peterson, Schriever, Fort Carson, Cheyenne Mountain, Air Force Academy and Buckley; Mirador-NASCO [The North American Strategy for Competitiveness] joint venture, which provides construction services at Peterson, Schriever, Fort Carson, Cheyenne Mountain, Air Force Academy and Buckley; and S4, which provides support to NORAD and USNORTHCOM.
Infinity Systems Engineering holds three prime contracts and 12 subcontracts with Colorado Springs Air Force bases — most are at Schriever.
The company, established in 1996, is headquartered in Colorado Springs and has approximately 165 employees, 160 are tied to government contracts. Infinity provides service to GPS and military satellite communications-related systems.
“Government contracts are a good piece of revenue for the company,” said Jay Kvale, vice president of programs at Infinity.
The business is the principal contractor at Peterson for space logistics infrastructure support services, valued at $32 million.
“The flip contract, awarded in 2013, is [one of] our bigger prime contracts that is doing well for the company,” Kvale said.
The company also has a subcontract with Raytheon through 2025 with an overall value of $50 million.
Ultimately, good relations and contracts among small business and government is beneficial to both parties, according to Kvale.
“Most of our staff are prior military,” Kvale said. “In the contracting world, the efforts by our personnel with GPS, MILSTATCOM initiatives help the government keep the U.S. safe. We’re indirectly supporting wartime initiatives.”
And there’s no lack of opportunity for defense contracts in Colorado Springs, Kvale said.
“Each of the bases and contract offices look to do small business initiatives which allow small business to compete amongst other small businesses, within our realm,” Kvale said.