Eastern CT businesses talk defense contracting, program challenges with SBA administrator
Mashantucket ― In a visit Monday to southeastern Connecticut, Small Business Administration Administrator Isabella Casillas Guzman heard from local business owners and economic development officials about the challenges they have faced with government contracting and with accessing different SBA programs.
Guzman met with about two dozen people at a roundtable at Foxwoods Resort Casino, after meeting with casino officials to talk about their future and diversification, and before visiting Electric Boat and Olio Restaurant & Bar in Groton and Sift Bake Shop in Mystic. Rep. Joe Courtney, D-2nd District, hosted Guzman for the tour.
While participants shared examples of past difficulties accessing SBA programs, Guzman said changes are being made, and that several businesses approached her after to say how impactful SBA programs have been.
The visit comes amid workforce development efforts both to support submarine production at Electric Boat and the nascent offshore wind industry in the region.
Cindy Hersom, owner of DICIN Electric Company in Waterford, said since its founding, the company has wired all five new piers at the Naval Submarine Base in Groton.
But DICIN had not worked with Electric Boat before 2019, when Hersom participated in a supplier event with EB and got help from a Procurement Technical Assistance Center, now known as an APEX Accelerator. Since 2019, DICIN has done more than $2 million in electrical work for EB.
Hersom said DICIN is now feeling a “COVID hangover” in supply chain issues: The company has to wait to get certain components, and Hersom would appreciate any help from the federal government.
Chris Jewell, president of Bozrah manufacturer Collins & Jewell, noted that companies working with the Department of Defense can sometimes jump the line for national security reasons. Jewell also alluded to the COVID hangover: He initially felt bad about getting a Paycheck Protection Program loan because it wasn’t needed, but a year later, he saw the pandemic impact and was grateful for that money.
Jewell explained that prior to the Great Recession, only about 10 to 15% of Collins & Jewell’s business was government contracting. But when people stopped buying cars and building houses, the company pivoted to doing work for Electric Boat, which is now 80% of its business.
Being a government contractor has required hiring more office people, which meant that once private-sector business bounced back, “we kind of priced ourselves out of that market,” Jewell said. But with the EB work, he said that’s OK.
Jewell also said the Cybersecurity Maturity Model Certification (CMMC), a framework to protect the defense industrial base from cyberattacks, “is a heavy lift for small businesses.”
Donna Hunneycut, chief business integration and risk officer for Command Holdings, said Command Holdings spent more than $1 million on the implementation of CMMC, which most small businesses can’t afford.
When it comes to CMMC, Guzman said SBA is looking at how to leverage best practices around the country and provide free resources through its existing programs. SBA is also looking at regulatory reform to create simpler products and a broader distribution network for 7(a), its most common loan program.
Jewell said he is glad to hear 7(a) is being looked at, because it was an “incredibly lengthy” process and he had to send financial statements six times over 18 months, even though not much changed.
Guzman said the country has seen a decline over the past decade in the number of small businesses participating in government contracting, and she wanted to convene small business owners to see what policies SBA could advance to increase contracting.
“We know a lot of businesses need technical assistance to know how to bid on contracts, how to get contracts ready,” Guzman said.
Bob Ross, executive director of the Connecticut Office of Military Affairs, rattled off some figures to illustrate the scope of defense contracting in the state: Connecticut has received an average of $13 billion a year in prime contracts from the Department of Defense, and the state ranks fourth in the nation for defense spending as a percentage of state gross domestic product.
The roundtable included discussion not only of defense contracts, but also of the offshore wind supply chain.
Paul Whitescarver, executive director of the Southeastern Connecticut Enterprise Region (seCTer), said he has learned that the pivot for the wind power supply chain coming to southeastern Connecticut is probably a few years off, and that the region needs to figure out how to get existing offshore wind suppliers in Europe to want to move their supply chain here.
Editor’s note: This version has been updated to include the latest figure on defense spending as a percentage of state GDP.