Michael Herson in the News

http://ebird.osd.mil/ebird2/ebfiles/e20110805834758.html

Bloomberg Government (bgov.com): By Roxana Tiron and Brendan McGarry, Bloomberg News

August 4, 2011
Brook Reinhold was riding in an armored truck last July with soldiers of the 82nd Airborne Division in Kandahar, Afghanistan, when the vehicle’s gunner stood to look out of the turret. As he moved into position, the gunner inadvertently stepped on an antenna cable, shorting out the vehicle’s radio.

The soldiers were steamed. Reinhold wasn’t. He did what he always does in situations like this. He snapped a few photos on his BlackBerry and e-mailed them to a team of engineers in Rochester, N.Y. He asked them to come up with a metal shield to cover the wires.

Reinhold isn’t a soldier. He’s a salesman, one of about 40 Harris Corp. employees who have spent months alongside troops while looking for small product opportunities that can lead to big profits for the defense contractor.

Over the last decade, U.S. defense contractors such as Harris of Melbourne, Florida, and truck-makers Oshkosh Corp. of Oshkosh, Wisconsin, and Navistar International Corp. of Warrenville, Illinois, have dispatched engineers and sales personnel, often ex-military, to Iraq and Afghanistan to maintain equipment and promote their gear directly to U.S. troops.

This side of the business is where a lot of the money can be made, and where it’s often easiest for contractors to quickly penetrate — or even sidestep — the Pentagon’s forbidding bureaucracy. More sales representatives may start showing up in war zones and at stateside bases as lawmakers consider shrinking the defense budget by more than $400 billion over the next decade.

“You have to cast your net as wide as you can and create opportunity and find out where the trends are,” Michael Herson, president of American Defense International (ADI), a lobbying and business development firm in Washington, D.C., said in a telephone interview.

Reinhold’s observations from Afghanistan led Harris to improve its Falcon III AN/PRC-117G radio system. Another time, back at Fort Bragg in North Carolina, he heard a soldier complain that the knobs on the radio turned too easily if they get bumped. He phoned in that fix, too. The company’s willingness to change its product on the fly has helped it win over commanders in the field and sell more than 10,000 of the radios to the military for $30,000 apiece.

“You’re not going to know what the customer wants unless you’re sitting right there with them at the moment they become aggravated about something,” said Reinhold.

Sending company reps to the field happens “a lot more than you think,” Jay Kimmitt, executive vice-president for government operations and industry relations at Oshkosh, the military’s biggest supplier of blast-resistant trucks.

“There have been a lot of people both in Iraq and Afghanistan, lobbying forward,” said Kimmitt, referring to working in a “forward” area, or war zone. The informal term “lobbying forward” can encompass a range of activities, including sales pitches, technical support, and business development in war zones and at U.S. military bases.

Oshkosh and Navistar, which sold the military thousands of blast-resistant trucks to protect troops from roadside bombs, have hundreds of field representatives whose feedback resulted in improvements, such as vehicle underbody armor and nets designed to increase protection from rocket-propelled grenades.

“We make sure that the trucks are readily available for any mission,” said Archie Massicotte, president of Navistar’s defense unit.

In Afghanistan, companies have representatives “just to sniff out contracts,” said Jeff Raleigh, who spent time in the country as a contractor for the State Department and for Hill & Knowlton, a public relations company with headquarters in New York. “They make the rounds and talk to folks over in Afghanistan to find out what kind of needs people have.”

Jack Kem experienced it when he started his job two years ago as the top civilian representative to the NATO training mission in Afghanistan. He described fending off contractors trying to get an inside track on selling their services and equipment. Kem, who oversees a $12.8 billion Afghan security fund, said he doesn’t allow contractors to see him or his boss, Army Lieutenant General William Caldwell IV, to avoid any appearance of ethical taint.

“I want to be completely clean,” he said.

Often companies are in Iraq and Afghanistan “on their own time and own dime,” said Julie Mattocks, deputy operations manager for Marine Corps Systems Command in Quantico, Virginia. “They are doing that as part of their market research, their own business development.”

Advances in surveillance cameras that helped protect U.S. troops against roadside bombs in Iraq grew out of contractors’ first-hand observations of the dangers, Mattocks said.

A frequent way to boost sales is through “urgent need” requests that commanders send to the Pentagon to fill gaps in equipment and rush gear to war zones. If a salesman can convince a commander to put in a request for his company’s product, it can mean a quick contract without the usual red tape.

Contractors “are very important members of the team when it comes to meeting war-fighter needs rapidly,” Pentagon spokeswoman Cheryl Irwin said in an e-mailed statement.

Since 2004, the Pentagon has processed almost 500 “joint urgent operational needs” requests while the services and other task forces “have collectively supported thousands of initiatives” to fulfill immediate needs, Irwin said.

Rush orders also sometimes lead to redundant equipment, as company reps working different parts of the country push competing products. At least 31 entities, from the Pentagon’s Joint Staff to various program offices to Special Operations Command, play a role in processing urgent needs, according to a Government Accountability Office report from March. The department spent at least $77 billion on filling the requests, according to the GAO.

Colonel Jim Carpenter, who served in Afghanistan last year, said that for a time the Army was buying multiple versions of the same kind of radio, including Harris’ RF-7800W and the AN-80i model by Redline Communications Group Inc. of Markham, Canada.

“When I left Afghanistan last summer,” Carpenter says, “I would have vendors come see me, try to sell me other products that do that same thing.”

More common, Carpenter said, are vendor visits to troops in the U.S. starting eight to 10 months before they deploy. “That’s when they’ll try to hit you up to buy their products,” he said. “There are some that will come into theater, but that’s a little bit more controlled because there’s a vetting process they have to go through to get clearance.”

Bruce DeWitt, a vice-president with Alliant Techsystems Inc., says relationships his company cultivated at stateside military bases, such as Fort Sill, Oklahoma; Fort Benning, Georgia; and Fort Bragg, North Carolina, helped it to win a $65.8 million contract to test its XM-25 advanced grenade launcher, nicknamed “the Punisher.” Soldiers in Afghanistan are evaluating the weapon. Alliant also won a contract for a GPS-guided 120mm mortar as a result of an operational need statement.

DeWitt, an Air Force Academy graduate, describes his company’s approach to military sales as “business development on steroids.”

Likewise, Harris has offices outside bases and is expanding to Fort Bliss in El Paso, Tex., where the Army is testing communications gear.

The sprawling outpost in Texas “has become the center of the universe for Army modernization,” Dennis Moran, vice president of government business development for Harris, said in a telephone interview. “Companies that want to play in that have got to be present.”

For years, defense contractors counted on Congress to protect them from big Pentagon cuts. “The numbers are going to get so tight,” says Oshkosh’s Kimmitt. Hoping budget cutters won’t touch the Pentagon “is a losing strategy.”