DEFENSE SPENDING EASES DOWNTURN
October 30, 2008 12:36 am

• Military electronic components at Colonial Assembly await a step in the process at the Spotsylvania business. 
• Alan Street packages towels at the Rappahannock Goodwill Industries' laundry facility in Fredericksburg. 
• Carolyn Carona (foreground) assembles electronic components at Colonial Assembly and Design, one of the area businesses with defense contracts. 
• Jack Robinson and Maria Guzman work at Rappahannock Goodwill Industries' laundry, which has contracts with area military bases. 
• Battery adapters used by the military are lined up and packaged at Colonial Assembly and Design in Spotsylvania County. 

By RUSTY DENNEN

Though many parts of the region's economy have been buffeted by the nation's financial storm, one facet--defense--has been a silver lining.

About half a billion dollars in defense procurement contracts flowed to companies in the Fredericksburg area last year, according to the U.S. Department of Defense.

The majority of the money went toward big-ticket items such as weapons systems and computer and technical support at places such as Quantico Marine Corps Base, Naval Support Facility Dahlgren and Fort A.P. Hill.

But money is also flowing to hundreds of area companies for goods and services such as laundry, food, office supplies, construction and waste disposal.

"This is a real case of the strong getting stronger and the weak getting weaker," said Stephen Fuller, director of the George Mason University Center for Regional Analysis.

Because of its proximity to the seat of government, its numerous military bases and other factors, Virginia has been a magnet for defense contractors, Fuller says. Many area workers commute to jobs at the Pentagon, Fort Belvoir and a host of other defense jobs in Northern Virginia.

Fredericksburg has been drawing its share of government contractors. Four years ago, according to the Fredericksburg Regional Alliance, there were about 350 contractors; today there are more than 800. Most do business with the military.

"All of that contracting is important, and you're building on a nice base there," Fuller said, and as a result, "it's given the Fredericksburg region an economy stronger than its population would have supported on its own."

Virginia receives more federal money per capita than any other state, according to the Consolidated Federal Funds Report for 2007. That amounted to $45 billion last year. About 12 percent of the total was defense related.

The numbers are reflected in the money flowing to companies here.

For example, BAE Systems Technology Solutions & Services, a subsidiary of the global defense firm, in September won a five-year $175 million Joint Expeditionary forensics facilities contract with the Navy.

Most of the work will be done at Dahlgren. The company employs about 220 people in King George County in an office near the base.

BAE spokesman Scott Fazekas said the company will design, develop and deploy mobile forensics labs to troops throughout the world. He described it as "C.S.I. for the military."

BAE is supporting research on Dahlgren's rail gun, which "shoots" a projectile at great speed with an electromagnetic pulse rather than gunpowder.

In July, the company won a $94 million contract with the Marines for its Operational Test and Evaluation Activity Omnibus Support program. Fifty employees are expected to be working in the company's Stafford office on the five-year contract by January 2009.

"We support the Marines when they evaluate equipment," said BAE spokesman Greg Caires.

Even in a slow economy, the demand for military work--and specialized workers--is steady. On a recent weekend, for example, 11 companies were advertising for engineers, administrators and analysts in The Free Lance-Star classifieds.

Another indication of the growth in the sector: The Quantico Government Contractors Association held its kickoff meeting earlier this month at the National Museum of the Marine Corps.

There's much more to military contracting than research and development, computer software, bombs and bullets.

According to the governmentcontractswon.com Web site, which lists defense contracts by locality, Rappahannock Goodwill Industries in Fredericksburg won 61 contracts worth $10.7 million from 2000 to 2007.

The nonprofit, which employs disabled workers, provides laundry and custodial services to the military, said Woody Van Valkenburgh, president and chief executive officer.

"We've been doing custodial work for Quantico since 1982. Holding a contract that long says something about the quality of our service," Van Valkenburgh said.

RGI's commercial laundry does washing and dry-cleaning for A.P. Hill, the Marines, Fort Belvoir, and for clients on other bases in Maryland and Virginia.

GMU's Fuller says the payroll from contractors gives local economies an added cushion, regardless of the outcome of the presidential election or what happens on Wall Street.

"Virginia has gotten such a large share of procurement contracting on its merits and not because of politics," Fuller said. "This is the economy that doesn't go away in a business cycle."

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