Key Logistics Llc

The road to job creation starts with procurement

Obama has spoken eloquently and often on its determination to create jobs in America, and to restrict the practice of single sourcing of the Pentagon. But it seems that the Ministry Defense has not been heard.

Our company, Infrastructure Defense Technologies, LLC ("IDT"), is a manufacturer of protective barriers for the U.S. military. We have seen firsthand how the defense establishment is the destruction of the National Defence Industrial Base by distributing sole source contracts to foreign companies amid the trials of war and economic depression. Here is the history of our company, and a recommendation to the White House on how to fix the continued practice of subcontracting the Pentagon at the expense of jobs U.S. and manufacturing on the homefront.

protective barriers are one of the pillars of the military supply chain, and are deployed in all U.S. bases in Iraq and Afghanistan. For the past seven years, the Defense Logistics Agency (DLA – Support Agency Department of Defence for the provision of protective barrier equipment) purchased more than $ 1 billion of goods from a foreign company on a sole source contract. Worse, our government has paid for these purchases in foreign currency exchange rate unfavorable to American taxpayers.

In 2008, the DLA has been commissioned by the Pentagon brass to find alternatives to the barrier products for foreigners to break the monopoly of a single source, to find a better protection for our deployed troops and increased longevity of service in the field (the foreign product was reported in a memorandum from the U.S. Air Force as "not in as little as six months to a year").

The DLA has responded to the order Pentagon conducting a solicitation of competitive barriers, which requires that the technical characteristics and protection criteria would most important evaluation. The winner is awarded a four-year contract worth $ 400 million.

Product barrier IDT has been held by the Defense Logistics Agency to provide the best protection benefits of the U.S. Army. Our technical proposal was highest rated among all bidders, and our price was determined to be "fair and reasonable. Yet despite these facts, the DLA award the same foreign company, it was a single supplier for the past seven years, continuing their monopoly status in the chain military supply.

IDT quickly filed a formal bid protest with the Government Accountability Office (GAO), and said that the foreign company is ineligible for the award because they did not meet the requirements of the solicitation of DLA. DLA responded our protest by asking the GAO to reject our protest so they can take "corrective measures" …. likely to correct errors they have committed in awarding a vendor ineligible aliens with 400 million U.S. taxpayers treasure.

Well the DLA has had many corrective measures. They have allowed foreign companies to set their offer unacceptable, then rewarded them again.

IDT is based in the President's home state of Illinois. Our town of Belvidere (and the Greater Rockford), has an unemployment rate unenviable 22% (and rising). A prize of success of this contract would have created 250 new high paying jobs in our factory, and one thousand of jobs estimated Further in our supply chain, since 100% of our content is American made.

Then, in the midst of war and economic recession, the DLA has chosen to stick to our soldiers, taxpayers, workers and the industrial base in a coup. They have also taken into consider two major initiatives of President Obama: Job creation and the end of a single source monopoly on defense spending.

Well done, DLA.

There is no shortage of stories of contracting problems in the Department of Defense, where several of their key suppliers are foreign entities. The recent battle between Boeing KC-X and American European Aeronautic Defence and Space is a case in point. But how can we solve this problem of coddling the Department of Defense foreign companies at the expense of American jobs and security industry? Response is surprisingly simple, and it's called the Buy American Act.

The Buy American Act provision sounds like a very good, but like most things political, its meaning has been diluted over time. The law was promulgated by President Franklin D. Roosevelt in 1933, and requested the U.S. government prefer U.S.. products manufactured in its purchases. Fast forward to 2010, when allies of the United States by a treaty or trade agreement are allowed to compete for public procurement in the United States on an equal footing with U.S. companies.

The practice of allowing foreign entities from bidding for U.S. contracts on an equal footing with U.S. companies can not be justified against to empirical evidence that illustrates the absurdity. While proponents of free trade without restrictions are quick to point out that international agreements reciprocity, two examples aside their argument. First, the U.S. government buys a lot more than any other nation on Earth, making the justification reciprocity conditions of equality impossible for reasons of parity. Secondly, there is the U.S. trade deficit, which kills our competitiveness, undermine our currency and weakening global economy.

Consider for a moment the benefits of preference true for products manufactured in the U.S. system of public procurement. Contracts to U.S. companies will create jobs, which will in turn create new taxpayers and reduce the unemployment rolls. Domestic procurement boost capital spending on durable goods such as machinery and equipment, thereby boosting productivity downstream. U.S. companies pay taxes on their profits, whereas the entities Foreign use our money to pay taxes in their own country. Finally, the current prosperity breeds ingenuity by future research, development and expertise (formerly known as American know-how).

Based on the foregoing, consideration of 25% of price should be paid to a U.S. company that offers a product or service in the United States Government, in the presence of foreign competition. And unlike most action in Washington this very effective strategy, could be implemented at short because of its simplicity and popularity with the American people.

A technology infrastructure defense, our mission is to protect troops deployed in America and create jobs at home. Maybe the Pentagon should consider these values. And as for the president? Well, sir, what are some of your commitments campaign and the functions of your office.

About the Author

Ken Carlton is the Executive Vice President of Infrastructure Defense Technologies, an Illinois based manufacturer and marketer of physical security equipment. He is responsible for the overall management of the company, including Finance, Operations and Administration. He has been with IDT since its founding in 2005.

From 1990 to 2005, Mr. Carlton was the General Manager at Corrugated Metals, Incorporated, an IDT affiliated company which manufactures metal building products.

Ken attended Loyola University Chicago, and the Loyola University Graduate School of Business. He is an active member of the National Defense Industrial Association (NDIA), the Society of American Military Engineers (SAME), and the Illinois Manufacturers Association (IMA). Ken was born and raised in New York City, and has lived in the Chicago area for the last twenty years.

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