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Flag firm sitting pretty
Mar 29, 2009 (The Arizona Daily Sun - McClatchy-Tribune Information Services via COMTEX) --
A lot has changed for Aspen Communications since it graduated from the small business incubator several years ago.
It has grown considerably since CEO/President Don Richardson left his job at FMC to go into business with his wife Sheila, launching the start-up telecommunications business. The company started with a $211,000 loan and $39,000 the couple had set aside. Staff has grown to 10 highly trained personnel and has moved into a large eastside warehouse. The company designs, installs and manages various types of communication technologies, such as fiber optic cable and wireless networks.
The company recently secured a contract with the Veteran's Administration hospital in Prescott worth an initial $540,000. A second phase, which has not been awarded, is worth an additional $1.35 million.
But the biggest contract has come from the federal government: Aspen Communications recently announced it will be a subcontractor on a $15 billion General Services Administration contract.
Aspen Communications will work with Electronic Consulting Services, which is one of 72 primary contractors, for the five-year contract. The contract covers work to improve telecommunications infrastructure at various government agencies across the country as well as U.S. facilities across the globe.
But how those federal contracts are financed -- contractors are paid only after the work is completed -- has Richardson searching for investors or a loan.
A downside to competing for federal dollars, Richardson said, is the financing terms. He said private business often allows for some payment up front, giving a contractor the ability to pay employees and buy materials.
"The federal government just doesn't do it that way," he said.
Richardson said he needs about $150,000 for materials, new equipment and to hire new employees.
He understands it might be a formidable task in the midst of a worldwide recession.
"We recognize it is a difficult climate," Richardson said. "Investors are looking for a risk-free investment."
Richardson went after the federal contracts, in part, by strategically relocating his business into a large industrial area of Flagstaff.
The current location on Huntington is designated by U.S. Small Business Administration to be in Historically Underutilized Business Zone, which is designed to spur economic development in neglected areas.
He said the federal government has set aside a percentage of contracts that must go to these areas, allowing small businesses to compete with a smaller pool of bidders.
Richardson also competes for federal contracts under the Service-Disabled Veteran-Owned (SDVO) Small Business Initiative, which gives a portion of contracts to those who have served in the armed forces. He served for 26 years in the Navy.
Between the two programs, Richardson sees a competitive edge while bidding for federal contracts.
"It gives us an advantage," Richardson said
His company also invests heavily in the professional training of its technicians.
He said several of his employees have certifications from the Building Industry Consulting Service International for demonstrating a high level of expertise in the telecommunications field.
To date, there are only 7,700 telecommunications professionals worldwide who hold the Registered Communications Distribution Designer designation.
"It makes us unique," he said.
Richardson said he remains loyal to his alma mater, Northern Arizona University, and tries to hire NAU graduates whenever possible.
But Richardson wasn't always lucky with securing government contracts, noting his first attempt at part of a $5 billion government-wide acquisition contract with the GSA failed. It was limited to bids from SDVO companies but Richardson said the contracts were primarily given to companies near Washington, D.C.
"All or almost all went to Beltway companies," he said. "We learned all decisions are made back east."
So in his second attempt for a piece of a multi-billion dollar contract, Richardson spent time in D.C. making contacts.
"You can't do that remotely," he said.
So how much of the federal pie does Richardson expect to get out of the $15 billion contract?
"I would predict Aspen Communications will be able to do, at a minimum, $1.2 million per year for five years off this contract," he said. "My intention is to do considerably more than that."
Joe Ferguson can be reached at jferguson@azdailysun.com or 556-2253.
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