Small Business Success Story: Kitsap Home Businesses Establish Themselves as Parts Suppliers to Navy

Original Article: Kitsap Peninsula Business Journal

With the Navy presence in our area, it’s not surprising there are business opportunities for local firms to furnish supplies and services the Navy needs to accomplish its mission. It then should come as no surprise that two local small businesses were established to supply parts, or that they were awarded a total of about $9 million in contracts over the past three years. What is surprising? They are both home-based businesses.

Government contracting offices typically don’t comment publicly regarding the performance of contractors, but the fact that these two small businesses have received hundreds of purchase orders attests to a strong performance record.

A few years ago, Keith and Lydia were looking for an idea for a home business that would permit Lydia to spend some time at home and supplement their incomes. They’d heard from friends — one a retired government buyer, another who worked with a parts supplier — about the Navy’s appetite for parts and supplies to support ships and installations. They established a small business and navigated through the maze of federal contracting regulations to establish themselves as parts suppliers.

During the first few months, Keith says they were excited when they received one or two orders a month. Now, operating from their East Bremerton home, they fill as many as 10 to 20 orders per day and had over $1.5 million in sales to the government during the last fiscal year alone.

In addition to sourcing parts and supplies for local ships and installations, including the Puget Sound Naval Shipyard and Intermediate Maintenance Facility, they also send parts to Navy activities in Japan and on the island of Diego Garcia in the Indian Ocean. Along the way, they’ve expanded their business to include many commercial customers outside the government.

Keith and Lydia’s company is awarded contracts for a wide range of parts and supplies, items including filters, seal rings, gauges, packing, gaskets, hose assemblies, screws, electronic components, and wire rope that have applications on ships and in Navy facilities. They don’t manufacture any of these items or carry an inventory. Instead, they specialize in sourcing the parts and supplies from large distributors and equipment manufacturers.

When asked why he thought the Navy went to them when soliciting quotations, instead of going directly to large distributors or manufacturers, Keith said he believed many buyers preferred sourcing parts and supplies from a small business that was responsive and customer-focused.

“We move more quickly than a large company,” he observed, “and we make sure the parts get to where they are needed, on time.”

Keith pointed out that as a home business, they have low overhead and can remain competitive in their pricing. He said they are often successful tracking down hard-to-identify parts for older and obsolescent equipment, some manufactured by companies no longer in business, before larger companies are able to respond.

“Buyers are appreciative of prompt and reliable customer service, so they’ll be more likely to request us to provide pricing on future Navy requirements,” he said.

Keith also pointed out that since they are a small business, the government gets credit towards meeting congressionally mandated small business contracting goals.

Their company makes a conscious effort to keep business local, in Kitsap County.

“We’ll often source a part to a local distributor even if the price is a little higher to keep the business local,” he said. “Sometimes getting the part quickly from the local distributor is what allows us to be successful meeting our customers’ demanding delivery dates.”

Across Dye’s Inlet, Steve and Elayne Burton run EHB Supply from their home in Silverdale. The couple initially owned a business that developed, marketed and distributed an extensive inventory of shareware software applications. In the late 1990s, the spread of Internet connectivity and online access to software programs threatened the viability of their business model.

Fortuitously, they were approached by a Navy project manager seeking a specialized software program for one of the aircraft carriers in the shipyard. He’d run out of options and had resorted to calling software firms listed in the Yellow Pages. While Steve and Elayne were successful in locating the needed software and sourcing it for the project manager, their most important lesson was learning the ropes selling to the Navy and getting paid for their work.

Fast-forward 16 years to their current business, EHB Supply. Last year they were awarded $2.6 million in contracts for selling everything from electrical components to mechanical hardware to the Defense Department. Their customer base not only includes local ships, bases and the shipyard, but also Navy activities in Japan and Defense Logistics Agency buying offices on the East Coast.

Elayne pointed out they had some help along the way figuring out how to work in the complicated federal contracting system.  “We often heard how hard it was to do overcome the high barriers to entry and how much had to be learned to do business with the government, but it can be learned,” she observed. They received invaluable assistance from a Defense Department-funded office called the Electronic Commerce Resource Center (ECRC), which was then housed in Kitsap Economic Development Alliance’s offices in Bremerton. “They provided us a great deal of help figuring out the contracting process,” Elayne said.

While the ECRC no longer exists, a successor organization, the Washington Procurement Technical Assistance Center (, provides assistance to small businesses seeking government contracting opportunities.

After their initial success and armed with information from organizations such as the ECRC, Steve began calling local buying offices. He convinced some of the purchasing agents to solicit quotes from EHB Supply, especially for parts that were hard to find. They were successful in sourcing the items, reliably and consistently getting them to where they were needed on time. They developed a strong reputation among buyers as being able to identify and source the most difficult parts, including ones that had become obsolescent and non-standard.

“We sometimes get lists of over a hundred parts at a single time. We research each item and source it to the distributor or manufacturer who can provide the best price so we can get the best overall deal for the government,” Elayne said.

She said the work of being a supplier is often challenging and the variety makes it interesting. Knowing that U.S. servicemen and women depend on the parts and supplies, the work is also rewarding: “We take the job very seriously and understand that we can’t afford to make a mistakes because of who we support.”

These two businesses did not become successful overnight. It took hard work to learn the government contracting system and the inner workings of the Defense Department supply system. By being persistent and providing outstanding customer service, these two Kitsap small businesses, operating from their homes, successfully created a niche sourcing parts and supplies for the Navy and Defense Logistics Agency.


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