Small Business Success Story: Tampa Defense

Original Article: Tampa Tribune

PINELLAS PARK — Pushing the throttle forward, Adrian Bishop guns the 44-foot boat to nearly 65 mph through the gently rolling waters of Tampa Bay. The company Bishop helps run, Tampa Defense in Pinellas Park, is capitalizing on demand among militaries in the United States and abroad for boats of this size and function. They’re similar to the Iranian vessels that seized U.S. Navy boats and crew last month during an international incident in Iranian waters. Bishop, who worked with SEAL teams when he served in the Navy, smiles broadly as the boat lives up to expectations. Still, the testing this day is limited by a massive bank of thick sea fog hanging on the horizon, keeping the boat close to shore. The weather is an apt metaphor in a business where the next sale — hinging as it does on the vagaries of government policy and procedures, here and abroad — is a murky prospect.  Tampa Defense just shipped off the first four of what it hopes will be 40 of these Fast Coastal Interceptor boats to the coast guard of Kuwait — a contract worth up to $60 million. But it took four separate bids to finally win the job, and success isn’t certain yet, said Robert Stevens, the company’s chief executive officer and a longtime boat builder. Tampa Defense lost out on another major bid in 2009 after investing $1 million on the chance to build up to $400 million worth of boats for U.S. Special Operations Command, headquartered at MacDill Air Force Base. “The deck was stacked against me,” Stevens says. Socom disputes that, saying it was merely reacting to the changing needs of warfighters. This wasn’t the fog Stevens intended to navigate when he first got into boat making. The company does business now as Tampa Defense in the United States and Tampa Defence in England, but it is incorporated as Tampa Yacht Manufacturing LLC. Stevens had hoped to build private luxury yachts for wealthy Middle Easterners.

A young-looking 67, Stevens is a blunt-talking Yankee boat builder who grew up near Boston and now calls the Tampa area home. Sitting in the sparsely appointed conference room of his ship-building enterprise in a boat-building complex off of 62nd Avenue North, he recalls the original course he charted for the company after a headhunter reached out to him with an enticing opportunity. “He wanted me to write a business plan to take advantage of an emerging market in recreational boating, which was really based upon the development of recreation and entertainment and business in Dubai,” Stevens says. The economy in the United Arab Emirates, where Dubai is a major commercial center, was booming. “If you recall, about one-third of the world’s cranes were in that city.” In 2008, the Dubai Boat Show was “growing hand over fist,” he recalls. “Suppliers attended from all over the world, debuting yachts and mega-yachts.” At the time, the company was too new to have any boats to offer, but Stevens was there, got some ideas and mapped out a plan to license designs of existing boats for sale in the Middle East. Then the global economy imploded. “And no sooner had we started that the recreational boating market went off Niagara Falls so fast it would give you a nosebleed. Eleven months later, everything in Dubai stopped building, and expats were headed to the airports, leaving their expensive cars behind.” Stevens’ business partners, all from the region, were concerned. “‘What are you going to do now?’” they asked. “I said, ‘Well, I’m not sure. I didn’t write a business plan for that.’” There was precedent, though, for a way ahead. The USS Cole was attacked by jihadis in a small boat packed with explosives in Aden Harbor in 2000, killing 17 sailors. The big guided-missile destroyer couldn’t get out of its way and its weapons couldn’t be trained low enough to hit such a small, fast-moving target. Military leaders began to see the value of small patrol boats. Stevens and his partners seized on the idea. The Kuwaiti coast guard was looking for high-speed interceptor craft. The partners suggested reaching out to a company they knew of, Tempest Yachts in Palmetto, to see if it would be willing to submit a bid. “But I didn’t need to contact them,” Stevens says. “They went out of business years ago.” So the partners set out to find the company’s boat-building molds and tools and craft their own version of the vessels. Stevens gathered up what he could, including some 230 fiberglass molds from Palmetto, and trucked them to Tampa. From there, he and a crew of boat builders he calls “the best in the business” converted what was the Tempest 44 FCI, used by the U.S. Coast Guard for many years, into the type of vessel sought by the Kuwaitis. They made it a bit wider, took the “vee” out of the fiberglass hull to give it better performance, replaced 327-horsepower engines with 800-horsepower engines, created a more sophisticated drive train and married surface-piercing propellers to the engines. Half the propeller is above the surface of the water, more efficiently harnessing the power of the engines and converting it to propulsion, Stevens says. The results of the upgrades were evident during the recent test runs by training and writing director Bishop, especially on serpentine turns, when Bishop lowers the drive train to give the propeller extra “bite.” This allows the boat to smoothly navigate turns at more than 50 mph. To give some perspective to the boat’s speed, Mike Heatley, the company’s engineer, points to his eyewear.

These are skydiving goggles,” he says over the roar of the engines and the stiff wind. “We are moving so fast that if I were wearing regular glasses, they would just fly off.”

On a rainy January morning, inside one of Tampa Defense’s two 40,000-square-foot hangar-like structures, workers sand and saw fiberglass and tend to some of the 16 boats in progress. The company manufactures vessels ranging from 23 to 53 feet long. It is one thing to build a new boat, Stevens says, but quite another to get it sold. In 2008, the company built that prototype of the fast coastal interceptor and sent it to Kuwait. “The coast guard tested it and loved it,” Stevens says. Then the bidding process began. And though the Kuwaitis liked the boat, everything stopped after the Kuwaiti parliament canceled the contract. Then the Kuwaitis opened it again, tested the boat and awarded the contract to Tampa Defense. Until they canceled it. And opened it up again to the world. Stevens says his company went through the bidding process again. Then Kuwait canceled it. Again. Eventually, the company signed a deal with the Kuwaitis to build 29 boats, with an option for 11 more, at $1.5 million apiece. “That’s a few dollars,” he says with a grin. Part of the challenge in competing for government contracts is submitting not only a low bid but evidence of the financial wherewithal to carry through on the deal, Stevens says. All that takes planning and close scrutiny. Stevens recalls another frustrating process bidding on an 88-boat contract for the Indian navy. Tampa Defense was among the final three companies standing from an original pool of 69, but Stevens lost the bid by $1,000 to a company that had written its bid with pencil on paper.

In the high-stakes world of government bidding, not everyone walks away happy. In 2009, around the same time his company was going through its second round of bidding on the Kuwaiti coast guard contract, Tampa Defense bid on a small-business contract with Socom for a boat known as the Combatant Craft Medium, originally envisioned as a 37-foot boat designed to get commandos in and out of low- to medium-threat environments in a hurry. The initial bid concept was solid, Stevens says. The command, he says, realized it was important to get input from recreational boat builders, who are familiar with small, fast craft. For the next 18 months, Stevens says, the company had 18 people working full time on the bid. “It was 1,600 pages,” he says. “The backup sat in six banker boxes on a two-wheel dolly.” All told, Stevens says, it cost about $500,000, with his large-contractor partners spending another $500,000 of their own money.

But on the day the contract was supposed to be awarded, it was canceled. He says the command called him in and told him the bids were too high, which surprised him. “So they said, ‘Look, we’re going to reopen the bid and we’d like you to bid,’” Stevens says. “I said, ‘I bet you would. Here is what I’m going to do. I’m going to light $500,000 cash on the floor and I’m going to get the heat, because if you want to buy my boat … you know exactly what to make the check out for and where to mail it. Otherwise I have no interest in doing business with you.’” Socom, for its part, says it would still like Stevens to compete for contracts. “We have to strike a balance for all involved,” says Lt. Cmdr. Matt Allen, a Socom spokesman. “First and foremost, we have to provide the most effective equipment and systems for our deployed forces as rapidly as possible. We have to do this in an open and transparent solicitation process for our contract partners. And this needs to be competed in a way that we get the best savings for our taxpayer dollars.” That’s no easy task for the command, Allen says, but “something that we excel at with small businesses.” As proof of the command’s positive relations with small business, Allen points to a top federal small business excellence award Socom received in 2014 and to the $1.68 billion in small business contracts it awarded in 2015. Allen says there was a change in operational requirements for the Combatant Craft Medium during the evaluation process. As a result, Socom “had to relook at what this craft should be able to provide our forces in the maritime environment,” Allen says. “These changes, which were operational necessities, resulted in the issuance of a new solicitation for proposals.” The command wound up awarding a 10-year contract, worth up to $400 million, to Vigor Works in Clackamas, Oregon, to build a boat about 60 feet long. “We appreciated Mr. Stevens’ willingness to be part of the original competition process and hope to have his highly capable company compete in future solicitations,” Allen says. Stevens says the foreign market has advantages. “As far as I’m concerned, and I’m convinced, the deck is stacked against me,” he says. “I won’t win. It is far better for me to respond to international tenders, which cost on average between $12,000 and $18,000 and I have a much better chance of winning the contract. So why would I not do that.”

The Kuwaiti coast guard boats are being built in Pinellas Park, then shipped to Kuwait, where a local company will help arrange the transfer, Stevens says. The first four fast coastal interceptors are en route to their final destination, says Stevens, who is also seeking work from England, India and countries in South America. Heatley, the engineer, says the company is also exploring a request for information by the U.S. Navy, which is looking to replace 160 patrol boats. “Our first team is on the ground in Kuwait right now to receive those boats, prep them and then sea trial them with the Kuwaiti coast guard for approval,” Stevens says. Bishop, the retired Navy commando boat crew member who has been designing training materials for the interceptors, left Thursday night for Kuwait. Before departing, he chuckles when told about the fog bank metaphor, adding that right now, it looks like smooth sailing ahead for the small boat building firm.

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