Spending for military grows, report shows

MARK HIBBSMOREHEAD CITY North Carolina saw significant growth in military spending during 2011, but an effort is under way to attract more defense industry contractors.Gov. Bev Perdue and the N.C. Military Business Center announced this week that U.S. Department of Defense spending for prime contracts in North Carolina exceeded $4.06 billion in federal fiscal year 2011 an increase of 13 percent and $471 million over procurement in the state in 2010.North Carolina is securing a bigger and bigger share of the global military and defense market, Gov. Perdue said. Our investments and efforts have built a growing cluster of defense industries that is capturing federal revenues and growing jobs right here in North Carolina the most military-friendly state in America.Meanwhile, economic development officials in the eastern part of the state are set to roll out an initiative intended to capitalize on the militarys cost-cutting and energy-saving measures.The N.C. Logistics Initiative is basically a combined marketing and lobbying effort that seeks to encourage investment in Eastern North Carolina by private firms that perform ground systems maintenance for the military. Mark Sutherland, clamp president of North Carolinas Eastern Region and director of the Military Growth Task Force told the News-Times recently the initiative is a result of information gleaned from studies conducted in relation to the Defense Departments troop buildup at area military bases.Overall, its about expanding the things we do in North Carolina with the military and building our defense economy in a way that actually makes sense, Mr. Sutherland said.Mr. Sutherlands organization has made a case for private defense contractors to consider locating in Eastern North Carolina, using the successes of similar firms as a model.The mid-Atlantic is the center of gravity for the East Coast military. That makes us the epicenter, logistically, Mr. Sutherland said.Mr. Sutherland is set to discuss the initiative next week during t! he NCERs fifth annual State of the Region meeting at the Riverfront Convention Center in New Bern. The March 14 session begins at 8 a.m. To register for the session visit www.nceast.org/eventregistration.He will discuss the defense logistics initiative and the Military Growth Task Forces upcoming name change and transition to PlanIt East. The new organization will be a regional forum meant to foster communication, coordination and collaboration among public, private and nonprofit leaders from Carteret, Craven, Duplin, Jones, Lenoir, Onslow, Pamlico, Pender and Wayne counties through 42 delegates.Mr. Sutherlands organization has produced a video presentation available online that touts the example of a Jacksonville firm that provides maintenance and overhaul services for Camp Lejeune.North Carolina is ranked as a top place to do business due to its tax structure, quality workforce and low unemployment insurance rates, according to the presentation.The state is the third fastest growing state in terms of industrial growth and military jobs grew by 20 percent during the past five years. Defense-related businesses moving into the state have kept a similar pace.Eastern North Carolina is home to five major military installations within a 70-mile radius, which base nearly half of the East Coast ground operations units. Facilities include Marine Corps Air Station Cherry Point, Marine Corps Base Camp Lejeune and MCAS New River in Jacksonville, U.S. Army Base Fort Bragg, which includes Pope Field, formerly an Air Force base, in Fayetteville and Seymour Johnson Air Force Base in Goldsboro.Also in the 70-mile radius are the states two seaports in Morehead City and Wilmington and the Global TransPark in Kinston, an industrial park with both rail access and extra-long runways that can support large, heavy aircraft.Eastern North Carolinas central location stands to reduce Defense Department travel costs by as much as 80 percent compared to longstanding maintenance processes. It also significantly reduces turnaround times for r! eadiness and the militarys energy usage, according to the presentation.If you were going to create the perfect logistics environment from scratch, you would look for proximity to your consumer and logistics capacity the things that are part of a logistics village, just like what we have here, Mr. Sutherland saidHe pronounced the effort is geared to help the Defense Department meet its goals of greater energy efficiency and reducing the size of its carbon footprint.They need warehousing, distribution, transportation, fuel and food and they need all that with their requirement to be more renewable, Mr. Sutherland said.He pronounced a Food and Fuel for the Forces effort is under way to find and present ideas and ways of dealing with the Defense Departments needs at the highest levels of government. The response so far has been positive.A few weeks ago, three of us from North Carolinas Eastern Region went to D.C. to a re-set conference and tried out our new marketing materials and they cleaned us out. They took just about all our brochures and videos and the overwhelming comment we heard was it makes sense, Mr. Sutherland said. Thats what we want. We want the defense industry to say it makes sense and then they will come check us out. Then the economic developers will do their thing using these recruiting materials.The State Ports Authority is also part of the effort, which began in 2006 when then-Gov. Mike Easley called on all state agencies to assume an economic development stance, pronounced Jimmy Yokeley, director of community economic development for the State Ports Authority.It has matured to a point today where most of the involved entities from an economic development standpoint recognize the value of collaboration. That includes the ports and we see, going forward on the heels of the N.C. Maritime Strategy Study the opportunity to bring even more benefits to North Carolina industry and the military to make the state more competitive than its ever been in the past, Mr. Yokely said.The study looks at the rol! e ports can play in sustaining the economy and creating jobs in the state. It makes no specific recommendations but examines broad opportunities together with expanding military usage of the ports in addition to industrial and agricultural uses that could benefit North Carolinas economy. A public meeting on the study recommendations is set for Thursday (see related story).Mr. Yokely pronounced the interests of the state ports, the military, the private sector and the states agriculture industry are all intertwined in terms of logistics.In this global economy, all of these entities are attached at the hip with sea cargo being the dominant mode for imports and exports, compared to any other mode of transportation, Mr. Yokely said.He pronounced the only way for the state to remain competitive in the global marketplace is to continue to have accessible ports.We at the ports have always had a long history with North Carolinas military installations and in light of the upcoming budget cuts, we know that will place even greater emphasis on logistics savings in the military, he said.Gov. Perdue has made defense logistics a focus. She helped establish the N.C. Military Business Center within the states community college system and launched the Military Foundation, a business development organization focused exclusively on building the states defense and homeland security economy.Defense spending in North Carolina is critical to expanding our economy and growing jobs in North Carolina, pronounced Scott Dorney, executive director of the NCMBC. The defense and federal market is still booming. Although it is not easy, businesses across the state are competing and winning in the federal market. Since not all subcontracting is reflected in these figures, the value of total defense-related business activity in the state far exceeds even $4.0 billion annually.Businesses in 87 of North Carolinas 100 counties performed defense-related prime contracts in 2011. Twenty-two of those counties received over $20 million in defense-relate! d work, 12 of these received over $50 million in defense-related work. Of all counties performing defense-related work, Onslow County received the highest dollar amount with $1.2 billion, surpassing Cumberland County by $51 million.According to a 2008 Department of Commerce study, the military has a $23.4 billion total annual impact on the states economy.Defense procurement in North Carolina increased from $3.6 billion in 2010 to $4.1 billion in 2011. During the same time frame, spending by all federal agencies in North Carolina increased about $507 million, from $5.4 billion to $5.9 billion./>Powered By iWebRSS.co.cc