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From the Desk of...

Federal Contracts Drop;
DC-3 Director Resigns

Just when you think Michigan could not withstand any more bad news, federal government spending in Michigan is down significantly this fiscal year and the man hired by Governor Jennifer Granholm to attract more government business to Michigan firms has suddenly resigned.

Government spending in Michigan is down more than $110 million - approximately 34 percent - in the first six months of the current federal fiscal year, compared to the same six-month period a year earlier, based on recently released government reports. And that's bad news for veteran-owned small businesses and other companies that depend on government contracts.

Nearly $268.97 million was awarded in government contracts between October 2008 and March 2009, according to the most recent activity report for the Procurement Technical Assistance Centers of Michigan.

That's down from the nearly $378.88 million awarded in the comparable October 2007 to March 2008 period, according to the activity report for the Michigan PTACs for that year-ago period.

The Michigan PTACs are coordinated by the Defense Contracting Coordination Center (DC-3), which was established in 2005 to help Michigan companies leverage their engineering and manufacturing capabilities in the federal defense sector, according to information provided by the center.

Bradley M. Lott
(Maj. Gen. USMC Ret.)

The center has been under the direction of Bradley M. Lott, a retired Marine Corps major general. The MEDC, which oversees the center, has acknowledged that Lott is leaving the job at the end of June, according to a recent article in Crain's Detroit Business, a weekly business magazine. Granholm has not named a replacement for Lott.

His resignation comes on the heels of the recent report and a rift between some PTACS and the DC-3.

The data was provided to VetBiz Central by the legal unit of the Michigan Economic Development Corp. in response to two Freedom of Information Act requests submitted to the state.

The Genesee County PTAC reported more than $8.19 million in contracts for the most recent six-month period, down from nearly $10.64 million in the year-earlier six-month period.

It was a similar story for many of the other regional PTACs. But not all.

The PTAC of Schoolcraft College in Livonia reported more than $16.77 million in government contracts for the most recent six-month period, up from nearly $13.70 million awarded in the year-earlier October-to-March period.

Some of the other Michigan PTACs and the government contracts awarded in the first six months of the current fiscal year compared with the year-earlier six-month period:

• Northwest Michigan, $39.46 million, up from $23.83 million a year earlier.

• Northeast Michigan, $8.65 million, down from nearly $10.96 million a year earlier.

• Saginaw, more than $13.30 million, down from $26.96 million in the year-earlier six-month period.

• Southwest Michigan, $47.00 million, down from nearly $146.24 million a year earlier.

• Jackson area, almost $10.58 million, down from $15.17 million in the year-earlier six-month period.

Lott, who retired from the military in 2006 after 34 years of service, was in charge of the Marine Corps Logistics Command.


After he retired, Lott formed TrueNorth Logistics LLC, a logistics consulting firm that specializes in industrial logistics and federal government purchasing, the MEDC said.

In a recent interview with Crain's Detroit Business, Lott said that government contracting in Michigan actually is on an upswing.

Some of Michigan's latest government contract dollar figures — which appear to be falling — are skewed, Lott told the business magazine, because of issues with the PTAC in the Muskegon area.

The Muskegon PTAC is in the midst of two federal audits, the magazine said, and the state is setting up a new center in Grand Rapids to take over the work currently done by the Muskegon office. But the director of the Muskegon PTAC disagrees, saying the information on the audits is misleading and the reported takeover by Grand Rapids is wrong.

Figures from the Muskegon PTAC were not included in the state's most recent six-month activity report.

"So we're not leveling off in growth yet," Lott told Crain's.

Pamela Poort, director of the Muskegon PTAC (called Muskegon Area First) told VetBiz Central that there's a lot more to the story. For starters, the Muskegon PTAC is not closing, she said, and Grand Rapids office is not taking over. "No. Absolutely not," Poort said. She said all PTACs in the country, including the one in Muskegon, are audited every year by the Defense Logistics Agency. The Muskegon PTAC passed its most recent audits "with flying colors," she said.

"I received the best rating you can get." "The DLA audits are protocol. They do them every year. I welcome the audits to ensure we are doing everything correctly. And we are," Poort said. "We are not going anywhere."

So why wasn't the Muskegon PTAC included in the state's most recent six-month activity report? Poort says that's because the state's MEDC pulled its funding from the Muskegon PTAC, (although its federal funding continued). As a result, the Muskegon office no longer was part of the state report.

The PTACs of Michigan are non-profit organizations funded by the Defense Logistics Agency, the MEDC and local funding partners.

PTACs assist small businesses — including veteran-owned businesses— in the entire process required to become a government contractor, from identifying bidding opportunities to understanding the bidding process.

"The federal government buys nearly every item that you might find in your home or office," according to handout information from the PTACs of Michigan Inc. "In addition, the federal government purchases products and technologies to protect and support our armed forces.

"State and local governments are also major purchasers of products and services."

Carl Stoddard
Maj. MIARNG (Ret.)

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