Are You Ready For The Impact of BRAC and How It Will Affect Your Bottom Line?

By Joseph A. Oricchio, Jr., Talisman Consulting Services, LLC

BRAC 2005, Its here, and it will impact this region’s business environment over the next six or more years.

BRAC, while it may seem new to some, it really is not. We have seen four previous rounds of base closings, in 1988, 1991, 1993 and again in 1995. All in all about 450 installations or facilities have been closed or realigned. BRAC, (Base Realignment And Closure) is the vehicle by which the Department if Defense (DoD) reconfigures its infrastructure for efficiency while maintaining or enhancing its strength and capability. While BRAC effects domestic U.S. bases, a sister program, Global Force Posture Review will have a similar effect on U.S. bases overseas.

One of the most popular questions we hear is: “When will they (the relocated workers specific agency, and support contractors) arrive?” These, like many other questions have answers that are useful, but it’s prudent to keep in mind these timetables are impacted by ever changing conditions.

Before the bulk of the relocated report for duty here in this region several things must happen. First a NEPA-EIS needs to be completed. This is an Environmental Impact Statement per the National Environment Policy Act. Once this is completed a MILCON or Military-Construction phase will begin which is anticipated to last 2 years. Essentially this includes creation or renovation of infrastructure or physical facilities where the new personnel will actually operate. Then this is followed by phased moves over a span of about two years.

According to Brigadier General Mike Hayes (Ret.), the Director of Maryland Military and Federal Affairs, Department of Business & Economic Development, we need to keep in mind:

"Regarding the first substantial impacts, we can expect to see about one billion dollars in the construction and building trades in the 2007-2009 time frame." Mr. Hayes goes on to state: "The large numbers of people moving into the area to begin work will be in the 2009-2011 time frame." Mr. Hayes and others will also be sure to add that time frames are anticipated, not guaranteed and could flex. There is legislation that states that the BRAC activities, once law, which they are now, must begin within two years, and conclude within six. But even this is not a guarantee, but more of a strongly stated guideline.

Even with this information, many questions still remain including one that asks; will you, the business person, be ready for the effects of BRAC? And, how will it impact your bottom line? The influx of new jobs generated by BRAC in Harford County, specifically at Aberdeen Proving Ground is estimated at 8,200. This is broken up into military and civilian military jobs, most of which are well paid positions averaging salaries of $87,000 per year. Using a popular multiplier of 2:1 to determine the total additional new jobs this will mean and the swell in the regional workforce becomes even greater. The average relocator is about 46 years old. Using an average household size of 2.7 the potential population impact to the Harford, Cecil and Baltimore County region is 30-60,000 new residents.

In regard to specific procurement opportunities, making contact with other firms (regardless of size) that will likely pursue BRAC related federal work is an excellent start. For small and mid-sized businesses, contacting agencies like the SBA, (Small Business Administration) PTAP, (Procurement Technical Assistance Program) and the GSA’s (General Services Administration’s) Office of Small Business Utilization can offer powerful insights and direction. The State’s Department of Business and Economic Development and Harford County’s Department of Economic Development both represent timely and relevant resources for both pure business and BRAC related information and updates.

According to Denise Carnaggio, Assistant Director, Harford County Office of Economic Development: “Small businesses and entrepreneurs with an understanding of the needs of incoming tenant activities, their employees and families, will gain significantly from BRAC changes, which must be complete by 2011”.

BRAC’s impact is gaining lots of attention, the news of the potential gains to businesses in this area has been well promoted or “run up a flag pole”. That flag pole is pretty tall and has gotten the attention of your competitors both near and far, some of whom you may not even know exist yet. You may not know about them because these competitors may be from out of this area and are just gearing up to open shop here. In other cases these competitors will come from brand new local businesses or expansions of existing ones preparing to capitalize on the new economic condition.

Brigadier General Hayes states that “we should keep an eye on the timelines, develop relationships now and be ready”.

If you are really interested and serious about participating in the benefits BRAC will bring to this region, as it was stated at the Spring 2006 SBDC conference on BRAC “to ensure you gain all that you can, you must become a student of BRAC”. The information you see here and elsewhere is just scratching the surface.

An excellent way to help you be prepared for BRAC and its impact is with a regularly updated source of business information that includes relevant news and information about BRAC. You can find valuable business information on the SBDC website at: www.harford.edu/sbdc. Also, visitors to the SBDC homepage can signup to receive a special e-newsletter covering business, BRAC and your bottom line news and information.

Mr. Oricchio Co-Chairs the SBDC’s BRAC Advisory Committee and is a Lead Business Consultant and Public Speaker for Talisman Consulting Services, LLC in Central Maryland. Mr. Oricchio can be reached directly at (410)-420-1718 or joricchio@comcast.net.