Navy courts small businesses for submarine program.

• Author: Fein, Geoff S.

In an effort to keep costs down and competition up, the Navy is seeking out small businesses to provide new technologies, especially in the Virginia-class submarine program, which is dominated by two large shipbuilding contractors--Northrop Grumman and General Dynamics.

"Small business participation is very important to the Virginia-class program, both from technical and business viewpoints," said Kevin Sykes, Naval Sea Systems Command spokesman.

Small businesses are creative and provide options to program managers, Sykes said. "They stay close to commercial products and solutions available in the market."

Small companies, such as Digital Systems Resources, Progeny Systems Corp. and Chesapeake Sciences Corp., have developed everything from composite materials and tactical controls to weapon simulators for the submarine. Of the 3,204 subcontractors working on the Virginia-class program, 1,309 are considered small businesses, according to a General Dynamics Electric Boat Division spokesman, who asked not to be quoted by name.

General Dynamics Electric Boat Division and Northrop Grumman Newport News are the prime builders of the Virginia-class submarines.

General Dynamics Electric Boat Division, for example, relies on small businesses for electrical supplies and hardware, valves, fabricated parts, medical supplies, paint and paint products, lumber, fuels, welding supplies, industrial and safety supplies, and packing and gaskets, said the GD spokesman.

One of the major subcontractors on the program is Lockheed Martin Naval Electronic & Surveillance Systems. The company makes the command control, communications and intelligence systems for the Virginia-class ships. The C3I work amounts to about 10 percent of the value of each submarine.

Lockheed's vice president for submarine programs, Richard A. Udicious, said that the company outsources about half the C3I workload and that about 25 percent of that outsourcing goes to small businesses. "We are contractually obligated" to include small businesses in the program, he said.

The Navy has created several avenues to encourage small business participation: The Small Business Innovative Research (SBIR) program, technical expertise contracts, and large-business incentives and outreach conferences.

The SBIR funds early-stage research and development at small technology companies. It is designed to stimulate innovation, increase private sector commercialization of federal research and development, increase...