COVER STORY

File photo, Deb Cram

The Seacoast of Maine and New Hampshire has such a storied military history, from the Portsmouth Naval Shipyard to the former Pease Air Force Base, it comes as no surprise that government plays a major role in the economy. But it's bigger than you might think, and it's getting bigger thanks to Uncle Sam buying goods from many smaller companies.

Opportunities abound for those manufacturing new and traditional products.

Government contracts for New Hampshire companies totaled approximately $500 million in 2006, state economic development statistics show. And that does not include the many subcontracts.

The Portsmouth Naval Shipyard's annual economic impact is about the same, starting with a $319 million civilian payroll. The shipyard also posted $47 million in public works contracts and $41 million in purchased goods and services, according to a 2005 report by the Seacoast Shipyard Association.

The cradle of American shipbuilding, Portsmouth is the country's oldest continuously operating shipyard. With its motto "Sails to Atoms," the yard posts Navy records for quality and for on-time service in overhauling nuclear submarines, said Capt. William McDonough, a retired base commander from Kittery, Maine, and tireless advocate for the shipyard association.

"The skill levels are far above what is demanded elsewhere in the world," McDonough said. "That technology there, and in the space program, is some of the highest you will ever see."

Beyond the yard, Maine and New Hampshire are home to an increasing number of companies serving the Department of Defense. There are plenty of opportunities for companies and specialists ready to help them succeed. Beyond contracts awarded for things like missile technology and armor, the federal government is buying just about everything, from computer software to clothing.

"That's one of the great myths -- that the federal government only buys defense supplies," said Christopher Way, manager of the Procurement Technical Assistance Program, which is part of the Business Resource Center at the New Hampshire Department of Resources and Economic Development.

In a telephone interview, Way said there has been tremendous growth in technology services, though he cannot talk company specifics because of confidentiality.

One success story the state procurement program recounts is the growth of Namtek Corp. of Bedford, which was established in February 2006 by two former employees of Cabletron Systems. James A. McDonald Jr. and Keith Turgeon went from a start-up company to $500,000 in sales in less than a year by focusing on the federal government as its primary customer.

The company, which provides information technology solutions, has received contracts from the Army, Navy, Department of State and Marine Corps, according to New Hampshire's procurement specialists.

The state program, which is funded in part by state and federal money, "proved to be more valuable than we were expecting," Turgeon said in report prepared by the state. "The guidance we received on how to leverage our small business classification and the introductions we receive to prime contracting has been invaluable."

The Procurement Technical Assistance Program helps companies understand bidding processes, how to submit proposals, and how best to identify potential markets. Specialists tailor searches based on a company's qualifications or goals, and they work with a number of smaller companies looking for subcontract work from companies that have won government work.

"Our sole reason to exist is to help companies get federal contracts -- and state contracts," Way said. "It could be the Army. It could be a state agency in Minnesota. If you could sum up what we do here, it's really trying to make businesses more efficient in marketing themselves."

Government agencies are taking additional steps to help small and medium-sized companies secure work. The Defense Logistics Agency of the Department of Defense last year launched a New England manufacturing supply chain initiative after a successful pilot program. The Maine Manufacturing Extension Partnership, an agency dedicated to helping producers, has already helped several Maine companies, including Maine Tool & Machine LLC, to navigate the defense system contract process. Any manufacturer is eligible to participate.

The U.S. Small Business Administration has also taken several measures to help small businesses land government contracts.

Every week it seems there is a new announcement of a major government contract award. Bath Iron Works in Maine received a $64 million work order last year. BAE Systems, an international company with a large operation in Nashua, received a $71.7 million Navy contract for its Maryland base last month to continue work on a ballistic missile strategic weapon system.

While the bigger companies get the bigger paycheck, there is ample work available for smaller companies, said Way. He estimated his office has 450 active company clients. The procurement assistance is now in its 17th year -- and its services are free.