Raytheon offers tips on how to get ‘in’ on contracts

When Cheryl Snead, president of North Smithfield-based Banneker Industries Inc., started a relationship with Raytheon Co. in the early 1990s, her company was a machine shop supplying hardware components for aerospace and ground support systems in the defense industry.
But realizing that, in the long run, Banneker would not be able to compete on a global scale, she refocused the company on what it did well – manufacturing support, from inventory management to testing and inspection to procuring product.
And when Raytheon started consolidating its facilities in the Northeast, Snead saw an opportunity.
“By listening [to Raytheon] we’ve been able to grow our business with Raytheon and become a strategic partner in supply-chain management services,” she said.
But not all small-to-medium-sized companies have the same luck getting an “in” with technology-driven giants such as Raytheon Co., which employs 73,000 people worldwide, including 13,700 in New England and 1,650 in Rhode Island.
Dan Smith, president of Raytheon’s Integrated Defense Systems division, is hoping to change that by partnering with the Smaller Business Association of New England. On Nov. 1, the two hosted a special seminar at the Crowne Plaza Hotel at the Crossings in Warwick on how small companies can do business with the prime defense contractor.
The event included a panel discussion with company owners who work with Raytheon as suppliers, technology partners and contractors.
Infoscitex Corp., for example, has been trying to get contracts with defense industry giants such as Raytheon, Boeing and Lockheed Martin for about two years.
“There’s this chasm that small companies have to jump,” said Joe Kyle, project development specialist for the Waltham, Mass.-based technology company. “What you want is long-term sustainability. When you partner with a large prime … you begin to build your own channels of distribution … begin to stand up and become your own entity.”
Many startup technology companies become “SBIR mills,” he said, referring to the Small Business Innovative Research grants awarded by the U.S. Department of Defense. But that only provides short-term sustainability.
After that, “the challenge is convincing the major prime that you have something that will add value,” Kyle said. “It really comes down to relationship building and technical capabilities.”
And persistence. Joe Marino, president of Middletown-based Rite-Solutions, said being located close to Raytheon’s Rhode Island office helped the company in some ways because it was easier to repeatedly contact Raytheon until he got a face-to-face meeting.
But the first meeting didn’t pan out the way Marino had hoped because he hadn’t done his research.
After taking a long look at his company, he recognized one of the things Rite-Solutions was doing well at was its work with the SBIR program. So he pitched the capability to Raytheon at a time when Raytheon was looking at developing its own SBIR program.
Marino said the most important thing for companies looking to do business with Raytheon is to “know what your value proposition is.” The second is to find a “champion” once you’re in the door, and to handpick the very best people from your staff, the brightest with the best cultural fit, to work on projects with Raytheon.
It’s also important to expect change and be willing to adapt, said Les Brown, president of Materials Systems Inc., based in Littleton, Mass. It’s important to propose new business approaches, to see yourself as a peer, not the underdog, and always tell it like it is, he said.
As Raytheon executives see it, working with small businesses makes the company more competitive. Small companies are often more agile and can move faster to generate new ideas, they said.
Unlike in the mid-1980s, when the only viable way for defense contractors to bring in new technology was to develop it themselves, “small businesses today play an absolutely critical role in technology development,” said Mark Kampf, vice president of advanced technologies for Raytheon IDS.
It is partly why Raytheon IDS has increased the share of its procurements going to small businesses from 27 percent in 2004 to 51 percent this year. And total procurement has gone from $400 million to $1 billion in the same time period.
Smith said he wants to keep the momentum going as Raytheon IDS enters the next five-year cycle. And the company has developed an “OpenAir” business model to make it easier to form partnerships with small businesses technology partners and universities.
“We have to create these partnerships because they add value … to Raytheon and the market,” Smith said. •

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