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Thursday, May 24, 2018
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Pinellas trying to grow its defense contracting economic base

While the defense industry isn’t as visible a part of Pinellas County’s economy as tourism, it employs thousands of people here and is a focal point for county economic development officials.

Two of Pinellas’ biggest defense contractors, Raytheon and General Dynamics, recently landed lucrative government contracts that experts say should help stabilize that sector of the local economy, even as the Pentagon cuts spending in the coming years.

Raytheon, which has facilities on Bryan Dairy Road in Largo and on 22nd Avenue North in St. Petersburg, was awarded a $15-million modification to an existing contract with the U.S. Navy last week for the development of an antiaircraft detection system. Last month, General Dynamics announced it had won a contract worth as much as $562 million to build lightweight vehicles for special operations forces, though the contract has since been challenged by two rival firms.

The contracts aren’t expected to directly bring jobs to Pinellas, especially considering the challenge to General Dynamics’ contract could delay it for months or shift the job to a rival. But economic development officials say such contracts in the past have spurred the expansion of other high-tech companies working in everything from medicine to marine science.

And, over time, more jobs may come, especially as Pinellas County leaders make a push to preserve industrial lands and to lure more manufacturers here.

Apart from the contract it recently won, General Dynamics plans to merge its Pinellas facility with the company’s operations in Charlotte, N.C., likely bringing more jobs here, company spokesman Rob Doolittle said. Company officials don’t know how many jobs that will be yet.

The company’s armament and technical products business in Charlotte develops weapons and components for military vehicles. By the end of the year, that business will fold into the ordnance and tactical systems business headquartered in St. Petersburg.

“The consolidation is being implemented as a result of changes in the overall defense market,” Doolittle said.

General Dynamics employs 170 people at its offices off Roosevelt Boulevard, primarily in management, finance and other back-office roles. That’s out of about 2,500 workers spread among 10 states and several international locations.

With its proximity to MacDill Air Force Base, which houses U.S. Central Command and Special Operations Command, St. Petersburg remains a strong location for General Dynamics, Doolittle said.

The Raytheon contract calls for the continued production of Cooperative Engagement Capabilities, a communications system that allows Navy vessels to detect and track aerial threats, company spokeswoman Carolyn Beaudry said.

The work will be performed primarily at the company’s Largo facility, as well as its St. Petersburg location and one in Dallas.

The eight-county Tampa Bay region is home to nearly 2,400 defense contractors, according to the Tampa-Hillsborough Economic Development Corporation. Since 2000, those companies have received almost 45,000 military contracts, valued at more than $24 billion. Nearly half of that is in Hillsborough County.

In Pinellas County, the defense industry accounts for nearly 40,000 jobs, most of whom are civilian contractors, according to Enterprise Florida’s Florida Defense Alliance.

In addition to Raytheon and General Dynamics, the county is home to major defense contractors such as Lockheed Martin, L-3 Communications and SAIC. Economic development officials contend their proximity to MacDill Air Force Base and track record gives them a chance to lure more defense industry jobs here.

While there are far more defense contractors in Hillsborough, Pinellas is drawing an increasing number of firms, observers say.

”There’s more that are heading in Pinellas’ direction,” said Mary Allison Yourchisin, president of the National Defense Industrial Association’s Tampa Bay area chapter. “A lot of the companies that are deciding to get a bigger footprint … are setting up shop in Pinellas.”

Part of Pinellas’ appeal lies in easy access to MacDill, which is just across the Gandy Bridge from the Gateway and Feather Sound areas. The county’s push to preserve industrial-zoned land and ongoing efforts to recruit high-tech manufacturers may also be paying off.

“One of our target industries in Pinellas County, built on the strength of our manufacturing, is defense and national security,” said Pinellas County Economic Development spokeswoman Stacey Swank.

The challenge to General Dynamics’ $562-million contract to build lightweight vehicles for Special Operations forces shows just how fierce the competition for defense industry jobs is.

“It’s an extremely competitive environment for awards these days, and so the rate of protests has gone up,” said Jon Bayless, a retired Navy officer who is now vice president of business development at Tandel Systems, Tampa defense contractor.

“They’re going to look for an angle to fight it.”

Cuts in military spending and increased competition for contracts likely will likely hurt the area’s defense industry in the short-term, but those firms’ roots in the area and connection to other high-tech manufacturing will keep it strong in the long run, Tampa Bay Partnership President Stuart Rogel said.

Pinellas County, in particular, has a variety of small and large manufacturers reflecting a diverse set of skills in everything from tool-and-dye to plastic extrusion -- expertise that’s well-suited to developing product prototypes for the military and private clients, Rogel said.

The county is also home to an annual defense industry trade fair hosted by U.S. Rep. Bill Young, who chairs the House Appropriations subcommittee on defense and serves on the Appropriations subcommittee on military spending and veterans affairs.

Many of the region’s leading defense contractors have spurred other high-tech research and development companies working in electronics, medicine, marine science and aerospace, Rogel said.

“Short-term, there are some storm clouds ahead; longer term, looking backward and forward, this is a very strong and healthy and diverse industry for our region,” he said.

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