Thursday, May 12, 2005

Heartland HUBZones

To participate in the HUBZone Empowerment Contracting Program a firm must: Be small. Located in an "historically underutilized business zone" (HUBZone). Be owned and controlled by one or more U.S. Citizens (I rememeber many years ago doing business in a foreign country I had to have a "national" act as a front, have we come to that in the US?) At least 35% of its employees reside in a HUBZone.

A "HUBZone" is an area that is located in one or more of the following: A "non-metropolitan county" that is: not located in a metropolitan statistical area…and in which the median household income is less than 80 percent of the non-metropolitan State median household income…has an unemployment rate that is not less than 140 percent of the statewide average unemployment rate for the State in which the county is located; Lands within the external boundaries of an Indian reservation.

Written into law in 1997, the current version (adopted June 11, 1998) is championed by Senator John F. Kerry. The law requires that 3% of all federal contract funding be directed towards a HUBZone certified business by 2003 when the program is fully implemented.

The HUBZone program is based on the economic needs of everyone in a community…To obtain and maintain HUBZone status, a company’s principle headquarters must be located in a designated HUBZone area, and 35% of its employees must live in those areas. With projected goals of 25,000 new jobs and $6 billion in federal contracts funds allocated by 2004, the HUBZone program will create unprecedented growth in communities that have been neglected in business development.

A map to see if your firm qualifies. The heartland so qualifies. A job is a job.

Government and Military Contracts Save New Madrid Employer: New Madrid, MO -- Most of our casualties in Iraq come from explosions or mortar rounds. But a New Madrid company is developing cutting-edge ways to keep our military safe.

Kontek used to make concrete and steel buildings for telecommunication companies. But the bottom fell out of that industry in 2001. And Kontek lost millions, until managers turned to the government and business took off in a different direction.

About 50 employees at Kontek still work with steel and concrete. Only now they build barriers and buildings to withstand explosions (pouring concrete is "cutting edge"?)... "These fragments explode from the mortar three times faster than a bullet," explains Merrill. "This is what kills people." An explosives test at the University of Missouri - Rolla last month shows trucks crashing into barriers and buildings exploding. Merrill says his products all passed. "It's to exciting to go from making something so mundane, to doing something with such impact," he adds.

Merrill says federal law makers from Missouri helped secure $2.4 million in grant money from the defense department, and credits them with continuing to establish contacts with the military. "Because we are working with the defense department, the military pretty much tells us what they're looking for, what they need, and we try to develop something for them," Merrill explains. Kontek's business is booming... In four years the company went from the verge of closing, to a record year last year.

"We have quite an impact in the New Madrid economy," he says. "Also in other ways. It's broader than that. We buy a lot of stuff." Merrill is confident a couple of their new products will generate more military contracts. Kontek products already sit at 12 nuclear power plants and eight air force bases.

"And we're still in the first inning with this!" he says.

Another article on Kontak: With the help of Emerson (Joanne, R-MO), Kontek strengthened its ties with the University of Missouri engineering schools at Rolla and Columbia, which both did blast mitigation work and research on different types of concrete barriers. That research combine with Kontek facilities and Emerson's political connections has brought Kontek back to the forefront of a new and expanding industry. Kontek is currently under contract to install concrete barriers for perimeter security at 12 nuclear facilities throughout the country. Furthermore, through research done in cooperation with the universities, Kontek has patents pending on several designs of concrete delay and blast resistant barriers. Kontek is back on top.

With billions going to IT contracts (where some of us watch the rest of us) and billions for armament abroad and billions for homeland "security," I'm reminded of another little weasel, backed by bankers and industry, who geared his nation's economy toward war and defense of the fatherland. What a ball game, US vs "Them" and this is just the "first inning."

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