Posted on May 20, 2010 with No Comments
Supporting the War Fighter - Eric W. Barton
Relyant Spray Foam Insulation
An explosion caused by a live shell left behind at a World War II-era military base killed two California boys in 1983 and triggered a new private industry funded by the U.S. Department of Defense: finding and clearing explosives from former military sites.
“That event really brought to light the issue of unexploded ordnance,” says Matt Kaye, president and CEO of EOD Technology Inc. in Lenoir City. “EODT was one of the first couple of companies started to respond specifically to that issue.”
Headquarters: Lenoir City
Offices: Washington D.C.; Tuscon, Ariz.; Huntsville, Ala.; Kabul, Afghanistan; Baghdad, Iraq; Pretoria, South Africa; Kuwait City, Kuwait; San Jose, Costa Rica; Victoria Island, Lagos, Nigeria
Leadership: Matt Kay, president, CEO
Ownership: Employee owned
2010 projected revenues: $300 million
East Tennessee employment: 170
Global employment: 5,000, including contractors
Ranking: No. 86, Top 100 Defense Contractors; No. 118, Top Government Contractors by Government Executive magazine
The company, founded in 1987 by two retired Marine sergeants, worked through the next decade removing explosive ordnance and accumulating the experience to win multimillion dollar contracts as the U.S. military increased its presence in Iraq and Afghanistan.
The company – along with a Maryville firm launched by two former EODT employees – has seen its fortunes grow exponentially as the Defense Department has turned increasingly to the private sector to support the its efforts in the Middle East. Contracts awarded by the Defense Department grew from $170 billion in 2002, the year before the Iraq war began, to $365.9 billion in 2009, according to the federal government’s USA Spending website. EODT has capitalized on that trend since receiving its first contract in Iraq in 2003 to clear explosives from oil fields and industrial centers. “Certainly the wars in Iraq and Afghanistan have fueled a lot of opportunity, a lot of growth for us. They have also put us on a bigger stage worldwide,” Kaye says.
Its core business remains explosive ordnance disposal, hence its name, but since adding security services to protect is own operations, EODT has expanded to provide security for military installations, embassies and borders. It has also added construction, building temporary housing for troops and contractors, along with services needed to support operations, including information technology and logistics, to its offerings. “A lot of the work that we have done in Iraq, and a lot of the work we are doing in Afghanistan now, is associated with cleaning up land mines, the explosive remnants of war,” Kaye says.
EODT, which expanded in 2008 into additional offices and a warehouse in Kingston, employs about 170 people locally and about 5,000 around the globe, including contract workers, with about 4,000 of them in Iraq and Afghanistan now.
The company was ranked among the top 600 U.S. Department of Defense contractors for fiscal 2009, receiving contracts worth $66.8 million, according to a federal government listing of contractors at www.USAspending.gov. The company was one of 84,079 contractors awarded Defense Department contracts totaling $365.9 billion in 2009, according to the spending report. Government Executive magazine ranked EODT as 86th among the Top 100 Defense Contractors and 118th among the Top Government Contractors for 2008. Competitors include giant companies with a broad scope of services, such as Tetra Tech and Shaw Environmental, as well as much smaller, specialized companies, Kaye says. “A lot of companies popped on the scene as Iraq and Afghanistan happened, as these wars came about,” he says. “There is a whole element of our business that is understanding how to work with the government within the regulations and being able to do that properly. It takes some time to gain a full understanding and appreciation for that.”
EODT won its first federal contract in 1992 for the U.S. Army Corps of Engineers and grew steadily to about $25 million in annual revenues in 2003. Entering Iraq in 2003, EODT doubled its annual revenues to about $50 million. “We have built from there and are projecting about $300 million this year,” Kaye says. Its strategic growth plan aims to take the company to $1 billion, he adds. Earlier this year, EODT was named prime contractor on a $945 million contract – its largest to date – to provide national and international military support services, including munitions clearance and hazardous waste cleanup. Among its subcontractors are Science Applications International Corporation and CAPE Inc., global companies with offices in Oak Ridge and Knoxville, respectively.
Relyant, based in Maryville, entered the business of supporting military operations more recently, with its founding in 2006 as Critical Mission Support Services.
Founded: 2006 as Critical Mission Support Services
Offices: Afghanistan, Iraq, Africa
Principals: Eric Barton, president/CEO, and Daniel Smith, vice president of operations
Projected 2010 revenues: $30 million
East Tennessee employment: 20
Global employment: 200, including contractors
Owned by former EODT employees, Relyant landed its first $17 million contract for vehicle maintenance in Iraq in 2007, according to Eric Barton, Relyant president and CEO since 2008.
Barton and vice president of operations Daniel Smith, both former Marines, are equal partners in the company. “We consider ourselves to be an infrastructure development company that works in a war zone,” Barton says. In 2008, the company won contracts in Afghanistan to construct two- and three-story relocatable buildings and to provide spray foam insulation to tents. “A lot of what we do is smaller in scale, so you don’t have big businesses going after this business. We are the only company actively spraying foam in Afghanistan,” he adds.
Relyant’s technicians spray foam on military tents, coating them with an inch or two of insulation, and have them ready for occupancy in an hour. Barton ticks off the savings to the Army: a 66 percent reduction in fuel costs, 11,000 fewer troops on the road delivering fuel, a reduction from five to two gallons of fuel per hour for a generator. “This is a feel-good contract for us. At the end of the day we can go home and see the impact. The troops are sleeping better, the climate-controlled tent is easy to manage, not nearly as many troops are on the road delivering the fuel, which is dangerous,” Barton says. “Outside those FOBs (forward operating bases), the safety zones, it is cowboy country.”
This year, Relyant also entered the security contracting business, winning a $10 million contract with the Joint Contracting Command in Afghanistan to provide escorts for construction contractors at the forward base at Sharana, Afghanistan. Barton said 125 people will be working on that contract by June. Relyant now has more than 200 employees and contract workers in Afghanistan and Iraq, with most in Afghanistan, and about 20 employees in its Maryville office. Barton expects to have contracts worth $30 million by mid-year and projects that Relyant will expand significantly as the need for its services grows, even as the United States. eventually withdraws from the Middle East war zones.
Planning for war’s end
What happens when most U.S. troops head home?
The CEOs say their companies have strategic plans addressing their growth as the military diminishes its presence in Iraq and Afghanistan. And both say the companies aren’t totally dependent upon U.S. military contracts now. “Somebody has to come in and deal with what’s left behind,” Kaye says of peacetime contract possibilities. “As Iraq redevelops, the legacy of Saddam’s regime and the legacy of the wars are still there. There is still a tremendous amount of de-mining and explosive cleanup that has to be done in order for oil exploration to go on.”
He expects his company’s role to continue to be as important as military needs to change.
“A lot of our services in the future will be employed under the smart power concept, applying a bit more effort before conflict to avoid conflict,” he says. While 65 percent of EODT’s business is in Iraq and Afghanistan, the company also maintains offices in South Africa and Costa Rica, where it provides security at U.S. embassies, and in Kuwait and Nigeria. Besides the federal government, Kaye says the United Nations, United Kingdom and NATO are among EODT clients.
Stability operations around the world are the future for the company – work that requires getting to some remote location and supporting those there with food, shelter and security, whatever the reason. “That whole integrated stability operations package is our business model going forward. We look to grow that to about $1 billion,” Kaye says.
Barton says an estimated 90 percent of Relyant’s work is in Iraq and Afghanistan, but the company is seeking to increase its commercial business here and overseas by marketing its infrastructure development capabilities for use wherever needed. Similar to EODT’s stability operations, Barton said he envisions the company setting up everything needed to support a camp – relocatable buildings, tents, information technology and other life-support systems – anywhere in the world. “The revenue from Iraq and Afghanistan is not going to be a forever opportunity,” Barton says. “That makes us work that much harder to get our business established in the U.S.” Relyant also has offices in Uganda, Jordan and Libya.
EODT and Relyant may be neighbors, but they’re not all that friendly.
Litigation and accusations included in lawsuits – allegations that those founding Critical Mission Support Services stole trade secrets from EODT while working for EODT, and counter-allegations that EODT violated arms export laws and overcharged the government – make it unlikely that the two would ever partner to bid on a military contract. A lawsuit filed by EODT against CMSS resulted in an agreement in January that CMSS would change its name. The CMSS name was similar to the name of a business unit of EODT’s, Kaye says, and that was confusing to clients.
Barton said the name change to Relyant, which officially occurred April 1 and was rolled out at a celebration at the Tennessee Theatre on April 12, had been in the planning stages before the settlement was reached. Both would comment only briefly on the lawsuit.
“That was what we wanted out of the suit,” Kaye says of the other company’s name change.
Barton says, “The name change was something we were happy to embrace.”
While Relyant is privately owned, EODT employees have a share of the business through an employee stock ownership plan. Barton, as a former EODT employee, says he remains connected to his former employer through that plan and hopes EODT continues to do well.
The two CEOs bring back different backgrounds and management styles to their roles.
Kaye, an Oak Ridge native with a bachelor’s degree in finance from Auburn University, worked at SAIC and Westinghouse before joining EODT in 1993 as a marketing assistant was subsequently promoted to marketing director, finance director and vice president before assuming his current role. His understanding of the “nuances of working with the government,” he says, complimented the experience of the skilled bomb technicians that founded the company.
Barton, originally from Illinois, joined the Marines at age 17 and later received his bachelor’s degree from Southern Illinois University in electronics management. Barton went on to earn two masters’ degrees and began work on a doctorate before joining EODT in 2005 and then Critical Mission Support Services in 2007. He became president and CEO in 2008. One of his Dobermans often accompanies him to work in Maryville.
Kaye divides his time between EODT’s corporate headquarters in Lenoir City and its office in Washington, D.C.. Barton said he spends an average of one to two weeks each month traveling to various Relyant locations, including Iraq and Afghanistan.
Kay Brookshire is a contributing writer to the Greater Knoxville Business Journal.
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