Donald Fry: Military is driving Maryland’s anticipated biggest economic spurt in 60 years

By Donald C. Fry

We all know of cities such as San Diego, Jacksonville and Norfolk as military towns, whose economies are dominated by the major armed forces installations in their midst.

In Maryland, the presence of major military facilities in our state dwarfs the impact of the installations in most military towns in the U.S. In fact, it’s entirely reasonable to think of the Baltimore-Washington corridor and central Maryland as a bona fide military region.

Data from a report issued last week by Governor Martin O’Malley bears that out. The report, compiled by the Jacob France Institute of the University of Baltimore’s Merrick School of Business, calculates that the 17 major military installations in Maryland contribute $36 billion annually to the state’s economy.

To put this number in perspective, it’s equivalent to more than 13 percent of Maryland’s entire annual gross domestic product. It equals or exceeds the GDP of four U.S. states.

Military facilities in Maryland directly employ 118,000 workers. Military-related direct and indirect employment in Maryland exceeds 268,000 jobs – approximately 7.7 percent of our state’s total employment.

And that’s data from 2008 – before Maryland experiences the full scope of Base Realignment and Closure (BRAC) growth, which will make this report a useful tool in measuring the ultimate economic impact of impending job growth related to BRAC and other military-related expansion in Maryland.

That job growth — a major part of which is now under way and will occur within 12-16 months — will be massive, according to General Mike Hayes, director of Maryland’s Office of Military and Federal Affairs.

Estimates that BRAC and other planned growth at military facilities in Maryland will ultimately create 60,000 jobs are likely understated, Hayes told a business audience at an October 4 Greater Baltimore Committee event on BRAC. He predicted that the ultimate job growth could be more than 75,000 over time, including direct military positions, defense-related jobs at private contractors and growth in other services.

As many are aware, most of the military job growth will occur at Aberdeen Proving Ground (APG) in Harford County and Ft. Meade in Anne Arundel County.

At APG approximately 9,000 new BRAC-related jobs and an equal amount of other jobs will be created, according to state estimates. “Harford County, when you see it 10 years from now, will be dramatically different,” says Hayes.

Growth at Ft. Meade will include 5,700 direct BRAC-related jobs, plus an estimated 14,000 other jobs as a result of non-BRAC growth planned for the National Security Agency (NSA), including a new Cyber Security Command, the Army, and the Department of Defense.

Additionally, more than 5,500 new jobs are projected at other military installations in Maryland, including the National Naval Medical Center at Bethesda, Fort Detrick in Frederick and Andrews Air Force Base in Prince George’s County.

The reality is that the military in Maryland is in the midst of generating the largest single spurt of economic growth in Maryland since World War II, say state officials.

So, is Maryland ready?

On the bases themselves, the answer is unequivocally “yes,” says Hayes.

“Things are on time. There are billions of dollars in construction (on bases) that was involved in making all of this happen, and everything is progressing accordingly,” says Hayes. There is no element of the military timetable for moving BRAC workers to Maryland bases that is behind schedule, he says.

Outside the base gates, the challenges associated with BRAC are straightforward. They relate to workforce and infrastructure, Hayes says.

All new or vacant BRAC jobs will likely not be able to be filled from Maryland’s existing workforce. “These are wonderful jobs. These are high-paying jobs, but we’re not going to get from here to there, unfortunately, even with unemployment in Maryland, without recruiting externally,” says Hayes.

Meanwhile, transportation infrastructure improvements “are going to take time,” says Hayes. He notes that only within the last two years has the state completed infrastructure improvements associated with the growth at Navy facilities in southern Maryland that took place in the 1990s.

“The growth is going to create transportation challenges,” Hayes says.

For instance, of 107 heavily-impacted intersections identified near Aberdeen Proving Ground, Ft. Meade and the Bethesda National Naval Center, the state targeted 16 intersections for improvement, and advanced them to the design stage. Because of limited resources, the state then asked military stakeholders to select top priority intersection improvements to begin implementing in coordination with the BRAC schedule.

The Maryland Department of Transportation’s draft six-year capital budget plan for FY 2011-2016 currently includes $115 million for BRAC intersection projects – a decrease of $32 million from the FY 2008 six-year capital budget.

The only congestion-reduction alternatives in the near term are what’s known as “traffic demand management” such as car and van pools, ride-sharing, and a “Guaranteed Ride Home” program, which state transportation officials are working with the military bases to implement, in addition to promoting telework, flexible work hours and bicycle and pedestrian accommodations.

“We just have to be much more innovative relative to getting groups of people from point A to point B,” says Hayes. “They’re doing it much more aggressively out of necessity.”

What does this all mean for businesses? We can expect significant defense-related business opportunities as a result of military growth in our region, particularly in the area of defense research and development. The question on the minds of many in the private-sector is: how can Maryland businesses that aren’t currently defense contractors tap into these opportunities?

“People are forever coming in and saying ‘how do we take advantage of the largesse that is the expansion of things military in Maryland?’ And we tell them it’s all about networking – getting to know people, getting to know issues. Just stay engaged,” says Hayes.

He suggests learning the military and federal procurement systems and, if you’re a small business, finding a partner who is a prime contractor.

“Availing yourself of Department of Defense opportunities as a small business enterprise is extraordinarily difficult,” says Hayes. The best path to the opportunities is through partnering, which can be achieved by “constant networking and making the big guys, who are well-staffed to compete, aware of your capabilities.”

Hayes recommended that businesses interested in defense-related opportunities obtain the “Business Resources Guide 2010 – Contracting with Maryland’s Federal Facilities,” that was recently published by the Maryland Department of Business and Economic Development.

The booklet offers comprehensive information on topics including the federal procurement process, how to identify the right contacts at federal installations, how to find opportunities that fit your business, and how to prepare proposals. Among the highly useful information in the booklet is a list defining the more than 90 government acronyms – such as CAGE, ORCA, SDVOSB, and NAICS – that populate the prevailing language in the world of federal contracting.

As adroit federal contractors already know, and many Maryland businesses are in a position to discover, opportunity lurks among those acronyms.

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