Brick by brick, American business loses edge
Jeffrey Anderson THE WASHINGTON TIMES
Since its founding in 1912, Summitville Tiles has been a proud family
company with a legacy of service to the government.
F.H. "Pete" Johnson, the company's founder and a World War I veteran,
stood proudly by the company's motto, "American Made, American Owned"
- and true to his word, Summitville tiles cover the roof of the White
House and the floors of Washington, D.C., Metro stations.
Today, Mr. Johnson's grandson, David Johnson, wonders whether that
legacy has any value. Last year, his company had high expectations of
landing a subcontract to provide brick for a school to be built at a
U.S. Army base. Despite competitive prices and federal laws intended
to support American manufacturers - not to mention common sense, Mr.
Johnson thinks, given the nation's poor economy - his company lost out
to a German competitor.
The loss will be felt beyond Summitville Tiles' bottom line and could
have dire effects on the already depressed region in southeastern Ohio
that is clinging to economic life.
Equally troubling, when Summitville challenged the selection process,
Mr. Johnson encountered a wall of silence, bureaucratic confusion and
disturbing signs of contract-fixing within the U.S. Army that rewards
a foreign company over a domestic one.
The $250,000 subcontract for an elementary-middle school project at
Fort Bragg in Fayetteville, N.C., has since caught the attention of
lawmakers from Ohio, who are concerned that the Army has no say over
hundreds of millions of dollars in military subcontracts. The Defense
Department's office of inspector general already has opened an
administrative investigation into the selection process.
Two Democratic congressmen from Ohio, Rep. Charlie Wilson, whose
district includes Summitville, and Rep. John Boccieri, along with
Reps. Jim Jordan and Bob Latta, Ohio Republicans, wrote to Secretary
of the Army John McHugh in late November and asked for an explanation
of "the Army's decision to overlook a domestic manufacturer and the
failure to support the American economy."
A month later, an Army official responded that the Army "does not have
privity of contract with subcontractors or a subcontractor contract
award." The official added that the German company was exempt from the
Buy American Act, which protects U.S. manufacturers from foreign
competitors because of a World Trade Organization pact to stimulate
After a closed-door Capitol Hill meeting in January with high-ranking
Army officials, Mr. Wilson appeared unassuaged. "I still strongly
believe that the Army should be better about ensuring that American
companies are given a fair shake," the congressman said in a
statement. "This experience with Summitville Tiles has reinforced my
strong belief that American companies should be supported at all
levels of federal contracting.
"I look forward to working with my colleagues to ensure that we have
better oversight of such contracts in the future," he pledged.
That may come too late for Summitville Tiles. Mr. Johnson was forced
to lay off 22 more workers in an ever-shrinking manufacturing belt. In
recent years, his work force has shrunk from 750 to 150 - all while
his global competitors skirt the Buy American Act in the wake of a
"This is another example of why American manufacturing is dying on the
vine," Mr. Johnson said.
A bright spot
With military base realignment and consolidation throughout the
country, new construction is a potential bright spot for some builders
and manufacturers. In the Fort Bragg region alone, officials expect to
spend $274 million over the next several years just to build schools,
according to the Army's comprehensive growth plan.
However, Ohio lost almost a half-million jobs between 2000 and 2009 -
a recession driven primarily by manufacturing losses, said George
Zeller, a Cleveland-based economic research analyst.
In an election year, with congressional seats at stake and a steady
erosion of manufacturing jobs, Mr. Johnson is wondering whether
lawmakers will press the Army for oversight of the subcontracting
"These jobs are not coming back," he said. "We don't just send out a
memo, either. We go into the factory and explain what is happening,
like a family at the kitchen table. It's painful to look into people's
Although the school at Fort Bragg was not going to make or break
Summitville, Mr. Johnson said it would have helped stop the bleeding.
"When folks are down, I'd think the military in particular would want
to help American companies," he said.
In July, the U.S. Army Corps of Engineers awarded the $39 million Fort
Bragg school construction contract to Balfour Beatty Construction, a
subsidiary of a British engineering firm of the same name. The firm
has more than $16 billion in annual revenue.
Balfour Beatty has excelled in winning military contracts.
From 2000 to 2008, the Defense Department awarded the company more
than $185 million in contracts, according to federal government
records. In October, the firm announced an award of military
construction projects totaling $449 million.
Once a general contractor was hired for the Fort Bragg project, Mr.
Johnson said, the Army "preselected" his German competitor to provide
brick for the school.
Had 'no role'
Army officials contend they had "no role in the selection of
contractors or materials," said Fort Bragg Garrison public affairs
officer Thomas D. McCollum. "That belongs to the Army Corps of
Not so, countered Louis J. Moore, chief of the regional contracting
center for the Army Corps of Engineers in Savannah, Ga. He said the
general contractor chooses subcontractors and materials.
"Every general contractor has their own way of doing it," Mr. Moore
Officials at the Department of Defense Education Activity Fund, which
provides funding for school construction on military bases from its
$1.8 billion annual budget, pointed to Fort Bragg: "The local
installation has the final say on those matters," Kevin Kelly, chief
of financial operations, said of the selection of building materials.
Complying with specifications issued by the Army Corps of Engineers,
Balfour Beatty solicited bids last fall for a brick veneer wall system
for the Fort Bragg school from a number of companies, said Balfour
Senior Vice President Kent Long.
Mr. Long said many factors come into play in choosing a vendor: price
of materials, availability, conformity with Army standards. A key
factor at Fort Bragg, he said, was that one of Summitville's
competitors, Feldhaus Klinker, a German company, supplied brick for
two other projects under way at the base.
"We certainly could've used other brick," he said. "But [Feldhaus] has
already been used, so the benefit is, you don't have to go through the
approval process again."
Such decisions can be cost-effective, but it remains unclear whether
that was the case at Fort Bragg.
"If we arbitrarily gave out price information, it could stir up a
hornet's nest," Mr. Long said in declining to disclose competing bids.
In November, he said, his team met at Fort Bragg with officials from
the Army, the Army Corps of Engineers and the Defense Department, and
the group decided to go with Feldhaus. Afterward, according to
multiple sources, Balfour's architect, Cathy Roche, of the Orlando,
Fla., firm Schenkel Shultz, told a Summitville sales representative
that Feldhaus was "preselected."
The problem, Mr. Johnson said, is that Summitville had not yet quoted
Ms. Roche referred questions to her firm, which referred questions to
The Washington Times reviewed numerous documents and written
communications and interviewed multiple parties involved in the
selection process. The documents show that in early December, after
Feldhaus was selected as the brick veneer supplier, Balfour Beatty
project manager Dave Goltz issued a purchase order and told a
Summitville sales representative that Summitville's price was $3 per
square foot higher than Feldhaus' for 100,000 square feet of brick.
However, a quotation from Summitville's distributor, Harwood Brick, a
Florida company, shows that Summitville priced its brick at $4.58 per
square foot. That would put the German bid at $1.58 per square foot,
Mr. Johnson said.
"With costs of shipping across the Atlantic Ocean and transportation
to the site, that simply is not possible," he said.
Harwood never quoted Summitville's price to Balfour Beatty either, he
added. More troubling, Mr. Johnson said, is that Summitville suspects
that the domestic distributor of Feldhaus brick had something to do
with freezing out Summitville.
"We believe that Fort Bragg has been misled by those representing the
German [company]," he wrote to Ohio's congressional delegation in
Feldhaus is distributed exclusively in the United States by United
Wall Systems of Greenville, S.C. Brian Drummond, president of United
Wall, did not return calls.
Although Mr. Long maintained that Balfour Beatty relied on brick wall
construction firms to solicit brick prices, Mr. Johnson contended that
those firms also never conveyed his actual price to Balfour Beatty.
"We included a brick estimate in our overall price," said Roger Webb,
chief operating officer for Florida brick installer Tilt-Con, noting
that his company estimated the cost of brick at $5 to $8 per square
"Maybe Balfour Beatty got [Summitville's] price from the distributor,"
said Brent Long, of Charlotte, N.C.-based Choate Construction, which
won the subcontract to install the German brick.
Brent Long of Choate and Kent Long of Balfour Beatty are twin
In early December, Summitville Tiles filed a formal complaint with the
Defense Department's office of inspector general claiming a "no-bid"
contract award. Gary M. Comerford, a spokesman for the inspector
general's office, confirmed recently that an administrative
investigation is under way. The office's policy is to decline to
comment on such matters until resolved, he said.
On Jan. 12, Mr. Johnson received a letter from Mr. Moore of the Army
Corps of Engineers, explaining that "Balfour decided to procure the
brick directly from Feldhaus in order to improve its ability to meet
the construction schedule."
Mr. Long of Choate Construction, however, said the brick does not need
to be delivered "until spring at the earliest, because of delays due
to wetlands issues." Mr. Johnson replied that Summitville could have
delivered the brick by now with no problem. "We have a whole new
product line - it's 'shovel-ready,' " he said.
Sen. Sherrod Brown, Ohio Democrat, declined to comment, although his
office said it was looking into the subcontractor issue and that the
senator had concerns with World Trade Organization procurement rules.
A spokesman for Sen. George V. Voinovich, Ohio Republican, said his
boss does not get involved with individual procurement matters.
Although the office regretted that Summitville was not selected, he
said, "if any [federal regulations] were violated, we hope [the
Defense Department] will address the issue through proper channels."