Disabled vet Sherman Barton battles for military contracts for business

They were 12 hairy years in Sherman Barton's life. The Burlington County resident worked in military intelligence for the U.S. Army in Germany and Italy from 1972 to 1984, getting shot three separate times while hunting terrorists, he said.

The personal toll was vast, including the loss of two ribs, a portion of his lower intestines and some hearing, along with three broken neck vertebrae, ankle stiffness and instability, muscle weakness and depression.

Those injuries earned Barton an honorable discharge and classification by the Department of Veterans Affairs as having "a 100 percent permanent and total service-connected disability."

It was a tough-to-take classification for the Edgewater Park resident whose military career was distinguished by his ability to hold up against many physical challenges.

Twenty-six years later — and after an 18-year second career as a disabled veterans counselor and special projects coordinator at the Department of Veterans Affairs in Philadelphia — Barton would see a silver lining in his disability designation: a leg up in competing for federal government contracts as a small-business owner. Or so he thought.

Even with laws and a presidential executive order in place to help steer government work to Service-Disabled Veteran-Owned Small Businesses, or SDVOSBs, Barton said he has found the opportunities maddeningly few and the process for securing such work too slow and unreliable on which to build a business.

He's on a mission to change that. His primary target is one of the largest Department of Defense purchasing centers in the United States — Defense Logistics Agency Troop Support in Northeast Philadelphia. The center provides more than $14.5 billion annually in food, clothing, textiles, medicines, medical supplies, construction equipment and industrial hardware to troops around the world and others in need.

After two years of e-mails, calls and near-monthly visits to DLA Troop Support — including an unauthorized failed attempt in October to see the commander — Barton's supply company, VE Source L.L.C. in Shrewsbury, Monmouth County, which currently is solely focused on getting government work, has secured just one SDVOSB contract. Awarded in March, it is worth $111,420 for 250 portable tents.

"How can you call this trying?" Barton said he has asked officials at DLA more than once.

According to the agency, DLA had 1,045 SDVOSB contracts totaling $62 million in 2010, and 3,780 valued at $48 million last year.

In all, DLA's small business contracts totaled $2.4 billion in 2011, or 30.7 percent of the contract dollars eligible for small business. The remaining $5.4 billion in work eligible for small business awards went, instead, to larger domestic companies. DLA officials said they feel a responsibility to support bigger firms to ensure they will be around at times of heavy need, such as troop deployment.

Barton said he has been assured by DLA officials that more opportunities are coming for small businesses owned by disabled veterans. Those assurances have been accompanied by reminders that the agency must also answer to other mandates, including that it provide work when possible to programs that employ federal prison inmates, and the blind or severely disabled. DLA Troop Support's contracts to two such primary programs, Federal Prison Industries and AbilityOne, totaled $422 million last year, said spokeswoman Stacey Hajdak. By law, those programs are given priority over service-disabled veterans and other small business subsets, such as women-owned and minority-owned firms.

"That's kind of a delicate balancing act we have to go through," Michael McCall, director of small business at DLA in Philadelphia, said in an interview earlier this month. "As the [federal] budget shrinks, that balancing act gets more and more difficult because everybody is trying to get their share of the pie."

Barton, 59, VE Source's president and majority owner, said he doesn't begrudge set-asides for other groups. He just wants more action for himself and other disabled veterans trying to forge new careers. Those opportunities are imperative as troops return home from Iraq and Afghanistan to a stingy job market, said Barton, who plans to hire disabled veterans as soon as his company lands some substantial deals.

"With the downsizing of the military, there are going to be more and more veterans like myself trying to start companies because there is no employment for them in the civilian sector," Barton said last week.

He formed VE Source with two partners in 2010 to take advantage of an executive order issued by President Bush in October 2004 to strengthen opportunities for SDVOSBs. That directive called on the heads of federal agencies to "more effectively implement" previously adopted SDVOSB initiatives.

They included the Veterans Entrepreneurship and Small Business Development Act of 1999, which established an annual governmentwide goal of awarding not less than 3 percent in total value of all prime contracts and subcontracts to SDVOSBs.

In December 2003, the Veterans Benefits Act was passed by Congress to build upon the 1999 measure. For instance, it allowed — but did not require — federal contracting officers to restrict competition to SDVOSBs and award a sole-source or set-aside contract under certain conditions, such as if it could be done at a fair market price.

In May 2004, the Small Business Administration (SBA) established a Service-Disabled Veteran-Owned Small Business Concern Program to implement the Veterans Benefits Act, establishing criteria and guidelines.

From Barton's perspective, it was an encouraging string of initiatives — until he retired from his Veterans Administration job in December 2009 and ventured into the trying world of entrepreneurship and DLA Troop Support.

The military supply agency would represent little more than tantalizing but unrealized opportunities, Barton said. Take for example a $28 million contract for cold-weather jackets for which VE Source submitted a bid to provide in July 2010. Seventeen extensions later, the contract still has not been awarded, Barton said.

"It's just bad bureaucracy," he said, adding that few small businesses have the financial wherewithal to endure such a waiting game.

At a closed hearing in December held at Burlington County College in Mount Laurel, one of Barton's partners, Christopher Neary, told the House Armed Services Committee's Defense Business Panel that the DLA "is not doing right by the policy of the executive order for the SDVO small business program or the veterans themselves," according to a copy of his remarks.

Long before that hearing, deficiencies with the SDVOSB procurement program had apparently registered at DLA headquarters in Fort Belvoir, Va., according to a July 2010 internal memo obtained by The Inquirer. In it, Nancy Heimbaugh, acquisition management director, and Peg Meehan, then-director of the office of small business programs, urged recipients to "reinvigorate your efforts to increase business opportunities for SDVOSB concerns."

The memo concluded: "Our wounded warrior entrepreneurs deserve nothing less."

At DLA Troop Support in Philadelphia, McCall said he shares that sentiment.

"We have the utmost respect for these people," he said.

McCall would not discuss why the contract for cold-weather jackets still has not been awarded nearly two years after bids were solicited.

"I can't go over the issues because it's an open acquisition," said McCall, a 30-year veteran of government contracting.

In general, such contracts, especially for large acquisitions, require substantial research, in part to determine if the companies wanting the work are legitimate and can be counted on, and if their costs are in line.

"Our number-one priority is we support the warfighter and we do that at a fair and reasonable price," McCall said. "We're stewards of the taxpayer. We want to make sure we spend wisely."

He acknowledged Barton's frustrations and did not fault his aggressive efforts to be heard, including the former Army intelligence officer's unauthorized visit in October to the office of Rear Admiral David F. Baucom, who happened to be out of town.

"The same tenacity they had that served us well in the military, they brought to business," McCall said of veterans as a whole.

Months later, Baucom took what McCall said was unusual action. He called Barton in February to discuss his complaints about the lack of set-asides for SDVOSBs.

"He assured me that the future would be brighter," Barton said.

A month later, VE Source got the tent contract, its first sale. McCall said other SDVOSB opportunities are in the pipeline, including a $50 million contract for Navy uniforms, a $20 million deal for body bags, and a $4 million agreement for rifle slings.

"The trend is definitely, well hopefully, going up," he said.

As the region's only procurement center representative for the SBA, Ricardo Sacidor keeps pressure on the DLA to provide work for all varieties of small business. He also warns those business owners that dealing with government is far different than the private sector in that "we don't have the luxury of making deals because we like you. When you are a contracting officer, you represent the taxpayer."

Having been a government employee for 30 years, Barton gets that. He just wants improvement.

"I'm not expecting anybody to give me anything," he said. "I want the opportunity to compete."

Contact Diane Mastrull at 215-854-2466, dmastrull@phillynews.com or follow @mastrud on Twitter.