Army Annual Gathering Not Stunted By Budget, Government Uncertainty

The Army is shrinking, as is its budget. But its largest annual gathering is on track to be bigger than ever.

The Walter E. Washington Convention Center in Washington, D.C. is thrumming with the service’s largest industry showcase and professional development forum of the year.

A 16-day government shutdown threatened Army participation at AUSA, though the association maintained the show would go on regardless of whether federal agencies were open for business. The show was able to fill both exhibit halls and was set to outpace last year’s registration numbers.

AUSA spokesman David Liddle said the show was never at risk. Unlike other shows  that are primarily business venues for companies to market equipment and services to the military, AUSA is a major professional development conference for Army leadership. That distinction buoyed the show, Liddle said.  

“This is a professional development forum. It is part of how the Army accomplishes its mission. Because the Army got out front, there was never a real concern that they would not participate.”

High-ranking officers have canceled appearances in recent weeks and a spate of major military trade shows have fallen victim to the brutal combination of an  overall decline in the defense budget, sequestration and the two-week-long government shutdown.

Concern swirled last year that top Army officials would be kept from attending AUSA while this year the government shutdown stirred rumblings around Washington that the show could be the latest victim of fiscal constraint.

Liddle said the Army preempted potential budgetary impediments by assuring all local commands that their personnel were authorized to attend. That, in turn, encouraged exhibitors that the show would go on, despite the government’s fiscal woes, he said.

Three days before the show, preregistration was at 25,000 — slightly more attendees than had signed up online by this time in 2012. With onsite registrants, Liddle was confident the show would meet or exceed last year’s total attendance, which was just shy of 30,000.

The convention center’s combined 500,000 square feet of exhibition space is shared by 700 vendors, which is slightly fewer than last year, Liddle said.

“That’s still a strong showing,” he added.

Sequestration and falling military attendance have made it more beneficial for some contractors to attend as individuals instead of exhibitors.

Intevac Photonics, Inc, which develops night vision devices, has staffed a booth at AUSA in the past, but this year company officials decided to forgo exhibiting on the conference floor, said Drew Brugal, vice president and general manager.

The company still has a full plate of meetings at the conference with Army officials and defense contractors, he said. "The Army has historically been our largest customer. They have provided us with a lot of our funding. So we're strong supporters of AUSA. We think it's very, very advantageous for us to be here.”

Shitij Chabba, global business segment director with DSM Dyneema said the erratic fiscal position of the Army and the Pentagon was of little worry for companies that are able to accommodate a customer whose coffers are running dry.

“The good news is the government did, in fact reopen,” he said. “We are confident that this year will be better than last year.”

Dyneema makes stronger-than-steel armored plating from a proprietary polymer that can be molded to create any shape. The company is walking the same thin line many are walking at AUSA.

“The reality is the DoD budget is tighter than ever before,” Chappa said.  

Still, there were big-ticket items on display, as always. Helicopter manufacturers Sikorsky and Bell each trucked in full-scale mockups of their joint multi-role demonstrator aircraft that are still under development.  

Meanwhile, military vehicle manufacturers Lockheed Martin, AM General and Oshkosh continued to hype their respective offerings for the Joint Light Tactical Vehicle that will replace a portion of the Army’s Humvee fleet. One of the service’s top modernization priorities, JLTV is one of the few major vehicle procurement programs that has pressed forward despite impending austerity at the Pentagon.

International vendors made their way to the conference in the hope of wooing U.S. customers.

Some Israeli companies flocked to the AUSA for the first time. Among the new  vendors at the Israel pavilion were consulting firm Milper, Ltd., software company Verint Systems Inc., and Ricor Systems, which manufactures cooling equipment for thermal imagers.

RT LTA Systems, an aerostat manufacturer, is seeking to expand its market abroad and sees the United States as a customer, said Vice President Taly Kosberg Shmueli. The Army used the company’s Skystar 180 for six months for base protection in Afghanistan.

RT officials expected to book many meetings with potential customers during the conference, but arranging talks with government personnel was challenging because of the shutdown, she said.

“When we got into the building this morning, it was before eight o’clock in the morning,” she said. “There were many people rushing in, and all looked very excited. … I think the atmosphere is very good, and we really high hopes that many [military personnel] will arrive despite the shutdown.”

New this year is a small business pavilion occupied by 30 companies looking to do business with the Army. Nestled into the crowded and cavernous lower exhibit hall, the pavilion was humming with activity Monday morning.

AUSA is also holding a series of hiring sessions sponsored by Warrior to the Workforce, which gives active duty and former military personnel face-to-face access with companies looking to hire veterans.

AUSA made a de-facto admission that fiscal concerns would affect attendance  at the show, which is half an arms and equipment bazaar and half a professional development forum for soldiers and their families.

Pentagon travel restrictions, duty schedules and deployments were expected to keep thousands of soldiers of all ranks from attending the expo. So AUSA decided to bring the expo to them.

“When the Army faces extraordinary budget constraints, fiscal challenges – how do you complete the professional development mission? With technology,” he said.

Nearly all of the Institute of Land Warfare and family forums will belive streamed and archived online. Questions will also be taken via Twitter.

Topics: Business Trends, Doing Business with the Government, Defense Department, DOD Budget, Defense Contracting