Building a company
Published: Sunday, January 26, 2003 at 6:01 a.m.
Last Modified: Saturday, January 25, 2003 at 11:42 p.m.
The words "hiring spree" have become a bit dated, given our nation's current economic situation. But that's exactly what Jeff Bleke is conducting at his Newberry architectural and engineering firm.
The sudden surge in activity at Bleke's company, Ellis Environmental Group LC, is due to a pair of hefty government contracts awarded to the firm near the end of 2002. And while Bleke is quick to credit his staff's skills in winning those deals, he also knows that Ellis wouldn't be here without a U.S. Small Business Administration program that helped get the company started several years ago.
"It took quite a few years before we got any meaningful contracts," said Bleke, Ellis' president. "In the beginning, all we were doing was writing proposals. We even did most of the labor ourselves when we started, but the SBA deserves a lot of credit for getting us where we are right now."
The SBA's 8(a) business development program was created to help small "socially and economically disadvantaged" businesses. The SBA defines those companies as having minority owners, or individuals whose ability to compete in the free enterprise system "has been impaired due to diminished capital and credit opportunities."
Rusi Charna, a native of India, is Ellis' chief executive officer and owns 51 percent of the company. He and Bleke teamed with Bleke's father, Jim, to form Ellis Environmental Group in April 1996.
Knowing that they could qualify for 8(a) status with Charna at the helm, they applied for the program later that year.
At the time, Jeff Bleke and Charna were working for Environmental Science and Engineering (ESE), a local environmental services firm. Market conditions were forcing a lot of midsized environmental companies out of the business, and Bleke said he and Charna determined it was time to move ahead on their own.
"We knew the big firms would survive, but there would still be a niche for small operations," Bleke said.
With financial backing from Jim Bleke - who owned a Louisiana-based construction business - they created the company and originally worked as a subcontractor for ESE.
"We approached ESE, and they agreed to the arrangement," Charna said. "We were already doing a lot of government and military work with them, so it was a fairly easy transition."
Getting help from the SBA
Some of Ellis' first contracts were around $20,000, just barely enough to sustain the business in its early stages, Charna said. But a key codicil of 8(a) certification allows the company to avoid competition for certain bids on government deals, in order to give that business a chance to survive.
"At the same time, it's not a case of the government just giving away work," Charna said. "You have to be qualified to handle each of those contracts."
Drawing on previous experience with ESE, Charna and Bleke gradually began to win the confidence of government agencies. Their work consisted primarily of architectural consulting, environmental remediation for contaminated sites as well as construction work on projects at government facilities.
Charna and Bleke already had extensive backgrounds with engineering work, and the construction division of the business was developed largely through Jim Bleke's experience with his own company. It has become an integral part of Ellis' operations, Jeff Bleke said.
"We had to drag Dad out of retirement, but we were able to form a unique partnership as a result," Bleke said.
In 1998, Ellis broke completely free from ESE's operations and opened its own office on SW 62nd Boulevard in Gainesville. After moving twice, the company settled into its current location on SW 140th Terrace in Newberry - coincidentally, in the same buildings formerly occupied by ESE, which left the area several years ago.
Today, Ellis has two buildings - one for its construction division, and one for its engineering/architecture division - and also owns four acres of neighboring property. Bleke said the company is weighing the possibility of developing another building to accommodate its growth. Although it varies from project to project, Ellis' work force usually averages about 220 employees, Bleke said. Of that group, 80 work full time in Newberry.
The 8(a) program has provided a springboard for a number of other businesses in the SBA's North Florida district, said Ron Ammerman, supervisor of economic development in the SBA's Jacksonville office. The North Florida district encompasses roughly the northern half of the state, from Pensacola down to Orlando.
Beyond getting contracts for minority-owned companies, 8(a) status also includes training and marketing consultation from SBA officials, Ammerman said. In all, 8(a) constitutes a nine-year program that is designed to make businesses self-sufficient when they complete that term under SBA's guidance.
"It's rather extensive," Ammerman said. "Ellis in particular has done a super job of marketing themselves. We're very proud of the work they've done."
There are 150 firms in the SBA's North Florida district that are 8(a) certified, Ammerman said. Those companies are in various stages of the nine-year program, and they include construction companies, information technology firms and computer hardware suppliers.
The Jacksonville office of SBA sets a goal to obtain contracts each year for at least 10 percent of the 8(a) firms in the district, Ammerman said. In fiscal 2002, which ended last Sept. 30, there were 66 deals awarded to 28 of the firms, or nearly 19 percent of the district's 8(a) companies.
Those contracts totaled $42.7 million, and ranged in size from about $20,000 to $3 million, Ammerman said.
"This is not a 'gimme' program by any means," he said. "These guys can't sit back and wait for the contracts to show up. If they've done well, through the latter part of the program we push them to earn a higher percentage of their contracts from non-8(a) programs. That way when they graduate, it's not such a shock."
The right direction
It appears that Ellis is heading in the right direction with the 8(a) process. The firm is expected to graduate from the program in November 2005, and recently hooked onto its two biggest contracts to date.
Last October, Ellis was granted a three-year, $30 million deal with the U.S. Navy. The work will focus on design, building and construction projects at Naval facilities throughout the Southeast, such as airplane hangars and barracks.
The Navy has been Ellis' biggest client, Bleke said, and on a separate project some of the company's workers are installing an airfield lighting system for the Navy in Pensacola.
About two months after winning the Navy deal, Ellis received what Bleke called "the best news we've had yet." The company learned it would be responsible for between $75 million and $100 million worth of work on a $1.1 billion contract from the U.S. Air Force.
The five-year, worldwide deal will center on engineering, design and project supervision for Air Force concerns. Part of the work involves "unexploded ordnance," or environmental remediation at former Air Force weapons testing sites.
As a result, Ellis expects to add between 60 and 100 workers, many of whom will work in Newberry. The Air Force also has the authority to increase the contract to $2.75 billion during the next two years, which could result in even more work for Ellis.
Charna said the firm will need engineers, geologists, chemists and biologists to work on the Air Force projects. The biggest problem has been finding qualified candidates around Alachua County, which has a low unemployment rate but a tight pool of available workers for those types of jobs.
"We'll be hiring in many places," Charna said. "Our goal is to eventually get beyond 'small business' status. Luckily, we are starting to make a name for ourselves."
Joe Coombs can be reached at 338-3102 or email@example.com.
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