Canvassing the Marketplace

Mom-and-pop canvas shops are a common feature of midsize western cities. Such shops typically have been part of a community for decades, and Spokanes F.O. Berg is no exception. Started by Frederick Oliver Berg in 1883, the company built the tent city that housed much of Spokane after the devastating fire of 1889.

According to company President Andy Barrett, while these shops usually make and repair tents, awnings and other canvas items, not many of those shops have evolved into anything like what Berg has become.

Through an aggressive expansion push during the past five years, Berg has become a multi-million-dollar collection of companies that makes much more than tentsand reaches far beyond the inland Northwest.

It was little, sleepy F.O. Berg, Barrett says. It did $1 million in sales every year. If you dont expand your product lines, thats where youre going to stay.

Berg, which Barrett owns with business partner Craig Dolsby, now comprises three firms that together are on pace to have more than $65 million in sales this year, up from $27 million in revenues in 2008. Next year, Berg has a good shot at cresting $100 million in sales, Barrett says.

One of the biggest vehicles for Bergs growth has been a partnership with the Coeur dAlene Tribe of Idaho, located 35 miles southeast of Spokane on the Idaho side of the Washington-Idaho state line. In 2006, Berg sold 75 percent of Echelon Manufacturing LLC to the Coeur dAlene Tribe and renamed it Berg Integrated Systems. That companys manufacturing facility in Worley, Idaho, makes metal structures designed to be placed in remote areas for military operations, disaster-relief efforts and mine-exploration sites, among others. Six miles away, in Plummer, Idaho, the company manufactures large-capacity, collapsible fuel tanks.

The partnership paid dividends almost immediately. In 2007, the company landed a five-year contract with the U.S. Army thats worth up to $400 million. For the Army, Berg Integrated Systems is making large fuel bladders that can withstand the 130-degree Middle East heat.

To produce these fuel tanks, Berg Integrated Systems established in Plummer what Barrett calls a moonshine shop, customizing its manufacturing equipment specifically to produce these collapsible fuel tanks. The tanks vary in size; the biggest ones are 72 feet long by 72 feet wide and can hold up to 210,000 gallons. The Army fuel tanks began to roll off the production line in 2008.

Chief James Allan, chairman of the Coeur dAlene Tribe, says the Army contract is a major first step for Berg Integrated Systems. The manufacturing operation has landed other contracts as well, both in the public and private sectors, and has grown to employ approximately 100 peopleabout half of whom are tribal members.

In many ways, Berg Integrated Systems has lessened the blow of the national recession were currently experiencing, Allan says.

The tribes ownership allows Berg Integrated Systems to secure public-sector contracts it wouldnt be able to land otherwise. The company is also certified under the U.S. Small Business Administration 8(a) Business Development Program, HUB Zone and the U.S. Department of Defense Indian Incentive Program, which also open doors to government contracts.

Berg Integrated Systems accounts for about 60 percent of Bergs overall sales, but the other two companies, Berg Manufacturing and Berg Flexible Containment, are growing as well. Both of those companies are located in Spokane Valley and together employ about 100 people.

Berg Manufacturing makes a variety of tents and inflatable shelters. The tents conform to military specifications, but are sold in both the private and public sectors.

Berg Flexible Containment produces spill-containment products and flexible tanks. One such product is containment berms, which tractor-trailers carrying hazardous materials park on in case of a spill. The berm is designed to contain all the material being transported, if need be.

Across the three companies, nearly 75 percent of Bergs sales involve public-sector work. In many cases, the company doesnt pursue government contracts alone.

How we grow from lowly Berg to a bigger company is by partnering with the big boys, Barrett says.

Those corporations include Science Applications International Corp. (SAIC), Lockheed Martin Corp. and others. While Berg is substantially smaller than its Goliath partners, it often takes the lead on contracts where small businesses receive preferential consideration.

In the upcoming year, Berg hopes to expand its reach into the private sector, targeting mining companies, large manufacturers and others. One of its bigger private-sector customers presently is Kaiser Aluminum, which has a large aluminum-rolling and heat-treating plant in Spokane Valley.

Which company will see the most sales growth in the near future remains unclear, Barrett says.

All of these companies have large possibilities in front of them, he says.