May 28, 2007
Creative thinking | Penobscot Bay Media lands a spot in a lucrative federal contract program
By Kerry Elson
Sen. Olympia Snowe was thrilled. When she found out that Penobscot Bay Media in Camden was accepted into a $5 billion federal contracting program last year, she proclaimed the small technology company a success story. "[The] business truly exemplifies the tremendous spirit of American entrepreneurs," she said at a Senate hearing on federal contracts.
For Ann Yahner, president of Penobscot Bay Media, getting accepted to a program that will allow her company to bid on major federal projects is a big deal. Of 4,000 applicants nationwide, just 44 qualified, and most of them were big firms near Washington, D.C., which Yahner calls the "beltway bandits." The companies do have one thing in common: they're owned by Navy or military veterans who became disabled during service. The federal government created the contract, called the Veterans Technology Services Government-Wide Acquisition Contract, or VETS GWAC, in 2004 to help boost veteran-owned companies.
Pen Bay Media, as the company is called, is the only service-disabled veteran business in New England to receive federal money through the VETS GWAC program. "For the state of Maine to have a small company in Camden go head to head with the big boys is pretty important," says Ed Dahl, an advisor at the Procurement Technical Assistance Center, a state agency that helps companies land federal contracts.
Yahner says the VETS contract could fuel huge growth for Pen Bay Media, which specializes in film and video, Web development, mapping and robotics. The company has landed contracts with federal agencies in the past, but the VETS program is a "huge opportunity," Yahner says. "Before, when we were out of the mainstream, it was harder for us to compete."
She expects the company to double in size over the next year, from 22 employees to as many as 40, and more than double its 2006 revenues of $1.2 million. The extra money, Yahner says, will help the company attract qualified workers ˆ a difficult proposition in the midcoast region, which, like much of the state, has lost college graduates to out-of-state jobs. "We can't afford to pay our people a good salary and benefits unless we take larger jobs," she says.
The federal dollars wouldn't just benefit Pen Bay Media, according to Yahner. The company could spread the wealth by subcontracting work from the VETS contract to other companies in Maine.
Still, Yahner acknowledges that there are plenty of challenges for a company like Pen Bay Media. For starters, Yahner says banks are reluctant to loan money to tech startups. The region's small pool of qualified workers also is enough to put the squeeze on any company's growth plans. And Pen Bay Media's fortunes hinge in part on a federal program that could dry up at any minute. Yahner remembers the years after 9/11, when slow federal spending forced Pen Bay Media to lay off 14 workers. (Those workers have since been rehired, says Yahner.)
But Yahner is confident Pen Bay Media will continue to grow, partly because it's not relying only on federal contracts. The company is discussing ways to balance federal work with projects for state, municipal and commercial clients. To Yahner, the increased business is more a result of smart business development than her veteran status. "A lot of the groundwork that we did over the years is beginning to pay off," she says.
The federal connection
Penobscot Bay Media launched in 1999, branding itself as an "information visualization" company. In simple terms, that means taking data and putting it in a visual format such as a database, digital map, website or video. For example, Pen Bay Media created payroll software for Cianbro Corp., and then created a video that trained people to use that software.
Several years ago, the U.S. Marine Corps hired the company to make a 30-hour online course for officer training. The course, "Theory and nature of war," included maps and video simulations of historical battles.
The company has three divisions: geographic information systems, which comprises 70% of the business's revenue, plus Web development, and film and video production.
Pen Bay Media is in the process of moving into a larger space at Camden's Knox Mill, though with 22 employees, it's still relatively small. The company's size however, hasn't kept it from working with high-profile clients. Eighty percent of the company's clients are state or federal agencies, including the Connecticut Department of Environmental Protection, the New York City Department of Health, the U.S. Marine Corps and the National Marine Fisheries Service. The other 20% are commercial clients like L.L.Bean, Fidelity Investments and New York media giant News Corp. From 2005 to 2006, revenue has grown from $800,000 to $1.8 million. (For more on Pen Bay Media's work, see sidebar, "Three-legged stool," page 36.)
Pen Bay Media had some success marketing itself out of state. But in 2004 the company took a step that would allow it to gain even more contracts. That year, President George W. Bush announced the VETS contract. Though the company's three partners, David Berez, Stu Rich and Ann Yahner's husband, Frank, weren't service-disabled veterans, they knew someone who was: Ann Yahner, who at the time was a company advisor, is a retired Navy captain with a disability ˆ she injured her back while serving as a nurse in Vietnam and carrying soldiers to hospital beds.
Ann Yahner received 51% ownership of Pen Bay Media, to qualify the company for the contract. Today, Berez and Rich each own 24.5%, and Frank Yahner is no longer a legal partner in Pen Bay Media, though he is still involved with the company.
It was a smart move, Yahner says, but not an easy one. At first, Yahner wasn't sure she even wanted the job. "I have a pension. I've done my career. I'm a grandmother," she says. But she soon realized she was craving activity during her retirement years, so after some consideration, she agreed to take the position. "This company does some really cool stuff, and it was a compliment to be involved in it," she says.
The company was accepted to the VETS program in September 2006, sharing "thimblefuls" of champagne to celebrate, Yahner says. Pen Bay Media won its first project in April. The work involves doing GIS mapping for Langley Air Force Base in Virginia, a client that previously worked with Pen Bay Media. Yahner isn't sure how many contracts the company will win in 2007, but estimates that the company will land enough federal work to more than double its revenues to $3 million by the end of the year.
Well-trained workers wanted
But like other tech firms in the midcoast, Pen Bay Media has some obstacles to overcome. For starters, funding has been an issue: In D.C., for example, government contractors can use the upcoming government pay as collateral to get working capital from banks. But that's easier said than done in Maine, where most bankers think lending against government money or intellectual property is too risky. "The lending institutions in Maine aren't used to dealing with [industries besides] real estate or manufacturing," says Stu Rich, manager of Pen Bay's GIS division. "It's been a limitation to growth, quite frankly."
As a result, the three owners have leveraged their own personal property to support the company, including a second mortgage for Ann and Frank Yahner. The company also has received money from angel investors. The company earlier this year raised $1 million in two months from friends and family to launch the robot division. In the future, Yahner says, the company may turn to out-of-state banks to get funding.
Another challenge has been to find enough qualified workers. The company currently is hustling to find people for four open positions in the GIS division, but in a month of interviews, had only made one hire, a 2007 University of Maine grad. "We're just not finding much," Rich says. "It's really hard to sell the midcoast region as an exciting place to live to a 20-something."
To help grow the pool of applicants, Pen Bay Media late last year helped launch the Midcoast IT Planning Group, a trade group that's working to create training programs and software user groups at the University of Maine's Hutchinson Center in Belfast. Members of the group include KNOW Technology in Camden, Midcoast Internet Solutions in Rockland and Maine Coast Design in Searsmont. The group hopes this year to launch training programs to prepare recent college graduates in Maine for jobs at IT firms.
Whether the midcoast can build a viable technology cluster remains to be seen, however. Joe Kumiszcza, excecutive director of MESDA, the state's technology trade group in Westbrook, is working with the planning group to develop the training centers. But he says the midcoast needs better infrastructure for telecommunications, from more widespread Internet access to more reliable cell phone service. "My own phone doesn't work up there sometimes," he says.
But Yahner says the company has already drawn some young people to the midcoast. One recent hire moved to Maine from New Mexico last year, attracted to a job at Pen Bay Media.
Yahner is crossing her fingers that the federal program will mean new contracts. After all, she and her partners already have begun moving into Pen Bay Media's new offices in the Knox Mill. "We stand a decent chance, I think, of winning contracts," she says.
For Ann Yahner, president of Penobscot Bay Media, getting accepted to a program that will allow her company to bid on major federal projects is a big deal. Of 4,000 applicants nationwide, just 44 qualified, and most of them were big firms near Washington, D.C., which Yahner calls the "beltway bandits." The companies do have one thing in common: they're owned by Navy or military veterans who became disabled during service. The federal government created the contract, called the Veterans Technology Services Government-Wide Acquisition Contract, or VETS GWAC, in 2004 to help boost veteran-owned companies.
Pen Bay Media, as the company is called, is the only service-disabled veteran business in New England to receive federal money through the VETS GWAC program. "For the state of Maine to have a small company in Camden go head to head with the big boys is pretty important," says Ed Dahl, an advisor at the Procurement Technical Assistance Center, a state agency that helps companies land federal contracts.
Yahner says the VETS contract could fuel huge growth for Pen Bay Media, which specializes in film and video, Web development, mapping and robotics. The company has landed contracts with federal agencies in the past, but the VETS program is a "huge opportunity," Yahner says. "Before, when we were out of the mainstream, it was harder for us to compete."
She expects the company to double in size over the next year, from 22 employees to as many as 40, and more than double its 2006 revenues of $1.2 million. The extra money, Yahner says, will help the company attract qualified workers ˆ a difficult proposition in the midcoast region, which, like much of the state, has lost college graduates to out-of-state jobs. "We can't afford to pay our people a good salary and benefits unless we take larger jobs," she says.
The federal dollars wouldn't just benefit Pen Bay Media, according to Yahner. The company could spread the wealth by subcontracting work from the VETS contract to other companies in Maine.
Still, Yahner acknowledges that there are plenty of challenges for a company like Pen Bay Media. For starters, Yahner says banks are reluctant to loan money to tech startups. The region's small pool of qualified workers also is enough to put the squeeze on any company's growth plans. And Pen Bay Media's fortunes hinge in part on a federal program that could dry up at any minute. Yahner remembers the years after 9/11, when slow federal spending forced Pen Bay Media to lay off 14 workers. (Those workers have since been rehired, says Yahner.)
But Yahner is confident Pen Bay Media will continue to grow, partly because it's not relying only on federal contracts. The company is discussing ways to balance federal work with projects for state, municipal and commercial clients. To Yahner, the increased business is more a result of smart business development than her veteran status. "A lot of the groundwork that we did over the years is beginning to pay off," she says.
The federal connection
Penobscot Bay Media launched in 1999, branding itself as an "information visualization" company. In simple terms, that means taking data and putting it in a visual format such as a database, digital map, website or video. For example, Pen Bay Media created payroll software for Cianbro Corp., and then created a video that trained people to use that software.
Several years ago, the U.S. Marine Corps hired the company to make a 30-hour online course for officer training. The course, "Theory and nature of war," included maps and video simulations of historical battles.
The company has three divisions: geographic information systems, which comprises 70% of the business's revenue, plus Web development, and film and video production.
Pen Bay Media is in the process of moving into a larger space at Camden's Knox Mill, though with 22 employees, it's still relatively small. The company's size however, hasn't kept it from working with high-profile clients. Eighty percent of the company's clients are state or federal agencies, including the Connecticut Department of Environmental Protection, the New York City Department of Health, the U.S. Marine Corps and the National Marine Fisheries Service. The other 20% are commercial clients like L.L.Bean, Fidelity Investments and New York media giant News Corp. From 2005 to 2006, revenue has grown from $800,000 to $1.8 million. (For more on Pen Bay Media's work, see sidebar, "Three-legged stool," page 36.)
Pen Bay Media had some success marketing itself out of state. But in 2004 the company took a step that would allow it to gain even more contracts. That year, President George W. Bush announced the VETS contract. Though the company's three partners, David Berez, Stu Rich and Ann Yahner's husband, Frank, weren't service-disabled veterans, they knew someone who was: Ann Yahner, who at the time was a company advisor, is a retired Navy captain with a disability ˆ she injured her back while serving as a nurse in Vietnam and carrying soldiers to hospital beds.
Ann Yahner received 51% ownership of Pen Bay Media, to qualify the company for the contract. Today, Berez and Rich each own 24.5%, and Frank Yahner is no longer a legal partner in Pen Bay Media, though he is still involved with the company.
It was a smart move, Yahner says, but not an easy one. At first, Yahner wasn't sure she even wanted the job. "I have a pension. I've done my career. I'm a grandmother," she says. But she soon realized she was craving activity during her retirement years, so after some consideration, she agreed to take the position. "This company does some really cool stuff, and it was a compliment to be involved in it," she says.
The company was accepted to the VETS program in September 2006, sharing "thimblefuls" of champagne to celebrate, Yahner says. Pen Bay Media won its first project in April. The work involves doing GIS mapping for Langley Air Force Base in Virginia, a client that previously worked with Pen Bay Media. Yahner isn't sure how many contracts the company will win in 2007, but estimates that the company will land enough federal work to more than double its revenues to $3 million by the end of the year.
Well-trained workers wanted
But like other tech firms in the midcoast, Pen Bay Media has some obstacles to overcome. For starters, funding has been an issue: In D.C., for example, government contractors can use the upcoming government pay as collateral to get working capital from banks. But that's easier said than done in Maine, where most bankers think lending against government money or intellectual property is too risky. "The lending institutions in Maine aren't used to dealing with [industries besides] real estate or manufacturing," says Stu Rich, manager of Pen Bay's GIS division. "It's been a limitation to growth, quite frankly."
As a result, the three owners have leveraged their own personal property to support the company, including a second mortgage for Ann and Frank Yahner. The company also has received money from angel investors. The company earlier this year raised $1 million in two months from friends and family to launch the robot division. In the future, Yahner says, the company may turn to out-of-state banks to get funding.
Another challenge has been to find enough qualified workers. The company currently is hustling to find people for four open positions in the GIS division, but in a month of interviews, had only made one hire, a 2007 University of Maine grad. "We're just not finding much," Rich says. "It's really hard to sell the midcoast region as an exciting place to live to a 20-something."
To help grow the pool of applicants, Pen Bay Media late last year helped launch the Midcoast IT Planning Group, a trade group that's working to create training programs and software user groups at the University of Maine's Hutchinson Center in Belfast. Members of the group include KNOW Technology in Camden, Midcoast Internet Solutions in Rockland and Maine Coast Design in Searsmont. The group hopes this year to launch training programs to prepare recent college graduates in Maine for jobs at IT firms.
Whether the midcoast can build a viable technology cluster remains to be seen, however. Joe Kumiszcza, excecutive director of MESDA, the state's technology trade group in Westbrook, is working with the planning group to develop the training centers. But he says the midcoast needs better infrastructure for telecommunications, from more widespread Internet access to more reliable cell phone service. "My own phone doesn't work up there sometimes," he says.
But Yahner says the company has already drawn some young people to the midcoast. One recent hire moved to Maine from New Mexico last year, attracted to a job at Pen Bay Media.
Yahner is crossing her fingers that the federal program will mean new contracts. After all, she and her partners already have begun moving into Pen Bay Media's new offices in the Knox Mill. "We stand a decent chance, I think, of winning contracts," she says.
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