Newport Beach-based defense contractor Global, A 1st Flagship Company has managed to place No. 23 among Orange County’s 110 largest women-owned businesses on the strength of a single client.
The company works exclusively with the U.S. Navy to decommission military vessels that have operated past their projected lifespans, said Sherri Bovino, owner and chief executive of the female-owned company, which has six Navy contracts worth $66 million. It employs 420.
Decommissioning is the process of removing weapons, electronics, fuel, engines and other equipment from a ship. The Defense Department determines whether the stripped hulls can be used for target practice, sunk and turned into a reef, converted into a museum or memorial, recycled for the metal, or sold to friendly countries that want to upgrade their navy fleets.
Global also can maintain and store the hulls at various Navy shipyards for later reactivation when the Navy expands its force.
Bovino said she bought the company in 2005 from her former employer, Owl Companies, a large government contractor in Irvine, using a portion of her retirement savings.
Owl Companies formed Global in 1964 as part of a joint venture with Atlas Corp. in New Jersey to provide operations and maintenance services to the U.S. Army’s Kwajalein Missile Range in the Republic of the Marshall Islands, about 2,900 nautical miles east of the Philippine Islands.
Global won defense contracts over the decades to decommission military vessels, conduct emergency salvage operations in the case of a sinking ship, and provide medical training to military personnel.
The Defense Department set aside Owl’s contract in 2005, a few months before it came time for renewal, saying it wanted a smaller company to service vessels.
Bovino, sensing an opportunity, said she convinced Owl’s third-generation owner, Gregory Burden, to sell the remaining four months of the four-year contract, plus Global’s operations, to her.
“As the vice president of operations (for Global), I already knew how to run the contract,” she said, but she needed the technical expertise of Global’s specialists and administrators to service it.
She and eight other bidders responded to the government’s request for proposals, but she lost the contract to George C. Sharp Inc., a defense contractor in New York.
“I thought the government made a mistake,” she recalled, and she protested the award.
Sharp’s bid came in 15% lower, according to documents from the General Accountability Office, because a government evaluator mistakenly inserted miscal-
culated labor costs when Sharp omitted those items in its proposal.
Bovino prevailed, and Global received the contract in December 2005, along with compensation of $130,000 for legal costs.
“I had a $6 million contract and 40 employees when I started,” she said.
Global won new contracts with the U.S. Air Force in 2007 and subcontracts with Boeing, the Chicago-based maker of defense systems and aircraft, in 2009.
“Then I had to pull back operations and conserve cash during the Great Recession,” Bovino said. “Defense cuts also occurred, and that lowered every defense contractor’s (operating) budget.”
Global picked up additional contracts in 2010 to service and maintain ships in Pearl Harbor and in Washington state, she said.
It expanded by offering emergency ship salvage and environmental cleanup services to the Navy, training programs to firefighters in Bahrain, and underwater ship propeller repair.
The latter service saves the Navy money, Bovino said. “It costs about $1 million a day to dry-dock a ship.”
The Competition
The business owner along the way has had to rebut competitors’ challenges to Global’s status as a small- or female-owned business—necessary to be eligible for the lucrative work.
Bovino about three years ago successfully refuted a challenge by her old rival Sharp and Honolulu defense contractor Ship Maintenance LLC, which claimed Global was still affiliated with Owl Companies because the companies shared a headquarters building and many Global employees were former Owl employees, according to a document from the U.S. Small Business Administration.
Bovino said many companies rent office space in the same building as Owl and proved with paperwork that she was Global’s only owner and that Owl employees chose to remain with Global after it was sold.
“It is a tribute to Ms. Bovino’s stewardship” that those employees chose to remain with the company eight years after the sale, the SBA document said.
The agency agreed with Bovino, opening the way for Global to receive the five-year, $32.4 million maintenance contract for Navy vessels in Pearl Harbor.
Successor Plans
Bovino said she encourages more women to start their own businesses and contract with the federal government.
“There’s a lot of opportunity in government contracting, because there are a lot of incentives for small businesses and for women-owned businesses.”
The federal government buys about $400 billion in goods and services each year and reserves 5% of the contracts by dollar value for small businesses, including those owned by women. Global is among the estimated 53,000 such businesses that compete for the approximately $20 billion available each year.
“I’m very grateful for all I have accomplished and built,” Bovino said, “and I feel that I have a responsibility, an obligation to give back” to the employees and the community.
Bovino, 62, said she has no plans to retire soon and that she wants to continue to build a sustainable business for her employees.
“My managers (around the world) run their operations as if it were their own company,” she said. “A good chief executive doesn’t have to be in the office every day to set standards. CEOs establish standards, a culture (of continual respect)” and hold people to those requirements every day.
“I’ve released good performers if they were disrespectful to employees,” Bovino said. “It’s difficult, but it’s for the good of the company.”
