Contracts for UA, Tucson companies fell over $4M in '09, but remain vital

Feb 23, 2010 — The Arizona Daily Star

Ian Friedman

Feb. 23, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- NASA contract awards for local companies fell by more than $4 million in 2009, but industry leaders say the funding remains vital to Tucson businesses.

While Arizona saw the sixth- largest decrease in NASA funding of any state between 2008 and 2009, 30 other states also saw their funding levels drop, agency statistics show.

NASA funds are critical to small businesses' ability to develop new technologies, said Joe Berro, manager of business development and marketing for Ridgetop Group Inc., a Tucson-based company that works on health-management and electronic systems.

"It allows us to almost get an artificial pulse on the market because we have customers like NASA saying 'We have a need for this technology,' " Berro said.

Landing a NASA contract can have a measurable impact on job creation. Ridgetop Group brought in about $379,000 through three contracts in 2009 and will generally hire from one to five people depending on the size of a contact.

"It is a great way to get some outside money to develop some really fascinating technologies," Berro said.

A large part of the $4 million-plus decrease in funding for the region can be attributed to the University of Arizona's $2.8 million decline in NASA grants in 2009. But Joaquin Ruiz, dean of the UA College of Science, said the difference was simply a slight budget fluctuation and did not represent a trend.

The UA still received the largest amount of NASA funding in the region last year, bringing in $56.8 million through 166 contracts.

Overall, the Tucson region was awarded about $64 million worth of NASA contracts in fiscal year 2009, which ended Sept. 30. The entire state got $146 million.

Arizona ranked 13th in NASA funding in 2009. The state was ranked 12th in 2008.

On the flip side of the funding decline, Universal Cryogenics enjoyed a substantial increase in NASA contract values between 2008 and 2009, said Richard Schickling, who owns the Tucson company with a partner.

Universal Cryogenics was awarded about $222,000 in 2009 compared to roughly $29,000 in 2008. Schickling said the increase occurred once the company became more experienced at filling out contract proposals.

Universal Cryogenics has 10 full-time employees. It takes two employees two full days to put together a NASA project proposal, Schickling said.

Paragon Space Development Corp.'s $1.1 million in NASA funding in 2009 was the most for any commercial entity in Tucson.

Taber MacCallum, CEO of Paragon, said NASA projects are critical to his company, not only because of the money but also because they often inspire new developments in other branches of the company.

"We take the technology work, especially, and spin it into other areas," MacCallum said. "Most notably we are taking spacesuit design ideas and technology ideas and using them to develop a diving suit for the U.S. Navy so they can dive in extreme waters like jet fuel and chemical-warfare agents."

President Obama's recent announcement that he plans to shift NASA's focus away from launching rockets and toward becoming a research and development organization could be "terrible" for Paragon, which has spent 10 years working on NASA contracts relating to the now potentially canceled Constellation Program, MacCallum said.

The current market is also making it more difficult to win NASA contracts, Berro said. The poor economy has fueled many businesses' desire to win government-funded projects to supplement their private-sector income, which generates more competition.

Ruiz said he has noticed a simular trend in NASA grants for education. "When you try and get a grant, the chances of getting it are becoming smaller. There is more competition and there is not as much money," Ruiz said.

NASA contract-funded programs decreased nationwide by about $238 million in 2009. Last year NASA contracted about $15 billion worth of projects.

Ian Friedman is a NASA Space Grant intern who is paid in part by NASA. Contact him at 434-4083 or at friedman@azstarnet.com

Newstex ID: KRTB-0014-42282983