BRAC Bucks

Lumberyards also sell building materials to housing developments on military bases. The Base Realignment and Closure (BRAC) program created a huge need to build new housing on the bases that expanded, while bases that closed often were repurposed by private developers, sometimes with help from economic development or affordable housing funds. That business has begun to slow as BRAC winds down; the last round of BRAC money was authorized by Congress in 2005. Congress is also expected to debate military spending at it struggles with the federal budget deficit, though the results of that debate could differ markedly depending on who wins the White House and controls Congress.

But there is still work to be had. This summer, VNS sent several hundred Energy Star-rated windows to Beale Air Force Base in California. VNS has also provided lumber, plywood, and trusses to the military base at Guantanamo Bay, Cuba. The building materials used to build these projects are much more exacting than those needed at conventional developments. For instance, construction projects that receive federal stimulus funds may have to use building materials that are marked “Made in America.”

And there’s more attention to the specifications, VNS’ Campbell says. Many government programs that fund construction projects now demand certifications for energy efficiency. If a housing project receives funding from multiple agencies, there may be multiple, overlapping requirements. Local officials can also get into the act at projects like the Village Park Apartments, where Goodman says the city of Grand Junction is heavily involved in the design process.

Despite shrinking local budgets, lumberyards can also do a significant amount of business directly with local governments. Civic work provides $1 million to $2 million of the $25 million in annual sales at Prince Lumber in New York City, according to Christine Zotinis, controller for Prince.

To get bidding rights, Prince has registered itself as a vendor of building materials on the websites for the City of New York and New York State. Doing so puts it in line to get faxes containing requests for bids, terms of the project, and the date the bid is due.

Other dealers don’t bother.

“A lot of the products don’t line up,” says Patrick Goebel, president of Star Lumber & Supply, which has eight locations in and around Wichita, Kan. For example, contractors that build public schools may order sheetrock in different dimensions than what’s used by traditional homebuilders. The deliveries also need to be serviced in different ways. Star does provide flooring materials to schools; it’s part of the company’s growing business that provides materials to larger commercial projects.

“I belong to a lot of community things,” says Jim Taylor of Warner Robins Supply in Georgia. “I go to the city council meetings. … Golf courses and restaurants and sidebar conversations is where deals are struck.”

On the other hand, the lumberyard never returned to the business of providing hollow metal doors to schools, which it left several years ago during the boom. Hanging the doors is a complicated proposition that would require hiring a welder, says Goebel.

Minor Accounts

There’s also a certain amount of business from government employees who simply walk into the store to buy supplies. At Ojai Lumber in Southern California, forest rangers from the fire station at Los Padres National Forest come in to buy building materials to maintain the campgrounds. The purchases are small, adding up to a few hundred dollars a year in lumber and odds and ends. The staff serves these employees the same way they would any other customer, except that the rangers don’t pay sales tax.

In New York, Prince Lumber also has government officials—especially from the Post Office—buying small quantities of building materials. In most ways they’re regular retail customers—until a buyer lacks a government credit card and instead needs to arrange for a purchase order.

Ojai’s Richard McArthur once sold materials to a buyer from the Vandenberg U.S. Air Force base in Lompoc, Calif. It was a small order, but the buyer was very precise about the specifications required.

“It was chains and hasps to secure something in a bunker… probably rocket fuel,” says Ojai owner Richard McArthur. It was just a $24 order, but the buyer needed to get a purchase order from the base before he could close the deal. “It was three months before he could pick up the product.”

At least he didn’t demand a fire-rating label.

Selling To Win Bucks from Bureaucrats

Selling to projects funded with government money can be worth the effort provided you develop the right habits. Here are tips from dealers that already are in the game.

• Follow the competition for funds. State housing finance agencies reserve federal low-income housing tax credits and often post the winning developments online. You can also find out about planned developments by attending community meetings and asking your town or county redevelopment officials.

• Be ready to meet exacting specifications. From fire ratings for doors to R-ratings for insulation, government developments are often very, very specific about the building materials. The specifications are often tied to funding, so their may be no wiggle room.

• Get on a formal bid list if your city or county has one.

• Hurry up and wait. Government developments can take much longer to plan and complete than conventional development. Be clear upfront about how long you can maintain a price for building materials.

• Adjust your billing methods. Expect to use invoices rather than signed contracts, says Patrick Goebel of Star Lumber, Wichita, Kan. And make sure you get a signed change-order from the architect. Once the materials are delivered, the architect may be less than eager to take responsibility for the extra cost of the change, especially if the project is under some scrutiny from local politicians.—B.A.