Tribally owned tech startup lands $42.B Air Force contract

DILLON TABISH

Flathead Beacon

POLSON (AP) - From his office atop a hill on the south end of town, Thomas Acevedo can see the impressive reach of Flathead Lake stretching into the northern horizon beyond his home - the Flathead Indian Reservation - and providing a vital source of sustenance to the region.

From the same perch, he said he can envision the continued growth of a family of Salish and Kootenai businesses under his watch that are setting a global standard among tribally owned companies.

In November, the U.S. Air Force awarded S&K Aerospace a multi-year contract worth at least $4.2 billion. It's the largest single contract in the history of S&K Technologies, a corporation headquartered in Polson and owned by the Confederated Salish and Kootenai Tribes that encompasses five subsidiary companies, including S&K Aerospace.

Acevedo, CEO of S&K Technologies since 2007, said he considers the Air Force contract the latest in a long line of success stories, rooted in the tribes' identity as "A People of Vision" and the entrepreneurial spirit that thrives across Montana. It also provides another significant boost of revenue for a corporation that has given more than $25 million since 2002 to the CSKT tribal government, which oversees the reservation and its roughly 7,750 enrolled tribal members.

"This is a phenomenal win for us," he said from inside the company's headquarters. "It has given us tremendous satisfaction to be able to (give back to the tribes through annual dividends) and help at that level."

At the end of November, S&K Technologies will employ more than 500 people, including 50 in Polson and St. Ignatius, where the other company office is located. Among this large staff working around the globe, all types of skills and backgrounds are represented, including physicists, psychologists, engineers and former military personnel.

The corporation operates offices across the U.S., including Georgia, Colorado, Texas and Florida. In 2012, it opened an office in Riyahd, Saudi Arabia, after a lengthy vetting process that few companies survive. S&K did, receiving approval to set up shop in "The Kingdom" to work with the Royal Saudi Air Force for supply-chain management government contracts. Now, with S&K establishing a strong reputation and knowledge for doing business in the Middle East, the Polson-based corporation has become a go-to source for other U.S. and foreign companies trying to develop offices in The Kingdom.

"Our reputation stands out," said Dermot O'Halloran, senior vice president of corporate development with S&K Technologies.

The recent multi-billion dollar contract, which was awarded after a competitive bid and analysis process, could likely lead to added employment as roughly 100 people will be dedicated to the Air Force's Parts and Repair Ordering System - PROS - V Program. This contract, which has the ability to extend 15 years and swell beyond the $4.2 billion baseline, will put S&K in charge of facilitating parts and repair orders, as well as specialized engineering and technical services, with more than 90 foreign military customers.

S&K was the primary contractor overseeing the U.S.-based program for the last six years, and when the latest, expanded contract was announced, the company emerged victorious despite other companies bidding lower than the Polson-based outfit, according to Acevedo.

"We were not the lowest bidder, but they said the reason we got it was because we did beyond-satisfactory work on previous contracts and did substantially better work," he said.

The PROS program is tasked with providing allied customers a way to maintain aging weapons systems, and S&K oversees the global network of vendors and specialists who will accomplish that high-profile goal.

"The success of the program relies on our ability to process a significant volume of customer requirements in a relatively short period of time to meet the requirements of the contract, as well as managing a well-qualified and diverse vendor base to satisfy the wide range of needs," said Tim Horne, director of PROS programs.

If the importance of the Air Force contract seems impressive, consider the other projects and programs in which S&K is actively involved.

S&K Logistics Services, another company under the S&K Technologies umbrella, is overseeing the cleanup of two former nuclear development sites. In Moab, Utah, S&K has led efforts to remove uranium-ore tailings and other contaminated materials at the former atomic energy site. Recently, the local corporation was awarded another contract to lead cleanup efforts for the U.S. Department of Energy at the Savannah River site, a 310-square-mile property in Georgia where nuclear materials were once refined for deployment in nuclear weapons.

Through a partnership with Boeing, S&K Global Solutions, another subsidiary, is providing a wide range of engineering and technical services for NASA's International Space Station program and Orion program, which is being built to take humans farther than ever before in space. Among its many projects, the company is closely involved in the development of human-like robots that NASA plans to use on manned space missions, including the exploration of Mars.

NASA has developed a particular fondness for working with the Polson company dating back to 1997, when the government agency awarded the contract that fueled the inception of S&K Technologies.

Today, S&K has an office at Johnson Space Center in Houston with a team that works directly with the director of NASA. At the agency's last space shuttle launch in Florida, Acevedo was invited to witness the event in person. He also sat in one of the Mars rover simulators and experienced the state-of-the-art technology that the Polson-based company has helped shepherd.

"It's amazing how far (NASA) has come so far," he said. "It's good to be part of that team, stretching those dimensions."

The tribal startup in Polson has evolved extensively in a relatively short period of time.

In the early 1980s, a deep recession swept the U.S., leading to increased unemployment and economic turmoil. At that point, 35 percent of families on the Flathead Indian Reservation were living below the poverty threshold, according to U.S. Department of Labor statistics. Jobs were few and far between, and the CSKT tribal government began exploring ways to spur economic development.

Enter Tom Acevedo. Born in St. Ignatius and raised in Plains, Acevedo, a tribal member, earned a bachelor's degree in political science at the University of Montana and a law degree at the University of New Mexico. Hoping to help his home tribe and fellow tribal members, Acevedo returned to northwest Montana after working in Washington, D.C., and Colorado.

Under the 1934 Indian Reorganization Act, the U.S. government allowed tribes to establish unique forms of government. The CSKT became the first collective of tribes in the U.S. to adopt a federally approved constitution and governing body. Through this agreement, tribes had the ability to own corporations. Boards of directors are established to oversee the specific corporations. In the instance of S&K Technologies, five board members are appointed to staggered four-year terms oversee the company.

Through these corporations, tribes can gain added revenue sources that benefit the entire reservation.

"The tribal government was really trying to find employment and was focused on job creation," Acevedo said. "They were subsidizing a lot of businesses and not really focusing on the bottom line or worried about why the businesses were not in the black."

Acevedo was tasked with evaluating the tribes' businesses and the local economy. Instead of investing in traditional industries, such as timber, the CSKT turned their attention to tourism. Acevedo spearheaded the creation of KwaTaqNuk Resort in Polson, a $7 million development that replaced a former mill site on the shores of Flathead Lake with a large hotel and casino. While the KwaTaqNuk was a success, the long-term viability of relying on tourism was uncertain, leading the tribes to explore tech startups and manufacturers.

"The tribes have always been more interested in being environmentally oriented, from its history as the first tribe to designate the Mission Mountain Wilderness as an official tribal environmental haven," Acevedo said. "That's the mindset. So we decided, if we're going to do other businesses, we didn't want to do smokestack industries."

The CSKT made another small investment in a startup manufacturing company called S&K Electronics, founded in 1984. It began with local employees, including O'Halloran, a Polson native, going door-to-door seeking work with residents and businesses.

Small but successful growth followed. And then the big break arrived in 1997, when U.S. Sen. Max Baucus brought NASA leaders to northwest Montana to show off S&K as a rising star in the tech services world. The agency awarded the local company a multimillion-dollar robotics contract, which spurred the development of S&K Technologies as a separate services corporation and allowed S&K Electronics to stay focused on manufacturing.

"They were looking for a company that seemed to really know what it was doing. They took a chance with us," O'Halloran said. "The key to our success was teaming with the right people. In this case, we didn't have any experience in that type of environment, but we knew what we had in our tool kit."

From there, the company thrived. By 2003, S&K had landed contracts with the Department of Interior, the Department of Defense and the various military branches. In 2006, it became apparent that the growth was only going to keep expanding exponentially. Enter Acevedo once again. After taking his talents to the East Coast to help other tribal governments address economic change, he once again returned home to Polson and was named CEO of S&K Technologies. In 2007, the decision was made to branch out with the subsidiary companies that could specialize in different areas and programs, a move that has proven visionary.

The success of S&K also provided confidence and a clear model that paved the way for Energy Keepers, another tribally owned corporation that oversees the management of the former Kerr Dam south of Polson. In 2015, CSKT became the first tribes in the nation to own and operate a major hydroelectric facility when they took over Kerr Dam.

Today, Acevedo could have an office atop any hill in any city in America. S&K Technologies could thrive in any corner of the country, perhaps even more so in an investor-rich hub like Silicon Valley or the government contract capital of Washington, D.C.

But Acevedo, O'Halloran and the other S&K leaders in northwest Montana say they are perfectly content being right where they are now. This is their home, and Acevedo said he relishes the chance to introduce national and global leaders to this place and its successful family of tribes.

"When (potential partners) look at us, they see our brand and they see that we're wholly owned by a Native American tribe," Acevedo said. "When they look at us, they see that identity and they see that all of the profits go back to the tribe and its people. That goes a long ways. And we can explain about the Confederated Salish and Kootenai. It is a nice opening to our story."