Recently, the Executive Director of the NSL had a conversation with Ms. Star Dillard, the CEO of CEPEDA, a 5-year corporate member. Following is a transcript of their discussion. If other NSL Corporate Members would be interested in a similar conversation, please contact execdirector@navalsubleague.org.
Oliver: How did CEPEDA get started and how have you been asso ciated with it?
Dillard: CEPEDA was founded in 1977 by Ira Banta, who had pre vious experience manufacturing carbon dioxide (CO2) scrubbers. Under Ira’s management, CEPEDA began providing refurbishment services for all classes of submarines. In the early 1980s, CEPEDA began to refur bish the carbon monoxide-hydrogen (CO/H2) burners (eventually buy ing out a competitor for burner manufacturing). CEPEDA then began to manufacture both scrubbers and burners for new procurements and after a change in ownership in 1994 also began to participate in the Ad vanced Equipment Repair Program, i.e. performing onboard inspections and refurbishment of equipment to save the Navy from cutting the hull to remove our air purification equipment for repairs, and thus saving them considerable funds.
I started in 1999 as the Controller. I became the President in 2008 during the transition of buying out the then-current three owners and establishing CEPEDA as an ESOP (Employee Stock Ownership Plan). I have encouraged growth and diversification of other critical equipment. CEPEDA now is the sole source producer of CO2 Scrubbers, CO/H2 Burners, Hoppers, Demineralizers, Missile Dehumidification and Dry ing Machine, and automatic high-pressure air dehydrators. We also bid competitively on Level 1 valve bonnets and bodies, forward and aft op erating rods, piston rods, valve stems, actuators, and non-Level-I candle furnaces, fire extinguisher brackets, fire extinguishing system compo-nents, and accumulator contents indicators.
Additionally, we offer design, qualification, and acoustic testing ser vices and participate in Small Business Innovation Research contracts. We are currently designing and qualifying a chlorine generator for the Trident Class boats.
CEPEDA has a supportive management team and owner-employees who love supporting the U.S. Navy!
Oliver: How did you get started as a submarine supplier?
Dillard: We have always been a 100% Navy contractor. We now support the Navy with direct contracts from NAVSUP and Navy contrac tors, such as Newport News, Electric Boat, Raytheon, Hunt Valve, Kidde Fenwal, FabForm, and British MOD via TPG Maritime Limited.
Oliver: What percentage of your business would you say is subma rine-related?
Dillard: 100%
Oliver: With the prospects of a growing demand for submarine products to support more submarine construction, how do you feel about CEPEDA’s preparations to meet the growing demand?
Dillard: CEPEDA is prepared to offer more manufacturing and engineering services to the Navy and shipyards. CEPEDA offers Navy qualified welding, machining, fabrication, design, qualification, and test ing services for mission critical equipment. We have excess capacity due to some obsolescence in the units we have historically manufactured for new procurements. We have also begun to explore our supplier base to determine where they have excess capacity to support the shipyards. This task is on hold until I have demand details from the shipyards. We have implemented an ERP system and upgraded our design tools. We have strengthened our Quality department, by strengthening the man agement of both internal processes and material and external suppliers.
Oliver: Do you have the information that you need to grow your business and to support the growing demand on the supplier base?
Dillard: No, I do not feel I have been successful in retrieving infor mation from the shipyards regarding what type of products they are in terested in outsourcing. I have let both shipyards know that we have full Board of Directors (BOD) and bank financing support to purchase real property or equipment to help support the shipyards during this Virginia Class Block V and Columbia Block I procurement. We have shared our capabilities with the shipyards and let them know we have additional ca pacity to assist them. We are poised to act and are only waiting for their communication. I hope they respond early enough to allow us adequate preparation time to support them.
Oliver: Do you have any ideas about any actions that could be taken that would enable you and other suppliers to be better able to respond to the growing market demands?
Dillard: Yes, I believe that the shipyards could use some of the $1.5 million requested from Congress for supplier development to set up a portal, much like the Navy uses NECO (Navy Electronic Commerce On line) at https://www.neco.navy.mil and FBO (FedBizOpps.gov) to share joint shipyard demand with qualified approved suppliers. I envision this portal would be a password protected portal where approved suppliers could see both shipyards’ demand. Each supplier knows their own capac ity and capabilities, while the shipyards only know their supplier base in part. The shipyards know their own demand, but the suppliers don’t have access to that demand information for quoting or planning purposes.
Advantages to the shipyards of using a NECO/FBO type system should include:
- Communication to all approved suppliers as a place to distribute RFQs, current and long-term demand, and offer access to drawings (with the exception of confidential or NOFORN).
- Exploiting existing approved suppliers for additional capacity or capabilities without the time and expense of visiting each supplier’s
- Additional awards to existing suppliers will aid in decreasing overheads and lowering overall cost to the shipyards.
- Investing/growing the existing supplier base contributes to new hires and potential to lower the standard labor rates and overall cost to the shipyards.
- Utilizing the existing supplier base lessens the risks to the ship yards’ quality and schedule since existing suppliers understand con tractual requirements and the necessity of maintaining the shipbuilding
- Utilizing the existing supplier base lowers the risk of a supplier running out of work which, in the case of a 100% Navy supplier, or/and especially a sole source supplier, is a risk to the shipbuilders and the
- Competitive bids from known suppliers – a portal should in crease the quantity of competitive bids and aid in cost reductions
- Opportunity to offer RFQs as small business set-asides to aid in meeting FAR small business plan requirements
Advantages to suppliers would include:
- Opportunity to offer additional services and capabilities to the shipyards
- Opportunity to view the shipyard demand and plan for equip ment or real property acquisitions to prepare to meet future new procure ment demand.
- Opportunity to secure more work which enables 100% Navy suppliers to grow their workforce and to retain skilled workers.
Oliver: As a Corporate Member of the NSL for the last 5 years what have been the most important features of membership to you?
Dillard: The conferences the NSL provides in the spring and fall, where Admirals, shipbuilder’s representatives, government officials, etc. share information and presentations regarding upcoming procurement, budgeting, and shipbuilding plans have been very insightful.
Introductions to other members of NSL – Admirals, suppliers, the League’s administrators and Board of Directors have been helpful.
I think this interview and publication will help bring awareness that suppliers are ready to aid the shipbuilders, but that they need more feed back in order to make decisions and implement preparations. I think hav ing the NSL as a voice and advocate will be helpful.
Oliver: How else could the NSL help you and your company?
Dillard: Having access to the presentation files from the conferences would be helpful. Is there opportunity to have liaisons or representatives from the SBA at an NSL function?
Oliver: We’ll be sure to look into that! Thank you.
