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The Business of War: Apparel Firms Benefit From Pentagon Orders

The war means more business for some domestic apparel and textile firms, but others are vying to get in on the more than $1.6 billion in military orders.

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American Apparel’s initial 2003 contract for battle trousers with a woodland camouflage print called for producing 6,000 a week. That amount was increased to 10,000 and then again to 15,000 to supply the Iraqi effort. Of that amount, 5,000 trousers have been switched to desert camouflage.

So far, for the fiscal year starting Oct. 1, American Apparel has been awarded $20.5 million in military contracts, according to the DLA, which doesn’t have figures on how much apparel makers spend on textiles. The largest private military apparel supplier is Puerto Rico-based Propper International, with $35.3 million in contracts.

Michele Goodman, president of Atlas Headwear in Phoenix, turned to military contracts as competition from low-priced foreign imports displaced fashion customers, which now represent 40 percent of her business. Atlas’ 140 employees just finished an order of 200,000 camouflage floppy hats for soldiers in Iraq.

Goodman said it’s a tricky balance to manage her regular customers with the military contracts, but "if you have a domestic plant and want to do domestic business, there’s not a whole lot of choice out there."

Domestic producers like Goodman are fierce about holding the government to its buy-America rules. She successfully sued the Air Force two years ago to stop buying caps in China that it gives recruits. Now Goodman has a $400,000 contract to produce the item.

The buy-America rule, also known as the Berry Amendment, is intended to maintain what’s called by the military a "warm industrial base," or a stable of manufacturers ready to supply the military in peacetime or conflict.

Exceptions to buy-America are made if the military declares an item not commercially available. It’s a standard tightened last year by Congress after a scandal erupted over the military buying $22 million worth of black berets from foreign sources, including 600,000 in China. The berets were added to active and national guard wardrobes in October 2000 and the military claimed only one domestic supplier was available to provide 1.2 million berets for $7.6 million. The berets are now being produced exclusively in the U.S.

Ken Mazer, director of business development at Lee Fashions in Lylesville, N.C., is angling for a military contract "in the low-seven figures" to produce high tech boot linings to compete with ones produced in Europe by DuPont under the Cambrelle trademark.
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