Spokane Valley-based Berg Cos. expects a surge in revenue this year thanks to a large, open-ended U.S. government contract for huge, soft-sided military fuel bladders won last summer by a company of which its part owner.


The rapid growth from that contract has caused Berg Cos. to put on hold recent plans to move some of its Spokane-area operations to the new Treaty Rock Corporate Center that company owners Andy Barrett and Craig Dolsby are developing with a partner in Post Falls. Barrett says that in the interim, Berg Cos. will re-evaluate its future space needs.


The U.S. government contract for the 210,000-gallon fuel bladders is worth up to $400 million over time, and dwarfs the Berg Cos. annual revenues until now, Barrett says.


Berg Cos. owns 30 percent of Berg Integrated Systems, the company that has the federal contract, and the other 70 percent is owned by the Coeur dAlene Tribe of Indians, Barrett says. Berg Cos. overall is known for manufacturing products used by the military and other government and emergency-services agencies to establish encampments quickly, often in remote locations, he says.


Last year, the total combined revenue of Berg Cos. two other arms, Berg Manufacturing and Berg Flexible Containment, doubled to $10 million, Barrett says. He says he expects the revenues of Berg Integrated Systems to reach about $22 million this year, with $16 million of that coming from the fuel bladder sales. He says he anticipates the combined revenues of the Berg Cos. and Berg Integrated Systems to reach about $38 million this year. Between them, the companies employ 150 people now, and Barrett expects that the three companies combined will employ more than 200 by years end.


Berg Integrated Systems had revenues of about $2 million for 2007, Barrett says. Before Berg Cos. sold the Coeur dAlene Tribe its 70 percent stake in Berg Integrated Systems in 2006, that company, then known as Echelon Manufacturing LLC, operated as a $1 million-a-year custom steel fabrication shop in Coeur dAlene, Barrett says.


Last year we invested a lot of resources into development of Berg Integrated Systems products, Barrett says.


Now, Berg Cos. runs the day-to-day operations of all three companies.


Barretts vision for Berg Cos. is to take it from what it is nowthree interrelated companies that make components for military and emergency-agency encampmentsto an overall company that can manufacture and assemble complete housing, office, and fueling systems.


Currently, the three Berg companies manufacture components that other businesses buy and use to make such systems. For example, the military uses the huge fuel bladders Berg Integrated Systems produces to build fuel-delivery systems for its own blend of fuel, which it uses in aircraft, vehicles, and other motorized devices. Each of the fuel bladders, which are made with an industrial rubberized fabric called Nitrol, sells for about $100,000, Barrett says. The military uses four of the six-foot tall, 72-by-72-foot bladders, along with other components such as pumps, valves, and hoses, which Berg Cos. doesnt produce, to build the fuel-delivery system, he says.


Barrett says he wants the three Berg companies to be able to provide complete, ready-to-use systems, as well as shelters, for agencies such as the military and the Federal Emergency Management Agency.


FEMA wants full 100-man camps, Barrett says. He says of the vendors to which Berg supplies components, The companies we work for are the companies we want to become.


In addition to components for remote site infrastructure, the Berg Cos. make stand-alone products that they sell directly to government agencies and private businesses. For example, Berg Manufacturing makes fabric tents, custom-designed equipment covers, and a variety of other items, including a heated hose cover that keeps hoses from freezing in extreme cold. That operation currently is negotiating to produce an inflatable tent line here for a Swiss company, Trelleborg AB, called the TrellTent, that could boost its sales increase by as much as 50 percent this year, Barrett says. Berg Manufacturing is a distributor of the TrellTent although the tent is manufactured in Lithuania now, Barrett says.


Berg Cos. other Spokane Valley-based arm, Berg Flexible Containment, makes much smaller soft-sided containers for water and fuel storage and portable spill-containment systems, which can be put into use quickly in locations where the ground might not be level. Barrett anticipates Berg Flexible Containment will grow about 20 percent this year. Between them, Berg Manufacturing and Berg Flexible Containment employ about 80 people at a 30,000-square-foot building owned by Berg Cos. at 16124 E. Euclid in Spokane Valley, Barrett says.


Meanwhile, the 70-person work force at Berg Integrated Systems is likely to increase by 20 people this year, Barrett says.


Barrett says a lot of Berg Cos. energy right now is aimed at developing that company.


Our focus has been on Berg Integrated Systems, Barrett says.


Though it has been relocated to Plummer, Idaho, from Coeur dAlene, Berg Integrated Systems products now are more related to the other Berg units, and because of its majority tribal ownership, that company qualifies for a U.S. Small Business Administration business-development program that gives it a competitive advantage for government contracts, Barrett says.


In addition to manufacturing fuel bladders, the company operates a metalwork shop that is developing the capacity to do the integration that Barrett says will bring his long-term vision for the company to bear. Barrett says an expandable shelter platform the metalworks shop makes is the first such unit that Berg has brought to market. It is a portable, metal-sided shelter that pops out on both sides to create a 20-by-24-foot self-contained housing unit. Before its opened up, the shelter is 8 feet wide. The company can customize the shelter for its customers, adding optional components such as generators, lights, air-conditioning units, plumbing, and phone lines that would be needed to set up a barracks or an office quickly in an area where electricity isnt available.


Although Berg Cos. wants to produce completed remote-camp shelters and systems rather than components for them, it still would need to buy some parts from suppliers, including companies in the Inland Northwest, Barrett says.


Were forging some very close relationships with companies here. We put a lot of importance on our supply chain, Barrett says. Were going to have to rely on these folks as we grow so quickly. There will be a large economic impact.


Darren Stuck, Berg Cos. director of supply chain, says the company works with more than 20 Spokane-Coeur dAlene area companies in contracts worth between $1.5 million and $2 million a year. For example, LA Aluminum Casting Co., of Hayden, recently signed a contract with Berg Integrated Systems to produce 6-inch drain and fill fittings for the 210,000-gallon fuel bladders. LA Aluminum Castings says that contract was one of two that together are expected to boost its annual sales by 25 percent and have caused it to hire four more employees.


Berg Cos. currently is considering what future logistical needs it might have, given the size of some of its products and the rapid growth of Berg Integrated Systems. Barrett and Dolsby, along with partner George Bourekis, are developing the 30-acre Treaty Rock Corporate Center property into 20 lots. Barrett says Berg Cos. originally planned to move one of its two companies to the business park from the building on Euclid.


While considering the Berg Cos. space needs, Barrett and his partners also have negotiated a lease and are developing a building for Berg Awning Inc., the modern-day offspring of the original F.O. Berg tent and awning business, which Berg Cos. spun off in 2006 by selling it to Bryce Ogle and Jim Worrell. Berg Awning will be moving to the Treaty Rock center later this year, Barrett says. He says five or six of the 20 lots at Treaty Rock will be reserved for Berg Cos. future use.


Meanwhile, Berg Integrated Systems recently leased 20,000 square feet of additional space in an old grain processing facility in Worley, just north of Plummer, to house its 30-person metalwork operation there. It moved its metalworks from the 50,000-square-foot Plummer facility to make more space for manufacturing fuel bladders, Barrett says. He says about half of the people employed at Berg Integrated Systems are members of the Coeur dAlene Tribe.


The Coeur dAlene Tribe owns the Plummer facility, at which it used to operate a strawboard factory. It recently built a lined earthen containment berm with 8-foot-tall walls and an inflatable fabric roof to test the fuel bladders, Barrett says.


Barrett grew up in an Air Force family, moving around the country and graduating from high school in San Antonio, Texas, though his extended family is in the Spokane area and he spent many summers here. He says he always knew he wanted to settle down in Spokane and run a business here. He went to work at F.O. Berg in 1992, under the mentorship of then-owner Bill Gabrio, who retired a few years ago, Barrett says. Barrett says he bought his interest in the company over the course of that seven or eight-year relationship. In 1994, Dolsby came on board as a co-owner with Barrett.


Contact Jeanne Gustafson at (509) 344-1264 or via e-mail at jeanneg@spokanejournal.com.