Fiscal Cliff in D.C. Has Chelsea Implications

December 6, 2012
By

The Fiscal Cliff discussions that seem to be dominating federal politics and just about every news network right now, seem to be a world away from Chelsea.

However, that precipice might be closer to several Chelsea businesses than many might expect. At least five local business had Defense Department contracts in 2011 that ranged from millions of dollars to just a few thousand dollars. However, most said they aren’t too worried about the looming “crisis” in Washington.

As part of the Budget Control Act of 2011, massive mandated cuts (call a fiscal cliff) were required if Congress could not agree on reductions in spending. Of course, as we know, a Congressional committee could not agree, and since that time, the “cliff” has loomed large.

Because the mandated cuts include nearly $1 billion in cuts to defense spending from 2012 to 2021 (the largest area cut in the debate), many businesses who do contracted work for the Defense Department are beginning to sweat bullets.

In Chelsea, there are at least five businesses that got payments from Defense Department contracts in 2011, and a survey of those companies showed that most are not overly concerned about the possibility of losing an estimated 27 percent of that business.

The largest contractor out of Chelsea is the Dennis K. Burke Oil Company.

The company had six contracts in 2011 from the Defense Department that paid out $12,435,413 to the petroleum company.

Ed Burke – an owner of the company – told the Record that he does a good deal of business with the government, but that the Fiscal Cliff discussions aren’t stressing him out – despite the fact that there is a possibility of losing quite a bit in Defense Department contracts.

“We have a necessity of life product,” he said. “Not to sound callous, but in bad times, we do pretty well. The fiscal cliff is looming, but life goes on. I’m not as much worried about it.

“I do a lot of federal government business,” he continued. “Some of it will go away, but we’re extremely busy now. I think the aggregate price will go down, but it will be dog eat dog and we always seem to do well in dog eat dog environments.”

Meanwhile, Winnisimmet Street boat building specialists Stillwater Design said they aren’t really worried because most of their government business comes from the Athletic Departments of the U.S. Service Academies – a majority of which are privately funded.

Jeff Myjak of Stillwater said they did sell a few row boats to the federal government last year, but they’re already paid for. Officially, the company had one contract that paid $120,000 in 2011.

“The VA and Navy work we did is already done and so it isn’t going to affect us really,” said Myjak. “We have an ongoing relationship with the Naval Academy and they purchase boats from us, most of which are alumni funded and not from the Defense spending per se. We did make some boats for the Defense Department and that’s what that contract was. We’ll either fall of this cliff or this will all be resolved by the time they want to order another boat. If we fall off the cliff, I’ve got my ropes ready for the climb out.”

Other Chelsea companies with Defense contracts in 2011 who did not respond to the record in time for comment on this article were:

•Chappy Corporation (Electrical Contractors – Charles Colbert) of Spencer Avenue, $97,762

•Chelsea Clock, $3,120

•Smart LLC (Plumbing/Electrical Services) of 27A Williams St. had eight Defense contracts in 2011 that paid $185,124.

Information on Defense Department contracts used in this article were provided from public records obtained by the non-partisan Center for Security Policy.

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