Boating Industry Helped by Law Enforcement Purchases

Recreational boat sales began a slight climb in 2011, but at least one segment of the boat-manufacturing market seems to have led the way out of the recession — building boats for the government. After recreational boat sales dropped 26 percent in 2009, and seven percent in 2010, the National Marine Manufacturers Association (NMMA) reported a six-percent rise in 2011. No one keeps numbers on boats sold to governments — there are just too many agencies to keep track of — but big-money contracts continue to come in for boatbuilders specializing in the kind of tough, fast, tactical, and even bulletproof boats needed by the Department of Homeland Security and on-water law enforcement.

In Texas, where the Department of Public Safety has battled armed drug smugglers on the Mexican border, the state launched five shallow-water patrol boats, complete with armored hulls, and three mounted 7.62-caliber machine guns. The 36-foot center-console boats, made by Sarasota, Florida-based Yellowfin Yachts, reportedly cost $600,000 each, paid for with a combination of state and federal money. Five of the six boats ordered, powered by triple Mercury 300 outboards, had been delivered as of August 2012 to the state's new Marine Tactical Unit for patrol along the Rio Grande and the Gulf Intracoastal Waterway around Brownsville and Padre Island. In Orange County, California, according to The Log newspaper, the Sheriff's Harbor Patrol used a federal Homeland Security grant to purchase two $400,000 boats — one patrol boat and one fire boat — from SAFE Boats, a Bremerton, Washington, company specializing in military and Coast Guard vessels. The 34-foot aluminum hulls are powered by three 300-hp Yamaha engines and capable of 60 mph. Ohio and New Jersey have also made recent maritime investments — a 25-foot Boston Whaler for law enforcement on the Ohio River, and a 44-foot catamaran for the New Jersey State Police.

Dean Jones is the national sales manager for Metal Shark, a company that specializes in aluminum small craft for government and military buyers. He says the firm sells "maybe three boats a year to special-request recreational buyers," but the vast majority of their business is with buyers like the U.S. Coast Guard, which recently awarded Metal Shark a $192 million contract to build almost 500 small response boats. Jones says business has grown every year for the last seven, but it's far from recession-proof. As state and local governments scrimp for cash, they look to the federal government for help, which means less money for the same number of potential buyers, and sales that might have taken weeks can now take months, as grants are processed and the inevitable red tape unrolls. "I wouldn't say it's sheltered, exactly," he says. "We're not as directly impacted as the recreational market, but we're still impacted."

Jones adds that he's seen smaller companies trying to get into the market, but it can be a difficult one to break into. "Some companies have been very successful, and others haven't," he says. "Some of it's luck, some of it is quality of work, or the ability to understand the government's needs. There are just so many things that go into it. It's a difficult [market] and it's drastically different from recreational boating."

Traveling 200 days a year to boat shows and customer meetings can get expensive. Jones says the time between bidding on a contract and getting it signed for the Jeanerette, Louisiana, boatbuilder can be around 18 months. It's a different business from selling yachts in a showroom, and the boats are different, too, he notes."

"There are many boatbuilders who've thrown their hat in the ring, but haven't been successful. It's not as easy as, say, building a boat and putting a blue light on it and saying, 'This is a police boat.'... Yes, they're both boats, but the engineering behind it is completely different."

Wes Hudson, of Shallow Sport Boats, says his company's decision a few years ago to start a government-products division was driven more by an ability to fill a perceived niche than economics. They had been building commercial boats for the oil and gas industry and commercial fishermen for about 10 years, but there's little doubt that the government contracts they're currently bidding on would be a boon to the small, family-owned boatbuilder.

"It would basically double the size of the company," he says, and require a second production facility, new equipment, and new employees at its Port Isabel, Texas, plant. Shallow Sport's recreational business took a slight dip, he adds, but has recovered to pre-recession levels. The company is sold out of small boats for the next six months and producing the firm's 27-foot shallow-draft "Near Shore Response Vessel" would create even bigger backlog without a dedicated production line.

In some ways, Hudson says, building the boat is just the beginning of the process. Shallow Sport has a lot of money and time invested in a prototype model, fully outfitted with the help of suggestions from state and federal agencies. Dealing with the intricacies of the government-contracting world isn't easy for a newcomer ("It's a full-time job for somebody for two years," he says), but he's hoping the effort will pay off.

"We've done several demonstrations for high-level officials," he says. "I can't mention their names, but we're definitely on the verge of becoming, possibly, the next big thing in law enforcement for that size boat."