With the help of the Dexter Research, soldiers in combat on the front lines may soon be able to remotely detect a biological attack - and exactly what chemical to protect themselves against - with the help of a portable sensor system.

Another company in Ann Arbor - Innovative BioTherapies Inc., which specializes in bioengineered human organs - made one of its devices small and rugged enough to safely store frozen stem cells in field hospitals. They were awarded $1 million last fall to further work on a device that quickly thaws cells to treat kidney injuries closer to the battlefield.

At a time when the United States is at war and U.S. Department of Defense spending on military equipment continues to grab the national spotlight, more local companies are creating innovative products with military applications. In turn, they're capturing defense dollars in the form of grants and contracts from the department that can have a positive effect on the local economy.

"What I've found in Ann Arbor is such a plethora of talent in places that don't do automotive," said retired Gen. Bradley Lott, director of the Michigan Defense Contract Coordination Center. "The whole pharmaceutical and medical hardware area is just ripe with opportunities over there; it tends to be focused on high tech, things like nanotechnologies ... but you might say, they aren't using their potential." According the most recent data recorded by Northeast-Midwest Institute, which compiles defense funding statistics, Michigan companies earned $5 billion, or about 1.4 percent, of the nation's overall defense budget in 2005. The most recent available data from the government shows Michigan subcontractors alone were awarded $1.7 billion, or 1.6 percent, of all subcontract money in 2006.

The Defense Department declined to give any additional information because it is behind in compiling that data this year, a spokesman said. Lott estimates there were about 300 Defense Department contracts awarded to Washtenaw County companies last year. According to the state's Procurement Technical Assistance Centers, at least $315 million in 2007 has been captured by small and medium-sized businesses that ordinarily might have had trouble competing.

More small companies in the area are looking to Small Business Innovation Research grants, provided by federal agencies, to kick-start research projects, said Andy Jakimcius, a primary consultant for Biotechnology Business Consultants in Ann Arbor. In particular, they are looking to get the grants through the Defense Department.

"There definitely are some companies targeting the Department of Defense in getting these research grants because these companies see, ultimately, the department might become your customer," Jakimcius said. "They see the SBIR program as a way to get their foot in the door."

The Ann Arbor-based National Center for Manufacturing Sciences helped coordinate a project that not only brought big names like Boeing Co. and Ford Motor Co. to the table, but Ann Arbor-based Solidica Inc., too.

The end result was a high-energy kinetic spray metal that could repair or prevent corrosion on military vehicles, which will drop repair cost and time. The Dexter Research Center was awarded $1.6 million toward creating a Total Perimeter Surveillance sensor system for both homeland security and commercial users for quick environmental gas analysis, said Wayne Baer, the company's director of research and development.

Customs officials inspecting shipping containers, post offices receiving parcels and even food processors determining the amount of carbon dioxide in the air could benefit from the sensors, he said. "Right now, the military needs something that's rugged enough, that's portable enough, that can easily detect and accommodate a variety of substances known and unknown in the field immediately. And having that as a low-cost item, not some benchmark item that's laboratory grade," Baer said.

The company already has some of its sensors on tanks that can sense excess heat and trigger fire suppression systems before troops are put in danger, Baer said.

Phil Tepley, technology team coordinator for the Michigan Small Business Technology Development Center said such Ann Arbor-area companies are capitalizing on the local technology talent to get defense grants.

"Some of these companies are early-stage success stories," he said, pointing to companies like A123System's local subsidiary that used to be known as T/J Technologies Inc., which has won research grants from the Defense Department.

"There are companies that could be doing better, but there are Ann Arbor companies that use this funding source very well." By Lott's figures, $1 out of every $4 in federal funding to Michigan comes from the Defense Department. While the 21st Century jobs fund is trying to refocus Michigan's economy in four different categories, including homeland security, Lott's sole task is to help Michigan companies better compete in the defense industry and replace lost automotive jobs.

"My job is to create jobs. It's that simple," Lott said. "People think of defense needs in terms of guns and ammunition. I typically tell them, if you buy it for your home or office, the Defense Department does, too, just in larger quantities."

http://blog.mlive.com/annarbornews/2008/04/ann_arbor_area_companiestake_...