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SCIFing for Growth

The Westway Services Group is a pioneer in the field of developing commercial Sensitive Compartmented Information Facility, or SCIF-as-a-Service, which has changed the way small companies conduct business with the Department of Defense, government agencies, and the U.S. military.

By Sanjay Kumar
By Sanjay Kumar

Editor-in-Chief

Pioneers often take a leap of faith that defies conventional wisdom to carve out a legacy that stands the test of time. They see the contours of emerging business trends before anyone else and create markets where none existed before. Mark Webber, Founder of the Westway Services Group, belongs to this category of pioneers for developing Sensitive Compartmented Information Facility (SCIF)-as-a-Service since 2007.

“Mark Webber, our chairman, used to be in commercial real estate a number of years ago. Then he took a break and had a race car team (Porsche team) and racing for several years. When he started getting older, he began thinking ‘what am I going to do for the rest of my life?’ (At that time), he ran into an individual who said, ‘you know there is an opportunity in commercial real estate to build SCIFs. Since there would be need for more SCIFs as the industry grows, there would be more sub-contractors who would need a place to go’. So, Webber said, ‘that is interesting’, and ‘I would like to do that’. That’s how we got our first building. The model is still the same, though it started as an opportunity for a small business,” says Jack Pryor, President, Westway Services Group.

Turning challenge into opportunity

SCIF, in the U.S. Department of Defense (DOD) parlance, is a secure room, building, or data center that is protected against all forms of electronic surveillance and data leakages of sensitive security and military information, and is manned by staff with security clearance. It’s imperative for businesses bidding for the U.S. defense or military contracts to operate out of an SCIF-accredited building. SCIF was a big hindrance for small businesses until the Westway Group came along. To access any defense-related request for proposal (RFP) or write a proposal, and work on the project after winning the contract required a secured facility. In essence, it was a Catch-22 situation for small businesses that wanted to get into the U.S. defense sector.

SCIF is a secure room, building, or data center that is protected against all forms of electronic surveillance and data leakages of sensitive security and military information

The Westway Services Group turned this challenge into a unique business opportunity by providing SCIF-as-a-Service for small businesses. The current generation of SCIFs must meet the parameters laid out in the Technical Specifications for Construction and Management of Sensitive Compartmented Information Facilities document. It’s a living document that is updated regularly based on inputs from the intelligence community and technical experts. “We started with a small business approach that we call the single-seat program. We still have it to this day. It was $1,200 a month, so more small businesses could afford it. That’s how we started growing,” tells Pryor. “Our building in Herndon, (VA) from where we started is about 94,000 sq. ft. and is now full. We have 132 companies and agencies in that building right now and 127 of them are small businesses.”

With no existing business model that could be used as a reference, Westway had to rely on ingenuity to break down the walls of skepticism and cut through government red tape. “Actually, we linked up with a guy named Jim Arnold. He worked for the NRO (National Reconnaissance Office) in the government. He was a guy who kind of painted outside the lines. He was a visionary; he really saw things. He helped us get business and get sponsorship from that agency. That’s how it all started,” recalls Pryor. “One of the challenges we faced was to change the culture. A lot of people said that it’s not the way the government did business — outsource to a contractor to build their SCIFs and handle the communications, packages, network, and all the things that go into it. There were a lot of people who were working against us because we were introducing a change. But we hung in there and battled through it. We gained credibility with the government to the point where they were writing new policies to allow what we were doing. The government is actually pushing us now; they are pushing people to us.”

Westway Services Group has leased 75,000 square feet in The Globe Building to construct a multi-tenant SCIF and secret collateral office space

As government agencies started talking of engaging with small businesses in the defense sector, Arnold realized that SCIFs would “happen in a big way.” He had the vision and the courage to follow his instincts. “We never thought we would get big clients, but now we have big companies and big agencies come to us. One of the things that I think helps make the model work is that we take all the risk on the investment upfront. We don’t get one dime from the government. With time, they saw that it worked,” explains Pryor.

The SCIF at The Globe Building is the first of its kind outside the national capital region and underscores the importance of the emergence of St. Louis as the National Geospatial-Intelligence Hub

Building SCIF

It’s not cheap to build a SCIF. “We make a $30 million investment upfront; we do not compete with our tenants; we don’t compete for any contracts. In fact, we help our tenants win contracts, because that’s good for us,” points out Pryor. “It takes pioneers to step out and be able to take risks. To me that’s the definition of leadership — somebody was willing to risk his investments, risk his career to create this opportunity. Metaphorically, everybody was watching to see if anything would happen, if this was going to be OK, and then it did. The security part of this is non-negotiable,” says Keith Masback, Principal Consultant, Plum Run LLC and former CEO, United States Geospatial Intelligence Foundation (USGIF).

Implementing the security protocols was one of the biggest challenges. There are no gray areas in the security business — either a facility is secure or it’s not. According to Pryor, hiring quality people with impeccable reputation and credentials is the key in the security business. “If you are going to be a pioneer or a leader, you have to get used to taking a lot of arrows in your back. Fortunately, in my career, I have worked with leading edge technologies and new approaches to things. So, there was nothing that was fearful. We hired people out of agencies who knew the rules, knew security, and had credibility,” he says. “In some cases, they wrote the rules,” adds Masback. 

Hiring the right people to build a web of connections paid rich dividends as it helped in spurring organic growth for the company. “We looked at people, their experience, their knowledge, their Rolodex, and their credibility. So, if I don’t know you and this guy knows you, we went to him, and he bridges us to you. We just kept building bridges to create a network,” explains Pryor. People like Masback, and the former Director of Defense Intelligence Agency, Ronald Burgess, who at present is with the Auburn University, helped the Westway Group to establish vital links between small businesses and government agencies.

“When I was the CEO of USGIF, I became aware of Westway. They were operating fairly quietly, and we had a meeting. They said, ‘our building is filled with companies of all sizes, and we are very focused on small businesses.’ We at USGIF wanted to do a lot to support small businesses. So, we created an agreement — we said that USGIF members would have the opportunity to receive preferential treatment and opportunity within Westway and they were very supportive of us. It was just another way as an educational foundation, as a foundation that was created to raise the entire industry of geospatial-intelligence. Having a partner like Westway was a natural step for USGIF,” recalls Masback.

Building SCIF

As the concept of SCIF-as-a- Service gained traction, big businesses started approaching Westway with big dollars. However, the company remained loyal to their core customer base of small businesses. “For example, we signed a lease with AT&T, but they were not in our building. They put five of their sub-contractors doing classified work in our building. We have a lot of that sort of things and that sustains us. We stayed true to our focus, and myself, having been a small businessperson through the years, had an affinity for helping those people because I understand some of the struggle,” says Pryor.

But big companies don’t tie up with small businesses out of any altruistic motivation. They do so purely out of the necessity of either fulfilling some specific requirement in the contract or technology that might have been developed by small operators. “They need you to win a bid or IDIQ (Indefinite Delivery, Indefinite Quantity) or whatever they are looking for. They bring you in and sign you up so they can check the blocks to win the proposal. After it’s all over, they really don’t want you in that space. So, a lot of those companies that are sub-contractors to the big guys want our space and we get those guys,” says Pryor, explaining Westway’s unique business model.

Each of the seven floors have 75,000 square foot floor plates that provide tenants the opportunity to readily and reliably scale-up their occupancies

When the need arises, the company is called upon to act as a bridge between the government and startups working on cutting-edge technologies. “When the Iraq and Afghanistan (wars) started, one of the things that the Army asked me to do was go out and find what they called ‘garage technologists’ — people working in their garages, doing bright things, working with smart technologies, but not being able to finish the product or scale it up. So, we found those, and I would go to large companies like Lockheed Martin or Raytheon and say that ‘look, we want this technology … figure out how to make this guy rich, give him a contract, bring him in, scale this and if you do that here is your contract’. I can give you an example with one company called (L-3) Mustang Technologies. They do radar type stuff (software-defined radars and RF sensors). They were a small business starting up in Dallas. We brought them and they are now almost a billion-dollar company. They started with just five guys and an idea,” says Pryor.

When any business starts growing and big investors start approaching privately held companies, the temptation to sell and exit appears to be an attractive option. But the leadership team of the Westway Services Group don’t want to go down that road, yet. It is on the verge of becoming a $100 million company. Pryor makes it clear that the company is focused on charting this next phase of growth.

“That’s always a possibility down the road. Mark is 65 years old, and I am 77. But I don’t have any plans to retire. My hobby has been my work. I don’t know what I would do if I wasn’t working. I am not a guy who is going to play golf every day. So, at some point in time, we could make an arrangement to sell, but right now, we are having fun, are enjoying, and are still building credibility. Currently, we have no competition, but that will come anytime. People know that if they can make money doing something, they are going to try to do it. We are in a big growth period,” says Pryor.

Stepping up

The period of growth that the president of the Westway Services Group is referring to includes developing a 75,000 sq. ft. state-of-the-art SCIF at The Globe Building in St. Louis, MO. “We determined in St. Louis over the next five years, assuming everything materializes, there is going to be a requirement of 300,000 sq. ft. of space. So, there was an immediate demand, and if you got to build a building that’s a two-year project. We found The Globe Building and were able to lease space from Steven Stone that allowed us to accelerate the timeline and get people in. So, The Globe is the first building that’s going in this town. And that building is right now 170% subscribed,” explains Pryor.

As the concept of SCIF-as-a- Service gained traction, big businesses started approaching Westway with big dollars. However, the company remained loyal to their core customer base of small businesses

The SCIF at The Globe Building is the first of its kind outside the national capital region and underscores the importance of the emergence of St. Louis as the National Geospatial- Intelligence Hub. It’s also a reflection of a bigger trend of the growing demand for a secure workspace. “There are a couple of other potential sites (in St. Louis) that we are looking at. We know as soon as we put the shovel in ground… I already have people lined up for…,” says Pryor. “But there are going to be a number of hubs outside the national capital region. St. Louis is one of those hubs, Austin, Texas, is going to be another hub; Denver, Colorado is going to be another hub; Huntsville, Alabama is another hub; Miami, Tampa … and all that area is another hub. So on and so forth.”

The recently refurbished vintage industrial space now offers a new futuristic aesthetic and electric atmosphere to help attract, retain and inspire a highly-skilled geospatial workforce

He sees the demand for SCIFs going up in the international market too, but much will depend on support from the various agencies in the U.S. He has helped setting up four SCIFs and one SCIFied hanger in Poland. He also anticipates a growing demand for portable SCIFs from the DOD, besides the private sector asking for secure facilities for activities like R&D to protect their patents and other intellectual property from industrial espionage and banks looking for more secure technologies to work with for the next 50 years. Pryor says that when the market for SCIF-like facilities starts emerging outside the government sector, the Westway Services Group will be in a position to deliver because of their expertise and experience in this area.

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