SimplexGrinnell contract could generate up to $10m in revenue in first year

NJPA contract gives 50,000 public entities easy access to SimplexGrinnell products; new service revenue expected to be ‘significant’
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Wednesday, October 30, 2013

WESTMINSTER, Mass.— More than 50,000 government, health care and educational entities now can obtain SimplexGrinnell products and services through a simplified procurement process, thanks to a new four-year contract the company has with the National Joint Powers Alliance.

The contract is expected to generate $8 million to $10 million in the first year for SimplexGrinnell and grow from there, said Jim Madson, VP of sales for SimplexGrinnell, a Tyco company based here. “It should be considerable,” he told Security Systems News.

NJPA, based in Minnesota, is a public agency that functions as a cooperative for its more than 50,000 member agencies, such as K-12 schools, colleges and universities, hospitals and state and local government entities.

Being on the NJPA vendor schedule is similar to being a General Services Administration (GSA) vendor or a vendor for the Western States Contracting Alliance (WSCA), according to Chris Woodcock, SimplexGrinnell’s director of marketing communications, who said the company also participates in those programs.

Madson explained that for hospitals, schools and governmental agencies, “going through the bidding process and vetting out different providers, contractors, and vendors is pretty arduous and takes a lot of time and there’s a lot of expense to doing that.” So, he said, the public entities “rely on the NJPA to do that for them. So when they’re looking for a particular service, they can utilize this schedule and have full confidence they’re getting the right vendor for the right price.”

SimplexGrinnell solutions, including fire alarm, sprinkler, suppression and integrated security, now will be available to NJPA member entities throughout the country.

Tom Perttula, NJPA contract manager, said in a prepared statement, “Partnering with SimplexGrinnell will save NJPA members time and money when procuring fire and life-safety products and services.”

Madson said that in addition to its products, SimplexGrinnell expects to provide a lot of services, such as testing and inspections, to NJPA members as part of the contract. “The service portion will be, in our view, pretty significant,” he said.

SimplexGrinnell, which has 9,500 employees and more than 150 district offices in the United States and Canada, has an “end-to-end solution” operational model, Woodcock told SSN. “We can go end to end from conceptualizing the product, developing the product, manufacturing, selling and some installations (with support from subcontractors), and then at the back end, doing that ongoing service and support to keep those systems in top working condition,” he explained.

Madson said about 70 percent of the company’s district offices don’t do installations, but instead subcontract that work out to installation companies. The NJPA contract will be a boon to such installers, he said.

“We do look to subcontract arrangements with [other companies] that do the installation side so … the more we expand this agreement in most of the North American markets where we don’t do our own installation, it will certainly benefit them,” Madson said.

After Tyco shed its ADT home security and flow control businesses last year, it became a pure-play fire protection and security company.

Madson believes that being part of a leaner and more focused Tyco helped SimplexGrinnell win the NJPA contract, because it “allowed us to invest more in some of the research and development of some of the new products… so it kind of helped us broaden what we could bring to the table for all the agencies and organizations that are represented by this particular contracting vehicle.”

On the security side of Tyco, Tyco Integrated Security recently won a four-year renewal of its NJPA contract for security solutions and services, the company said.

Madson stressed that the SimplexGrinnell and TycoIS contracts are “totally separate” but said the fact that TycoIS already worked with NJPA probably influenced that agency to deciding to award a contract to SimplexGrinnell.

“Since TycoIS had been on the contract for four years and they were happy with the level of products and services that TycoIS was able to provide, … they looked to SimplexGrinnell as another Tyco company worthy of getting aligned with,” Madson said.