Providence Company Gets $4.5 Billion Contract for Pocketknives
By Sarah Sparks
At the end of summer, Steve Paolantonio’s Providence-based Colonial Knife Co. was hanging by a thread. His customer base was crumbling. The 82-year-old company had no name recognition. He had cut his staff from 40 to 17 in six months.
Steve Paolantonio is proof that the edge of war can cut both ways.
As part of the mass military build-up called for by President George W. Bush’s “war on terrorism,” Colonial Knife Co. has won a five-year, $4.5 billion contract to supply three different kinds of knives to the General Service Administration, a military wholesaler. The contract will allow Paolantonio to hire 80 new workers in the next three months and cinch deals with Stanleyworks, Cooper and Danaher tool makers. And it will provide a much-needed cushion to a company whose 2000 annual revenue was $2.4 million.
“This GSA work was a blessing, it really was, because I wasn’t counting on it, and it came on board right away,” Paolantonio, 39, said.
He might not have been counting on the contract, but Paolantonio had been angling for something similar. “I’ve been after these guys for 10 years, trying to get a hold of somebody, but I never could,” Paolantonio said.
A few weeks ago, a new distributor told Paolantonio he was going to sell to the government and asked if Colonial could handle a major knife contract. “They all have to be American-made, and there aren’t that many knife companies left in the United States,” Paolantonio said, “so he knew who the players were, as did I.”
In a closed bid, Colonial Knife beat out nationwide competitors Gerber Knife, Camillus Cutlery and W.R. Case & Sons Cutlery, claiming contracts for three out of four knives. They refused a contract for a marlin spike knife, a survival knife for the Navy, because the order was too small for the knife’s complicated construction.
Vincent Vitralia, department supervisor, said the workers’ morale has gone through the roof since the company landed the contract. “We are all very glad to do this work,” he said.
Colonial Knife hasn’t had a government contract this large since World War II, when the company made fighting knives – bayonets, Navy deck knives, airmen’s survival knives, machetes – for the GIs. Paolantonio’s grandfather, a blacksmith in the Rhode Island calvary during World War I, started the business in 1917, working out of his garage and catering mostly to the then-booming jewelry industry in Providence. “He made knife skeletons, a couple knives a day, for the jewelers, and they would put pearl and ivory inlays in them,” Paolantonio said.
The World War II contract allowed the company to expand from the late 1930s until the 1970s, with two 300-worker shifts per day. For the most part, Colonial’s meat and potatoes customers came from mom-and-pop hardware stores, which ran the company into trouble as major chains such as Wal-Mart, Target and Home Depot began to put Colonial’s customers out of business.
“You could be kind and say we’ve had some financial problems. … It’s been hard, it’s been really hard, because we don’t have that many retailers left,” Paolantonio said. “You’ve got some Mid-west regional chains but they aren’t going to last much longer, either. There’s got to be a half-dozen major players, and if you’re not selling to them, you’re not selling to anybody.”
Since the 1980s, Colonial has struggled to stay afloat. Two years ago, the company changed its focus from small retailers to the industrial tool market – the “tool-belt, hard-hat guys” such as Stanleyworks, Cooper Tools and Danaher Corp., makers of Craftsman tools.
But before the contract, it was difficult to get noticed. “A company called Kline Tools, it’s phenomenally huge, and I emailed them, I said look, I just landed a $4.5 million deal,” he said, “They’ve never heard of Colonial Knife, even though we’ve been around for 70 years, because we haven’t made a big push into this industry.”
“This [contract] is buying me time to go after the industrial tool market,” he said. Paolantonio is now in negotiations to make knives under the Stanley label, among others.
The contract even saved one of Colonial’s traditional knives, the model 1200 Boy Scout Knife, a tradition for 75 years and destined for the vaults before the GSA’s 151,000-piece order.
“We were going to discontinue that knife,” Paolantonio said. “That style just is not popular anymore; you know, kids just don’t carry knives anymore.” Colonial was producing them only on a limited basis for Restoration Hardware, a boutique-style furnishings store.
Colonial will also produce 180,000 of model J316, a locking knife with a single, dull-finished blade and a rubberized handle, for use in survival and maintenance kits.
The most difficult order will be 33,000 switchblade rescue knives, the only pieces not already in production. “It can cut through parachute lines, so if you’re stuck in a tree you can get out,” Paolantonio said. “The reason it’s a switchblade – switchblades are normally illegal – but if you are in a crash situation and your arm is broken you can use it with one hand.”
Once the contract was in hand, Paolantonio was able to woo a new engineer, Joe, from a rival company. Joe, who didn’t want his last name used, will help tool the machines and organize construction of the switchblades.
“The automatic knife in particular, we’re taking it apart and looking at how it’s put together, deciding, okay, we can make it like this, because it has to meet government specs,” Paolantonio said.
In addition to the engineer, Colonial has started recruiting heavily and has recalled three retired employees to teach the new workers. Paolantonio said he is worried about hiring the 80 new workers that will be needed to start production on time in three months.
“The downturn in the economy might be good, because it might be easier to get good people,” he said.
Vincent Vitralia, department supervisor, said the workers’ morale has gone through the roof since the company landed the contract. “We are all very glad to do this work,” he said.
