HOLLAND – A willingness to work with a military contractor on product development and to add in-house capabilities helped a Holland-based medical device manufacturer secure a three-year deal to supply bandages to the U.S. Army.
KI Medical Device Manufacturing L3C is an atypical manufacturing company in West Michigan. For one, the company, founded in 2009, was one of the state?s first businesses organized as an L3C, or low-profit corporation.
It?s also staffed by workers from parent company Kandu Inc., a 60-year-old nonprofit organization that provides workforce development and job opportunities for people with barriers to employment.
The company?s mission and its ability to accommodate defense contractor PerSys Medical?s needs helped it secure a three-year contract last year to produce more than 1.2 million ?Israeli bandages,? which now are made in KI Medical?s new FDA-registered and ISO-certified clean room in Holland. The value of the contract was not disclosed.
The process of securing the contract for the work was three years in the making.
?We were looking for the right partner,? said Dee Williams, director of government sales at PerSys Medical. ?KI Medical goes above and beyond for us. They built us a clean room. They sourced everything for us. They essentially did everything necessary to win this contract.
?KI Medical treats customers like rock stars.?
The labor for the new contract comes from KI Medical parent company Kandu Inc., which provides about 40 of its workers to sew, glue and assemble the bandage kits.
The Israeli bandage assembly contract marks the second KI Medical has secured for U.S. military medical products. The company previously won a military contract to assemble mobile IV units, which are currently used in medical kits for the U.S. armed forces.
Parent company Kandu works with more than 70 companies, while providing job-related services and employment to more than 1,200 people with learning and other disabilities each year. The nonprofit employs 250 people to fulfill contracts with businesses, mostly for assembly and packaging.
The nonprofit reported a net loss of more than $316,000 on revenues of nearly $10.7 million, according to an annual filing with the U.S. Internal Revenue Service for 2011, the most recent year available. That year, KI Medical contributed more than $54,000 in revenue to Kandu Inc., according to the filing.
At the ribbon-cutting ceremony last October for the new clean room at KI Medical, Tom Vreeman, the CEO of Kandu Inc., said the PerSys contract would enable Kandu to further enhance its clean room capabilities and tailor them to land even more government contracts in the future.
It was Vreeman?s willingness to meet PerSys? product development requirements that cinched the deal with KI Medical, Williams said.
?Tom Vreeman is most patient and understanding person we could ask to develop this product,? she said. ?He began working with us three years ago to get this work. We could not have gotten this level of service with any other company.?
The Israeli bandage was developed under harsh battlefield conditions by Israeli military medic Bernard Bar-Natan, who adapted an improvised Israeli Defense Force field practice of placing a rock onto a bandage to keep pressure on a wound. What he discovered was many of these dressings were surplus from World War II and had not been updated. Bar-Natan took his idea to an Israeli business incubator, where he created First Care Products Ltd. to develop and manufacture the kit.
PerSys Medical last year acquired a majority stake in Israel-based First Care Products.
Now the bandages are not only assembled in Israel, but also in the United States by KI Medical.
The Israeli bandage was first used to save lives in the 1990s during NATO peacekeeping operations in Bosnia and Herzegovina, and by U.S. forces in Iraq a decade later. They were nicknamed the ?Israeli bandage? by American Special Forces troops. The bandage also has been credited with helping to save the life of U.S. Rep. Gabrielle Giffords in January 2011 after a tragic shooting at a public event in Arizona.
When it came time for PerSys to bring its battlefield dressing to the United States, PerSys CEO and President Ofer Molad came looking to do business with KI Medical, said Williams. She also said the U.S. military wants contractors to work with certified AbilityOne contractors, a program overseen by NISH, a network of nonprofit agencies that secures contracts to provide employment opportunities for people with significant disabilities.
?These kits are built by people with impairments,? she said. ?Kandu is an incredible place. The workers come up to you when you take a tour to tell you how excited they are to make these products.?
Vreeman said Kandu is a certified AbilityOne program that is able to manufacture items for the federal government and accept federal set-aside contracts for nonprofits that employ people with disabilities.
However, the contract for the Israeli Bandage is not part of a set-aside.
?It helps us that we are certified in that manner,? Vreeman said. ?It gives customers a level of confidence in our manufacturing for the federal government.?
Vreeman said about 70 percent of the 1,200 or so people Kandu serves every year have physical and developmental disabilities. Others may have a long-term prison record and are looking for employability training. Vreeman said besides assembling medical devices at KI Medical, Kandu also performs light manufacturing for the office furniture and automotive markets.
Don Beery, executive director of the West Michigan Medical Device Consortium, said KI Medical does good on two different fronts: They build great medical devices, and they provide employment for people who may not otherwise find jobs.
?KI Medical also is a good company that understands the FDA medical device process,? Beery said. ?Kandu is a very capable contract manufacturer.?
