Madison-HQ small business standing up as the local-resident teaming partner for the four out-of-state primes running federal contracts at the Blue Grass Army Depot.

The demand side is four named primes plus a $903 million MILCON build-out. Bechtel Parsons Blue Grass JV — Bechtel National of Reston, Virginia and Parsons Corporation of Centreville, Virginia, with Amentum, Battelle Memorial Institute, and GP Strategies as the three teaming subcontractors of record under PEO ACWA — is the BGCAPP systems contractor through closure. PEO ACWA's closure overview places the closeout window through 2027.

The Center of Excellence for Energetics layers on top. The fiscal year 2026 defense bill appropriated $903 million to establish the center at the depot, announced by Senator McConnell in February 2026 as part of $1.7 billion in Kentucky defense funding. Army Contracting Command Rock Island issued Sources Sought W519TC-26-R-0019 on March 13, 2026 (responses due April 15, 2026), with a target of fully operational before 2031. Both phases — closure and Center stand-up — generate small-business subcontract scope.

The supply side is a structural absence. None of the published vendors on the BGAD ledger is a Madison-headquartered small business positioned as a standing local teaming partner across all four primes. Centeio Associates, Valkyrie Enterprises, PIKA International, D&D LLC, Schwarz Construction, Micron Air and Mechanical, Capstone Precision, Luxfer Magtech, and MedVolt LLC all appear in the place-of-performance ledger at BGAD, but each requires SAM.gov verification by entity name before federal-contracting framing. The Madison Chamber, Berea Chamber, and Kentucky River Foothills Development Council are the partner channels through which a Madison aggregator would announce itself. None currently lists a member firm in this posture.

The mechanic is procedural, not aspirational. FAR 52.219-9 (Small Business Subcontracting Plan) requires every prime contractor with a contract over the simplified acquisition threshold and offering subcontracting opportunities to maintain a written subcontracting plan with separate percentage goals for small business, SDB, WOSB, HUBZone, SDVOSB, and VOSB participation. Prime contractors at BGCAPP and on the forthcoming Center awards file these plans and report against them to the contracting officer. A Madison-resident, properly certified small business that walks into Bechtel Parsons Blue Grass small-business outreach with a teaming agreement and named past-performance matches a procurement requirement the prime already has to meet — and the same firm, repeated across Battelle, Amentum, and GP Strategies, satisfies four primes' goals at once.

The competitive picture is open. Bechtel has been recognized by SBA for small-business support and BGCAPP has reportedly spent over $200 million with Kentucky companies during the destruction phase, per Bechtel and PEO ACWA materials. That is a demand signal, not a Madison-vendor-revenue figure. The current vendor surface shows out-of-area primes plus a long tail of smaller awardees with pending entity verification — the shape an organized Madison aggregator can consolidate into a single teaming partner across the four prime relationships before the Center recompete cycle locks in.

Federal-subcontract markup and the gross-revenue arithmetic. Federal subcontract pass-through markup at the second tier — the rate at which a Tier-1 prime such as Bechtel Parsons Blue Grass adds a small-business sub's labor and materials into its own cost-plus or firm-fixed-price bill — runs in published norms at 5–15% on subcontract value depending on whether the relationship is cost-reimbursement, T&M, or fixed-price. A Madison-HQ aggregator operating as a teaming sub at $1.5M of pass-through scope across the four primes in steady-state Year 3 captures gross fee at roughly $75K–$225K on the markup line alone, before direct labor margin on its own employees. Stack that on an additional $500K–$1.0M of self-performed labor at federal facilities-support gross 28–35% (RMA NAICS 561210 / 561612 / 541330 norms) and Year-3 gross profit lands in the $250K–$500K range at $2.0M–$2.5M total revenue.

8(a) / HUBZone / SDVOSB set-aside thresholds and the cert-economics floor. SBA 8(a) Business Development is a 9-year program for socioeconomically disadvantaged owners; sole-source 8(a) award threshold is $4.5M for non-manufacturing, $7.0M for manufacturing (vintage 2024 — verification queued). HUBZone certification (4–8 month timeline as of recent SBA process refreshes) requires the principal office in a qualifying tract plus 35% HUBZone-resident workforce; Madison County HUBZone-tract status is mixed and must be verified census-tract-by-census-tract for any candidate office address. SDVOSB (4–8 months) requires VA-rated service-disabled veteran ownership and control. Without one of these set-aside flags, the Madison aggregator competes head-to-head with established out-of-area subs that already hold the past-performance ladder. With one, the math reverses on the small-business-set-aside subset of subcontracts under FAR Part 19, and the prime's FAR 52.219-9 subcontracting-plan goals create an inbound demand for the firm rather than an outbound bid pursuit.

Worked example: a Madison-HQ aggregator on Year 3 against the four-prime book. Assume the entity is HUBZone-certified and a teaming sub on three of four primes (BPBG + Battelle + Amentum) plus on the CoE Sources Sought response with GP Strategies on workforce-transition scope. Self-performed labor: 8 W-2 employees (3 cleared, 5 uncleared) at fully-loaded $95/hr blended × 1,600 billable hours = $1.22M direct labor revenue. Pass-through markup on $1.0M of teamed scope at 8% blended = $80K. Total revenue ≈ $1.30M Year 2, scaling to $2.0M–$2.5M Year 3 as the CoE MILCON small-business carve-out lands. Gross 30% on direct labor + 100% on markup = approximately $445K Year 3 gross profit. G&A allocation on cost-plus federal work runs 12–22% of revenue (DCAA-acceptable indirect rate structure); at 18% of $2.25M = $405K G&A. Net profit ≈ $40K Year 3 plus principal salary inside G&A of roughly $140K–$180K for the cleared owner-operator. The math is not a service-business cash-cow; it is a federal-contracting equity build over 5–7 years with a real exit multiple on past-performance + clearances + IDIQ positioning.

Capital tier rationale. $400K–$900K acquisition tier reflects the realistic price for an existing small federal sub with active CAGE/UEI, top-secret or secret facility clearance, and 3+ years of named past-performance against one or more of the four primes — the kind of small firm that trades at 2.5–4x SDE in federal-contracting M&A precisely because the regulatory ladder is the asset. $250K–$500K start tier covers founding-entity legal, CAGE/UEI registration, 8(a)/HUBZone/SDVOSB application costs, facility-clearance sponsorship under the NISPOM (sponsor-prime required, plus DCSA processing — typically 9–18 months for an FCL at the secret level), federal-procurement counsel retainer ($15K–$40K/yr), DCAA-acceptable accounting system stand-up (Unanet or Deltek, $20K–$60K licensed-and-implemented), and an 18-month G&A reserve before Year-1 subcontract revenue meaningfully lands. Honest framing: this is an 18–36 month buildup before first material revenue. It is not a fast-cycle service-business start.

• Blue Grass Army Depot (BGAD)

  Federal installation — named customer

  Institution

  Federal installation in Madison County. Conventional munitions storage continues post-July-2023 chemical-weapons-destruction completion; BGAD itself expected to add jobs post-BGCAPP closure. The named customer for every prime and sub in this candidate. Not a vendor.
• Bechtel Parsons Blue Grass JV

  BGCAPP systems contractor

  Out-of-county

  Joint venture of Bechtel National (Reston, Virginia) and Parsons Corporation (Centreville, Virginia) per Bechtel Parsons and PEO ACWA fact sheets. Federal contracting data records about $5.52 billion across six awards in NAICS 562211 with Madison County activity. These are prime-contract dollars at BGAD, not Madison-vendor revenue. The FAR 52.219-9 small-business subcontracting plan applies.
• Battelle Memorial Institute

  Prime teaming subcontractor at BGCAPP

  Out-of-county

  Headquartered in Columbus, Ohio. One of three named teaming subcontractors to Bechtel Parsons Blue Grass at BGCAPP per the PEO ACWA fact sheet. About $7.3 million of activity at BGAD in federal contracting records. Filed a WARN notice March 3, 2025 with the Kentucky Office of Employment and Training eliminating 245 positions effective April 24, 2025 over a 14-day window — closure-phase drawdown, not a vendor failure.
• Amentum

  Prime teaming subcontractor at BGCAPP

  Out-of-county

  Headquartered in Chantilly, Virginia. One of three named teaming subcontractors to Bechtel Parsons Blue Grass at BGCAPP per the PEO ACWA fact sheet.
• GP Strategies Corporation

  Prime teaming subcontractor at BGCAPP

  Out-of-county

  Headquartered in Columbia, Maryland. One of three named teaming subcontractors to Bechtel Parsons Blue Grass at BGCAPP per the PEO ACWA fact sheet. Workforce-transition and training scope is the structural fit.
• PIKA International Inc.

  Federal subcontractor at BGAD

  Out-of-county

  About $3.5 million of activity recorded at BGAD in federal contracting data. Headquarters indication is Wheaton, Maryland per public materials. Operating in Madison; not a Madison-headquartered vendor.
• D&D LLC

  Federal subcontractor at BGAD

  Out-of-county

  About $8.8 million of activity recorded at BGAD in federal contracting data. Common name — entity confirmation by federal identifier is required before further public characterization.
• Schwarz Construction

  Federal subcontractor at BGAD

  Out-of-county

  About $11 million of activity recorded at BGAD in federal contracting data. Operating in Madison; not a Madison-headquartered vendor.
• Micron Air & Mechanical

  Federal subcontractor at BGAD (HVAC and mechanical)

  Out-of-county

  About $9.1 million of HVAC and mechanical scope recorded at BGAD in federal contracting data. Operating in Madison; not a Madison-headquartered vendor.
• Centeio Associates

  Federal subcontractor at BGAD

  Out-of-county

  About $6.4 million of activity recorded at BGAD in federal contracting data. Operating in Madison; not a Madison-headquartered vendor.
• Valkyrie Enterprises

  Federal subcontractor at BGAD

  Out-of-county

  About $3.0 million of activity recorded at BGAD in federal contracting data. Public materials suggest a Virginia Beach headquarters. Operating in Madison; not a Madison-headquartered vendor.
• MedVolt LLC

  Federal subcontractor at BGAD (single award)

  Out-of-county

  Federal contracting data records a DoD award with BGAD activity; exact figure pending entity confirmation. A single large-dollar award against a small-name LLC is the fact pattern that requires entity confirmation before further characterization.
• Xator Corporation

  Federal subcontractor at BGAD

  Out-of-county

  About $7.4 million of activity recorded at BGAD in federal contracting data. Operating in Madison; not a Madison-headquartered vendor.
• Capstone Precision Group

  Federal subcontractor at BGAD (energetics-adjacent)

  Out-of-county

  About $5.8 million of activity recorded at BGAD in federal contracting data, with NAICS 332994 small-arms ordnance per public materials. Operating in Madison; not a Madison-headquartered vendor.
• Luxfer Magtech

  Federal subcontractor at BGAD (energetics-adjacent)

  Out-of-county

  About $3.4 million of activity recorded at BGAD in federal contracting data, NAICS 334511 per public materials. Public materials indicate a UK-parent and US-subsidiary corporate structure. Operating in Madison; not a Madison vendor.
• Madison Chamber, Berea Chamber, and Kentucky River Foothills Development Council

  Partner channels for a federal-vendor working group

  Institution

  The Madison and Berea Chambers are the local-business introduction surface. The Kentucky River Foothills Development Council captures about $4.7 million of existing federal flow as a regional community-action agency — the closest institutional analog to the procedural-overhead skill set this candidate needs, and a likely partner channel for an aggregator standing up.

Two acquisition lanes plus a named-build lane. Acquisition Lane A is the existing small federal sub with active CAGE/UEI + facility clearance + named past-performance against BPBG, Battelle, Amentum, or GP Strategies. The target list is small, specifically because most second-tier subs at BGAD are out-of-area; the candidate work is to identify the rare small firm whose principal office sits in Madison or an adjacent KY county, holds an FCL at the secret level, and has a succession-aged principal. KY Secretary of State business filings + SAM.gov small-business search by NAICS 562211 / 541330 / 541620 / 561210 with Kentucky principal office is the discovery query. Tier 1 in the register; small named target list pending verification verification.

Acquisition Lane B is the adjacent specialty-trades operator — a Madison-area mechanical/electrical/abatement firm with a public-works track record but no active federal CAGE — that becomes the platform for an aggregator entity on top. The acquisition transfers the operating platform; the buyer then layers the federal-contracting overlay (CAGE registration, set-aside cert application, FCL sponsorship intake, DCAA accounting stand-up). This is the build lane disguised as an acquisition: cheaper at the door but the federal-contracting clock starts on the day of close, not on the day a target sub gets transferred.

The build lane is a clean-sheet founding entity with the founding principal — an institutional-vendor entrepreneur with prior federal procurement past-performance from a previous employer, or a returning-home BGAD/Bechtel/Battelle alumnus with Madison roots and an existing security clearance the new entity sponsors forward under DCSA reciprocity. The build lane is what most of the candidate's economics model assumes (the $250K–$500K start tier). It requires the founding principal to walk in with credentials a buyer cannot acquire — past-performance affiliation under FAR 9.104-3(c) and an active personal clearance — that compress the 18–36 month build timeline by 6–12 months versus a cold-start founder.

• — Confirmed SAM.gov entity records (by CAGE and UEI) for Bechtel Parsons Blue Grass, Battelle, Amentum, GP Strategies, PIKA International, D&D LLC, Schwarz Construction, Micron Air and Mechanical, Centeio Associates, Valkyrie Enterprises, Xator, Capstone Precision, Luxfer Magtech, or MedVolt LLC. Public-website indications are not SAM-of-record. Every figure in this candidate is a Madison-County activity dollar until each entity's principal-office state is confirmed.
• — The public FAR 52.219-9 small-business subcontracting plan language for Bechtel Parsons Blue Grass's BGCAPP contract and the Battelle, Amentum, and GP Strategies teaming flowdowns. Subcontracting-plan goal percentages and goal-attainment reporting are not yet quantified.
• — The DFARS clauses governing community-impact reporting on BGCAPP and the forthcoming Center awards (likely DFARS 252.219-7003 and 252.219-7004 small-business participation plus contract-specific local-hire provisions). Direct contract-document pulls would let us cite the mechanic precisely.
• — Whether the founding principal qualifies for 8(a), HUBZone, or SDVOSB. The 8(a) thresholds are roughly $850,000 personal net worth excluding primary residence and retirement, $400,000 adjusted gross income, and $6.5 million total assets (2024 vintage). HUBZone requires principal-office census-tract qualification and 35 percent HUBZone-resident workforce. SDVOSB requires a VA service-disability rating. Each must be checked against 2026 thresholds.
• — The DCSA Facility Clearance sponsorship pathway for a new Madison-headquartered entity. FCL requires a sponsor-prime with a classified requirement plus DCSA processing under the NISPOM; processing windows have run 9 to 18 months in recent years.
• — The response field on Sources Sought W519TC-26-R-0019. The April 15, 2026 deadline has passed; the response set would require a FOIA pull or industry-day attendance to map.
• — The recompete schedule for any of the four primes' BGAD task-order books. Closure contracts and Center stand-up contracts have different small-business carve-out timing.
• — Bechtel Parsons Blue Grass's small-business subcontracting goal attainment in SBA's eSRS reporting. eSRS data is the cleanest measurement of the structural absence of Madison-headquartered small-business participation.
• — Whether a chamber-level small-business federal-contracting committee is active at the Madison or Berea Chamber. The chamber surface is the introduction lane but is not yet confirmed organized for this candidate.
• — PEO ACWA's or BGAD Public Affairs's published Center stand-up workforce projections, named small-business outreach contacts, and anticipated set-aside posture on the W519TC-26-R-0019 follow-on RFP.
• — The SBA Kentucky District Office's and Kentucky APEX Accelerator's application support pathways for 8(a), HUBZone, and SDVOSB, plus any existing pipeline of eligible principals.

Tonight, this week, this month — in that order. Each step produces a yes/no or a number, not a deeper understanding.