Graphene 3D LabIn news this morning, Graphene 3D Lab Inc. (web site) announced the appointment of Gil Mayron to the position of Chief Marketing Officer (press release).

Gil Mayron founded Florida-based consumer 3D printer manufacturer BotMill. His company was one of the first manufacturers of consumer grade 3D printers, and it was acquired by 3D Systems in August of 2011. Following the acquisition Mr. Mayron was an executive at 3D Systems identifying and managing strategic partnerships as well as new licensing opportunities.

This is obviously a key strategic hire for Graphene 3D Lab. Commercialization of Graphene 3D Lab’s proprietary, patent-pending graphene-enhanced 3D printing materials is expected to begin “in the next 3-6 months” according to the press release.

 

Read why I believe Graphene 3D Lab is the best 3D printing stock to buy now (8/11/14)

 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock


 

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Disclosure: I am long shares of Graphene 3D Lab. See additional disclosure in 8/11/14 article linked above. 

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

 

 

Inside 3D Printing Santa Clara

Inside 3D Printing Conference And Expo Comes To Silicon Valley


 

Mark your calendars for theInside 3D Printing Conference And Expocoming to Santa Clara October 21-23, 2014.

Inside 3D Printing is the largest professional 3D printing and additive manufacturing event worldwide and this will be the west coast’s largest array of international exhibitors to date.


It was great meeting some of my subscribers in person at previous Inside 3D Printing events, and  I’m happy to report that I’ll be speaking about investments in 3D printing at the Santa Clara conference as well.


The featured speaker lineup is always strong at the Inside 3D Printing Conference and Expos, and the Santa Clara edition continues that tradition:

Inside 3d Printing Santa Clara

Click for full conference agenda.


Following Santa Clara in October, Inside 3D Printing resumes its world tour with upcoming shows in:

  • Shanghai (November 4-5, 2014)
  • Singapore  (January 27-28, 2015)
  • Milan (February 2015)
  • Berlin ( March 3-4, 2015)
  • London (March 24-25, 2015)
  • And returning to New York (April 27-29, 2015)

So the Santa Clara show is the next “close travel opportunity” for North Americans to attend the conference until it returns to New York in April 2015.

 

How informative, cool, and fun are the Inside 3D Printing Conference events?  This video gives you an idea…

 

Register early and save.

Inside 3D Printing Santa Clara registration

And please stop and say hello – I really love to meet subscribers and am always up for a chat about 3D Printing Stocks!

 

Inside 3D Printing santa clara gary anderson

 

 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

 _________________________________

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

 

Groupe GorgeFrench robotics, nuclear safety, and engineering firm Groupe Gorge, which manufactures the Prodways line of 3D printers (see web site), provides update today on their first half 2014 results.

 


The 3D printing division discussion begins at 4:40 and includes news that Groupe Gorge now has a U.S. distribution agreement in place.

The outlook in the 3D printing segment for the remainder of 2014 is given at 16:25.

Investors may want to watch the entire video. Groupe Gorge is a well-established firm with strong fundamentals and has a sales backlog of 194 million euros vs. 101.4 million euros reported in the first half of this year.

Groupe Gorge also paid a dividend of €0.32 per share in July and yet has a PE ratio of 37 and a Price/Sales ratio of 1.15… which are among the lowest ratios you’ll find for a company entering the 3D printing space.

 

Groupe Gorge trades as GOE on the NYSE Euronext Exchange and GGRGF on the US OTC.

 

Shares of Groupe Gorge have outperformed all major pure play 3D printing stocks YTD, and are up 100% since I initially wrote about them in December of last year.

Groupe Gorge stock chart

 

Prodways Founder, Dr. Andre-Luc Allanic on the advantages of Prodways 3D printers.

 


I expect shares to continue to outperform as:

  • distribution agreement for sales of 3D printers in the U.S. along with future agreements expected in Europe open new sales channels
  •  revenue and income from the DeltaMed acquisition (see article on Engineering.com) are included in operating results in the second half of the year
  • the company’s expectations that growth in 3D printer sales will eclipse the growth rate of the 3D printing industry overall
  • launch of over 10 new resin materials this year
  • order backlog for the second half of the year is 194 million euros, nearly double the 101.4 million in sales for the first half of the year

 

 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock


 

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

 


 

Disclosure: I am long shares of Groupe Gorge (GOE). I was not paid by the company or any third-party for this article.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

SharesGGG in Graphene 3D Lab Inc. (GGG.V) have been on a roll since trading began August 11th, with a pullback/consolidation on lighter volume Thursday and Friday last week.

I wanted to get the opinion on initial GGG.V trading from the best technical analysis expert I know, and that’s Clay at ClayTrader.com.  

Clay’s video analysis is below.

 


 

 

 

Link to Graphene 3D Lab web site


 

I believe shares of Graphene 3D Lab will continue to perform well going forward as:

  • The company will be providing a demo of their patent-pending 3D printed battery technology soon

 

GGG 3D printed batteries

 

  • Revenue from the company’s graphene-enhanced filaments are expected to begin in the next 3-6 months
  • Official  listing of shares for trading in the U.S. is pending, allowing more investment in the company from the world’s largest market
  • Increasing awareness of the company via 3D printing industry publications (see below)
  • Future speaking engagements by management beginning next week (see below)

 


 

GGG shares

Dr. Elena Polyakova, COO of Graphene 3D Lab, will present at the Peter Schiff Euro Pacific Capital Global Investment Conference on Tuesday, September 9th at 1:30 pm. See conference agenda.

I’ll be attending as will many other individual investors, mutual fund managers, and professional money managers

 


 

If you haven’t heard about Graphene 3D Lab, (and I suspect most investors in 3D printing haven’t yet), you can learn about some of what they’re up to in the following articles:

Patent For 3D Printed Batteries Powers Graphene Potential (3DPrintingIndustry.com 9/4/14)

Graphene 3D Lab files provisional patent for 3D printed batteries (3ders.org 9/3/14)

3D Printed Graphene Batteries – Graphene 3D Lab Files Provisional Patent & Plans Demonstration (3DPrint.com 9/3/14)

Graphene Filament for 3D Printing (Fabbaloo 6/25/14)

GGG shares outperforming

and read why I believe Graphene 3D Lab is the Best 3D Printing Stock to Buy Now

Gary Anderson…..Follow me on Twitter: @3DPrintingStock


 

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

 


 

Disclosure: I am long shares of Graphene 3D Lab.  Due to the strengths I found in management and the technology of Graphene 3D Lab, I approached the company and key investors while the company was private, offering my services as a consultant. I have since signed a contract for those services with Numus Financial of Canada which began August 14, 2014 and runs through December 2015. Cash value is $110,000 USD with options for 100,000 shares at a price to be determined by the Toronto Stock Exchange on or before September 1, 2014.  I do not have a contract directly with Graphene 3D Lab and comments have not been directly endorsed by Graphene 3D Lab management.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

Tinkerine StudiosIn news this morning, consumer 3D printer manufacturer Tinkerine Studios (TTD.V) and (TKSTF) announced a distribution agreement with Asian giant SoftBank Group (web site). The two companies expect the deal to be finalized by October 31 according to the press release.

Chief Marketing Officer of SoftBank Group Korea (SBCK) Chinchul Yi explained:

“SBCK was looking for 3D printing solutions with strong education curriculum and Tinkerine is the right partner to initiate SBCK’s 3D printing business in terms of aligning with Korea’s 3D printing initiatives. We see Tinkerine as a catalyst to expedite SBCK’s 3D printing business not only in Korea, but all APAC regions in the near future, through SBCK’s global networks within the SoftBank group companies.”

According to this July 21st article on 3DPrintingIndustry.com, the Korean government is investing heavily in 3D printing technologies, and an education push is a big part of their investment.

South Korea plans to help 10 million people become skilled at using 3D printers — a fifth of the population — by 2020, and increase the nation’s global 3D printing market share to 15 percent in the same timeframe.

The Seoul government will also supply 5,800 3D printers to 5,865 schools nationwide by 2017, and will educate 13,000 teachers so they have a better understanding of 3D printing and can pass that on to their pupils. Around the country, 130 3D printing promotion centers will be built to spark interest in the technology.

“The biggest problem is there is minimal demand from large companies and individuals. One of the biggest barriers is price, and lack of software that designers can apply for using 3D printers,” Moon added. Only one company, Intelli Korea, develops software for 3D printers.

“We made more than 3,000 prototypes using 3D printers in the year 2012. That’s a 49 percent increase from the year 2011,” Hyundai’s spokesman added. Hyundai MOBIS in now in a partnership with Stratasys, the world’s number-one 3D printer maker, and seems ready to boost usage.

Reference: Korean government’s 3D printing blueprint targets 15 percent of global market.


With Tinkerine’s emphasis on the education market via TinkerineU, this looks like a great fit to me.

Additionally, considering the recent addition of former Ben Yan as Channel manager at Tinkerine Studios, I believe investors should expect to see more large-scale distribution agreements in the future. Ben was previously in charge of all sales at Hewlett-Packard and plans to integrate what he calls “the HP way” at Tinkerine Studios.

See also: My video interview with Tinkerine Management

Gary Anderson…..Follow me on Twitter: @3DPrintingStock


 

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

 


 

Disclosure: I am long shares of Tinkerine Studios. I was not paid by the company or any third-party for this article.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

 

Graphene 3D LabAfter the close of trading today Graphene 3D Lab Inc. (web site) announced the company has filed a provisional patent application for 3D printed battery technology and that the company will hold a public demonstration of their 3D printed batteries.

See: Graphene 3D Lab Inc. Files Provisional Patent Application Related to 3D Printable Batteries

I checked with 3D printing patent attorney John Hornick who explained that provisional patent applications can be used to “lock in” the date of the filing with the U.S. Patent and Trademark Office to get in front of a potentially similar application made later by a different company.

3D printed batteries are a (potentially huge) addition to what I believe is the company’s early mover advantage in the commercialization of graphene filaments for 3D printing.  Dr. Elena Polyakova, COO of Graphene 3D Lab stated in a June article that sales of their graphene-enhanced filaments for 3D printing are expected “within 3-6 months.”

3D printed batteries offer unique, potentially high-demand applications.

Graphene 3D Lab 3d printed batteries

Today’s news after the close is yet another reason I believe “The Best 3D Printing Stock to Buy Now is Graphene 3D Lab (GGG.V)“, and I can’t wait to see the public demonstration of this technology.

 Gary Anderson…..Follow me on Twitter: @3DPrintingStock


 

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

 


 

Disclosure: I am long shares of Graphene 3D Lab.  Due to the strengths I found in management and the technology of Graphene 3D Lab, I approached the company and key investors while the company was private, offering my services as a consultant. I have since signed a contract for those services with Numus Financial of Canada which began August 14, 2014 and runs through December 2015. Cash value is $110,000 USD with options for 100,000 shares at a price to be determined by the Toronto Stock Exchange on or before September 1, 2014.  I do not have a contract directly with Graphene 3D Lab and comments have not been directly endorsed by Graphene 3D Lab management.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

Arcam ABIn news this morning, Arcam AB (ARCM) on the NASDAQ OMX and (AMAVF) in the U.S. announced orders for their EBM (Electron Beam Melting) 3D printers.

One to Germany, (see press release) and the other to Italy (see press release).

While this is good news, I think probability is high for Arcam to announce sales of multiple machines per order for their new Q20 machine (PDF on Q20) developed for the high-growth aerospace market.

The Q20 was just released in the second quarter and CEO Magnus Rene stated at the time:

“The work to industrialize our technology with the major players within the aerospace and implant industries continue and we can now see good opportunities for volume orders during the year.”

GE Aviation stated earlier this month that the new EBM system developed by Arcam and GE’s subsidiary, Avio Aero is “10 Times more powerful than laser”(see prior article) and GE Reports.

 

Automotive Industry & New Titanium Aluminide Turbochargers

I expect to see Arcam make increasing inroads into the automotive industry in the next year or two resulting from the TiAlCharger Project for development of 3D printed Titanium Aluminide Automotive Turbochargers.

The TiAlCharger Project, (funded by governments of the European Union), aims to create a cost-effective, mass producible, low inertia titanium aluminide (TiAL) turbocharger using Arcam’s EBM technology. Expected outcomes of the project are:

– Weight savings of 60%

– A reduction on mass moment of inertia of 36% (compared to Nickel super alloys that are the current state of the art)

– Operation at temperatures >950°C

– Increased fuel to air ratios thereby improving vehicle efficiency by an additional 5% and reducing CO2 emissions by 8%.

Arcam’s EBM process will fabricate a hollow, lightweight, low-inertia titanium aluminide rotor-wheel. The TiAl wheel turbine will be joined to the steel shaft using electron beam welding. This fabrication method provides the possibility to manufacture turbocharger wheels from TiAl, which (if of the required quality) retains its strength at high temperatures, expanding the usage of turbochargers to a broad range of engine types.


Exciting stuff!

Gary Anderson…..Follow me on Twitter: @3DPrintingStock


Disclosure: I am long shares of Arcam AB. I was not paid by Arcam or any third-party for this content.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.


 

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

3D printing stocks have rallied in August with newcomer Graphene 3D Lab outperforming…a trend I believe will continue over the next few months for reasons I’ll discuss below.

3D printing stocks have performed well during the first 3 weeks of August. The 3D Printing Stock Index (a tracking index) measures daily changes in the weighted, combined market capitalizations of 3D Systems (DDD), Stratasys (SSYS), ExOne (XONE), Arcam AB (AMAVF), voxeljet (VJET), and Organovo (ONVO). The index rose 12.9% from August 1st – August 22.

Graphene 3D Lab 3D Printing Fund chart

The 3D Printing And Technology Fund (TDPNX) has also been strong in August and the trend could continue. This is due to a large short position in several 3D printing stocks combined with positive forward guidance from 3D Systems and Stratasys  for the remainder of this year and into next.

 

 


New player Graphene 3D Lab

The newest addition to 3D printing stocks is Graphene 3D Lab Inc. (web site) a company on the verge of commercializing graphene filaments for 3D printing.

Chart updated 8/27/14: Shares in Graphene 3D Lab began trading in Canada on August 11th under ticker GGG.V and a listing in the U.S. is expected in the next 60-90 days. The chart below shows the performance of GGG.V vs. DDD, SSYS, XONE, and VJET from the close of the first day of trading – Wednesday’s close on 8/27/14. Note that gains do not include those made on opening day, when subscribers were first alerted to the stock at market open.

Graphene 3D Lab comparison chart

Shares in Graphene 3D Lab have outperformed the broader August 3D printing stock rally since trading began. While past performance does not necessarily predict future results, I believe shares in Graphene 3D Lab will continue to outperform for the following reasons:

  • Graphene 3D Lab appears to be in the lead to commercialize materials for 3D printing
    In this June interview, COO Dr. Elena Polyakova stated they “expect to start selling materials for 3D printing within three to six months.”

  • Graphene filaments and materials are likely to be in strong demand
    When you combine the incredible properties of graphene with the advantages inherent in 3D printing, demand for new graphene-enhanced materials should be strong. Some have predicted a new “killer app” will come out of 3D printing that will result in widespread consumer adoption. I believe that “killer app” just might be built out of a new “killer material” for 3D printing…a graphene composite.

Graphene 3D Lab graphene and 3D printing

I asked Christopher Barnatt, a British futurist, scholar and author of “3D Printing: The Next Industrial Revolution” for his thoughts on graphene as a new material for 3D printing.  Chris replied:

3D printing revolution with graphene 3D lab-1“I am certain that, in the next few years, 3D printing will be driven forward as much by new material developments, as it will by improvements in hardware and new 3D printing processes. The creation of a plastic/graphene composite filament by Graphene 3D Lab is one example of cutting-edge work in this area. When it comes to making a really strong 3D printing materials, plastic/graphene composites may lead the pack. In addition to being strong, plastic/graphene composites will also be conductive, so opening up possibilities to create circuitry or sensors on 3D printed products at home.”

Incidentally, Chris is working on a new book about 3D printing for publication that should also be available on Amazon.com in November.

 

 

  • More online brokers will offer trading in Graphene 3D Lab by late September
    Shares of GGG.V are available now to U.S-based investors with foreign market trading accounts at Fidelity, Interactive Brokers, and a few others. Some brokers however, (including Schwab’s international desk), won’t have share available until after the first 40 days of trading. As more online brokers have shares available, I expect interest and volume to increase.

  • U.S. listing
    Graphene 3D Lab should be listed in the U.S. (where it’s also headquartered) in the next 60-90 days. This of course opens up a very large pool of investors in both 3D printing and graphene who like myself, see the company having first mover advantage in sales of graphene materials for 3D printing.

  • “Quiet period” ends in early September
    Similar to an IPO in the U.S. which must have a quiet period of 40 days following the start of trading, Graphene 3D Lab is unable to release materially significant news yet. This period ends in early September and I suspect at that point many investors will begin discovering the company when significant news can be released.

 


 

As a result of new investor awareness from press releases following the quiet period, an increase in the number of brokers having shares available, and a listing for trading in the U.S., a corresponding increase in demand for shares seems certain.

With 37.9 million shares outstanding and 21 million of those locked in escrow, the float is among the lowest in 3D printing stocks. When Graphene 3D Lab announces initial sales and/or distribution agreements for graphene-enhanced filaments “within 3-6 months”, demand for shares will almost certainly cause a major move up in the stock.

Read more about the properties of graphene and why I believe Graphene 3D Lab will be first to market in:

The Best 3D Printing Stock to Buy Now is Graphene 3D Lab


 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

 

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

 


Disclosure: I am long shares of Graphene 3D Lab.  Due to the strengths I found in management and the technology of Graphene 3D Lab, I approached the company and key investors while the company was private, offering my services as a consultant. I have since signed a contract for those services with Numus Financial of Canada which began August 14, 2014 and runs through December 2015. Cash value is $110,000 USD with options for 100,000 shares at a price to be determined by the Toronto Stock Exchange on or before September 1, 2014.  I do not have a contract directly with Graphene 3D Lab and comments have not been directly endorsed by Graphene 3D Lab management.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

Arcam ABI wrote previously about Arcam AB (AMAVF) and their new/improved EBM technology under development in:

and


Arcam

Apparently I’m not the only one who finds Arcam’s new/improved EBM technology attractive.

In a new report from GE , it’s stated that:

“The gun is 10 times more powerful than laser beams currently used for printing metal parts. This boost in power allows Avio, which is part of GE Aviation, to build blades from layers of powder that are more than four times thicker than those used by laser-powered 3D printers.”

and

“One machine can produce eight stage 7 blades for the low pressure turbine that goes inside the GEnx jet engine in just 72 hours.”


So, what’s next for Arcam? I believe 3D Printing Titanium Aluminide Turbochargers is still to come.

Arcam is a stock investors in 3D printing should keep a close eye on. If Arcam’s technology is being adopted by GE and subsidiary Avio Aero,  then I expect orders of significant size to be forthcoming from several players in the high value metals space.

______________________________________________________

Disclosure: I am long shares of Arcam AB. I was not paid by Arcam or any third-party for this content.

 

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

 ______________________________________________________

Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

By: Robert G. Bugge, August, 2014 © 2014 All Rights Reserved


The US government is the largest consumer of goods and services in the world.  If you include state governments the combination represents 75% of the entire US market for goods and services.  The application of AM within US Government contracting will have wide-ranging, disruptive effects on the business, economic and procurement models currently in use by US Government departments and agencies as well as the contractors that sell to and support them.

Procurement of all goods and services by the US Government is strictly governed by the Federal Acquisition Regulations (“FAR”) with each agency of the Government having its own supplemental set of regulations to deal with the unique aspects of their procurements e.g., Department of Defense Federal Acquisition Regulation Supplement (“DFARs”).

These regulations have extensive coverage regarding how procurements of goods and services are conducted and the content of the contracts awarded, including the ownership of intellectual property (“IP”) rights.  In the context of Federal procurement, there are the IP rights of the contractors that sell their products to the Government and the IP rights of Government departments and agencies to the products that they have paid the contractor to develop with Federal funds.  Essentially the paradigm has historically been that the contractor owns what it developed, or develops with its own funds and the Government owns the IP that is developed by the contractor with Federal funds.  This paradigm has been in existence for decades and has resulted in evolved, well-oiled business, economic and procurement models that have been in use for just as long.

The IP ownership nuances between these ownership models are covered by numerous pages of regulations and are often the central point of negotiations between the contractor and the Government.  The motivations are simple.  The contractor wants to own all of the IP so that it can use it to develop new products and remain competitive.  The Government likewise wants to own all of the IP not to compete with the contractor, but to ensure its source of supply to the product.

Even more important in this application are the business and economics models.  As the largest purchaser of goods and services the Government can place large orders for products that dwarf the size of typical commercial orders.  These attractive orders create economies of scale for the contractor and keep assembly lines open for long production runs.  Moreover, in Federal procurement the Government frequently agrees in its contracts to options to purchase additional products and for the purchase of spares for those products thus ensuring a valuable, continuous supply of business for the contractor and the maintenance and support of a very long logistics chain for the Government to support its field operations.  In the defense vernacular this is commonly referred to as the “tail to teeth ratio”.

AM has the potential to radically redefine the business, economic, procurement and logistical models in the Federal procurement space as it will clearly impact product development, product manufacturing and supply logistics. But what will this new paradigm look like and how will the procurement regulations need to change to address it?  The answers to these questions could easily serve as the subject of several masters thesis, but just touching on them will hopefully serve as a catalyst to stir debate as the current process for regulatory change is slow and cumbersome and most certainly will not move as fast as AM adoption will in the Federal procurement space.

Business Model:  Today contractors compete with one another for Government business.  They assume an initial contract award for a specified quantity of an item and potential options for more products after the initial product run plus an ongoing quantity of spare products.  Their pricing models depend on this ongoing procurement of their product and its associated spares.  Their business models count on economies of scale with open production lines.  So how will AM change their business models?  There are a number of ways.  As was noted, contractors compete for Government business.  As such, AM offers the ability for them to rapidly prototype both in the pre-award procurement phase resulting in lower bid and proposal (“B&P”) costs as well as in the technical competitive area by offering a lower cost, technically superior product resulting from lower materials wastage and more complex geometries of the product that without AM were not previously possible.  But, AM will also disrupt the previously well settled IP aspects of the procurement.  With AM, Government departments and agencies (with their own AM printers) will now want to own all of the IP for the product so that they can make all of their own spares.  They will no longer want to buy many of their spares from a contractor.  By making some or most of their own spares they not only eliminate the contractor from the equation, but also many aspects of their own logistics systems that previously had to obtain, store and distribute the spares into the field.  This will have an enormously disruptive effect on existing logistics, but it will be even more disruptive of the economic models used by contractors that compete for government contracts.

Economic Models:  While AM may give early adopting contractors a competitive edge in Federal procurement it will also necessitate them changing how they view, and the economic models they use to remain competitive in Federal contracting.  If the Government wants to own all (or most) of the IP (both the contractors existing IP and the Federally funded developed IP) so that it can use its own AM to make its own spares, then the contractor will need to change its pricing models because it can no longer count on the lucrative spares production that kept its production lines open.  Certainly ownership of all (or more of) the IP will command a higher initial product price, but that higher price may be paid for by the Government by the massive savings it will achieve as a result of reduced logistics cost and infrastructure.  With AM added to the equation, IP negotiations will be even more central to contract negotiations than they already are.  Maybe contractors will license the Government to use AM to make its own spare parts (some of them or all of them) with the Government paying a royalty to the contractor each time that it does.  How will the contractor establish its royalty pricing for its spares made by the Government using its own AM?  Will such pricing cover the lost opportunity cost associated with long spare production runs and the early closing of production facilities?  Will (or should) the Government be willing to pay that kind of AM premium?

Procurement Model:  There is massive, existing infrastructure in place both regulatorily and physically that supports the existing non-AM based Federal procurement model.  The impacts of AM will be felt by both the Government and the contractors throughout each phase of that procurement model from the bid and proposal competitive phase through post-award performance and post-performance lifecycle spares support phases.  As noted at the outset, the Federal procurement system is governed by the FAR and the agency supplements.  Every aspect of every procurement is controlled and scripted by those regulations.  The FAR is in excess of 1,500 pages and the agency supplements are even longer.  All of these regulations will need to be assessed for potential impact of AM.  The Office of Federal Procurement Policy (“OFPP”) would likely spearhead this effort.  As all proposed changes to these regulations by the OFPP are subject to public review and comment the process will be lengthy.  Request for proposal document packages (usually containing technical, cost, contractual and management volumes) will also need to be revised to address AM, not only in terms of the contractor’s use of AM in the development and production phases, but they must also address the Government’s use of AM post-award.  In addition to the IP and pricing issues that would need to be addressed, the issues of product liability associated with the Government making of its own spares outside the purview of the contractor as well as the Government’s right (if any) to use AM to reverse engineer, or repair an item that they have previously procured form a contractor would also need to be addressed.  So too, will the Government need to re-assess its approach to logistics in light of the massive potential cost savings that it can realize by using AM to make its own spare parts.  To achieve these savings not only will hundreds of procurement regulations need to change, but so too is the need for change to the Government’s entire regulatory approach and logistical infrastructure.

Governments around the world are investing large sums in AM and are actively assessing how AM can be employed by them and their contractors.  How they do so and how fast they do so in the context of their procurement systems will likely determine whether they will gain the AM first mover advantage they seek over their international rivals.  Game on!


About Robert Bugge

Robert Bugge
Robert Bugge

Rob is a corporate, in-house transactional attorney specializing in information technology, software licensing and government contract law.  His career spans 27 years where he has held positions as Senior Legal Counsel for Racal Electronics Plc, Assistant General Counsel Price Waterhouse Washington D.C., Counsel to the Canadian Commercial Corporation, Senior Counsel at the Washington law firm of Dunnells, Duvall, Bennet & Porter and Vice President, General Counsel and Director of Contracts for RJO Enterprises.  Rob retired in in 2011 from his position as Director of Legal Services Asia Pacific for Nuance Communications Australia based in Sydney, where he was responsible for multimillion dollar smart phone software licensing transactions across the Asia Pacific region for companies including Samsung, HTC, Nokia and Huawei.

Rob got his BA from the University of Florida in 1979 in Political Science with a specialization in military strategy, the Middle East and foreign arms sales where he studied under John Spanier who was the US lead negotiator of the SALT I Treaty and John Eisenhower for military strategy.  Upon graduation he was employed by the Boeing Military Airplane Company as a Weapon Systems Analyst in their Military Airlift Division where he was responsible for Middle Eastern mission planning while his masters degree studies and thesis at Wichita State University focused on arms sales as an instrument of foreign policy.

Rob attend the Cumberland School of Law where he graduated with his JD in 1986.  While in law school Rob was appointed by the American Bar Association as Law Student Division Representative to its Section on Government Contract Law.  After law school and pending completion of the bar exam Rob took a position as a Senior Contracts Administrator in Honeywell’s Space and Strategic Avionics Division where he managed a number of space-based military weapon system development contracts.

Rob is admitted to practice in Washington, DC, Florida and New South Wales Australia.  In 2003 Rob completed a 2 year 14,000 nautical mile TransPac sailing voyage aboard his 36’ sailing yacht Lone Eagle.  He began his voyage from Washington DC a month after 911, transited the Panama Canal and visited more than 22 countries.  Rob has dual US / Australian citizenship and lives with his wife in the little beach-side town of Yamba, New South Wales about 3 hours South of Brisbane.