This is reprinted with permission from The News & Observer of Raleigh.

In an otherwise bleak economy, Fort Bragg is an island of activity. Bulldozers churn the earth and construction cranes hover above it as the base prepares for the arrival of two Army battalion headquarters relocating here over the next 18 months.

Outside the gates, planners in 11 counties are hoping to turn this influx into an economic windfall, the basis of a huge new industry based on military and homeland-security spending.

More than $1.3 billion in new construction is planned or under way on post, including one of the largest building projects in the state right now: the $289 million, 700,000-square-foot combined headquarters for the U.S. Army Forces Command and the U.S. Army Reserve Command.

But that's just the beginning. Together, the nearly 3,000 soldiers and civilians who will work in the headquarters have $30 billion a year to spend on goods and services for soldiers stationed all over the world. Some of that could be spent in North Carolina if the contractors and manufacturers were here.

"I see this whole area being completely transformed," said Paul Dordal, a retired U.S. Air Force brigadier general who is executive director of the BRAC Regional Task Force.

The 2005 BRAC, or Base Closure and Realignment Commission, recommended moving the two Army commands -- the business equivalent of corporate offices -- from the Army's Fort McPherson in Atlanta to Fort Bragg, outside Fayetteville. The move, part of the government's long-term plan to streamline the military and reduce costs by closing bases, must be complete by September 2011.

Along with active-duty service members and their families, the move is expected to bring civilians and contractors who work for the two headquarters, as well as people who will come to the area to work in real estate, education, health care, retail and other sectors that will expand to serve them.

North Carolina is a big winner in the base realignment process. The changes will also bring 12,000 new Marines to Camp Lejeune and Marine Corps Air Stations Cherry Point and New River, while Seymour Johnson Air Force Base will gain 345 airmen.

But it's the arrival of two Army headquarters to Bragg that promises to have the most spillover into the civilian economy.

Attracting Companies

The BRAC Regional Task Force is trying to recruit the 400 or so companies that now do business with Fort McPherson to come to what the task force and Gov. Beverly Perdue call the All American Defense Corridor. The hope is that those companies would be followed by as many as 250 more, locating anywhere from the coast, close to North Carolina's ports, to the Triangle, with its scientists and easy access to Raleigh-Durham International Airport.

Though there is no requirement for contractors to locate close to the installations that hire them, Dordal and others think proximity to military decision-makers will hold strong appeal. Businesses are beginning to trickle in. Last month Boeing opened a small office in Cumberland County, though the company doesn't yet have a contract at Fort Bragg.

"We are a diverse region," said Lee Ann Nance, economic development director for Harnett County, which abuts Cumberland. "And the companies are diverse. Some companies will want to be out in a low-cost, rural area. Others will want to be close to the universities and Research Triangle Park, and others right by the base. All of that is available."

Already one of the fastest-growing counties in the state, Harnett expects to get the bulk of the overflow of military and civilian families coming from Fort McPherson to Fort Bragg. Newcomers began arriving in 2007, and many of them landed in a new satellite addition to Fort Bragg called Linden Oaks, on land once part of the Rockefeller family's "Overhills" retreat. The neighborhood, guarded like any other base entrance, will eventually have 1,262 homes on 1,100 acres, with two resort-style swimming pools and a dog park. There's a waiting list of three to eight months.

An Army-owned elementary school that opened there last year is already full; extra students are being bused back to Fort Bragg. A small strip shopping center across the highway from the subdivision entrance is doing so well that its anchor, Food Lion, sent 14 company reps to the area late last month to discuss a possible expansion.

The Cost of Growth

But growth always comes at a cost. Harnett County expects to need $200 million worth of new public school space by 2013. Roads in the area are jammed at peak hours and need expansion. The county's best hope of paying for those improvements might be to land some of the companies that do business with the Army.

"It's certainly a mixed blessing," said Phil Ferrell, the interim school superintendent, of the BRAC growth. "The experience that our military children, who have traveled all over the world, bring -- that certainly enhances our classrooms. But at the same time, being a poor rural county, it puts a strain on our county commissioners to find the funding to build new schools, or just to pay the rent on mobile classrooms."

To attract companies that can build the next generation of armored vehicles or design the combat communication system of the future, the region will need a ready work force. School systems within the proposed corridor are trying to reduce their dropout rates and build their science, technology, engineering and math programs.

Fayetteville Technical Community College has launched an interactive 3-D education center, with software that classrooms throughout the region can eventually use to teach such things as how to rebuild an engine using a three-dimensional computer model.

Military contracting is not a new business in North Carolina. Companies throughout the state sell their goods or professional services to the Department of Defense or its contractors. A business incubator and a trade group have been established in recent years to help companies get a larger share of spending.

Though North Carolina has six military installations, the state ranks relatively low in defense contracts -- 25th in the nation, or $2.7 billion worth in 2006. California, No. 1, got more than $32 billion in contracts, according to the National Priorities Project, which tracks military spending.

Fairly Stable Industry

As an industry, military and homeland defense contracting is somewhat stable for the foreseeable future, said Shaun McDougall, North America analyst for Forecast International, a space and defense market consulting firm in Connecticut.

The Pentagon's annual budget is about $500 billion, not including supplements for fighting in Afghanistan and Iraq. Even with troops scheduled to withdraw from Iraq by August 2010, McDougall said, the military will have to spend billions over the next few years replacing the vehicles, armor, weapons and other stock lost or damaged during the war.

It's not as clear, McDougall said, that a company that wanted to supply any of those elements would have a better chance of getting a contract by being close to Fort Bragg or any other North Carolina military base.

"There is a potential benefit," McDougall said. "There's a certain culture there that is aware of the needs of the military. It's possible to get your foot in the door with the local commander, and the general in the headquarters knows what he has available to him in the local community.

"On the other hand, it's not that easy for contractors to move their operations. And it may be easier to get their foot in the door with their local congressman, who might have more sway with procurement than the local commander. So it's a give-or-take, depending on the contractors' priorities."

At Saab Barracuda in the Harnett County town of Lillington, the priority is on making the world's finest camouflage covers, which the military buys to hide its soldiers, tanks and other targets from enemy eyes and radar. About 160 people work at the plant, essentially an extremely high-tech textile mill where fabric is treated to look like fresh foliage or desert rocks.

The company currently manufactures under contracts with military buyers out of state. But spokeswoman Rebecca Truett said that as the state's defense industry grows, the military could begin to do more of its buying closer to home.

"We'd like them to say, 'Hey, we have a supplier right in our backyard,' " Truett said.