Sims Recycling Solutions plans to close its processing site outside Baltimore following the loss of a sizable contract to handle devices from U.S. military branches.
That contract, which Sims Recycling Solutions (SRS) held with the U.S. Department of Defense’s Defense Logistics Agency (DLA) for several years, was awarded to a pair of other companies after a bidding process in October.
Steve Skurnac, the global president of SRS, told E-Scrap News the company attempted to hold onto the contract but the two sides were unable to work out an agreement.
“We define our bidding prices based on targeted levels of profitability that could represent an attractive return to our shareholders,” Skurnac said. “As those levels of price and profitability were not acceptable by the customer, we concluded that the contract was no longer attractive enough to Sims.”
As a result, SRS will close its Elkridge, Md. plant this March. According to a report in the Baltimore Business Journal last week, the 96,000-square-foot site employs 86 workers.
SRS is the e-scrap wing of publicly traded Sims Metal Management.
Without going into specifics about the volume of e-scrap generated each year through DLA, Ken MacNevin, chief of public affairs for the DLA’s disposition services department, said the vast majority of the material comes from federal defense and military agencies.
In mid-October, DLA hosted electronics recycling companies from across the country to participate in a live bid for a two-year contract.
Ohio-based Regency Technologies, a company widely known for its processing of CRTs through a partnership with Dlubak Glass, won the rights to handle e-scrap originating east of the Mississippi River, and Phoenix-based Global Electronic Recycling (GER), won the rights for e-scrap in the West.
GER, which has processing locations in Phoenix and Memphis, is currently involved in a lawsuit with Microsoft over claims that the e-scrap processor resold key cards it was contracted to destroy. The company did not return a phone call at its Phoenix office. A judge has scheduled a seven-day non-jury trial for March 2017.
Tim Hoyle, another DLA spokesperson, told E-Scrap News “the lawsuit wasn’t something we were aware of at the time of the bidding.”
“At that time we just focused on whether the companies could successfully do the work they were bidding to do,” Hoyle said.
While the plant closure in Maryland may be tied to the DLA contract, SRS’s Skurnac said the company will continue to evaluate its processing operations throughout the U.S. as part of an ongoing effort to ensure profitability “in light of current commodity prices and global market conditions.”
“Businesses and/or operations that do not presently generate returns above our cost of capital will either develop a plan to achieve such levels of return within a reasonable time frame or be rightsized, divested or shut down,” Skurnac stated.