Hathaway loses out on big Air Force contract

WATERVILLE – C.F. Hathaway Co. lost out Thursday on a lucrative military contract that was considered a key to the financially troubled shirt maker’s survival, according to U.S. Sen. Olympia Snowe.

Macon Garment Co. and Ashland Sales and Service, both of Olive Hill, Ky., were awarded the $18 million to $20 million contract to manufacture long-sleeve dress shirts for the Air Force, Snowe said.

Hathaway has a right to appeal, and defense officials are not allowed to discuss details of their decision until Sept. 19, according to Snowe.

Donald Sappington, Hathaway’s chief executive officer, has said the company will likely run out of work at the end of September without the five-year contract. Sappington could not be reached for immediate comment Thursday.

Hathaway’s owner, Connecticut-based Windsong Allegiance Group, had planned to shutter the Waterville factory this fall before an investment group led by the nonprofit Made in the USA Foundation inquired about buying it.

That sale has not been finalized, with the foundation still trying to line up financing for the purchase.

But Joel Joseph, who heads the Made in the USA Foundation, has insisted the factory can survive even without the Air Force contract, which calls for 386,000 shirts in the first year, and up to 250,000 a year for the next four years. Joseph did not immediately return a message seeking comment.

The Defense Logistics Agency’s announcement on Thursday came after a series of delays, and Snowe lamented the decision. “I continue to believe that Hathaway had a strong bid that could have offered the best value to taxpayers,” she said.

Hathaway, as an American manufacturer with fewer than 300 employees, got priority in the bidding process.

Meanwhile, Hathaway is waiting to hear on a smaller contract to manufacture dress shirts for the Navy and Marine Corps. That decision could come later this month.