Contractors See Stellar Profits in ‘Star Wars’ Research : San Diego Firms Expecting to Play a Significant Role

It was Friday, Dec. 13, when the Strategic Defense Initiative Organization (SDIO) invited reporters and photographers to Maxwell Laboratories headquarters building to witness a demonstration of a “Star Wars” device that could shoot a small plastic cube through a half-inch-thick steel plate.

Bowing to superstition, a federal government project supervisor quipped that, due to the experimental nature of the project, “We’ve asked the gods for a special dispensation . . . that would banish the devil or other evil spirits that might be lurking in the skies above San Diego.”

Minutes later, the electromagnetic launcher, or “rail gun,” popped and the plastic cube blasted through the steel plate and came to rest in a thick cache of telephone directories.

The rail gun’s split-second demonstration--which for safety reasons took place behind closed doors--generated a thunderclap that one military observer compared to the sound created by an exploding artillery round.

The Defense Department’s “Star Wars” research program has generated more than just explosions for a select group of San Diego’s high-technology military contractors who are taking part in what a Pentagon official has described as a “horse race” that will be won by “those who get there first with the most.”

SDIO research generated more than $20 million in prime contracts for San Diego companies during fiscal 1985, according to Lt. Col. Nile D. Radcliffe, an assistant director for program management in the sensors office of the Strategic Defense Initiative Organization in Washington.

That figure has risen during the current year, despite the nation’s federal budget-cutting fervor, said Radcliffe, who on Friday spoke to members of the California Society of Professional Engineers.

San Diego’s share of “Star Wars” dollars includes prime contracts held by companies such as General Dynamics, Maxwell Laboratories, Western Research Corp. and GA Technologies.

It also includes subcontracts awarded to the “significant subcontracting network which supports the (larger) companies,” said Radcliffe, who quipped that the Defense Department should begin tabulating subcontract totals “because congressmen always ask (the department) what’s in their district.”

Congressmen know that prime contracts pumped $1.3 billion into congressional districts across the country during fiscal 1985--38% of it, or $463 million, in California.

Not surprisingly, “the largest percentage of SDIO work is in Southern California, with the greatest proportion being in Los Angeles,” Radcliffe said. “After Southern California, it’s a tossup between the San Francisco-Silicon Valley area and Boston, although we’ve got 2,000 contracts spread across the country.”

Local companies and the Naval Oceans Systems Command have been developing the scientific understanding needed to create rail guns, powerful airborne sensors, electron lasers and other high-technology items that until a few years ago were more the realm of science fiction than science.

“The so-called ‘horse race’ approach which allows a high degree of competition and a rapid rate of progress is well suited to the overall objectives of SDIO,” said Tom Dillon, vice president of the advanced defense division at La Jolla-based GA Technologies.

And San Diego is well suited to “Star Wars” research, he added.

“There will be a lot of excitement in San Diego . . . because San Diego is going to make a major contribution to the country” with its SDIO work, said Dillon, who believes that San Diego will become “a major center for this type of high-tech work.”

During the 1990s, when the research could lead to the actual production of weapons, companies such as Maxwell and GA Technologies will use their “Star Wars” knowledge to generate hefty revenues.

“I can easily see that more than 50% of our business which today is government-related will either directly or indirectly be related to the SDIO” by the mid-1990s, suggested Maxwell Laboratories President Monson H. Hayes Jr.

For example, although both the powerful “rail gun” and the lasers that Maxwell Laboratories have been researching have been touted as part of the nation’s likely defense against incoming ballistic missiles, they might also be used to destroy enemy tanks.

“We see SDIO as a significant opportunity for (revenue) growth,” Hayes said.

GA Technologies has similar visions.

Building on research completed during previous programs, GA Technologies has concentrated on building a functional electromagnetic launcher and developing a neutral particle beam accelerator--and company officials expect that both of the technologies could find other uses as well.

However, there are dark clouds on the “Star Wars” horizon. Although SDIO research funds were not trimmed during the recent budget-cutting round, firms cannot count on future budgets escaping unharmed.

“Gramm-Rudman has no specific effect on SDIO because President Reagan protected it from cuts,” Radcliffe said of the bill that mandates a balanced federal budget by 1991. “But given the general atmosphere in (the nation) we’ve been getting less money than we’ve needed. In fiscal 1986 we requested $3.75 billion but Congress agreed to give us $1 billion less.”

Although Maxwell Laboratories’ general defense bookings backlog has been hurt, SDIO programs have remained unchanged. “We think that if rules continue as they are today, we won’t be hurt,” Hayes said.