You might think every company would want a seat on the military gravy train. Far from it. As the budget squeeze increases pressure to seek cheaper commercial products, procurement officers accustomed to issuing voluminous specifications for everything from screws to solder are finding that civilian industry doesn’t work that way. As a result, the latest in optics and electronics often isn’t for sale to the armed forces. “I don’t know anybody who’s anxious to do business with the Department of Defense other than people who are in effect captive,” says Thomas Murrin, dean of Duquesne University’s business school.
Defense electronics systems are rarely state of the art. In the Persian Gulf, tank crews dissatisfied with the Army’s navigational gear had families send global positioning systems-satellite receivers-from electronics stores back home. Reporters covered the action with newfangled satellite telephones, while many troops were using old field radios. “In the past, defense in most areas was really a leader in technology,” observes Jacques Gansler, a former electronics-industry executive and Pentagon official. “Today I would say that in many areas of electronics, defense is no longer the leader.” Commercial technology could bring weapons and communications up to date-if the Pentagon could only get it.
In Alcoa’s case, the obstacle is disclosure. Commercial-aircraft manufacturers that want to evaluate it must promise not to reveal its technical data. But the government doesn’t like secrecy pledges: it wants to help other companies develop similar products for competitive bidding. Alcoa insists on confidentiality. “It’s something that’s new and difficult for the government to deal with,” says Del Naser of Alcoa’s aerospace group. If the metals eventually find their way into military craft, it will be long after they are helping fly vacationers around the world.
The armed forces aren’t having an easy time getting hold of Hewlett-Packard Co.’s Frequency Agile Signal Simulator, either. Telephone companies can order the machine, which generates radio signals, from H-P’s catalog for $220,000. The Air Force wants a special version costing more. But because the product is new and commercial sales are few, it wants to know H-P’s costs to make sure it isn’t being gouged. The company won’t hand over the information-and, so far, it hasn’t sold to the military.
Many potential suppliers shudder at the thought that DOD might try to impose its procedures on them. Civilian industry has cut back on costly testing of components and raw materials; instead, companies now reduce defects by working more closely with their suppliers. But Norden Systems Inc., a defense contractor in Norwalk, Conn., tests each incoming semiconductor before it’s built into a radar unit. The military requires the practice, but commercial industry frowns on it: testing can damage parts and lower reliability.
In many cases, the armed forces have good reason to make tough demands. Semiconductor makers guarantee their chips to function at temperatures from 0 to 70 degrees Fahrenheit, but the Air Force requires its electronics to work in minus-55-degree arctic cold and 125-degree desert heat. Thousands of companies package prepared foods-but while an airline meal may look the same as a military Meal Ready to Eat, it doesn’t have a shelf life of seven years. In both cases, a noncommercial product is needed, and a special defense industry may be required to make it. And sometimes there’s no commercial market at all. The sole U.S. maker of kits to inject nerve-gas antidotes, Survival Technology Inc., nearly closed its St. Louis plant two years ago for lack of business; only a special Army payment kept the production line open. Within weeks of Iraq’s invasion of Kuwait last August it was turning out 775,000 kits a month. If the plant had been mothballed, says president James H. Miller, “it would have taken months to get back.”
Still, there are many items the Pentagon could buy off the commercial assembly line. That would strengthen civilian industry, speed the flow of new technology to the military and make it easier to boost production in the event of war. The Pentagon would need a change of culture-and so would Congress, which has responded to past scandals by enveloping military procurement in endless rules and procedures. “All we’re talking about is making DOD a world-class customer,” says Debra van Opstal of the Center for Strategic and International Studies. Even in an era of tight budgets, that’s a pretty tall procurement order.
AIcoa scientists design new alloys (above) but the government won’t get them soon. Three hassles that drive companies away from military deals:
Disclosure: Companies that don’t want to reveal trade secrets-or their costs-often shy away.
Specifications: Detailed directives govern how products must be made before Uncle Sam will buy.
Testing: Some requirements-like testing every microchip-actually make products less dependable.
