Organizing A Constituency: SDIO And The Contractors
As Erik Pratt, John E. Pike, and Daniel Lindley have pointed out, although the formal rationale for SDI is that it is a research program to determine whether comprehensive strategic defenses are feasible and desirable—a program that is not intended to lead to a decision to develop or deploy until after the term of the Reagan administration—the expenditure of funds in this phase of the project will help build a constituency in favor of its continuation:
Before a formal deployment decision can be made, SDIO will have spent billions of dollars and involved hundreds of institutions and thousands of individuals. In the process, many of these people and organizations will have acquired vested interests in SDI and in the deployment of strategic defense systems. For many government organizations, research labs, and universities, SDI will provide a large share of the budget. For defense firms, SDI will be the source of significant profits. For some individuals, careers and promotions will be determined by the progress of the strategic defense program. As a result, these vested interests will become part of the "Star Wars constituency," seeking to influence policy and control decisions concerning strategic defense.
This statement puts the argument sharply, perhaps too sharply. Not all of the institutions and individuals engaged in SDI work have an exclusive interest in its perpetuation. They are often also engaged in other
types of military research. For instance, the nuclear-weapons laboratories did not expand to accommodate work on SDI. As the program grows, it attracts people from elsewhere in the laboratories and, as an SDI project is completed, they may well shift to other work, so they do not necessarily have the same vested interest in SDI as other organizations would whose entire raison d'être is predicated on it. It is misleading to suggest that corporations engaged in SDI work depend on it for profits. Whereas military procurement has had a "critical role" in the growth of defense industries, military R & D spending has had "a much more modest role." It is only insofar as R & D work may lead to procurement that profits enter the picture in a significant way, and in some cases the firms that are likely to secure the procurement contracts are not the same as those that carry out the R & D. Nevertheless, there is good reason to suppose that the expenditure of large sums of money on SDI will create a constituency interested in perpetuating it. By the time a decision must be made to move to the stage of development, at least $20 billion is likely to have been spent on the research phase. The development stage would involve far higher expenditures.
For most of the contractors, SDI's importance is accentuated by the fact that several of the large strategic programs, such as the B-1B, MX, and Trident II, are now being completed. New "black" or secret programs—like "stealthy" bombers, fighters, and cruise missiles—have been taking up any slack. Had it not been for SDI, however, funding of military R & D might have been reduced. As the new systems are deployed, SDI could become the major source for continued military R & D funding and for deployment contracts. Because deployment could involve much larger sums—estimates range from hundreds of billions to a trillion or more dollars—the stakes could be very high. Interest in the defense contracting community in SDI has been keen. The contractors sent 1,200 representatives to an initial classified briefing. During the first three years of the project, 2,210 SDI-related contracts were awarded to 510 different entities. These entities are located in the private, university, and government sectors and also include federally funded research and development centers (FFRDCs) as well as foreign contractors. Some 331 business firms and 15 nonprofit corporations have been engaged in SDI research, along with 14 of the 38 FFRDCs, entities that perform research on behalf of government agencies but are administered by nonprofit organizations. Two such FFRDCs are the Livermore and Los Alamos laboratories, both of which have played leading roles in SDI research. SDI work has also been performed at
eighty-one campuses and in sixty-seven U.S. government agencies. The largest share of the funds—almost three-quarters—has gone to the private contractors. Another 20 percent has gone to the FFRDCs. The remaining 5 percent is divided among the others, with universities accounting for 2.7 percent, U.S. government agencies for 2.3 percent, and foreign contractors for only .4 percent.
Among the private contractors, awards tend to be concentrated among relatively few firms that inevitably develop an interest in promoting various SDI programs. The top one hundred SDI contractors account for 95 percent of the total, the remaining four hundred plus for less than 5 percent. This concentration is even higher than is generally the case in defense work, where the top one hundred contractors receive 88.3 percent of total prime contract awards. Ten firms alone account for 53.1 percent of total SDI awards, five for 42 percent. More than 90 percent of space weapons' prime contracts in FY1983 went to four states: California (45 percent), Washington (22 percent), Texas (13 percent), and Alabama (10 percent); 77 percent went to states or districts represented by House and Senate members who sit on the armed services committees and appropriations defense subcommittees. Thus, the program promotes possibilities for conflict of interest for both legislators and contractors. Contractors with much to gain "have been assigned the task of both developing and assessing the technical feasibility and strategic advisability of proceeding beyond the research and development phase."
As the program moves out of the concept-definition stage—in accordance with the "horse race" scheme adopted by Abrahamson—fewer contractors are selected for the succeeding stages, and the value of the contracts grows larger. The horse-race idea was originally employed for the study and development of alternative architectures. Contractors would be eliminated when a particular architecture (or a smaller set) was chosen for more detailed analysis. Four contractors were awarded Phase I contracts for the development of the National Test Bed. Two teams, one led by Martin Marietta, the other by Rockwell, were selected for the second phase, and Martin Marietta was chosen as prime contractor for the construction of the facility, possibly worth $1 billion. Because the prime contractors distribute some of these large amounts to subcontractors, the constituency remains fairly large, despite the concentration of the awards, as measured by prime contracts.
Although SDI support for university research remains relatively small, it contributes to a growing trend toward increasing dependence of university
researchers on military R & D support. As a fraction of all federal support for university R & D, the DOD share rose from 11.6 percent in FY1980 to 16.7 percent in FY1986. In constant dollars, DOD funding for university research during the Reagan years nearly reached the level attained in the peak years of the Vietnam War. This dependence could dampen university protests against SDI, particularly in view of the comments by at least one DOD official, Donald A. Hicks, under secretary for research and engineering, who pointedly noted that although university researchers may be free to criticize DOD programs, the DOD is free not to provide them with support. During his Senate confirmation hearing on July 25, 1985, Hicks said: "I am not particularly interested in seeing department money going in someplace where an individual is outspoken in his rejection of department aims, even for basic research." In an interview with a reporter from Science, Hicks confirmed his belief that critics of defense policy should not expect research support from the DOD: "If they want to get out and use their role as professors to make statements, that's fine. It's a free country, [but] freedom works both ways. They're free to keep their mouths shut, [and] I'm also free not to give money." The DOD later claimed that Hicks was expressing his own views rather than department policy, but the warning had been delivered.
The general point properly made by critics is that all support, even in relatively modest amounts, can serve to co-opt potential critics, or at least generate self-interested acquiescence, both domestically and abroad. But the point should not be exaggerated. An offsetting factor is that many of the largest firms are so large that SDI work constitutes only a small fraction of their total budgets. General Motors (GM), the second-largest SDI contractor, had net sales in 1985 of more than $102 billion. Less than one-tenth of 1 percent of the total came from SDI work done by Hughes Aircraft, a division then newly acquired by GM. Even for Hughes, however, which had annual sales of $6 billion, SDI became more significant in 1985 and could become still more so. For a number of other firms, SDI already represents 20 percent or more of their R & D contracts. By "buying in" early, they can hope to receive even larger amounts in the future and thus gain an inside-track position from which to compete for far more lucrative procurement contracts. For smaller firms, SDI contracting can be a very substantial part of their business—without which they would not survive. One such company, Sparta, whose president had served on the Fletcher Committee, had a nearly 1600 percent sales increase between 1981 and 1985, owing in large part to SDI contracts. Close to half the companies highly dependent on SDI
R&D funding are located in Huntsville, Alabama, near the army's Strategic Defense Command.
Four FFRDCs perform 96.2 percent of all SDI work awarded to these institutions: Livermore, Los Alamos, Sandia, and Lincoln laboratories. At the first two, SDI-funded work grew to about 12 percent of the budget by 1985; at Lincoln, which does virtually all of the work on SATKA, the SDI budget grew to 22 percent of the total. At these laboratories, government-established priorities set the pace for research efforts, and SDI is considered a major challenge, particularly for younger researchers. The competition among the laboratories, especially between Livermore and Los Alamos, is clearly evident in their competing designs for a free-electron laser. This rivalry is helpful because it provides critical reviews of ongoing programs and a stimulus to advance the project. Los Alamos scientists, for example, raised questions about the quality of Livermore's X-ray laser research and testing. The involvement of the various laboratories and industrial contractors makes it inevitable that those involved in the work will have a significant degree of influence over the evaluation of what has been achieved and the decision to move on to the next stages. Defense-review panels rarely include critics. At the same time, the greater the involvement, the less likely that laboratory representatives will favor terminating the projects altogether.
In addition, conflicts of interest arise because so many former military officers and DOD civilian employees enter employment with defense contractors once they leave their Pentagon positions. Although federal law requires that such employees notify the DOD if they join a defense contractor within two years of leaving the government's employ, a GAO study in 1986 concluded that only 30 percent of those who were required to file a report actually did so and that many others were exempt from reporting on technical grounds. The DOD, which has no institutional interest in closing the revolving door, has not been active in enforcing the requirement. In 1985, of the ten contractors with the most former DOD employees, nine were major SDI contractors. Several key figures in SDIO had previous jobs with defense industries and have taken subsequent positions with firms heavily engaged in SDI work. Although this flow between DOD and the laboratories and industrial firms is inevitable as both seek to obtain the best-qualified personnel, the result is that a strong relationship of shared assumptions is created, which is bound to affect judgments about research priorities. Thousands of jobs are already at stake, and a drastic cutback in SDI would have serious consequences.
The existence of such a constituency is certainly a real enough phenomenon,
and its potential role is evident from previous cases, when defense contractors helped to stimulate initiation and perpetuation of projects that might have languished on purely military or economic grounds. Whether such constituency pressure will be enough to promote an increase of support for SDI is at least questionable, at this stage, especially in view of the opposition SDI has met in Congress. The existence of a constituency is not an automatic guarantee of its success, especially given the general interest of that constituency in defense funding, which can be spent on systems other than those under study in SDI. Even with respect to strategic defense, this constituency has actually restrained the more radical proposals for SDI. Staunch supporters of SDI have argued that the program is suffering in the hands of defense officials who do not share Reagan's belief in the possibility of a fundamental shift away from offense to defense, and a leakproof defense at that. Thus, the constituency could just as well frustrate the more radical dreams of SDI advocates as promote them. By emphasizing near-term options that can serve mainly to protect retaliatory capacities, they may actually be undermining support for the president's emphasis on a long-term effort to develop population defenses.
It is equally a mistake to suppose that all those who are in the employ of FFRDCs and industrial contractors are venal and will thus support any program that promises to provide them with research funding. They must recognize that funds for one program may come at the expense of others. They may have conflicting interests, which could lead them to prefer non-SDI programs to SDI, particularly if they work on technologies that lose out in the research phase. Those who work at FFRDCs are presumably freer to put their professional judgment ahead of their vested interests, if only because they cannot benefit from follow-on procurement contracts. When decisions have to be made to enter into development and procurement, their independent judgment could be crucial in blocking efforts by industrial contractors to promote the adoption of programs that are not likely to work.
Still, the actual experience of such costly failures as the division air defense (DIVAD) anti-aircraft gun suggests that the DOD does not have adequate mechanisms for ensuring unbiased appraisals and may be too reliant on the judgments of contractors who work closely with procurement officers. Both groups have a vested interest in not canceling expensive projects, even though they are not performing as expected. In order to assure that decisions with respect to development and deployment of strategic systems are not unduly influenced by the assessments of their
sponsors, better reviewing mechanisms may well be needed. The experience with DIVAD indicates that the influence of supporters can keep a program going even though it is not meeting prescribed goals. But it also shows that the truth cannot be suppressed indefinitely. Experience with strategic defenses is similar. Twice before, the United States has gone a long way down the road of deploying defenses. Each time, the effort was strongly supported by vested interests. Each time, however, the nation drew back when technical considerations as well as military and strategic factors made the efforts seem unattainable.