Tapping an Arsenal of Retirees

At 63, Keith Milbrandt is pulling down more per hour than he has in four decades as an aerospace engineer, and he’s retired.

That doesn’t matter to Raytheon Corp., where Milbrandt is in the midst of a four-month contract, developing an airborne radar program for the Navy. He has another part-time job with Boeing Co. designing an Air Force satellite system.

He’s never been so popular. His experience and his high-level government security clearance make him a very hot commodity in Southern California defense contracting circles.

Being the aerospace engineer version of a Kelly Girl “is a pretty good deal,” Milbrandt said. “If you do it properly, you can make the same as you did full time, but working only six months out of the year. And you still have time for golf.”

After his Raytheon stint ends, he plans to take a few months off before accepting another job.

He probably won’t have trouble landing one. Defense firms, unable to find enough highly skilled engineers and managers, are courting aerospace retirees -- and paying as much as $150 an hour for those with top-level government security clearances.

“We’re constantly being asked for engineers with top- secret clearances,” said Ed Larson, co-founder of Legacy Engineering in Irvine, a temporary employment agency that matches retirees with defense firms. The firm has placed Milbrandt and about 200 retirees, whose average age is 60, with defense firms.

“If you have the clearance, we can place you right away,” Larson said.

Since the Sept. 11 terrorist attacks, demand for engineers has climbed as the processing of security clearance applications has slowed.

Right now, there’s a two-year wait for engineers to obtain the clearances necessary to work on many aspects of government contracts. The application backlog at the Defense Security Service, which processes clearances for defense agencies and contractors, is 90,000 deep. Time concerns aside, it can cost a company $30,000 in paperwork and administrative costs to secure a clearance for a single worker.

So companies eager to reap the benefits of the biggest military buildup in decades have turned to retirees from aerospace companies who still have their secret clearances, many of which can be renewed every two years. Boeing, the nation’s second-largest defense contractor, offers $4,000 in cash to any employee who refers a successful engineering candidate with the appropriate clearance.

Exactly how many of these hired guns are back on the job is unclear. But industry executives and retirees themselves said there had been a recent surge in demand, concentrated in Southern California, where much of the research and development work is done for secret military weapons and communications systems.

“We’re growing very rapidly, but there is a tremendous dearth of talent,” said Mark Williams, head of human resources for DRS Technologies Inc., a defense and electronics company. DRS has more than two dozen retirees on temporary assignments in its offices in Anaheim and Torrance.

The reason for today’s lack of qualified engineers can be traced to the end of the Cold War. Engineers and others hired at the height of tensions between the U.S. and the former Soviet Union quit, were laid off or took early retirement in droves in the 1990s as defense spending declined and the industry consolidated.

“There was a lot of knowledge walking out the door, the kind of knowledge that you can’t find in a textbook or in a company manual,” said Pierre Chao, director of defense industrial initiatives for the Center for Strategic and International Studies.

The number of aerospace workers in the U.S. fell by nearly half from 1989 to 2002 to less than 700,000, according to the Labor Department. At the same time, undergraduate enrollment in aerospace studies was falling sharply.

Then came the Sept. 11 terrorist attacks. The Bush administration bankrolled a record defense budget and the Pentagon poured billions into new missile defense systems, spy satellites and other equipment to fight terrorism. That triggered the call for personnel with key security clearances.

Just this year, Raytheon’s unit in El Segundo has hired more than 1,000 new aerospace engineers and managers, many of them recruits lured away from competitors. And there is a need for more experienced hands.

“We do bring back some retirees, but on a selective basis,” said Melvin Jackson, Raytheon’s top recruiter in El Segundo. “They would be based on the skill and the security clearance they may have had.”

There are three levels of security clearances: “confidential” -- the easiest to obtain -- “secret” and “top secret,” which is required to work on intelligence and national security programs. And each level has dozens of variations that limit access to certain classified information.

Stephen Cunningham, an Altadena resident, has one of the highest levels of top-secret clearance. He retained it after his retirement in 2000 from Boeing -- which is where the 59-year-old is working on a six-month contract, helping to manage a space-based radar program and earning more than he did when he was a full-time Boeing employee.

Money isn’t the only lure. After having spent 25 years with Boeing, Cunningham said he discovered that “whenever someone asked me what I did, I didn’t like saying I was retired.”

As much as the retirees themselves, the big beneficiaries of the trend are the temp agencies that provide the mature talent, such as SM&A; in Newport Beach, Shipley Associates in Framington, Utah, and Legacy Engineering, which Larson co-founded with two other aerospace veterans in 1998.

Larson, an engineer who took early retirement from Lockheed Martin Corp., said he “could see the crisis coming” when the industry cut heavily from the ranks of mid- and senior-level engineers. The crisis paid off for Legacy, which expects revenue to hit $13 million this year, up 40% in two years.

The typical contract job pays about $125 an hour, Larson said, with about $100 of that going to the worker and the rest to the agency, which handles billing and other administrative duties.

For many engineers, the hourly contract pay is 30% to 40% more than what they earned during their careers. In Jerald V. Johns’ case, it has been double what he made developing infrared sensors in spy satellites at Raytheon, where he worked for 22 years.

The 64-year-old recently completed a four-month stint with Lockheed Martin in San Diego working on a new Navy computer system. The job was intense, Johns said, sometimes requiring him to be in the office 12 hours a day, six days a week. He plans to take three months off to spend some time with his ailing mother in Idaho.

Because he has a secret clearance, Johns doesn’t fret about landing a job when he returns to California.

“It’s a beautiful situation,” he said. “I feel like if I want to go back to work, I just pick up the phone.”