$26.7-Million ‘Top Gun’ Contract Shoots an Upstart Into the Limelight
Cubic Corp.’s loss of its 16-year lock on the “Top Gun” computerized pilot-training market last month was good news for an upstart San Diego company that happens to be the major subcontractor of Cubic’s victorious competitor.
The company, Applied Data Technology, was founded here just one year ago by longtime defense consultants James Flora and William Gordon. Their company will supply systems software and integration to Kollsman of Merrimack, N.H., which last month received the $26.7-million contract to supply air combat maneuvering instrumentation ranges for Air National Guard bases in Alaska and Wisconsin.
Kollsman beat out not only Cubic but also Science Applications International of San Diego and Metric, a company based near Orlando, Fla. The air combat training systems enable pilots to conduct simulated dogfights without using live ammunition and, after the flights, let the pilots review their performances in electronic “debriefing” rooms. The systems are integral parts of the Navy’s Top Gun fighter pilot-training program.
60 Positions Planned
Applied Data Technology’s piece of the Kollsman contract will be worth $10 million to the new company over a two-year period, said Flora, Applied Data Technology president. The company has just 15 employees now, but it will hire another 60 or more over the next three months, said Gordon, who is its vice president of development. The company moved into a 48,000-square-foot plant in Sorrento Valley last month.
Until last month, all air combat training systems were supplied to the military exclusively by Cubic as prime contractor. Cubic has built 21 of the systems, costing up to $25 million each, for Air Force and Navy bases and also for foreign armed forces friendly to the United States.
Last year, however, Cubic became enmeshed in the so-called “Ill Wind” defense procurement scandal when federal investigators searched its offices. Cubic has acknowledged that former executive C.C. Wellborn, who retired last month after 32 years with the company, is a target of the fraud inquiry. The U.S. attorney’s office in Virginia recently said that Cubic is a target but declined to say when or whether charges would be brought.
Last September, the Pentagon prohibited Cubic from receiving classified contracts for 30 days, charging Cubic with failing to adequately secure classified information at its Defense Systems subsidiary.
Cubic may also have been at a disadvantage in the recent bidding because of the military’s desire over the past two or three years to free itself from depending on sole-source suppliers as much as possible, Flora said.
To promote more competition for the Top Gun contracts, the Air Force specified in its request for proposals that the lowest bid for the contract to supply the system for the Air National Guard bases near Anchorage, Alaska, and Madison, Wis., would not necessarily win the award. Technology was listed as the chief criterion, Gordon said.
That “is the only way the government can control who is best suited for the job,” he said.
Other companies had begun chipping away at Cubic’s domination of Top Gun systems even before the defense procurement scandal broke, however. In late 1986, Ford Aerospace won a contract to run operations and maintenance at range systems in Virginia and Arizona. Also during that year, Kollsman won the contract to supply “pods,” or airborne hardware, for aircraft used in the training systems.
It was Kollsman’s success at wresting a manufacturing contract away from Cubic that led Flora and Gordon to the company, a division of Sequa Corp. of New York, to suggest that they link forces. The combination of Kollsman’s manufacturing prowess and capacity and Applied Data Technology’s systems design and engineering won over the Air Force last month, despite the fact that the team has never built an entire range system.
Cubic did not take this reversal lying down. Apparently apprised that it was about to lose the Alaska-Wisconsin contract, Cubic made an unsuccessful court bid shortly before the contract was announced, asking a Washington judge to delay the award to Kollsman. Documents supporting Cubic’s court challenge remain sealed, and Cubic has declined to comment on the basis for it.
Flora and Gordon declined to comment on the court challenge, saying only that the contract was awarded, in Flora’s words, after a “fair and open competition.”
Cubic spokesman Jerry Reeves said that Cubic was aware of Applied Data Technology but had no comment on the company.
The Kollsman-Applied Data team will be submitting bids on other Top Gun range system contracts, including one for a system to be installed in the Philippines later this year and one to upgrade an existing system at Oceana Naval Air Station near Virginia Beach, Va.
Both Flora and Gordon have been in the defense contracting business for the better part of 20 years and have worked with Cubic in some capacity producing air combat simulation systems.
Flora, 43, began his career as a civil servant providing engineering support for naval weapons systems. After leaving the government to work for Triga, a Ventura, Calif.-based weapons maker, Flora started his own company, JAF Associates of San Diego, in 1982. There, he did work for manufacturers, Cubic among them, on various military training, weapons and communications systems.
Gordon, 46, was a longtime employee of Ford Aerospace before he started his own consulting firm, Entertech, and linked up with Flora. Applied Data Technology was capitalized with $1 million last year, all of which was contributed by eight employee-stockholders of the company.
Aside from range systems, Applied Data Technology expects to start production later this year on test instruments for auxiliary power units used in military and commercial aircraft. The market potential for the testers, which will sell for between $10,000 and $15,000 each, is in the “tens of thousands of units,” Flora said.
