State Groups Win Major U.S. Grants

On the eve of a visit by President Clinton to Los Angeles, the Defense Department announced Friday that California-led organizations will receive about $50 million of a new round of defense-conversion grants.

The Pentagon selected 13 projects from California corporations and universities to convert defense technology to new commercial products and establish economic development programs to help offset Defense Department budget cutbacks.

The 13 projects are an eclectic mix of advanced technologies, including an effort to develop a new type of rocket engine, a proposal to speed up the writing of educational software, a new chemical process for manufacturing electronic circuits and a new rechargeable battery.

Big winners included Hughes Aircraft Co., Rockwell International Corp. and the University of California, all of which won federal funding for two projects each.

Overall, California’s awards were concentrated in the Los Angeles area and Silicon Valley.

The new awards, part of a $155-million package, put California far ahead of other states receiving the funding, although California officials have complained that the state is not receiving enough to compensate for the devastating impact of Pentagon budget cuts on its economy.

Ultimately, the federal government plans to disburse $2 billion over a five-year period to help defense contractors convert their military technology to commercial products, as well as to develop new technologies and set up economic development consortiums and training programs that would help jobless defense workers find new careers.

In the first round of awards, California won 42% of the $140 million available, by far the largest portion any state received. The state’s share in the second round dropped, however.

Anita Jones, deputy undersecretary of defense for research and engineering, said the program represents a crucial part of the Clinton Administration’s effort to enhance U.S. competitiveness in the world economy.

“This Administration recognizes that national security is inextricably tied to economic security,” she said. But Jones had no estimates for the number of jobs that will be created by the $2-billion program.

Clinton is also getting plenty of political mileage out of the conversion program. The awards Friday apparently were timed to coincide with Clinton’s eighth trip to California, in which he will again assert his Administration’s commitment to help yank the state out of its economic quagmire.

Later today, Clinton is scheduled to hold one of his town meetings at Rockwell International’s Rocketdyne Division, which was selected as one of the 66 national winners in the conversion program, formally known as the Technology Reinvestment Program.

Rocketdyne’s proposal is for a portable monitor that can detect low concentrations of hazardous chemicals, enabling emergency response teams to quickly check spills or allowing environmental regulators to examine automobile emissions as cars drive by.

“We are tremendously excited,” said Maribeth Hunt, program manager for the device, known as the EcoScan. “The ultimate market is mainly commercial. It will be in the tens of millions of dollars.”

Hunt said that when EcoScan enters production after two years of development it could create 200 jobs.

Hughes Aircraft’s research laboratories in Malibu, which have produced such breakthroughs as the world’s first laser, won awards for a device that will reduce the cost of interactive communications systems and for a method of improving production of electronic circuits.

Although California has appeared to fare well, a spokeswoman for the California Trade and Commerce Agency said the awards Friday still did not support projects that had been endorsed by the agency and as a result failed “to maximize the resources” that California had committed to defense conversion.

“Every state feels they should get more, even California,” said Lee Buchanan, head of the technology reinvestment program at the Pentagon’s advanced-projects research agency. “I can’t say what is fair. The allocation is by merit.”

The Technology Reinvestment Program has wide support in the defense industry, which is the main recipient of the funding. But some outside analysts say the program is unfocused and attempts to accomplish too many goals.

“You end up with a patched-together program,” said Michael Beltramo, a defense industry consultant. “You know what it is really focused on--allowing the President to run around spreading money and cutting ribbons. It is more about politics than economics.”

Even one of the winners Friday was less than effusive about the award. CALSTART, a Burbank-based consortium dedicated to developing an advanced-vehicle industry, had applied for $42.4 million for 21 projects, but was funded for only $3.4 million.

“It’s not even close to what we are requesting,” CALSTART executive director Michael Gage said. “If that’s it, we are pretty disappointed.”

The other California winners included teams led by UCLA, UC Irvine, American Rocket Co. in Ventura, Lockheed Missiles and Space in Sunnyvale, Sierra College in Rocklin, Loral Space Systems in Palo Alto, Xerox in Palo Alto, and Apple Computer in Cupertino.

Nationwide, 2,800 proposals have been made for funding, and 162 have been selected so far.