SPAWAR’s mission: Bringing a business approach to military matters

HANAHAN – James D. Ward oversees what is perhaps the largest cluster of electrical engineers and computer scientists working under one roof in South Carolina. So it’s logical that he would liken his organization to a big high-tech enterprise.

Like many technology concerns, Ward’s operation is going through some big changes.

“In the mid-’90s, Oracle Corp. was growing by leaps and bounds,” he said. “They recognized that they were going to be a major industry player, and they asked themselves if their systems and infrastructure were ready to take them to the next level. They actually paused and reflected. I think that’s where we are. We’re pausing and reflecting.”

The key difference is that Ward’s organization, SPAWAR, the acronym for Space and Naval Warfare Systems Center Charleston, does not dwell in Silicon Valley. It’s part of the federal government, but it doesn’t behave like it.

“I don’t look at this place as a typical government organization,” said Ward, an MBA and electrical engineer who was named executive director of SPAWAR’s Charleston-based operations in January.

What sets SPAWAR apart from most other federal agencies is its status as a “working capital organization.” In the civilian world, that means the center receives no direct funding appropriations from Congress, so it must compete with the private sector and other government agencies for contracts.

“It’s a different mind-set,” Ward said. “The only way we get paid is when customers bring us workload. So we have to stay competitive.”

SPAWAR has only one advantage. It looks to break even rather than earn big profits. “We operate like a nonprofit,” Ward said.

If the center takes in more money than it spends, it can trim its rates the following year. If it falls into the red, “We would have to raise rates,” Ward said.

“We have to recover all of our costs of doing business,” he said. “It’s very much a business mentality.”

With national security concerns high, the center’s technical talent and business-like culture are in high demand these days.

In one of its more publicized successes, SPAWAR recently teamed up with defense contractor Raytheon Corp. to improve a pocket-size night-vision scope by adding a heat sensor. During the wars in Iraq and Afghanistan, the Army put in an emergency order for 400 of the devices. Soldiers used them as they entered dark buildings and caves to see whether enemy combatants were ahead.

“You know that saved lives. … Those guys were going into scary places,” Ward said.

About $2.1 billion worth of work flowed through SPAWAR in its last fiscal year, a figure that is directly reflected in the region’s ex-panding private-sector defense contracting industry.

In addition, SPAWAR’s nearly all-civilian labor force, including employees in other cities, has almost tripled over the last five years to roughly 2,300 workers, and it continues to expand. At its main engineering center on the south end of the Naval Weapons Station, SPAWAR has just added 70 engineers and computer scientists, which boosted the payroll by more than $3 million. Nearly half of the new hires are graduates of South Carolina colleges and universities, Ward said last week.

SPAWAR’s mission, complements efforts by state and regional economic development agencies to attract more high-paying technology businesses. “You have a catalyst here to move South Carolina to a knowledge-based economy,” he said.

It’s no easy feat, even for Ward, to describe in laymen’s terms what SPAWAR does. He learned that firsthand when his youngest son, Jason, asked the inevitable question: “Dad, what do you do?”

Ward’s explanation only confused the boy, who put his imagination to work. “He was telling kids in the neighborhood I was a spy,” Ward said. “I’m really not a spy.”

SPAWAR essentially is a government-sponsored, information-technology business. It was created by the Navy to provide sailors and Marines in combat with every possible electronic advantage. The center’s steady growth reflects the significant impact that technology is having on the way wars are planned and fought.

“Our mission statement is to ensure the war-fighter is never alone,” Ward said. “He’s always connected. It might be radio communication, a navigation system, a battlefield display or an intelligence signal.”

Typically, the center takes existing commercial technology and improves on it with the help of private industry. For instance, the Pentagon might turn to SPAWAR to redesign an electronic device, such as a computer mouse, so that it can withstand sandstorms or other harsh wartime conditions, Ward said. Center engineers and vendors also might be called on to integrate telecommunications networks that were not designed to work together. Ward described the work as “application engineering.”

In response to a directive from the secretary of defense’s office, Ward and his employees are helping develop software that would allow all of the armed services to communicate with each other over different radio systems.

SPAWAR has received high marks for its performance. In a study commissioned by the Secretary of the Navy, the consulting firm Booz & Allen found that it was the Navy’s most cost-efficient engineering organization when measured by factors such as workload in relation to overhead expenses.

Ward isn’t resting on that laurel. Nearly six months into the top civilian post at SPAWAR, he is putting his business degree to work and looking for ways to make the center run even more efficiently.

“Obviously, our business practices and processes become very important to us in this type of environment,” he said.

One of his priorities is to find ways to save money and use those savings to build a SPAWAR labor force made up almost entirely of specialists. “My strategy has been to reduce the cost of doing business and increase the investment in employees,” he said. “What the Pentagon wants is the brightest, most competent engineering professionals.”

Nine teams of SPAWAR volunteers are exploring ways to improve how the center operates internally. This reflects Ward’s push for efficiency and Defense Secretary Donald Rumsfeld’s demand that the uniformed services collaborate better.

“We’ve got to be more competitive, more agile and operate more like a network,” Ward said.

Meanwhile, he must manage SPAWAR’s growth, which has become trickier as more agencies clamor for its services. SPAWAR, in other words, can’t do all things and prefers not to try.

“The key is to look at things you think will grow into critical programs and get involved in those,” Ward said. But SPAWAR can’t lose sight of its most important client.

“We cannot let down the Navy because of other customers,” Ward said. “We have to be real sensitive to that. … We have to look at divestitures and not getting into some things.”

The new executive director also is well aware that a potentially larger issue is ahead as the Pentagon prepares for more base closings and relocation of military facilities.

Whether SPAWAR will be affected when the hit list comes out in 2005 is anyone’s guess. Ward can only hope that performance will trump politics.

“If they make an educated decision, everything will be wonderful,” he said.