Iraq War Strains U.S. Business

Titan Corp. Struggles With Military's Need For Arabic Translation

It should have been a simple $10 million contract for Titan Corp. Recruiting translators for the military hardly rivals the complicated, and sometimes classified, software and engineering problems the company usually tackles for the Pentagon.

But that was before the Sept. 11, 2001, attacks and the war in Iraq created an unrelenting military demand for Arabic speakers. The low-tech specialty is now San Diego-based Titan's largest source of revenue and one of its most difficult management challenges.

It was not an easy transition. Titan has been forced to choose between taxi drivers, medical students and accountants for interpreters, according to competitors and industry groups. They say many of Titan's interpreters have fallen below professional standards.

Titan officials declined requests for an interview for this article and have refused to discuss the contract in detail, but a company spokesman said its translators are qualified. "We hire translators who are professionally competent in the language or dialect that we're looking to work in Iraq or Afghanistan at assignments that are established by the military which address a wide variety of needs," said Wil Williams, a company spokesman. Williams has said the company confirms applicants' abilities with written and oral tests.

Titan has 4,200 translators around the world, according to Army Intelligence and Security Command.

In recent weeks, as a result of its translation contracts, Titan has become part of the scandal of Iraqi detainees being abused at a prison outside Baghdad. At least one Titan interpreter at the prison, Adel Nakhla, has been identified as a suspect, and John Israel, who works for a Titan subcontractor, has been accused of lying to Army investigators.

Titan was founded in 1981 during the Reagan administration defense buildup. The increase in defense spending encouraged the company's founders -- including a nuclear engineer, physicist and astrophysicist -- to follow a new model of defense companies that do not make weapons. Titan focused on such things as getting different weapons to communicate, developing software for the military, and information technology. One of its first contracts was work on a communications system for Minuteman missiles.

In the early 1990s, Titan decided to adapt its military technology to the commercial market, and it set up an international communications business. But as the economy began to deteriorate after the tech bubble burst, Titan turned its focus back to the defense sector. Since 2000, it has made 10 defense-related acquisitions. In 2002, the firm took a $218.1 million charge to discontinue its commercial operations and reorganized to concentrate on national-security-related contracts.

Now, 99 percent of Titan's revenue is from government contracts.

One of the company's most significant acquisitions was the 2001 purchase of Reston-based BTG Inc., another systems integration company that specialized in information collection and analysis and network design. BTG's $10 million contract to supply translators to the Army "was barely considered" when negotiating the deal, said Jon B. Kutler, chief executive of Quarterdeck Investment Partners LLC, which represented BTG in the deal.