Iraq War Strains U.S. Business

But the contract was modified to keep up with the growing demand for translators after the 9/11 attacks and the war in Iraq. It is now capped at $657 million.

Hiring for the contract has not been easy, sources close to the company said. Arabic is not widely taught in public schools and until recently wasn't a popular language at colleges or military training centers, said an industry official familiar with the contract. That meant Titan had to hire from the limited pool of native speakers and even then had to discern which spoke the right dialects, the official said.

In April, Titan held an open house in Arlington to recruit Arab speakers at a salary of $70,000 to $107,000 a year, plus a bonus for every six months of service, according to a listing on the Monster.com Web site. On RecruitMilitary.com the firm posted a position for an "NSA Crisis Arab Linguist" who would be responsible for quality control on Arabic translations and transcriptions.

Complicating Titan's task is the fact that its competitors were also trying to hire more interpreters. For example, the staff of Worldwide Language Resources Inc., based in Andover, Maine, grew from fewer than 50 translators before the 9/11 attacks to more than 500 now, including 200 to 250 in Iraq and Afghanistan.

With its thousands of translators, Titan developed a reputation as a wholesaler in the translation business, where boutique firms have reigned for years, according to its competitors. Titan's primarily requirement for a translator is that the applicant be fluent in certain languages. That upset industry officials who spent years lobbying the Labor Department to include translation among the recognized professions. "It takes years of training and experience to be able to [do this] well. It's not just being able to speak two languages," said Kevin Hendzel, spokesman for the American Translation Association.

ASET International Services Corp. often spends 30 to 60 days evaluating an applicant, said Hendzel, the company's chief operating officer. "The question is not just whether the person knows Arabic," he said.

ASET provides Arabic speakers to the military but has shied away from responding to the military's need for translators in Iraq, Hendzel said. The effort is "pre-doomed for failure because there are not enough qualified, trained linguists to do the job," he said.

But in Iraq, the military may not necessarily need translators with a technical background. Instead it needs those who can help soldiers communicate with the general population, said an industry source familiar with the contract. Those performing sensitive duties have the needed security clearances and the technical know-how to perform those jobs, that source said.

In the company's 2003 annual report, the only reference to the contract is an acknowledgement that it accounted for 7 percent of its $1.8 billion in revenue.

A Titan translator stationed in Guantanamo Bay, Cuba, was charged last year with mishandling sensitive information and making false statements to federal officials. The Pentagon later acknowledged to Congress that some translators were brought in without complete evaluations. "In our rush to meet the requirements, the more numerical requirements, I think folks were brought on based on those initial checks [by the contractor] and then the more detailed checks followed as time permitted," Charles S. Abell, the Pentagon's principal deputy undersecretary for personnel and readiness, told a committee.

A Pentagon spokesman said Abell was not available for comment on whether the Guantanamo Bay case had been resolved. In a written statement, the Army Intelligence and Security Command said Titan translators are required to undergo background screening but not to have security clearances. Some have interim clearances based on "minimum investigative requirements," the agency said.

In Iraq, the company's hiring of local translators occasionally raised concerns, said Jason Ayres, who worked as a site manager for Titan last year. "The majority are pretty good" but the military sometimes questioned whether a few had ulterior motives and were putting soldiers in danger, he said.

Titan is in the process of being acquired by Lockheed Martin Corp., the Pentagon's largest contractor, but the acquisition has been delayed pending the outcome of an unrelated Justice Department investigation.

Titan's income for the first quarter was $3.1 million, compared with $7 million for the first quarter of 2003. The reduction in earning reflected merger-related costs, legal costs and money set aside for potential liabilities related to the government inquiry.

Meanwhile, the Army Intelligence contract is back up for bids and has attracted interest from much of the defense contracting industry, including Lockheed Martin, Northrop Grumman Corp. and L-3 Communications Holdings Inc., as well as niche players such as McNeil Technologies Inc. Proposals are due Friday, and the five-year contract is expected to be awarded shortly afterward.