BAI got in the running with its Evolution XTS and survived the first round of cuts -- though defense giants Northrop Grumman Corp. and Lockheed Martin Corp. did not. But this month, it lost out on that contract to AeroVironment Inc. of Monrovia, Calif.
"We're not discouraged because we know these kinds of opportunities will come around again," Willmott said. "When you've got the likes of Lockheed and Northrop chasing a small [unmanned aircraft] program like this one, it's a bellwether for this market's potential."
As part of its contract, AeroVironment is supplying the Army with a four-pound, packable plane, called the Raven, that can be launched by throwing it like a football and can fly for about 90 minutes, usually less than 400 feet above ground.
Getting into the business, for many small firms, meant latching on to a prime contractor involved in one of the larger drone projects.
Aurora Flight Sciences took that path. When funds dried up for the global climate research planes it was building for NASA, the firm picked up subcontracting work in 1995 from Teledyne Ryan. Northrop Grumman acquired Teledyne four years later and ultimately produced the Global Hawk, the large, high-altitude drone used in Afghanistan and Iraq.
Today, Aurora builds about one-third of the exterior of each Global Hawk. But the firm hopes to branch into mini drones because it makes business sense, said John S. Langford, Aurora's founder and president. To that end it's building the GoldenEye-50, the garbage can-like plane with its propeller blades buried inside to increase safety and cut down on noise.
With the GoldenEye-50, Aurora can play a prime contracting role and produce drones in volume, creating efficiencies of scale. Let the big guys make the big drones and engineer the combat force of the future, Langford said.
"When you look at little airplanes, it's like building telephone handsets for the Bell system 75 years ago," Langford said. "We want to make telephone handsets for the Bell system. We're not trying to develop the Bell system."
Shirley Collier, chief executive of Optemax, wasn't even trying to do business with the military when she licensed what she considered promising technology from the Johns Hopkins Applied Physics Laboratory. But when Collier shopped the technology around to the commercial sector, none of the for-profit firms wanted to take a chance on a newcomer. So she applied for the Navy contract that calls for technology that can transmit vast amounts of data for pilotless planes. Now, her three-person operation in Ellicott City subcontracts most of the work to a team of eight PhDs, she said.
"The military had an immediate need, and we knew we could address it," Collier said.
The money at stake on drones of all sizes is not much by Defense Department standards. The $1.67 billion in unclassified funding set aside for drones is less than 1 percent of the entire defense budget, said Loren B. Thompson, an analyst with the Lexington Institute, a think tank in Arlington.
But the growth of the drone market makes it appealing, especially when the Bush administration has signaled its reluctance to spend more money on Cold-War-era weapons, such as fighters and destroyers, Thompson said.
