When General Dynamics Corp. was told it would have to wait in line to buy one of Cray Research Inc.'s ultrafast supercomputers, the nation's largest defense contractor didn't argue or throw a fit. The maker of F16s, Trident submarines and cruise missiles simply jumped to the head of the queue by invoking national security.
"You're talking about some very major defense programs here," said General Dynamics spokesman Peter K. Connolly. "If any defense contractor is going to qualify for [preferential treatment], General Dynamics is."
The power play, initially mentioned in Lars Erik Nelson's column in the New York Daily News, demonstrates the clout that top defense contractors and the Pentagon can wield in the marketplace when national security becomes an issue.
By moving to the head of the line, General Dynamics apparently will be getting the supercomputer originally intended for Bell Laboratories, one of the world's premier research institutions and a leader in the increasingly competitive arena of information processing.
"We were scheduled to have it and, I guess, we're now looking at a few months delay," said Arno Penzias, Bell Labs's vice president of research.
According to Richard Meyers of the Commerce Department's office of industrial resource administration, a defense contractor's using national security to muscle out a commercial company for a computer is "way out of the ordinary, it's very different from normal." A Pentagon official agreed the conflict was unusual.
With their ability to perform billions of calculations a second, supercomputers are at the cutting edge of an information processing technology that can perform a wide range of intricate and sophisticated programs. Aerospace designers can simulate wind tunnel experiments on a supercomputer; electronic engineers can test complex circuit designs. A supercomputer can cost anywhere between $5 million and $15 million, depending on its speed and sophistication.
With over $228 million in annual revenue, the Minnesota-based Cray Research is considered the world leader in supercomputer design and research. The company, which has a two-year waiting list for its high-powered machines, expects to install 30 of them this year. Many will go to government contractors and national security related agencies. General Dynamics, however, was not on Cray's customer list, although the two companies have been talking since 1983.
Late last year, General Dynamics decided to purchase a Cray XMP-1 supercomputer for "across-the-board use on a number of crucial defense programs," including the F16 and Trident submarine, Connally said.
However, Cray said it would be unable to deliver its machine quickly enough to suit General Dynamics. In response, General Dynamics turned to a provision of the Defense Priorities and Allocation System outlined by the Defense Production Act of 1950 that "requires preferential treatment for special contracts and orders in the national defense."
Citing "military urgency" in getting a supercomputer, General Dynamics filed a form to get a special "Defense Order" rating on an existing contract that enabled it to get the national security preference. That preference, in turn, bumped Bell Labs down Cray's delivery list.
For Cray, which numbers the top-secret National Security Agency as a customer, it marks the first time a customer has used national security concerns as clout.
"I'm very disappointed that a defense rating is being used," said John A. Rollwagen, Cray's chairman and chief executive officer. "We deal with a number of government agencies and contractors involved with the national security. If they all did this, it would be a mess for everybody. It's a defense contractor spoiling it for other defense contractors."
"Virtually everybody with supercomputers has some sort of defense contract," said Penzias of Bell Labs. "It's like every package shipped by air has "fragile" stamped on it -- people ignore it after a while." Labs. "It's like every package shipped by air has "fragile" stamped on it -- people ignore it after a while."