When it comes to software, Donald C. Latham can be a bit hard-headed.

In his six years at the Pentagon, the former assistant secretary of defense waged a tireless campaign to increase the budget for the military's sprawling computer nerve system.

"When I came to Defense in 1981, we were spending only a fraction of what we needed for a capable and enduring communications system," he recalled. It was difficult persuading officials in the Defense Department and Congress that software and technical support systems mattered, Latham said, "because they don't kill anyone."

But by the time he left office last month, Congress had doubled the budget for what he called his "invisible empire" -- the Pentagon's command, control, communications and intelligence operations -- to $22 billion, up from $10 billion in 1981. Latham's operations involved Defense telecommunications, reconnaissance and intelligence gathering.

"It's a good start," he said, "but we're still only about half-way there."

Latham will continue to fight for bigger and better software systems for the military in his new capacity as vice president of the systems group for El Segundo, Calif.-based Computer Sciences Corp. The firm, Fairfax County's second-largest employer, counts the Defense Department as its most important customer.

Federal law prohibits Latham for two years from administering any program at Computer Sciences in which he was involved at the Defense Department. But his experience is expected to be a considerable asset to Computer Science in its struggle to edge out Electronic Data Systems Corp. for the number one spot in federal systems integration work.

"The addition of Don Latham is really impressive," said Stephen McClellan, an industry analyst at Merrill Lynch. "You can't win big defense contracts on the basis of who you know, but sometimes it helps to know how the Pentagon operates."

"I've come out of government with a good understanding of the programming and planning process and a good knowledge of who the key players are," said Latham. "I got the chance to look across a broad spectrum of the things that Computer Sciences is interested in."

Computer Sciences, which earned $32.2 million on revenue of $1.03 billion for the fiscal year ended March 31, is fast emerging as one of the key players in the market for large-scale federal computer contracts. In the past five years, software design companies, or systems integration specialists, such as Computer Sciences, have nudged out large main-frame manufacturers including IBM, Burroughs, Sperry and Honeywell as primary contractors for government computer projects.

In 1982, recognizing that inefficient software was the real bottleneck in its computer operations, the Army tapped Electronic Data Systems, at that time clearly the industry's leading systems integration specialist, for a $650 million contract to revamp its network of IBM mainframes. In the months that followed, the Post Office, the Navy and the government's patent office also awarded large prime contracts to software specialists.

Now the government's "megacontracts" -- the computer industry's designation for contracts worth more than $100 million -- are routinely awarded to software specialists including EDS, CSC and Maryland-based Planning Research Corp.

The makers of computer hardware, meanwhile, have been relegated to subcontractual relationships.

"The tail has started wagging the dog," said McClellan.

Computer Sciences has made steady gains on Electronic Data Systems' lead in recent years, winning five of the nine contracts to come up for bid since January 1986. The three contracts it secured in 1987 have a combined value of about $834 million.

McClellan attributes Computer Sciences' improved performance to key personnel changes and a more focused management strategy that concentrated on developing "mainstream" technologies.

Some analysts say that Electronic Data Systems' preoccupation with the needs of General Motors Corp. since it was acquired by the giant auto maker three years ago has also played an important part in Computer Sciences' recent success.

To date, all but a handful of the computer megacontracts have been for work on federal government projects. But analysts predict that eventually, the commercial market for systems integration will surpass the federal market.

"The market now is about 95 percent federal government. But five years from now, about a third of the market will be commercial," McClellan said.

Currently about 85 percent of the revenue of Computer Sciences systems group comes from federal government contracts.

The next phase of evolution in the federal contracting market may be toward "systems management," under which government agencies share a vendor's computer or communications facilities, analysts say. "Eventually, government agencies may decide that it makes sense to just rent someone else's facility," said Latham.