Small-Business Battler

In the rough jousting for prime defense contracts, the small business with fewer than 1,000 employees usually fares badly against the giants. But last week the missile industry was abuzz over little Acoustica Associates, Inc. (sales for the fiscal year ending February 1960: $8,106,788), which became the first small business to be chosen a prime contractor for the operational Atlas missile system.

Competing against such giants as General Dynamics Corp.'s Convair, North American Aviation, Inc. and General Electric Co., Acoustica won a contract to develop and produce a crucial system for the Air Force's Atlas ICBMs. Acoustica devised a series of ultrasonic sensors to measure the level of liquid oxygen and kerosene in the Atlas.

The heart of the sensor is a tiny ceramic disk that vibrates 80,000 times per second, except when damped by a liquid. As the liquids from the two tanks fall below the level of the sensors, they begin to vibrate, sending a signal to a computer". Acoustica's contract should be worth $6,000,000 to $10 million during the current year and may reach $20 million over the next three years.

In the Boathouse. For Acoustica's gangling Chairman Robert L. Rod, 40, the Atlas contract is the climax of five years of building up his ultrasonics business from a shop in a Long Island boathouse to a leading position in ultra-high sound systems (TIME, Mar. 16, 1959).

The reason that small businesses do not land contracts more often, argues Rod, is that they do not find out what the military services want and then develop the products. Instead, they go to the Small Business Administration and plead their smallness. Rod set out aggressively to cultivate younger officers in the Pentagon, to find out service needs, and in 1956, the Air Force asked Acoustica if it had any ideas for the Atlas. Rod thought that the sensor would be just the thing. To get on the master bidders' list of defense contractors for other company products, he inundated procurement officers with promotion material about Acoustica.

In the Submarines. When he thought he was being ignored, Rod complained to Congressmen. Says he: "All other things being equal, the average military procurement office would rather give a contract to a big firm because he thinks it is safer and he takes less personal risk. If the contract doesn't work out he always has the excuse that the big firm is well known and well established and should have performed better."

So successful is Acoustica's liquid-level sensor that it is now being used on nuclear submarines to detect sea water in the launching tubes of Polaris missiles and in the ground-fueling system for some liquid-fueled missiles. Rod also envisions nonmilitary use of his device, has sold an ultrasonic measuring device to Du Pont for chemical gauging, another liquid-level sensor to a utility to measure the water level in a high-temperature boiler. Says Rod: "You have to keep pushing."

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