The Star Wars Sweepstakes

Not since John F. Kennedy launched a crash effort to put a man on the moon has the U.S. undertaken a public venture so ambitious or expensive. The Administration calls the program the Strategic Defense Initiative, the press has dubbed it Star Wars, and the hundreds of companies and universities competing to work on the project could easily rename it Star Bucks. Experts estimate that fulfilling President Reagan's vision of building an impregnable defensive shield against nuclear attack, if it is possible at all, could ultimately cost anywhere from $400 billion to $1.2 trillion. It would thus become the biggest bonanza ever for American businesses and educational institutions.

Thousands of applications for research grants have inundated the 70-member staff of the Government's new Strategic Defense Initiative Organization. Thrown together hastily last year, SDIO still occupies temporary headquarters in a dingy Washington office building, which also houses an Interior Department group that regulates fish hatcheries. Soon the Star Warriors will move to a new building complex in suburban Virginia near the Pentagon. So far, SDIO administers some 1,000 contracts worth $1.1 billion for studies aimed at developing such products as lethal laser beams and lightning-quick battle computers.

The top contract winners include Boeing ($131 million), TRW ($57 million), Lockheed ($33 million) and Rockwell ($25 million). Scores of other star-struck companies, from giant IBM to tiny General Research of Santa Barbara, Calif., have also pushed onto the SDIO payroll. Says Wolfgang Demisch, an analyst at the First Boston investment firm: "SDI is the future of the defense industry. No competitive high-tech company can afford not to be a part of SDI."

But corporations face risks even as they reap the rewards of Star Wars. The program could be scaled back or scuttled by the next Congress or President. "Companies can get geared up for a letdown," says Paul Nisbet, who follows the defense business for Prudential-Bache Securities. Also worrisome is the mounting opposition to SDI at the universities where much of the basic research will be done. Campus critics, including many scientists, argue that Star Wars is technologically unworkable and wasteful: a pie in the sky and a pork barrel on the ground.

For economic reasons, Star Wars has become vulnerable to efforts to trim the federal deficit. Congress has tentatively cut the President's SDI budget for 1986, from $3.7 billion to $2.75 billion. Nonetheless, the Administration is still shooting for $21 billion in Star Wars funds over the next four years.