Prime Target : The Technology Reinvestment Project, a controversial example of the post-Cold War Pentagon’s conversion efforts, now looms large in the sights of the budget cutters in Congress.

Hi-Shear Technology over the last 18 months has been a shining success in the Pentagon’s Technology Reinvestment Project, which pays defense contractors to develop products with commercial potential.

President Clinton praised Hi-Shear in a White House ceremony. Rep. Jane Harman (D-Rolling Hills) took her election campaign to the company’s Torrance headquarters. A NASA newsletter profiled Hi-Shear’s wreckage-cutting LifeShear, a more easily portable version of the Jaws of Life tool used to free occupants of cars smashed in accidents.

Now that Republicans in Congress want to kill the defense reinvestment program, the Pentagon could use a little friendly political support from participants that have won contracts under it.

But even Hi-Shear is hurling brickbats at the Pentagon’s technology program since it pulled the plug on $250,000 the firm was to get for development of a second rescue tool dubbed the “spreader,” a metal-bending companion to the LifeShear cutter.

“Here we have been a model project, and they just came along and canceled our program,” said Walt Smith, vice president and general manager of the publicly traded company.

The reinvestment program, heralded a year ago as a cornerstone for a post-Cold War defense industry, has recently been derided by Republicans as a “slush fund” supporting efforts of dubious military value.

Led by Rep. Bob Livingston (R-La.), chairman of the House Appropriations Committee, the GOP critics say the program is draining resources needed for military readiness.

The House voted to cancel the program’s entire $502-million appropriation last month, but the Senate kept the cuts to $200 million in the bill it passed March 16. A conference committee will reconcile the two versions. Congress also trimmed Pentagon spending in other non-military areas such as environmental restoration and medical research.

“This will hurt national security,” Undersecretary of Defense Paul Kaminski said last month after the House voted to kill the reinvestment effort.

Senior defense officials say that Republicans do not understand how important it is to the nation’s long-term military needs. The Pentagon no longer has the money to support every new technology, they say, and must rely more and more on the commercial economy, particularly when it comes to advanced electronics.

The Defense Department has awarded 251 contracts with a combined value of $820 million to develop so-called dual use technologies, which have both military and civilian applications.

Depending on the conference committee’s decision, the cuts could jeopardize a host of projects in Southern California.

A Redondo Beach-based precision laser project and a Torrance-based venture making satellite-guided earthmoving equipment already have received their federal money, but it is uncertain whether government funds will be available for later phases of development.

Without public money the firms would have to find financing on their own, and many companies may not be able to continue their projects.

“The larger companies, if they see any worth in it, should continue their programs,” said Rohit Shukla, executive director of the Los Angeles Regional Technology Alliance, a nonprofit group to boost technology companies. “But I’m not sure that is the case. Too many of them are too far away from the commercial marketplace.”

At TRW Inc., development of a precision laser tool that will reduce costs in building ships and planes has received funds for this year and next. After that, company officials are not sure if the Pentagon will support extensive testing of the device.

“It remains to be seen how that plays out,” said Len Marabella, a TRW engineer in Redondo Beach who is leading a team from 20 corporations developing the cutting tool.

He credited the Pentagon program with bringing the defense and electronics firms together. The payoff will be a laser tool useful in both the commercial and military sectors. This dual-use approach will make the laser product cheaper, Marabella said, than had it been made solely for the Pentagon.

“This will make lasers much more of a commodity,” he said. “It will keep this technology robust and available, when the government needs it.”

The argument that the TRP has been crucial to preserving technology has been difficult for supporters to convey in the budget-cutting frenzy going on in Washington.

“This is not just some kind of payoff to aerospace workers to get them to change jobs,” Harman said. “This helps the Defense Department because it gives them access to less expensive technology.”

One problem, supporters admit, is that some people expected to see a big payoff in the form of jobs. That has not been the case. At TRW, for example, just 12 employees are working full time on the precision laser.

“Now the emphasis is: ‘If the (reinvestment program) is part of the defense bill, it better be defense-relevant’,” said Richard Williams, project director of a Cal State Long Beach-based effort to create degree programs in manufacturing.

A Torrance firm’s project developing computer-aided earthmoving equipment, for example, came under fire in Washington as irrelevant to the military. But officials at Leica USA Inc., which is working with Caterpillar Inc. and the U.S. Army Corps of Engineers on the project, say such construction equipment will significantly reduce the time it takes military personnel to build airfields or clear ground for campsites.

Pentagon officials say they canceled Hi-Shear’s contract because the spreader did little to support defense technology or defense needs--the same criticism Republicans made in arguing to end the program.

In a letter to the company this month, program officials said they did not consider the new spreader “appropriate for funding.”

Hi-Shear’s Smith said some of the program administrators have a “military mentality.” Ultimately, the company was caught between the demands of the market and the demands of the Pentagon, he said.

The LifeShear cutting device was the company’s first commercial venture. During the Cold War years, Hi-Shear prospered supplying the military and the National Aeronautics and Space Administration with explosive devices and firing systems for planes, missiles and rockets.

Hi-Shear sought a contract as part of President Thomas Mooney’s overall push to go commercial. Mooney, a retired Army officer, joined the company in 1988 and expanded its research and development department.

The LifeShear cutter is meant to compete with the Jaws of Life device widely used in fire and police rescue work. The latter’s hydraulic power system makes it bulky and heavy; Hi-Shear’s product is 70% lighter because it is powered by pyrotechnic cartridges like those the company makes for use in aircraft ejector seats. The difference impressed program administrators, and they awarded Hi-Shear a $800,000 contract in October, 1993.

To get the LifeShear produced and marketed, the company has spent $530,000 of the government money and $1.2 million of its own. It has added 10 employees and plans to hire 15 more in the coming months. The first LifeShear was assembled in December; 100 of them have been shipped so far.

The partnership with the government ended when the company set out to design the spreader, which resembles a car jack. Hi-Shear engineers found the pyrotechnic cartridges that worked well for the LifeShear were not powerful enough for the spreader, so they added a gear system.

When Air Force Col. Lee Dimitri, a program manager, came to see the spreader design last month, Smith tried to show him that the components could be adapted for military aircraft and missile thrusters.

“The colonel said, ‘Ah, we don’t need it,’ ” Smith said, “but the other (pyrotechnic-powered) design would not be the best approach. It would be too heavy.”

The experience, Mooney said, has convinced him even more of the value of pursuing commercial products. They plan to go ahead with the spreader, he said, even though it will take an extra year to design it without government money. And the company is exploring other ventures in areas such as automobile air bags and high-powered locks.

The loss of the contract “is not going to hurt us,” Smith said. “It’s not going to knock us down.”