Charles Nichols Interview – October 5, 2016
WEISS: I'm Helen Weiss for the San Diego Technology Archive housed at Special Collections at the UC San Diego Geisel Library. I'm interviewing Mr. Charles Nichols on October 5, 2016 at his office in San Diego. Mr. Nichols was the first general counsel of SAIC and served in many capacities during his long career with the SAIC company and beyond. Thank you, Mr. Nichols, for taking the time for this interview. We'll start with your background in education, then we'll explore your extensive experience with SAIC, your leadership in the America's Cup and your ongoing involvement with San Diego's museums and businesses. First we just want to take a look at your background and education. Our SDTA notes show that you were the first general counsel for Dr. Beyster's new start-up called Science Applications International, SAI, which later became Science Applications International Corporation or SAIC. Dr. Beyster, who was a nuclear physicist, had been working at General Atomic Company before he jumped ship to establish SAIC the year before you came. Before we discuss your working with Dr. Beyster and your career with SAIC, tell us about your background. Where did you grow up?
NICHOLS: I grew up in West Texas, mostly in a small town called Big Lake which had no lake and was not very big.
WEISS: What were your interests in school and hobbies as a child?
NICHOLS: As a lot of West Texas kids, we were very much involved with animals. It was ranching country as well as oil country. From the early years, I was raising animals for show and also judging livestock and judging forage grass and things of that nature. And playing sports of course. A small town in West Texas, you were going to be involved in sports because there were not that many boys. My graduating class was 36. So it was a pretty small group.
WEISS: I read that you completed your undergraduate studies at Texas A&M University in 1963 where you were designated as a distinguished military graduate. What was your major and were you in the ROTC?
NICHOLS: Yes. In fact, I was in the ROTC but it was quite different at Texas A&M then it would be, say, at UCLA or University of California, San Diego. There you were in the corps of cadets. When I went to Texas A&M in 1959, for the first two years it was mandatory to be in the corps of cadets. Then thereafter, you might stay because you either had an interest in staying just to be a part of that group at the University or you had interest in going further and becoming an officer in one of the armed services. At that point, we had Air Force and Army and a battalion of Marines. We didn't have Navy at the time. I was in the corps of cadets and they were officially ROTC. It was much more than that. You wore your uniform all the time and you lived in a military environment and you became indoctrinated as an Aggie. Once you have been indoctrinated as an Aggie, you never change.
WEISS: What did you major in at the time?
NICHOLS: Well I started out in petroleum engineering because my family had been in the oil fields and [Texas A&M] was a well-regarded engineering school particularly in petroleum engineering at the time. Then I decided at the end of the first year that I really was doing that probably more out of my experience and my family background; but I was the guy who was always finishing everyone's sentences for them because they were slow-talking Texans. Things went very slow, too slow for me. I would be the guy trying to move things along. Whenever we got into issues with anybody, I was the spokesperson and I always enjoyed language. So I decided that I would go to law school. I called the dean, the associate dean of the University of Texas Law School and asked him if I was going to come to the law school when I graduated what should I take? He said – well literally he said, "You can take anything you want, anything you think you might like but don't take any of the undergraduate business law or courses like that. We'll teach you all the law you need to know when you get over here. But you do need to know how to read and write." So I changed my major to English and I graduated in English in 1963 and then went to the University of Texas Law School after that.
WEISS: Then you received your juris doctor degree from the University of Texas in 1966. What then brought you to San Diego and when did you first meet Dr. Beyster?
NICHOLS: Well first off, when I graduated the degree was called an LLB and they ultimately changed them to juris doctor after that, at a later date. But it was an LLB when I graduated. I had a commitment. I was already commissioned into the Air Force out of A&M in 1963 and I was deferred to go onto law school. At the end of law school in 1966 I had an obligation to go into Air Force. It took a while to get an assignment. I graduated in late May/early June and ended up getting assigned to go to a base in November of 1966. That base was in San Bernardino, California. It was called Norton Air Force Base. There is a long story about how I got assigned to Norton which I won't bore you with, but I did ultimately get assigned to Norton Air Force Base. I was assigned, interestingly, to an organization that was the research and development organization for the missile and reentry systems for the Air Force. Though they were doing the R&D improvement on the Minute Man Missile up through Minute Man III and the reentry systems, (the multiple independently targeted reentry vehicles) in another organization there. I was one of the counsel for that organization. So I got a lot of experience dealing with big companies, the big technical companies dealing with the Air Force in those areas. Companies like GE and Lockheed and Martin Marietta in those days and TRW and the like. I always had an interest in the technical things anyway. Didn't want to be a patent lawyer but I did like working with complex organizations looking at tough things to accomplish. In fact, when I was in law school I had roomed with a guy who had also gone to Texas A&M with me at the same time and he was working on his PhD in physics which he ultimately attained and we continue to get together and correspond today. But he was sort of my continuing involvement there in law school with the technical side of things. Then when I prepared to leave the Air Force in 1970 – I had a four-year commitment – so in November of '70 I was going to get out. I start thinking about where I was going to go and what I was going to do. I thought, "Well rather than start out at a law firm at the bottom level, I would like to start out taking advantage of the experience I got in the Air Force which was potentially very valuable to companies who would be dealing with the government and law firms who dealt with them." I interviewed around several places and I ended up finding out about SAIC through a colleague who – I was a captain at the time and had a friend (another captain) by the name of Ed Knauf. We were talking at a party one evening and some of the guys were asking me what I wanted to do. I said, "Well I don't think I want to get caught in a law firm where I'm sitting doing somebody's research for a few years before I can get any real exposure," and may even get pigeon-holed into a particular area which I've never been fond of just sticking with one item. It gets boring. So I said, "I think I would like to get with a little company who could use my expertise in government contracting and where I could get some equity in the company rather than just be an employee and find somebody that has some growth opportunities and go and learn and participate and contribute. Hopefully we can do something exciting." He said, "Gosh, I know a company that just fits that description." He said, "They are a sub-contractor to one of my contractors." He was in the technical side and he had contractors who worked for him. He said, "I'll bring that information down to you tomorrow." Well it turned out to be SAI in its early going. Their brochure was one of those little things we used to get. Remember the little booklets that you had a heavier gauge paper on the front and back and whatever you were writing was in the middle and you had this little combed binder along the back? Well that was the SAIC brochure. It was just a Xerox copy of something that they had run off. It had like 15 résumés in it that were extraordinarily talented people. I was totally impressed with what I saw. Not only did he have the little book, but he had the rough financial statements, the summary financial statements for every month since the company had been born. Low and behold, they were profitable from the very beginning. They literally did not have any time when they weren't profitable. They weren't hugely profitable, but a lot of start-up companies take years to be profitable. They were profitable right off the get-go. I knew they knew something about what they were doing. They had an interesting set of résumés and they described their expertise which was in nuclear physics largely and it was being applied, of course, in the defense department and doing simulations, nuclear bursts, high altitude, low altitude, what happens. They are also on the civil side working with hospitals and clinics to do radiation therapy facilities, doing shielding for people who would be involved in radiation therapy. So it was a nice little mix of people who were quite talented. They had a couple of other little projects going on that also had technical challenges, but had as its base nuclear physics. For example, they were using a little device called a moisture detection device. So it had a source in it, a low level nuclear source that presumably measured how much moisture was in the soil. I joked at an event where I was the speaker 20 years later about the company's first product and it was the moisture meter. The funny thing I said was it didn't work the way it was supposed to. It had a long, pointy end on a tube and a little meter reader on the top of it with a little handle. Although it didn't work, they discovered that they could push it into the ground and the more they could push it in the ground the wetter the soil was. So I was just teasing them about the effectiveness of the technology. But that was one of the funny things early on. So that's what I saw when I was evaluating SAI. So I called Dr. Beyster right out of the blue because his résumé was in there and his telephone number was in there at the company. Darned if I didn't get him right on the phone. I talked non-stop for about three minutes telling him who I was and what I had done in the Air Force and how he couldn't possibly work without me. I described how I had in my short tenure been responsible for major negotiations and settlements and big disputes with these big companies, millions and millions of dollars, briefed at the generals level up to Washington about how things were going, what our plans were and getting them approved. I took a breath and he said, "Well how old are you?" I thought, "Oh my gosh, I'm only 28 years old. He's going to think, 'How do you do all that?'" So I said, "I'm 28 but I'm almost 29." He said, "Well good." He said, "We appreciate young people around here." He said, "I'm going to send somebody up to talk with you." He said, "Send me your bio," which I did, and he said, "I'll send someone up to talk with you." So he did. That person turned out to be Dr. Gene Ray who represented the leadership of the small number of people they had that worked on Air Force contracts. So he seemed to be the natural person. He had been at the Aerospace Corporation in San Bernardino where I was across the street with the Space and Missile Systems organization that also supported the reentry vehicle people that he worked with at a Aerospace. So he came up, interviewed me. We had lunch and I got invited down to [interview at] the company. I was fortunate enough to get an offer. I ended up getting five offers, I remember. It was the second lowest. The one that was lower than SAIC wanted to give me an offer. I think they had no idea what I was going to do for them at the time, but we sort of liked each other. I had three higher offers than SAIC. But I thought that SAIC offered the best future, potential for growth and potential for learning with these extremely bright people. So I chose that offer. Certainly the key to that was the equity that I was able to get coming in, which we bought; that is, we purchased the stock. There was a price set for it based on their performance up to that point and that's continued to be the way they priced for a period of time with nothing very formal in terms of a formula. But ultimately we worked out a formula that made it more uniform. Then there was also the opportunity to get more stock and options based on your performance as you went along which was precisely what I wanted because when I left the Air Force they said, "Why are you leaving?" I said, "I'm going to go where I can work and where I get ahead on the basis of what I can do, not how long I've been there." Certainly that was SAI.
WEISS: When did you first meet Dr. Beyster? When you came down after you had met Dr. Ray?
NICHOLS: That's right. I met Dr. Beyster and we had lunch in the Bratskeller, I think, which was the restaurant that was in our building. We started out in 1250 Prospect in the McKellar Plaza Building. It looked like a little rabbit warren of offices in the back of the building overlooking the ocean. But there was no men's restroom and no women's restroom. There were a series of restrooms. [The employee offices were] in little suites that were little private suites. They didn't have any connection. You had to go outside to go into the next office. If that restroom was busy you went to another one down the hall. People would be coming around trying to find you and hollering at the restroom doors if somebody was on the phone you needed to talk to. I was one of the people. I never really got into the cove but there were people who had their towels and their flippers and their masks hanging in their offices because they would go down at lunch and take a swim at La Jolla Cove. It was just idyllic and so utopian in a way. These guys were all extremely bright. I was probably like the 35th employee of the company.
WEISS: Was it still SAI at the time?
NICHOLS: Oh yes, of course it was SAI. Yes, we didn't turn it into SAIC until a few years later. We had two companies. There was SAI and JRB Associates. The JRB Associates represented John Robert Beyster’s initials. They were involved in the civil side, on the medical side. Whatever other civilian and commercial things we had we put into JRB Associates.
WEISS: What was your first impression of Dr. Beyster?
NICHOLS: Well he was obviously very bright. He was a wonderful recruiter because he was so disarming. He didn't give you the impression that he was sitting up at some level as the president of something. He was just one of the guys. He's not a hail fellow well met by any means. He's fairly shy. But he's a great judge of people and even a better recruiter of them. I think the people that were there [at my interview] were Bob and Pete Jackson who was the first business manager of the company. Since I was the business guy, I was going to be working with Pete. Jerry Pomraning, Dr. Gerald Pomraning, was there, who was at the time the Secretary of the company and also a major player in the theoretical physics group and a brilliant theoretical physicist. Bob sort of led discussions but everybody chimed in and we had a nice lunch with my wife and myself and those fellows. Then ultimately, they sent me an offer letter.
WEISS: Some of the SAI pioneers spoke at Dr. Beyster's celebration of life service and they talked about the Beyster Book, a little notebook. Do you have any memories of that?
NICHOLS: Yes, I do. A number of memories. Everybody in those days would have. I spoke at Dr. Beyster's memorial service, as a matter of fact. The Beyster Book was something he carried around. It was a little spiral notebook that flipped over from the top and he carried it around in his shirt pocket with a pen. Bob had this penchant for coming by and he was busy. But he talked to everyone. Bob didn't really pay much attention to whatever organization chart that he might have had at his desk. He didn't worry about organization charts. He worried about how the things worked and how people latched up with one another, not who the boss was. So he would come by and he would say, "Chuck, would you look into this? Call so and so. There's an issue with regard to this and this and this and this." You might be in the hallway [during one of these encounters with nothing to write on]. So people started carrying their own “Beyster Book” because you'd [leave one of these conversations and] remember about half of what he told you. The next day he's coming by asking you where you are on each of those items because he had them written down in his Beyster Book. So we all got Beyster Books. So we would flip ours open and start taking things down to protect ourselves against not knowing – not being able to remember what all was said. He did that for years. I'm sure he carried that Beyster Book until he retired. Probably until I left for sure. Even after that, he would always write hand-written notes to people. He would buy these little message pads before we got to using computers for regular communication. These message pads would have a carbon on it. So he would write the message to you, flip the thing off and he'd have the carbon and he would send it off to you through the inter-office mail. Just another way he kept up. The old technology side of things. But of course, Bob was an experimental physicist. He continued to work on projects for several years in the early years of the company and always loved to go in and hear about the new things that were going on or help people start the new things. He had a great interest in seeing things develop, that may be difficult and risky, but he liked pushing the envelope because he was an experimental physicist.
WEISS: You signed on with SAI. What was your first responsibility or first type of contracts?
NICHOLS: Interestingly enough, when I signed on I was a Texas lawyer and had not taken the Bar in California because I didn't need to when I was in the government because you don't have [to be a member of the State bar of the State you are stationed] because they move you around and if you had to take the Bar at every place you went [it would really be burdensome]. You’re not doing state law anyway. You're doing your federal government business. So the fact that you're a member of the Bar somewhere was all that was required. So almost nobody until they decided where they were going to go took the effort to go take the local Bar unless they had some work on the side. There certainly was no time for me to have work on the side when I was in the Air Force. I didn't have my [California State Bar membership]. I couldn't be their counsel to begin with. So I was the manager of contracts. I managed the contracts department which was responsible for the negotiation of contracts and the maintenance of the contract files and the changes that went in and also the business proposal portions of all the proposals. There would be a technical proposal written and we would do the business side of it, pricing the proposal based on the company's pricing strategies and to do the business sections and to take care of all the stuff that was sort of non-technical in there. Then I had purchasing under me and other things of that nature. That was in November, the end of the November of '70 when I got there. In February, I took the Bar in California and passed the Bar and became the company's first counsel. Bob delighted in calling me his mouthpiece.
WEISS: Did it require with these contracts that you were going to Washington? Because I understand that the people that signed on with Dr. Beyster initially, part of their responsibility was to secure contracts. Did this mean that you had to have a presence in Washington and were you back and forth a lot?
NICHOLS: I was but I had a different role. We had a lot of small contracts. Even when we were a young company our contracts tended to be $100,000 or less. That was a level of which the [customers’] people could authorize things on a local basis in their offices. $100,000 would keep a scientist and a programmer assistant [covered for about a year] to perform a study. The contracts tended to be less than $100,000.00 and a year-long. Nothing was very long and nothing was very big. There were a lot of contracts to negotiate but they were basically very simple contracts because they were negotiating some labor and some computer time and some travel time and the study would be what the technical representative and the government wanted to see with regard to some particular aspect of either nuclear physics or weapons work. And systems engineering for bigger programs, where the customer didn't have the technical expertise; they could hire it and get the support they needed. We did travel a lot. My job was to negotiate with the government side, their contracting office. They have a technical representative and a contracting officer on the government side. I was literally the contracting officer of the company on our side and the Wayne Colemans of the world were the project technical people on our side. I didn't have to travel as much as they did because they were interacting all the time on the technical side with the customer’s technical representative. I could do a lot by telephone. So I wasn't traveling as much as they were early on. Later on in the company, I travelled quite a lot. We were putting new offices together. When I got to the company we had only one other office. It was in Washington, D.C. in the Rosslyn, Virginia area. After that, we got offices in many, many other places, as you know, over the years. Major contributions from Huntsville, Alabama and Los Angeles and Colorado Springs and you name it. Things just kept moving and moving. Contracts just kept getting bigger and we kept getting more credibility to do bigger things and added more top-level people. The company just continued to prosper.
WEISS: What did you see as the technical landscape of San Diego at the time? The Navy was here. There were Defense Industries…
NICHOLS: General Dynamics was here and some smaller companies that were sort of competitors of ours. There was a company called S-Cubed. Cubic was probably here by then but they weren't really a competitor of ours. Then Ryan was still here. Rohr was still here. Of course, all of that disappeared over the '80s I suspect and we became a larger company and we became one of the big players in town. We pretty much kept a low profile because that was Bob's nature. To the extent that we did have a local community involvement and people who had to speak to the press felt a need to do it, I was the guy who frequently got the news stuff that was on the non-technical side and we figured out what to do with it. Ultimately, perhaps we'd hand it off to somebody else or I kept it depending on what the needs were.
WEISS: Well with a lot of the proprietary or secret because you were still working in defense so you couldn't really talk a lot about the technology?
NICHOLS: Yes. There clearly were a lot of contracts that were in the classified arena and we couldn't even acknowledge the customer much less what was going on.
WEISS: In the first couple decades there you were the general counsel, corporate secretary. Then you became senior vice president of the Aero Systems Group. Then you were also on the SAIC Board of Directors. So since this is an oral history that's focused on San Diego, can you talk about working with your staff of nuclear engineers and scientists and technicians as SAIC grew and why did you take over this Aero Systems group? What was it and how did it function?
NICHOLS: It was the Aerospace Systems Group. This particular group had grown large under my good friend Gene Ray. He left SAIC to start his Titan Corporation. When he did that, unbelievably, Dr. Beyster put me in charge of the Aerospace Systems Group. It was something that I really enjoyed doing. I was glad I was selected to do it. It was successful. We had a good time and it prospered. But I never quite felt like I was the right person to be doing that because they were doing space defense contracts. It was really the space [science and engineering] side, the Air Force space side of our company. So I didn't know their customers when I came in there. In those days particularly, I think it was really important that the leader of any of our organizations had a real strong customer base and credibility with those customers. So we ended up hiring a guy from TRW who came in and took the role from me after that, after a year. But meanwhile, we won the largest contract in that group that the company had won. It was [a major space defense effort called] Spadex. It was won by our Los Angeles group led by a fellow named Don McPherson and his two associates, DeMayo and Holman. It was a big coup and I was very pleased about it because I had helped them with the proposal and given them the support they needed to succeed. That's where I had always felt like my talent was—getting people to do things together bigger than they can do by themselves and sort of take the sticks and stones out of the way so that they had an easier course to travel. That's the way I've operated forever. I try to get more out of the people than they'll individually get out of themselves.
WEISS: By then, it was SAIC?
NICHOLS: By then it was. SAI stood for Science Applications Inc. There was another company that was known as SAI and I think it was Systems Associates Inc. or something like that. They got in trouble. They were also known as SAI. So we literally changed our name so that we would not be confused with this company that had gotten in trouble and its reputation had suffered. We didn't want to have that happen to us because of them.
WEISS: When was the corporate headquarters built that was near UC San Diego?
NICHOLS: We still kept the headquarters downtown even after we built out there to begin with. We were at 1200 Prospect in La Jolla. I can't remember what the name of that building was now. That was where the headquarters of the company was even after we started building for some of the organizations [in the Campus Point area]. Some of the organizations moved out to Campus Point which is the area that became the headquarters for a little while. I guess it was '86, '87 when we got back from the America's Cup in Australia that we moved out to there to that facility. They had gotten more buildings and we moved the headquarters out there. Ultimately, Bob gravitated back to downtown La Jolla where he had always enjoyed being and had his own building behind there where he stayed. The rest of the corporate management that wasn’t Bob's close staff stayed out at the Campus Point area.
WEISS: I wonder later when you were doing this work with the Aerospace Systems Group, was it space technology on the civilian side as well or was it all military?
NICHOLS: That side was certainly the military side, yes.
WEISS: When Dr. Ray left to start Titan, what was the feeling at SAIC that had built a lot of loyalty to Dr. Beyster and did he take people with him?
NICHOLS: Some people did go and I think probably the basis for putting me in there was the idea that I could probably help keep them from going to Dr. Ray. It worked. We managed to be very successful. Dr. Ray and I continued to be good friends and are to this day. He was very successful in growing his company and we were successful in growing SAIC. Beyster who is not generally very fond of people [who left the company and set up a competing company]. He wanted people to stay and be part of SAIC and grow it there. He probably wasn't very fond of Gene at that point but they ultimately got back to be good friends. Gene has great respect for Dr. Beyster.
WEISS: So SAIC was an employee-owned company and somewhat unusual at the time.
NICHOLS: Yes.
WEISS: How was Titan different and what kinds of things were they doing differently than SAIC?
NICHOLS: I don't think they were doing things much differently than SAIC really. It was just that SAIC was growing and continuing to multiply and evolve. I think probably the main reason [Gene left was that] Bob didn't worry much about the organization chart. He’s spending time talking with people who worked for other people and helping them out and giving them ideas and direction. So it's hard to manage people when the head guy is coming by and telling them one thing and you may be telling them another. In fact, one of these organizations, Bob allowed them to come separate from Gene's organization because I think he thought they would be more likely to succeed and have a clearer road if they were independent. So he literally allowed that to happen. I think that caused Gene to decide he would just go where he could manage his own stuff without having those kind of things potentially happen, where you grow something and it gets pulled out from under you. That's happened and that happens at every company. Some people go with it, some people don't. We were employee-owned. We didn't start out with a great commitment to that. I think Bob thought it was fair in the early going that people who were working and making the company succeed should have a stake in the company. So on a pure fairness viewpoint that's where he was coming from. But then as he saw what impact it had on people, I mean people clearly felt a greater commitment to the company than they did if they only had a salary coming from the company. When you asked about the glue [that held the company together], it was really the stock in the company held by the employees. I think we probably paid salaries that were a little on the low side, but I think people felt like they were doing well because of their ownership and the potential for multiplying that. When a salary is $20,000 a year less when you might get $100,000.00 a year increase in the value of your company stock, that’s very attractive to a lot of people. When they left, they had to sell their stock back to the company if they had acquired the stock after a certain time in the company's history. I don't remember what year that was. Early on, we did not have to do it. If I left the company, I didn't have to sell the stock back. But the options…what's the word I'm looking for? Excuse me. I should know it. They vested over a period of years. If you had new options coming in and they weren't vested, if you left the company those options became no good. They disappeared because they weren't vested. So you couldn't sell them back because you didn't own them yet and you couldn't exercise them at the exercise price for a period of time. That was yet another glue. People didn't want to leave and lose that value. It also resulted in the company having a culture where everybody felt like they should be involved and they worried about things that normally they wouldn't worry about if they were just an employee of the company. They worried about what other people were doing in the company. Were they doing it properly and what was their reputation and was their work good? Just the policies of the company vis-a-vis the other employees. A lot of people had input into that and Bob could stand any amount of input. He liked input. He might ultimately make decisions or he may not. But he liked having a lot of people thinking.
WEISS: In 1984 then, you founded the SAIC Employee Ethics Committee. So this maybe ties in. What was that committee and why was that started?
NICHOLS: Well it was interesting. We had some issues in the company. There was a lot of freedom in the company and there were a lot of people who were marketing-oriented beyond everything else. Bob loved the marketers because they were out there spade-turning up new stuff and they were wild and woolly. He had a lot of interest in these guys. But some of them would end up getting off the reservation, if you will, and creating problems that we had to go in and solve and I was frequently the guy that went in to solve them because if they got into trouble with something they had done, then as a lawyer I was frequently sent in. The fireman to go in and put the fire out and sort out what had happened and who was responsible and figure out what should be done. I had been that forever, even up until the time I went to the Aerospace Systems Group. I didn't have the fireman job [while running ASG] but after I got out of that, I was back in the fireman role. So there were issues occasionally where the company would get in trouble with the customer because somebody had done something wrong. Maybe they had charged their time where they shouldn't have because there wasn't money in the thing that they were working on. So they simply just charged it another and they felt they worked a lot of nights and weekends and it wasn't going to damage anybody. But that wasn't the way the rule said they should do it. So we worried about those kinds of things. About that same time, the government was paying a lot more attention – and the auditors – to what was going on and big companies were running into trouble in the same way by taking on hard problems and maybe they'd be having cost overruns and they'd be trying to limit those. The government would be saying, "Well you're not following your contract the way you should be." So it resulted in the Defense Department talking with some of the top level [corporate] people that they worked with. We weren't the very biggest in those days, of course. We were sort of a middle-sized company. Jack Welch, who was the head of General Electric, became the leader of an effort to cause the defense industry to pay more attention to its conduct and ethics. It became known as the Defense Industry Initiative on Business Ethics and Conduct. He encouraged the large companies to join in this effort to get their people together to provide a liaison to this organization that they would talk about the way that things could be done better in order to keep people on the straight and narrow and what kind of education and what kind of policies and procedures you should have. This was going to be all developed through the cooperation of all these contractors, big contractors through this defense initiative. He called Bob Beyster as one of the middle-sized companies. He already had a dozen of the really big companies in there. So we were probably in the first 20 to join the effort because he called Bob and said he thought SAIC ought to be a part of it. Bob called me and asked me to get into it and find out what was going on and to come back with a recommendation. So we ended up joining as a consequence to that along with Bob's full endorsement, in fact his leadership. I became then the guy who handled the new ethics initiative. One of the things we did that people had started in other companies was create an ethics committee where ethical issues could be talked out and where people, if they had some problems with what somebody was doing in the company they had a place to go and tell somebody about it. If they didn't feel like they could go through their management chain for some reason, maybe because it might be construed to their own detriment as a whistleblower, they could come to the ethics committee. We had a hotline. We developed what became known as the SAIC credo. It was a document stating what's important to us as individuals, as a company, and as leaders in a company. We developed this credo. I don't know where it is now but it may still be around in some form at each of those companies, SAIC and Leidos, which are the two companies that spun out of SAI. I led that [ethics committee]. We put the credo together. That was, I think, a particularly interesting thing to do because if you talked to any individual they'll say, "Well of course I'm ethical and of course I know the difference between right and wrong." So to begin with I wondered as this effort began whether we would get anybody's attention. I came up with the idea after having listened to some other companies about doing this credo. I went back to the key managers. I said, "Look, here is one way we can focus on something in a way to try to develop a paper that says, 'Here's what we stand for. Here's what's important. It's our customer, our shareholders, our colleagues, our profession.' What are the standards that we want to be held to?" They bought into it. I said, "Look, I'll be the clearinghouse for this. I’ll get a draft of something put together and we'll send it to all you people. Then I'll just be the guy who moderates and collates and pulls the thing together as you talk about it and as you write about it." So we did that and it really created a great buy in from the organization because nobody took out something like the tablets and sent it down and said, "Here's your thing." What we did was we said, "You help us develop this thing and it's going to be what you think this company ought to be." As a consequence, they did that and they felt good about it and they followed it.
WEISS: From a practical standpoint, how are people are told to get customers secure contracts? Are they looking through the federal register for request for proposals? Does somebody know somebody else that they hear about? Do scientists read something in Physics Today or one of the newsletters about breaking technology? Do they just have inner tracks with the circle? How do they logistically pull together an idea for a contract and get it to evolve? Do they pitch proposals for under certain levels, which don't need to have a general RFP I'm trying to understand how this all worked.
NICHOLS: It all works in every way you just said and then some. In the smaller areas and early on in the company, you would have an area that the government was working on. Say they are trying to figure out what the radiation effects are on an instrument that's going to be on a satellite if there's a nuclear burst. Our guys would be going in and talking with them about what their interests are. Then using our guys' talent, they'd go back and create a proposal and submit it. This proposal would be proprietary. It would be something like the way that they felt was the right way to go and find this information or to develop it to the next level. Those were typically sole source. I would say to the customer, if you want that particular work done, you know who knows how to do it. You have got to come to us to get that person to do that work. That was a sole source way. Then those relationships would develop. As they finished that one and they would learn about what else is going on, they would say, "Well you know what we really ought to do now is we ought to do this and I'll go put a proposal together for you." They did that a lot early on. They would move on, iterate along and get to new areas that they read about or heard about in these technical offices. They called these unsolicited proposals. Also at the same time, there were these general RFPs coming out that they could bid on. People would pay attention to those. We had clearinghouses. Individuals would be following a customer’s plans and the customer’s office would say, "Oh we won't accept your proposal on that because we're about to put out an RFP, a request for proposal." So then the customer would put out a request for proposal. They knew who to send them to in our company and they had other people interested and they would send it to these other people and there would be a competition. Sometimes even though the parties in the government would send out an RFP, only one person would respond because everybody in the industry would know who it was that was going to do this because they were the people who really had the experience and the expertise. So there was no reason to bid. We probably did that some but we would go in and bid anyway. We even, one time, two SAI offices responded to the same RFP. I think Wayne Coleman was in the middle of this particular one. He was brought in, I think, to help resolve it. The customer ended up in this particular instance awarding two contracts to SAIC to do this work because they liked both ideas. They decided to fund both of them.
WEISS: At this point, are you working with some of the recruiting team to bring in certain kinds of engineers and technicians? Are you looking to the military veterans returning from service to try to involve them especially in the defense contracts?
NICHOLS: We did. Typically, in our early years recruiting was done by people who knew those folks in the industry and knew them from the government or knew them from another company. They had worked with them in some capacity and told them, "We're getting some business that's right up your alley. Why don't you come over with us?" Or, "You're capable of doing this kind of thing. Why don't you come get it started in our company and you can get equity and you can come in?" It was largely by word of mouth and by personal knowledge of people. We rarely got anybody through a recruiter. It just wasn't the way we got people. They just didn't have the relationships and the backgrounds that we generally wanted. Later on, more of that happened when we were having bigger things and there were fewer people who were the absolute key player at the top and there would be a lot of other people that were involved in sub-tasks in the contracts and what have you that we could get through recruiting. But by and large, in the early going, these people were so important to our getting the business that it was all done by personal knowledge, almost all of it.
WEISS: What was the relationship with UC San Diego, San Diego State and Southern California University, especially for the engineering and technical people? Were you trying to recruit locally?
NICHOLS: Well we recruited all over. At one point it was getting so expensive to live in San Diego and La Jolla particularly that we were trying to hire people elsewhere rather than here. Now if they were here already, we wanted them to work with us if they were good people. We got some of them through the university system because the Universities also would be working with some of these government offices. We ended up getting some people through the University. But our people were largely entrepreneurs. In those days and perhaps it's less so now, I think the universities did not have those entrepreneurial people. They were more academic and they were more theoretical and they hadn't had to make a profit. So I think we got fewer of those people because they weren't quite the types that we were looking for in those days. But we did do contracts with places like Lawrence Livermore and Los Alamos. There was some cross-pollination that went on as a consequence of that. I remember the Electric Power Research Institute in San Francisco, EPRI. We were helping them find better sources of energy, to create electric power more efficiently and less costly. We would have contract with organizations like that that were non-profits that were organized [to further the development of] solar energy and things like that. For example, we had contracts with SERI, the Solar Energy Research Institute. I am not remembering that we had so much going on with the universities in those days. I think later on, Bob had a lot more connection with the guys at the universities because he felt more comfortable with them—because they were technical—than he did being the leader of a big company and having to have the public exposure that leaders of big companies get. Bob just didn't like that. He was a shy guy, as I said. He never just had casual conversation. It was always about something important to him. He wasn't good at sitting around, having cocktails with somebody or going to Rotary meetings or any of that. To him it was an absolute waste of time.
WEISS: You said you didn't want to become a patent lawyer, but were you involved in any of the patenting process for SAIC? If not, who was doing it?
NICHOLS: I was. We would hire patent lawyers. But honestly, we didn't have much. The government things we were working on, a lot of times the government retained the rights to them and we didn't want to take the investment in the commercial rights anyway because it really wasn't our bag. We were more professional, technical services than we were builders of new prototypes in the early going. Yet, we did some of that and we did have some patents. I was always lamenting that we didn't pursue enough of that in order to get the kinds of value out of having something we could license that we should have. But there wasn't a lot of interest in it because it usually took longer. It took a bigger investment. Bob did not like long-term investments that didn't pay off right away. He was uncomfortable if you're going to come and spend $5 million in something before you made the first nickel. Remember, when I went to the company to begin with, he had been profitable every month. So he wasn't comfortable with making long term investments that you didn't know what the payoff was going to be.
WEISS: So meanwhile, the technology landscape and life science is changing in San Diego. You are talking about people with patents. There was Linkabit and split offs that became Qualcomm, ViaSat. Who else was here into the late '80s, early '90s that you might have had some business relationships with or just competitive situations?
NICHOLS: Yes, well I think certainly we were aware of Qualcomm but we didn't have a lot to do with Qualcomm. Irwin Jacobs was a more public guy and was out in the community and quite visible. I think Bob was uncomfortable with that. He didn’t value lunches where there were organizations like the CEO roundtable and the president's this or that. So it just didn't happen. Bob didn't encourage it among his lieutenants either. I mean I would come in and say, "Bob we need to get involved in this because we are in this community and we can't be hiding under a bushel all this time because people don't like it. They want us to be involved. They think we've got to be a community player." It was my role but my role was to keep it from getting very prolific. Bob didn't want it to get out of hand. My job was to keep control on it. When I left, Bill Roper ended up being more public because it was becoming clearer that we had gotten so big that we couldn't avoid being seen in the community. It was like the elephant in the room. So that happened more after I left in ’92 than it did when I was there.
WEISS: Now we're coming to America's Cup, speaking of 1992. Dr. Beyster enjoyed sailing and involved his family and friends. You were already talking about America's Cup in the '80s. Why did you leave at that point? You took a leave of absence. Had you sailed a lot with Dr. Beyster socially before this whole leave?
NICHOLS: Not so much. We sailed some together but not very much. But I had gotten interested in sailing through some other people in the company who had bought a boat and wanted to race it. I was fascinated by the whole idea of sailing. It just was a beautiful thing to me—the physics of sailing and the competition of racing and learning how to sail. It was just something I took to in the late '70s, really. I had only been in a sailboat once before of any size when I was in my 20s in the Air Force. I was fascinated that day when the engine went off and the boat just continued to go under sails and it was quiet and yet you felt the power of the boat. I was totally fascinated by it. When one of these people who worked with me got a sailboat I said, "Gee, I'd love to sail with you guys. I don't know anything about it but I'd love to learn and I can tell you I'd really make a commitment." So I started racing with them. Bob literally helped them buy the boat. He had a couple of people, one on the East Coast, one of the West Coast where he had helped them buy boats just out of his personal finances. Bob was involved in those things to one degree or another. In the late '70s and the early '80s, I became a more competent racer and started doing a lot of racing and winning things. Bob was aware of that and there would be some trophies would go into his office every now and then where he was showing people trophies [that had been won by company employees]. Occasionally, some of my trophies would be in there. The way the America's Cup thing came about is Bob had wanted to see the America's Cup finals in Newport in '83. We had these meetings that we called quarterly management meetings. We had them around the country. We'd go to various offices. We'd showcase that office's capability at the time we had the meeting. We might be in Huntsville, Alabama where we worked on missile development programs for the Army or we would be in Los Angeles or we would be in Chicago or somewhere else. We had a group in Newport who were hydrodynamics people and oceanographers doing ocean studies and a group in Annapolis, Maryland who did submarine work. So we decided to have – Bob decided to have the meeting in Newport while the America's Cup was going on. We chartered a big boat and some of the people stayed on the boat. But it became the place where we were having the meetings. We would go out and we would literally have our meetings and then shut them down during the time of the racing and watch the races and then go back to our meetings. That is the way we watched the finals of the America's Cup where New York Yacht Club with Dennis Conner as the skipper lost to the Winged Keel from Australia with Alan Bond's boat. I remember we were in a board meeting after that. I was on the board at the time. I was on the board like three times when I was at SAIC. A scientist guy, a guy named Clive Whittenbury who had worked with RAC and I think RAND [was also on our board of directors and was at the America’s Cup races in Newport].
NICHOLS: Clive was a thoughtful guy. It became clear of course at the end of the America's Cup when they exposed the Winged Keel on the Australian boat that they had beaten the United States with technology.
NICHOLS: Clive at the next board meeting makes a quick presentation. He says, "There we saw that the United States just lost the oldest trophy in major sports because of superior technology to a country, Australia, which has no reputation for big technology." He says, "That's an embarrassment." He said, "We could help. So why don't we offer to Dennis Conner that we will help him get the America's Cup back if he wants to do it because we can do something for them." Bob thought that was a great idea because it was using our knowledge and technology to help the country win back the trophy. To have our people involved with that he thought would be interesting for them and would be an exciting thing for company employees, in general, and would be a binding thing for the company, just knowing that we were out there trying to win this trophy back for the USA. He told Clive, "Go ahead; let's do something." Barry Shillito was also on our board and was a former Assistant Secretary of Defense for Installation and Logistics (INL) under Mel Laird, who was a wonderful guy. Barry was a member of the San Diego Yacht Club at the time where Dennis Conner was. He knew of Malin Burnham, if he didn't know him. He said, "I'll call Malin Burnham and see if they were interested in talking with us about supporting them."
NICHOLS: So Barry Shillito called Malin Burnham and said he was associated with SAI and that we had seen the America's Cup in Newport and we felt that we could help win the Cup back if there was an effort initiated to do that. Dennis had sort of fallen on hard times with New York Yacht Club. They were blaming it all on Dennis I think, Dennis Conner, the skipper. Dennis decided with Malin's help to initiate an effort out of San Diego to win the Cup back. Barry said, "Would you like to meet with us and talk about our involvement?" Malin said, "Possibly so." He said, "Let me talk to Dennis and we'll get back to you." He talked to Dennis and Dennis didn't want to spend a lot of time with it but he said, "I'll go with you." As they were pulling up to SAI in La Jolla in their car with Malin driving, Dennis said, "Malin, I don't want to spend any more than 20 to 30 minutes with these people. We'll have that done and get out." As it turned out, three hours later he left with a hand-shake deal for SAI to lead his technology effort, the design effort to go back and win the Cup. To make a long story short, our efforts did prove one of the key elements in the recovery of the Cup. Of course it takes a good crew and a good skipper and a lot of work, but the design things that we brought in and the ability to simulate sailing in a computer through the software that we had developed and we largely managed to do that by having had the experience with the Navy. We looked at the wake signature and the noise that a submarine makes when it goes through the water with its sail. If you turn a submarine upside down it looks pretty much like a sailboat with a winged keel. They adapted the software they had been developing to do this Navy work to do the hydrodynamic work that was needing to be done and we had other design tools. We had velocity prediction programs developed and pulled together a team to do that and we were successful in getting the Cup back in 1987. Then there was the debacle in 1988 where they had the catamaran against the big boat and the San Diego Yacht Club ultimately won that after litigation with the New Zealand challenger team. We then got significantly involved in the next America’s Cup competition when they were developing the new yacht [the International America’s Cup Class (IACC) yacht] that they would use for the next several years in the America's Cup. We started something called Partnership for America's Cup Technology. We had John Marshall, a fellow who had been involved with Dennis and who was a former president of North Sails running that thing. I was the corporate officer in charge of knowing what's going on with it and getting them what they needed and making sure that we were doing [what we had approved].
WEISS: To begin with in the '80s I understand that there was some of the people we've interviewed somewhat of a workaholic environment. You were very committed at SAIC.
NICHOLS: Oh very much so.
WEISS: The technology you brought in, these contracts people had to work on. Were they able to use volunteer time to put the efforts together to help with the America's Cup in the '80s and then once you took a leave of absence, how did that work? Did you involve more employees in that whole effort?
NICHOLS: There were budgets assigned to give people the opportunity to work on these jobs and they also had other jobs that they were working on besides the America's Cup. A lot of it was out of their hide, for sure. They worked nights and weekends. We all did. That's just the way the company worked. It was just a way of life. But they were excited to do that because they could see the results and they were interested in their technology being applied in this new way. It was just a remarkably good marketing tool because once we had done that, everybody was interested in talking to SAIC about how they did this. It worked to our advantage in the government. It worked to our advantage in the commercial world. We never advertised. This was the best publicity you could possibly get internationally and here you are being feted as the organization who is responsible for putting together the designs that won the America's Cup back for the United States. It was a pretty heady thing. Then as for myself, I was working with the Partnership for America's Cup Technology and sort of the corporate officer in charge of that in '90 to '92. '92 was when Bill Koch won the Cup but the organization that was the responsible that was the organizing committee for the '92 event went bankrupt. Left a lot of debts and a lot of disappointed people in San Diego. So there was a lot of aggravation [and embarrassment] at that point among the people in the San Diego Yacht Club. I was a member of the yacht club and I had been the judge advocate at the yacht club in the '89 and '90 timeframe when this was going on. I had been sort of critical of the club's effort on the legal side of the conflict with the New Zealand team. So they pulled me into the thing and I never complained about anything again. If you complain about something you are likely to discover you're going to be involved in it. So that's how I had gotten into the club's sort of hierarchy besides my own racing. They asked me if I'd be interested in being considered to run the next effort. They had had to come back and [recreate a new organization to run it after the old one had gone] bankrupt. [The yacht club leadership came to me to see if I would be interested in putting the new organization together] because they knew I had been involved with SAIC and putting new stuff together for a long time. I said, "Well that's interesting. I don't know because that would require me to leave the company." I said, "So let's not talk about this unless you're really serious because I don't want it to start getting around." So they said, "No, no; we're serious." I went and talked to Bob and said, "Bob, I'm being asked to do this." First I talked to my wife, my present wife, not the one I had when I started with SAIC. I said, "What do you think about this if I were to do this?" She said, "I think if you don't do it you'll always be sorry." So I went to talk to Bob. I said, "You know Bob, I'm really thinking about doing this. What do you think?" He said, "Well –" well of course on one hand he liked it because I'm going to go run the America's Cup and on the other hand he's not going be able to have me doing anything else that he wants done for that period of time. Anyway. He said, "Yes, but will you take a leave of absence to do it?" I said, "Well sure; that's very kind of you to offer." I said, "I know of course, when I get through with this there may or may not be a spot for me, but that's very kind." So I did. In like the October timeframe of '92 I left and started putting together the '95 America's Cup effort. It was a very interesting time. It was great fun. It was what I had wanted to do. I had reached the point in the company where it didn't look like I was going to be able to get another operating line management job like the Aerospace Systems Group for the same reasons that I had felt that it wasn't optimum during that time. But I had always wanted to run my own organizations. It gave me an opportunity to go create a new organization. We got through all of the old animosities that had been created by the last management of the America's Cup by promises that didn't pay off and people putting in money that they didn't get anything out of and law firms being left holding hundred thousands of dollars of bills that didn't get paid. We had to overcome a lot of negative prior actions. But we did and ended up having a successful event involving a lot of firsts in the '95 America's Cup, including the first women's team and the first pre-Cup keel unveiling. But we tried to get the thing more on a level playing field where it would not be viewed as being some partisan thing that you were trying to by hook or crook keep it through rule changes and whatnot. But we did end up losing the Cup to a very well run New Zealand team—they did a tremendous job on the water. So we put the San Diego organization to bed. Then I talked to a few people at the company about coming back and I didn't really see anything there that I wanted to do after having had this opportunity. I ended up being asked if I would be interested in running the Super Bowl Host Committee for Super Bowl [XXXII which was coming to San Diego in January 1998]. Would I be interested in interviewing for that? I said, "Well it sounds interesting." So I interviewed for it. I remember my wife and I were in Catalina for the week before I was supposed to be interviewed. I just wrote an outline of what I would do if I were going to run the Super Bowl, what would I do and how would it be handled. I laid the outline of how we were going to conduct the whole thing in front of [the San Diego Selection Committee] the first time I was interviewed. I think they were impressed by that and they ended up hiring me.
WEISS: Before we jump from the Super Bowl and beyond, as part of the Partnership for America's Cup Technology, did you involve colleagues from other San Diego based technology and life sciences and material sciences companies?
NICHOLS: Not so much San Diego. There were certainly San Diego Naval architects involved. Bruce Nelson, Doug Peterson, people in our own company. Those were two major Naval architects for racing sailboats, Doug Peterson and Bruce Nelson. We had Boeing and we had Ford involved and we had a number of big companies that were providing support into this effort. Most of them weren't San Diego. San Diego's life science guys were new and pretty fledgling in those days. Their stuff wasn't what we were doing. It just wasn't a life science kind of project. It was really hydrodynamics is what's going on, air and water, all part of the hydrodynamics equation.
WEISS: You did the Super Bowl and that was 1998 and you stayed there. How long did that take?
NICHOLS: I finished that off in the summer – no– it wasn't even the summer. The Super Bowl was in January or February of course, the end of January or February. I had to sort of put some reports together and close up the office. I think we probably closed it up by like May. But in the meantime, as I was finishing the Super Bowl, Malin Burnham called me and said, "We've been trying to get the USS Midway into San Diego as a museum and we've been working on it for several years and we're running into a lot of difficulties with people that you would be able to help with including the port," because I had had contracts with the Port of San Diego in both the America's Cup and the Super Bowl. Also with all kinds of organizations. The Navy, we had many contracts with the Navy and I had done a lot of work with the Navy. All of the government entities that needed to be dealt with were right down my alley. I went down and talked with them. This was '98. Ended up agreeing to go and be essentially their project manager for bringing the Midway here. At first, I had misgivings for a good while before I agreed to come forward because I worried whether this was really good urban planning like a lot of people were worried about to have this old aircraft carrier on the front doorstep of San Diego. There were a lot of people who were resisting it, but as I went in to talk to [the organizing group], they were so remarkably committed to it. They had been after it since late '92, early '93. So it was like five, six years that they had been working to get this aircraft carrier. They had no public money. They were spending their own money and they were doing it out of the goodness of their heart because they thought it would be a wonderful tribute to the Navy's history here and to the public to show how freedom really is preserved and the technology that's encased in all of that. They were just so great and they were doing the whole thing [with a few volunteer leaders]. They had been going like that for five or six years and they were just committed to do it. There were some of these people who had called me in addition to Malin. There were John Hawkins and Patti Roscoe and a fellow named Dick Burt who was a lawyer who is now dead and a few others. Alan Uke who was really the founder of the whole idea of bringing the Midway here called me. I had known him, too, from earlier during his campaign to become a U.S. congressman. One of the jobs I had at the company for many years was to handle our Washington interface with the congress and the executive department. [That’s how I knew him from my SAI days.]
WEISS: Was it always the idea that Midway would come here and be a museum?
NICHOLS: Yes. It was going to be a museum open to the public. We would convert it from being a ship into an active museum. Once we got into it and we had – Alan Uke had already gotten some surveys done that showed, even though there was some public resistance to the Midway, a huge percentage of the people thought it was really a great idea, but the leadership of the community wasn't for it for a number of reasons. My job was to go in and sort of get it moved through the process and change people's minds and solve issues that were keeping it from happening. A small group of people is always what makes something happen, right? There were several key people that were in the process who would never have gotten it without their help. I was part of that little group that managed to make it to the end. It turned out, of course, to be remarkably better than we'd ever guessed. I mean we thought about all the ways that it would be good and useful and it's just outstripped that by incredible amounts. We thought we might get $700,000.00 a year through the thing. It's doubled that. So it's a remarkable success.
WEISS: As you remain active today?
NICHOLS: Yes, I was the second chairman. Malin Burnham was the first chairman for the new museum when we first got the ship. He was chairman for three years and then I was chairman for three years and I'm still on the board.
WEISS: Have you found a way or encouraged the staff at the museum to bring in students and get them to be interested in technology and science through the ship?
NICHOLS: Oh yes. We have a strong program and it's very effective in the STEM side of things. We have a full education department and we teach teachers. We have teachers that come in and learn and get curriculum for their classrooms and they bring the kids in. They've got [lesson plans] that they've worked out beforehand about what they're going to work on and we have docents and hands on experiments showing them things and using the ship and aircraft to show them all these science principles. You've got everything from weather to currents and how the ocean works and navigation and flight. So you've got all of this at your disposal. The kids learn it because it's real to them instead of sitting in the classroom. Teachers love it. It’s just getting larger and larger. We have got new, good technology for doing things visually in the ship and we have these new classrooms. We call it Midway University. We're doing things now to reach out to other areas to give them lessons through the Midway University video. So it's worked out just tremendously. Thousands of students go through there every year.
WEISS: You have another science education institution, the Reuben Fleet Science…
NICHOLS: That's one of my favorites, yes, indeed. I felt that it was such a worthwhile organization for purposes of capturing these kids much like the Midway has done. They have a very good hands-on program, as you know there, where you get the interactive experience between the museum exhibit, whatever it is, and the person watching or looking or playing with the exhibit. That personal interaction is just a wonderful thing to cause people to remember what's going on rather than reading it in a book. You really get a hands-on experience of how things happen. I thought, "What better way can we get young kids attracted to the sciences before they get scared of them and turned off at about the seventh or eighth grade? If we can capture their interest when they're in the third, fourth and fifth grade they're apt to be more prone to come and continue that and when they grow up and they go to school we can hire them. If they're not around, if they've gone into journalism, if they've gone into medicine, we're not going to get them. So let's see if we can't do that." I talked to Bob about supporting the museum. He agreed to do it and we gave them some money. Not very much, but more than we had given anybody else in a charitable way out of the company at that time. People could do things on their own, for charities and things like that but early on the company didn't really do much [charitable giving] out of company funds. For example, we had people in offices all over the country who needed money to do charitable things and if we took company funds and gave them to a San Diego institution it didn't really help those people outside [San Diego]. It was more like we were headquarters and more important than they were. It was very hard to get money out of the company to do stuff locally unless we did it in many other places as well in similar amounts and those amounts weren't generally available. A lot of times things just didn't happen. This was one of those things that did happen. I went on the board of the Reuben Fleet and I was on it for like 13 years or something like that. I still work with them. We're now working on this hall that I mentioned, this Hall of Science and Technology Leadership that's going to be developed at the Reuben Fleet. I'm on the committee to help with that. It’s like the Midway in that regard. It's a wonderful way to get kids interested in science, technology and engineering and math through interaction with the exhibits.
WEISS: You were mentioning that hall. You hope to have put together and named in honor of Dr. Beyster and his wife?
NICHOLS: I hope so. I don't know that it's going to happen. It’s an expensive proposition but we're working on it.
WEISS: You also are a director emeritus of a Professional Service Council, which is a Washington, D.C. based trade association. Tell me how that organization functioned and how long did you stay active with that?
NICHOLS: Well I was active quite a lot up until the time I left SAIC in '92 and never really went back after that. When SAIC regressed a little bit, after the '95 America's Cup, they supported teams that would try to win the Cup back from New Zealand. One team they supported was a group called America One and it was Paul Cayard's team out of San Francisco. They ended up getting me to go and go to work with Cayard to try to raise the funds necessary for him to win the America's Cup down there. I worked with Cayard in the 2000 event. Now why did I mention that? I regressed on that because we were just talking about what?
WEISS: We were talking about the Professional Service Council.
NICHOLS: Ah, the Professional Service Council. The time that I was working with the company, a lot of my time was spent looking at policy matters that related to our kind of company. There was an organization that got started called the Professional Services Council and it was representatives, leaders of companies that sold professional services, professional technical services by and large. Places like Braddock, Dunn and McDonald and PRC and Computer Sciences Corporation and A.D. Little and many others that are technical services companies like SAI. We created this group called the Professional Services Council to be their representative. We supported the Professional Services Council with funds. They tried to impact policy that would affect companies like ours. Sometimes the government would decide, "We don't want to have these technical services companies doing government work because we want to have the employees ourselves and we don't want to be reliant on industry." But the fact of the matter is, many people don't want to work for the government. Many are entrepreneurial. Things have to move faster for them. They don't like all the red tape. They don't like the hierarchical system and they probably can't get paid enough in there. It is all based on, as I mentioned before, longevity versus capability frequently in the civil service system. It is just not going to happen. But occasionally Congress who doesn't necessarily understand all that would decide they were going to get rid of us. We had to have an organization that helped explain to Washington what we did and why it was necessary. That was a big thing. There are lots of other smaller policies like compensation and labor rules and things of that nature that this organization would address and then try to work out reasonable solutions with the government. It was literally our trade association.
WEISS: In terms of other businesses here, you went on the board of something called Space Micro. What does that company do? I see they are finalists in the 2016 San Diego Manufacturing Awards. We're interested kind of in material sciences, too. So how is this company doing and were they a small start-up here that's just been growing?
NICHOLS: They were. Space Micro Inc. was started by a fellow named Dave Strobel. It turns out that Strobel had been at SAIC and indeed Dave and I were in the Air Force together back in the late '60s, early '70s. So I'd known of Dave for a long time and occasionally we would see each other after he left SAIC and started another company before this one. They sold out and started this one. I had an investment with a fellow who had formerly been a partner of Dave Strobel's, a fellow named David Czajkowski whose father worked at SAIC and David C. did too when he was younger. I had an investment with David Czajkowski in another company and they ended up merging it into Strobel's company and he went to work with Strobel as president. Strobel is the CEO and the [Chairman of the Board]. Their meat and potatoes largely is making small radiation-hardened radios for satellite use in harsh atmospheric conditions. They do a very good job of it. They are a small company, probably $15, $16 million [annual sales] right now but with a lot of capability. It's sort of a niche capability and they do it very well and they do it less expensively. They've got good designs and a bunch of good people. The company is going to do I think pretty well. I got together with them and they were running into some trouble. They called me and said, "Can you come and help?" I wasn't going to ever be on a profit making board anymore. I wasn't going to – but here I am now on another profit making board but it's not something I will do normally. If it hadn't been old friends, I probably wouldn't have done it.
WEISS: So what do you see? They're San Diego based with all their staff here and engineers?
NICHOLS: Yes.
WEISS: What do you see is the future of space technology in terms – and how do you think San Diego's future looks in that realm?
NICHOLS: I think pretty good. I mean we've got people like ViaSat attacking the one side of it with their products. Then the Space Micro’s of the world – the world is going towards these mini satellites, the M-I-N-I satellites. They are these little clusters of satellites and they're inexpensive and they don't stay up long. So people who can provide reliable communications equipment to those satellites over short periods of time inexpensively are going to do very well. I think at least Space Micro is positioned to do well in that world. There's now much more commercial activity than there was, of course, and that may well be where the future is. Certainly a part of the future is there. How much the government will be involved in it other than as a piggy-back on a payload on these commercial rockets, I don't know, but clearly it's getting less expensive. These commercial organizations are finding ways to make things reusable and therefore cheaper. So it becomes more economical for people to use space assets than it's ever been and it's only going to get better.
WEISS: What about drone technology and its impact in terms of manufacturing here in San Diego and future applications?
NICHOLS: I don't have much knowledge about the drones other than I worry about the ethical problems associated with using drones in remote ways where somebody can sit in Colorado and kill somebody in Afghanistan because I just wonder whether the people would operate the same way. You don't want to subject people to the terrors of going in and fighting wars hand to hand but at the same time I think we have to think about the ethical implications of those kinds of things. I worry about the ethics of people in organizations and I put money into Texas A&M, my undergraduate school, to work on the better programs for teaching how to deal with ethical situations.
WEISS: What about in terms of networking and other start-up companies here in San Diego? Were you ever involved in CONNECT or EvoNexus? They have incubators and accelerators. What do you think of that whole concept in terms of keeping the San Diego vibrant and the future for the whole technology?
NICHOLS: I think it's great. I was not ever heavily involved in CONNECT but we had people who were. Bill Otterson in the early days did a tremendous job of getting that stuff moving and trying to connect the people out of the universities with the people in the technology arena. I think it's just done very well. I think we have a very collaborative attitude generally in San Diego and a lot of it I will lay at the table of Connect for having gotten that started. There has always been a lot of collaboration between organizations in certain areas, the life sciences people and the space people and what have you. Of course these incubators are just wonderful because that's just the place, as the name implies, where things get started and grow out of an incubator. It's inexpensive to get started and you have these areas where people of like interests can talk to each other because their offices are close by and you have a number of great investment organizations in this town who are watching for the new things coming out. So they get exposure to the investors. We've got a very, I think, robust system for a little out of the way town, San Diego, in the corner of the country.
WEISS: Where are the technology hubs today in San Diego?
NICHOLS: Where are they?
WEISS: Yes.
NICHOLS: Well of course in North County, Torrey Pines area and all across the north, Miramar, out in there where Qualcomm is certainly. Even downtown, now the Downtown Partnership is fostering these younger companies and helping to get them going.
NICHOLS: Well Mark Cafferty is the head of the Regional Economic Development Council and they represent a countywide, regional wide group of companies that are banded together to try to make business conditions better for those companies, bringing in new companies, making the existing companies have fewer impediments to growth. There are a lot of technology companies associated with Mark's organization. Then there is the Downtown San Diego Partnership. That's headed by a lady named Kris Michell, K-R-I-S and then M-I-C-H-E-L-L. She's a former chief of staff to the mayor and has done a great job in understanding our downtown businesses. They represent the downtown effort. I think one of the sleepers in this whole technology development area is the Downtown San Diego partnership. We tend to identify things with science parks that are out in the suburbs but I believe if you talk to Kris Michell you'll find out there's a lot going on in these incubators downtown and other businesses that we haven't really mentioned.
WEISS: If you look back from your years of experience with SAIC and Dr. Beyster and your association with him, how did you see him change over the years in terms of his management. You said he was always shy and what his visions for the future were and how the SAIC going public, if you feel comfortable commenting on that.
NICHOLS: Well I didn't see Dr. Beyster change much in his general attitude about things over all those years. He got older. He was certainly wiser. He certainly continued to grow in many ways. I used to say early on, "We can't continue to run this company like this and grow," and we would still run the company like that and it would still grow. I must have said that ten times and it still grew. So I stopped saying it. But Bob's methods worked. He was very much of a hands-on man and he stayed that way. He wanted to be close to the people who were doing the work. If there was something interesting they were doing, he'd be right in there hearing about it or pulling them in to have them give presentations. He did not change that much. He was a great believer in employee ownership when he saw how it worked. He thought it was fair and he thought it was a tremendous way to keep people working together when they might have otherwise said, "To heck with it," and gone off and done something else. So he saw it as a wonderful glue and I did, too. It was the thing that kept SAIC moving. As for public market, Bob always felt like the people that made out in the public market were the people that kept a lot of stock and they had big, big money in the organization. It was to their personal best interest to take it public because they got multiples on the stock that they had and they'd become wealthy and they'd go off and enjoy life. Bob's life was working in the company to the point where when he started out he had close to 100 percent of the stock. When he died, he had less than two percent of the stock. He was quick to give – we had stock program committees which I sat on many times and sometimes the committee would not be interested in giving a particular individual more stock because we were worrying about that person—maybe felt that he hadn’t really produced enough yet and worried about whether they were on the right track. But Bob who was excited about these people and would take his own stock and give it to them. So if he couldn't get it through the committee, he'd do it himself and take it out of his own shares. So he wasn't a believer in this whole idea of a public market. I think it cost him a great deal of personal pain when the company went public after he retired.
WEISS: In terms of the SAIC today, do you involve them in some of the educational efforts now and try to involve staff at the Fleet or at the Midway or other organizations you're active with?
NICHOLS: You know, at this stage, it's 2016, and I haven't been around the company much after Bob retired, anyway. I don't really know a lot. The company is now broken into two pieces. It's SAIC and Leidos. They are two different companies. They moved the headquarters from San Diego to Virginia. As a consequence of that, they're less visible now than they even were before in the community. So there's really no corporate management here to interact with on local stuff. I am sure SAIC people – and I know some of them still – are engaged in charitable and community work here in San Diego. There are lots of people still here, probably 4,500 I would guess or something like that in San Diego. Maybe fewer at this point. I don't know. But not that many fewer. I know that there is a culture of individuals doing things in the company because they're that kind of people. But I don't see an organized effort here like we used to have when they were involved with things like volunteers for the America's Cup, volunteers for the Super Bowl. I used to be able to go to the company and pull out a handful of very smart volunteers and figure out what it is that they were excited about doing and let them go do it. But I just haven't done that in recent years because the people are mostly gone that I knew and the management is not here.
WEISS: Are there any other comments you want to make about your time or any people here?
NICHOLS: Well one thing that we didn't talk about and I have very little knowledge about because I was in Australia when most of this was going on – excuse me, I was in New Zealand working in the 2000 America's Cup with Paul Cayard, the America One Organization. But the company had the responsibility for issuing the domain names for the Internet. It was like something we spent around $5 million on, something of that nature as I understand it. It went on to be sold later on for a huge amount of money, in the billions. The people who were most involved with that, as I understand it, are a fellow named Mike Daniels and a gentleman named Bob Korzeniewski. I would think that they would be just a wonderful two to interview because it was the Internet. To digress a little bit—when the Internet was first becoming an interest out of DARPA in the old days when this started in the government, Bob became interested in it early on and was trying to encourage people in the company to get involved and figure out – because it was going to be something important. It was going to really change the world in his view. He didn't make a big deal out of it but he kept just trying, urging people to explore more about it and figure out what was going to happen and try to be a leader and participant which the company did. One of the ways we did was through this Network Solutions that became an enormous economic benefit to the shareholders of SAIC.
WEISS: That is another great area to be explored now. Well thank you very much. We really appreciate your time, your contributions, your expertise in terms of your times with SAIC and beyond with all the different organizations and businesses you've been involved with. So thank you.
NICHOLS: You are quite welcome.
END OF INTERVIEW