JFCOM's high-tech jobs may be heading to Florida

Hampton Roads leaders trying to save the Joint Forces Command from extinction are looking nervously to the south.

Florida, already in the running to snag one of the Navy's Norfolk-based aircraft carriers, may also turn out to be a beneficiary of Defense Secretary Robert Gates' plan to close the Norfolk-based military command known as JFCOM.

As Gates and his staff look for ways to save defense dollars, perhaps the most vulnerable piece of JFCOM is the command's modeling and simulation functions. Those high-tech operations, used for training, experimentation and development of new warfighting concepts, have been the catalyst for a booming cluster of related businesses near JFCOM's operations center in northern Suffolk.

The nightmare scenario for local leaders is that those programs will be dismantled and consolidated in Orlando, Fla., which has an older, more deeply rooted and much larger concentration of modeling and

simulation operations.

Each of the military services - Army, Navy, Air Force, Marines and Coast Guard - has a modeling and simulation command in Orlando. Clustered nearby are more than 100 related companies employing some 17,000 people, with a regional economic impact estimated at $3 billion a year.

JFCOM and its spinoff businesses, with an estimated annual impact of $1 billion, pale in comparison.

Gates and his staff are almost surely examining the potential savings that would come from a consolidation in Orlando, said Joseph Bouchard, a retired Navy captain who was involved in the establishment of JFCOM as a National Security Council staffer in the late 1990s.

"It doesn't take much effort to figure out," Bouchard said. "One of the secretary's goals is to reduce the money spent on contractors, and that's a lot of contractors - a lot of very expensive contractors. If he can eliminate that, potentially that could be a significant cost savings. I would be astounded if they're not looking into that."

Roughly $500 million of JFCOM's $700 million annual budget is spent on contractors.

Bouchard, a former commander of Norfolk Naval Station and state lawmaker, is a JFCOM booster, believing that the command has helped transform U.S. fighting forces to meet 21st century threats. As for the merits of shifting its high-tech operations to Orlando, he said he has no opinion because he hasn't seen the Pentagon's analysis.

But he said he is confident that Orlando boosters have made sure Gates' staff is aware of the modeling and simulation capacity there.

"I'm sure they're doing it discreetly," he said. "They're not going to be blatant about it. They don't have to be. The deck is stacked in their favor."

Thomas Baptiste, executive director of the Orlando-based National Center for Simulation, which promotes the industry there, did not return a reporter's phone calls.

John Sokolowski, executive director of Old Dominion University's Virginia Modeling, Analysis and Simulation Center, one of JFCOM's biggest spinoff enterprises, said Hampton Roads leaders can make the case that JFCOM's modeling and simulation work is unique.

The individual military services' commands in Orlando focus primarily on procurement of training systems for their own troops, Sokolowski said, while JFCOM's emphasis is on joint force training.

"The expertise to do that is very specialized and resides here in Hampton Roads, not in Orlando," he said. "So it would be very difficult and, I think, very costly to try to replicate that anyplace else."

The Defense Department has not yet spelled out which components of JFCOM will be retained, moved or eliminated.

James Koch, an economics professor and former president of ODU, said he doubts that the estimated 10,000 jobs associated with the command and its spinoff businesses will all go away.

Even if they do, those jobs represent only 1 percent of Hampton Roads' 1 million-plus jobs.

"When all is said and done, I'd guess that we'd lose fewer than half that number - fewer than 5,000," Koch said. "And that's a hit, there's no question about it. But it's not the end of the world."

Job losses on that scale would be more than were lost in the closing of Ford Motor Co.'s Norfolk factory, but fewer than will be lost if the Navy follows through on its plan to move a carrier from Norfolk to Mayport, Fla., later this decade.

Even without JFCOM, the Hampton Roads economy will remain heavily dependent on military spending - dangerously so, in Koch's view.

Federal spending on military installations now tops $10 billion a year in Hampton Roads, more than in any other metro area in the country. The direct and indirect effects of military spending account for nearly half of the region's economy, ODU economists estimate, up from one-third a decade ago.

Direct Defense Department spending in Hampton Roads nearly doubled from 2000 to 2009, due in large part to more generous military pay and benefits.

The cumulative increase in direct local military spending during that period, $8.6 billion, is more than 10 times JFCOM's annual budget.

The trend holds lessons for local leaders, Koch said.

"Looking long term, I think we have to assume that peace is going to be declared," he said. "I cannot imagine that we are going to remain in large numbers in Afghanistan forever or that we'll have quite the same level of commitments in the entire Middle East that we have now. I'm not sure that's an electable platform in 2012.

"I am a great supporter of the Department of Defense, but we cannot depend upon the DOD increasing its expenditures every year, or even keeping them at the same level.

"The lesson is that we need to really work on diversifying our economy."

Bill Sizemore, (757) 446-2276, bill.sizemore@pilotonline.com