WASHINGTON -- A report soon to be released by the Optoelectronics Industry Development Association extols the virtues of closer connections between industry and the US Department of Defense, with particular emphasis on small-business participation. According to the report's author, the Defense Department can help ensure that future technological developments meet the military's needs by using federal dollars to direct early R&D. The report also warns that, in the past, rigid accounting practices have inflated project budgets. Small companies are better suited for military-specific component development, it says, because they are more flexible and easier to manipulate than larger corporations. The department, which helped develop the report, said it is consistent with the Pentagon's Science and Technology Initiative, a program that pays private industry to develop military technologies.