“How does STEC keep itself operational during its early years? Wasn’t the US trying to cut down its navy?”
Yes and no. No on the cutting down its navy (in context of STEC). Here’s an example of something to keep in mind.
The budget of the US Navy in 1953 was 13 billion. STEC, in the above document, received an injection of 27 million dollars. Its actual operational cost (being a lean operation and all) was maybe about 30 million, or the cost of maybe one U-2 or half of an Essex carrier.
Putting this into perspective, STEC takes a measly 0.22% of the navy’s overall budget. This is basically chump change and is well within the estimates of Navy R&D (at the time).