Small business and startups are front and center

Boosting small businesses and software for DoD are priorities for the Biden administration and their nomination for the Defense Department’s technology efforts.  Heidi Shyu, nominated for undersecretary of defense,  recently introduced her priorities to modernize the military during her confirmation hearing. She stated, “In order to rapidly transition the latest software, we need to have an open architecture that isolates the software from the hardware then allows rapid user testing.” (Defense Systems May 26, 2021)

Shyu told the senate that DOD should be investing so that development and procurement are 70% of their costs for a new weapons system. Shyu proposed buying more emerging tech such as artificial intelligence, synthetic biology and hypersonics rather than investing in older systems. Shyu said, “today, sustainment makes up 70% of total weapon system cost, with development and procurement making up 30%.” (ibid)

During Shyu’s hearing, she mentioned small businesses, especially startups working on new technologies, repeatedly. Shyu feels they are necessary for the Defense Department’s success. Shyu did not lose sight of the inability of the acquisition system to shift prototypes into programs. Shyu plans to institute a clear transition path. (ibid)

Shyu said, “part of the reason there is a valley of death for technology is that a lot of the technology programs are being developed by small companies, and unless you had the foresight two years ago to understand that the technology is going to be mature within two years time, by the time you get the money to buy that technology it’s two years old now.” (ibid)

Shyu said, “I saw a six-person company that’s developed any type of fuel as input and the output is a DC-plug. Those are the types of creative, innovative companies we need to nurture. And they are struggling to figure out who to talk to in the DOD.” (ibid)

Are you an innovator or a small business looking to work with the Department of Defense? Give us a call.

 

 

 

 

Matchmaking Money

The Department of Defense (DoD) is concerned that Chinese firms investing money into U.S. tech companies could provide the Chinese with a military advantage. A new effort to counter this effect, called the Trusted Capital Marketplace, is launching in upcoming weeks. At least 50, generally small, innovative tech companies without the sophistication to obtain capital seem to  fall under this umbrella. The Trusted Capital Marketplace will match these companies with capital investors, circumventing the “red tape” they’d normally go through to obtain the much-needed capital. (Government Executive, May 2019)

Over the next month, investment goals will be developed and put in place. The current plan is to set up a website infrastructure where providers of trusted capital can aggregate with those businesses looking for capital. (ibid)

Back in October of 2018, the Pentagon said they would invest in domestic manufacturing in an effort to keep the U.S. from relying too heavily on Chinese and other foreign made parts for American weapons. The next month,  Commerce officials released a list of “specific emerging technologies that are essential to the national security of the United States,” with the desire to keep these technologies based and “backed” by U.S. companies. The infrastructure should be in place by the end of June for these companies to receive the capital they need to work with DoD.

Questions about the Trusted Capital Marketplace and how your firm can obtain much-needed capital? Give us a call at 301-913-5000.