Two issues holding the Pentagon back from commercial “deep tech”

After cashing in from relatively simple internet applications like Facebook, Snapchat and others, entrepreneurs have started tackling harder problems. “Deep tech” requires significant capital and long R&D timelines, potentially creating a big impact. Private investment in deep tech grew 81 percent between 2015 and 2018, the Boston Consulting Group found, and includes 4,198 U.S. companies…

 

Two issues continue to stymie the DoD’s reach into commercial deep tech. First, defense agencies are spreading small dollars across a large number of companies…

 

A second issue for deep tech companies is access to shared services and enterprise tools. “If you raise $2 million, you can’t afford to go spend $500,000 on some expensive equipment,” said John Melas Kyriazi of Spark Capital.

That was from my article in Defense News, “Can the Pentagon tap into a soaring ‘deep tech’ ecosystem?” Of course, other problems abound. Cybersecurity regulations, supply chain risk management, pricing policies, and other issues continue to make the DOD an unattractive customer. Here’s a good comment from the insightful Christopher Monsey:

Wrt to shared resources – one under utilized authority is 15 USC cooperative R&D agreements (CRADAs).  AF entities with more than 200 engineers/ scientists can be designated as Federal labs (eg AFRL, the Air Logistics Complexes, AF Sustainment Center, etc) then enter into CRADAs where the AF can provide shared access to AF or DOD resources including facilities, equipment, tech data, inventions, software, materials, supplies, and experts/engineers/scientists to enable collaboration and developmental work.  Can’t provide money but can use CRADAs in coordination with other authorities that do provide direct funding.

CRADAs are only available from the technology labs. Unfunded Other Transactions contracts can be used to a similar extent by the program offices. Labs have some equipment and personnel, program offices have some access to users, but many of the most important enabling technologies are held at major prime contractors.