Army programs designed to attract non-traditional companies have been met with enthusiasm. According to a senior official, Army Applications Laboratory received 5,500 inquiries in 2020 from commercial firms. xTechSearch has worked with over a thousand companies in roughly two years, 60 percent of which had previously never worked with the government, exposing the Army to technologies it would not have otherwise seen. In addition, the Army’s Industry Opportunities Brochure has been the most downloaded document on the Army’s website for the past 1.5 years, proving valuable to Army personnel and companies alike. Therefore, and despite popular perceptions that commercial technology firms do not want to work with the Pentagon, thousands of companies are eager to collaborate with the Army.
… The Army has attracted companies with the allure of easily entering a lucrative new market vertical. The reality is somewhat different. Nearly every company interviewed found business development with the Army to be more difficult than it imagined. Companies pointed to two salient challenges: identifying relevant Army opportunities and engaging with potential Army customers.
That was from Jeff Decker and Mrinal Menon at War on the Rocks, Bringing the Army to Innovation. Interesting throughout. I think the authors are correct that search costs are high in the DoD, and often you have to be “in the know” to figure out what events and personnel need to be pursued. Using Beta SAM for solicitations is also not easy, as the authors find:
The company would need to properly filter over 300 Army search results on BetaSAM for a term like “wearable battery” to understand relevance and eligibility.
Presuming that those search costs are minimized, I think a bigger challenge awaits. The DOD succeeded in providing small contracts for proof of concepts. But the next step is harder, because even if the program officials want to scale up the technology, it is the contracting officer’s duty to more-or-less compete out the requirement and find the best supplier/price. That means taking the new entrant’s ideas and putting it into an RFP for everyone to see. Then, the company will likely have to compete against mid- or large-sized incumbents which have tons of money to spend of bid and proposal costs (all fully reimbursed by the government, a major advantage that the new entrant does not).
I can imagine dozens of headaches like this for a new entrant, even if it has an amazing capability that the government wants.
This is a major frustration I have with the SBIR programs in the DoD. The 20 years of data protections afforded to awardees are intended to preclude precisely the phenomenon of discovering an innovation through working with a small business, only to then award the real dollars for fielding to a prime. Unfortunately, convincing contracting officers to take advantage of the sole source justification an SBIR contract provides is very difficult.
Right. From the view of a KO, going to a sole source award from the innovative small business is a huge risk. You get no reward if it goes right, maybe a kudos, but your job is on the line if they don’t perform. By contrast, no one will blame you for running a competition and awarding to a prime. No one lost their job from giving a contract to a prime, even if the prime fumbles the ball!