An F-35 at Nellis Air Force Base, Nev. The Air Force Small Business Innovation Research program paid a small business to create an F-35 abrasion-resistant coating that lasts 20 times as long as a previous coating.

An F-35 at Nellis Air Force Base, Nev. The Air Force Small Business Innovation Research program paid a small business to create an F-35 abrasion-resistant coating that lasts 20 times as long as a previous coating. Air Force / Airman 1st Class Mikaley Towle

The Pentagon Must Pay More than Lip Service to Innovative Companies

The military has poured billions of dollars into the Small Business Innovation Research program — yet resists putting its fruits to use.

America’s economy generally rewards “creative disruption” — Amazon, Uber, and Tesla are great examples. The Defense Department, by and large, does not. Thanks to decades-old patterns of politics and protectionism, smaller innovators are discouraged from entering DOD markets, a condition that imperils our nation in an era of rapid technological change by adversaries in every operating domain. Should we fail to transform how the DOD conducts business, says the 2018 National Defense Strategy, we will soon field a Joint Force armed with systems irrelevant to our defense.

First, we need to understand why the DOD resists large innovations. Current DOD stakeholders are vested in long expensive acquisition cycles, with established budgets, personnel, and protocol. Small entrepreneurial companies are not and, if they had the opportunity, would rush to offer alternatives.

There is, in fact, already a mechanism within the DOD that would provide for entrepreneurial innovative disruption. The Small Business Innovation Research, or SBIR, Program is a congressionally authorized effort to attract small high-technology companies to federally sponsored research and development. Designed to foster innovative disruption, it feeds more than $1 billion annually to thousands of capable innovative companies. Yet it has produced few signs of significant creative disruptions. The SBIR Program acquisition rules offer agencies extraordinary flexibility to rapidly scale SBIR innovations. All competition requirements for commercializing SBIR innovations are satisfied by the competitions to originate and validate the innovations. The law even requires DOD agencies to use program awardees to the greatest extent practicable when continuing with R&D or production of their SBIR-derived technologies. Yet despite this extraordinary acquisition flexibility, the DOD fails to grow SBIR companies to fill critical needs in its industrial base. 

This failure is because the DOD plays “small-ball” with its SBIR Program. Agencies are happy to let SBIR companies originate and validate their innovations, but less enthusiastic about letting them grow to displace current incumbencies some of which are within the DOD—clearly a conflict of interest. It is also not apparent that the DOD understands the intent of the SBIR Program or the boom in innovation that would result if SBIR companies were given the support to run with their innovation. The shifting of significant market share to companies who identify and deliver innovation is the only effective competitive pressure to dislodge current incumbencies from protecting the status quo.

It is telling that despite about 2,000 SBIR Phase I and II awards annually over the last two decades totaling nearly 40,000 awards and about $15 billion, and with extraordinary Phase III acquisition preferences that enable DOD agencies to grow SBIR companies around their SBIR-developed technologies, we do not find the expected growth of SBIR Phase III companies. In fact, I would challenge anyone to name a “home run” SBIR company, one that is driving innovation and change throughout DOD as they exist in commercial markets. 

Even more frustrating are the reports from SBIR companies that DOD agencies use the Program to “out” and “vet” ideas — then pursue them with incumbent providers. This is in direct contradiction of the purpose of the SBIR Program and discourages companies from engaging with DOD. Several companies also make it to Phase III only to be left without a customer, a pathway, or an advocate to fully bring their technology or product to the DOD commercial market. Once an innovation has been developed and is being pursued within the DOD, it is essential that department commit to use that company to the greatest extent practicable. Without this assurance, companies will not engage or succeed. But a DOD culture that fosters and rewards innovation will attract the best and the brightest entrepreneurial innovators.

When pressed about why the DOD and the services are not enthusiastically pursuing SBIR innovations, agencies provide spurious reasons. They say helping SBIR companies to commercialize their innovations in the DOD market is a slippery slope to a future vendor-locked arrangement. The argument is a red herring: an unlikely and extreme hypothetical conjured up to protect incumbent providers and current processes. We need to worry more about engaging our country’s best innovators in national security and less about whether the small business will become a monopoly.

This week, I will speak at the Reagan National Defense Forum about ways to foster this essential innovation. Make no mistake: the competitive advantage that is narrowing between the U.S. and China and Russia will have real world consequences to Western civilization. If we want to protect the freedoms enshrined in the Constitution and Bill of Rights, then we need to defend them. Part of this defense is truly engaging small-business innovation to provide the necessary leaps in technology that will keep our competitive advantage, make the DOD more efficient, and ensure that the U.S. continues to dictate the terms of warfare. I look forward to working with senior DOD leaders, members of Congress, and industry executives to help maintain U.S. superiority at land, sea and air.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.