The military wants to hire more small businesses, but the process can be overwhelming

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

Of the hundreds of billions of dollars a year that the Pentagon pays for products and services, one large portion it flows to established military contractors like Lockheed Martin, Raytheon and Boeing. Military leaders want to direct more of the contracts to smaller companies.

In the last decade, the number of small companies with Pentagon contracts has declined, Farooq Mitha said in congressional testimony at the beginning of this year. He heads the Defense Department’s Office of Small Business Programs.

“This is a national security and economic risk to our nation,” Mitha said. “We risk losing national mission-critical capabilities, innovation, and strong supply chains.”

The military is trying to appeal to small businesses in part because they make up the vast majority of businesses in the US, Mitha said. The efforts reflect a broader change through Department of Defense agencies to collaborate with outside organizations that may not yet have strong ties to the military.

Military leaders said that smaller organizations provide key advantages.

“The biggest is the risk,” said Col. Martin Salinas, director of operations for the Air Force’s innovation arm, AFWERX. “Those big bites at risk, with cutting-edge capability, are likely to come from the big small American companies that are trying cool things.”

Salinas’ job is to help bring those companies into the Air Force fold through things like Small Business Innovation Research (SBIR) Program. It helps government agencies offer different levels of financial support to smaller companies that develop technology or products that an agency wants.

With AFWERX, Salinas manages more than $1 billion a year in this type of funding, the largest SBIR budget in the Defense Department, he said. It is equivalent to about 1,600 contracts per year.

“We understand that not all of those 1,600 contracts are going to transition to a capability, but if we cast a wide net, you have a better chance of finding the next big thing,” he said. “If we’re funding that small American business, ideally our adversaries shouldn’t.”

Challenges to enter

But the process for companies that want to tap into this cash pool can be cumbersome and frustrating.

Patrick Hitchins learned about that when he first approached AFWERX in 2018 about his company’s technology around data tracking from wearable fitness devices.

Hitchins, chief executive of Austin-based FitRankings, said it was well received but didn’t make it any easier to win a contract.

“The people are amazing; they are the greatest asset of the armed forces,” he said. “The systems in the military, the policies and the technology itself is the most frustrating…and the bureaucracy.”

It took Hitchins a couple of months to register his company to work with the government before he could apply for a contract, he said. His first request was denied.

Hitchins said the process has improved a lot in the last five years, but it’s still a challenge to overcome the way the military has traditionally handled work with outside proposals.

“You hear this phrase a lot: ‘Driven by requirements,’” he said. “So if you have a great idea and you want to work with the DOD, if they don’t have a requirement for what you have, you typically can’t work with the government.”

Salinas acknowledges that this traditional thinking has stymied progress in the past.

“Good ideas weren’t always welcome,” he said. “If there wasn’t a requirement, it was usually left out.”

But the mindset has diminished, Salinas said.

He adds that there are a lot of innovative ideas out there and that he is working to build demand for them within the Air Force. That means tightening the development schedule and helping the military see that a new solution could do most of what it’s looking for and probably at a better cost, Salinas said.

The military branches have also begun accepting proposals from companies that may have a solution to a problem that has not been explicitly identified.

Hitchins credits this “open issue” route as the reason he was able to get his foot in the door and ultimately secure a contract for provide the US Space Force with a new platform for measuring readiness and fitness.

However, that contract has now ended.

“Sometimes the technology outpaces the policies or the rules and regulations, and then the policy has to catch up,” Hitchins said. “It can be a painful process for that to happen.”

Hitchins said he is working with the Air Force under other contracts and is also seeking business with other branches of the military.

“It’s almost like you need to hire a consultant”

Open topics allow more companies to propose ideas to different branchesbut it can also be difficult for those companies to know what to include in the application.

“There’s not a lot of room for creativity to convey a broader vision of the product,” said Ashish Patel, director of DroneDomo. “You just don’t know who is reading the requests on the other side; not sure ‘is this the right way to frame it?’”

DroneDomo designs and builds “drone ports”, small structures where drones can be stored, charged and maintained. It’s turning to the military as a lead because the FAA has strict regulations on civilian drones.

“We really felt like we had an innovative product and we wanted to find a way to use it,” he said. “The military has the ability to potentially circumvent some of the needs of regulators.”

Earlier this year, Patel’s SBIR application was rejected without much constructive feedback, he said.

“Tell me why this is not a good application for the military,” Patel said. “I don’t know how we can change our proposal. It’s almost like you need to hire a consultant to navigate this.”

who do you know

Patel came away from his experience with the impression that winning military contracts requires having connections within the military.

Small business owners who have won contracts with the Pentagon don’t necessarily disagree.

“A lot of our success comes from the fact that we know some of these people, or that over the years they have seen or heard of our work,” said Craig Brooks, president and chief engineer of AP/ES Inc. .

Brooks’ St. Louis company has obtained SBIR contracts since the late 1990s to provide engineering and analysis to determine how long aircraft fleets will last.

Before starting AP/ES, Brooks was an industry consultant. He has found that sometimes developing an innovation is the easiest part of working with the military.

“We were able to make the technology, but were we able to convince the other people to use the technology?” he said. “There is not a single Navy, there is not a single Air Force. You are dealing with hundreds of entities that have their own controls, procedures and processes.

And those points of contact change frequently due to turnover in the military ranks, Brooks said.

“You have to re-introduce yourself every few years, you have to re-educate them,” he said. “They are constantly on the move, because that is the nature of the military.”

Despite the frustrations and challenges, Brooks and the other business owners said the SBIR and Defense Department programs are positive and bring new technology to the military.

“[The military] it’s a customer worth going through some growing pains, because it’s for everyone’s benefit,” Hitchins said.

This story was produced by the American Homefront Project, a public media collaboration reporting on military life and American veterans.