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News | March 8, 2022

DOD Wants to Shepherd Small Business Innovators

By C. Todd Lopez DOD News

The Defense Department needs innovation now — and too often the best new technology from America's small business innovators dies before it can become a program of record for the military, said the undersecretary of defense for research and engineering. 

A woman is seated in front of a computer monitor.
Heidi Shyu
Heidi Shyu, undersecretary of defense for research and engineering, speaks to defense writers via Zoom at the Pentagon in Arlington, Va., Jan. 13, 2022.
Photo By: Marine Corps Sgt. Taryn Sammet
VIRIN: 220113-D-ZY556-0024C

Heidi Shyu said the DOD spends over $2 billion annually on Small Business Innovation Research, or SBIR, in a variety of technology areas. 

"I'm personally engaging with small businesses, small business roundtables to understand the impediments in doing business with them and what are the impediments that they see that we can help them out [with] in terms of removing the roadblocks," said Shyu said yesterday at the National Defense Industrial Association's science and technology conference in Hawaii. 

One road block the department hopes to overcome involves how some technologies that originate in small business are unable to make it to fruition due to lack of funding. 

A combat vehicle drives down a dirt road.
Tactical Breaks
A joint light tactical vehicle demonstrates its braking capability in the driver's mobility course in the Boblingen Local Training Area, Germany, April 22, 2021. Large combat equipment is often made by major defense contractors. Many small businesses, that can also bring new technologies to the Defense Department on their own, are also involved in contracts to build such equipment.
Photo By: Jason Johnston, Army
VIRIN: 210422-A-RY767-0041C

"We are submitting a legislative proposal to enable more funding of multiple tranches of Phase II funding," she said. "Phase I funding is usually pretty small, $50 to $75k over a period of six months — basically to flesh out your concept." 

The second phase, she said, is for a small business to think about developing a prototype. She said funding there typically ranges around $1.5 million dollars. 

"After Phase II, SBIR ends," she said. "Phase III is up to the program of record, the services, to fund, so they have to catch the football. The problem here is typically the technology's not mature enough at a [technology readiness level] six to enable a successful transition into a program of record." 

An angular ship traverses a waterway under a large bridge.
USS Michael Monsoor
The Zumwalt-class guided-missile destroyer USS Michael Monsoor passes under California’s Coronado Bridge in San Diego Bay, Dec. 7, 2018. Large combat equipment such as this is often made by major defense contractors. Many small businesses, that bring new technologies to the Defense Department on their own, are also involved in the contracts to build such equipment .
Photo By: Navy Petty Officer 1st Class Jacob I. Allison
VIRIN: 181207-N-BT947-1059C

What that means, she said, is that promising technology might make it through Phase II, but never make it to Phase III — adoption by a military service — because it's not quite ready yet to make that transition. So, any hope a small business might have of putting their new technology into the hands of service members comes to an end. 

"What I would like to do is have Congress approve to allow us to form multiple tranches of funding — Phase IIa, Phase IIb, Phase IIc — so we can continue to mature the technology and bridge over, I call it 'the valley of death,' for small companies," she said. "This way we have a much higher probability of helping them to transition into a program of record." 

A military aircraft flies across a blue sky creating condensation trails from its wingtips.
Lightning Flight
An F-35 Lightning II assigned to the 48th Fighter Wing at Royal Air Force Lakenheath, England, flies over Siauliai Air Base, Lithuania, March 2, 2022. This fifth-generation aircraft is forward deployed to multiple locations in the Baltic region to support NATO’s collective defense and enhanced air policing mission.
Photo By: Air Force Senior Airman John R. Wright
VIRIN: 220302-F-KY598-1114C

Shyu also said the office of research and engineering is redesigning its website to make it easier for small businesses with ideas to make inroads with DOD. 

"We are also in the process of rebuilding the USD [undersecretary of defense] R&E [research and engineering] website ... to help small business, especially, to navigate the Byzantine DOD," she said. "A lot of the small businesses, they have no idea who to even go talk to ... it's this giant wall in front of them. And, hopefully, once we get our website up and running, they can be able to Google and input whatever product that they have to help them figure out who to go talk to."