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DOD Wants to Shepherd Small Business Innovators

By C. Todd Lopez

WASHINGTON (March 08, 2022) -- 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.

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

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"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.

"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."

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."

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."

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