investment | The Contracting Education Academy

January 20, 2021 By cs

Pentagon launches online marketplace to pair small firms with ‘trusted’ investors

The Defense Department on Wednesday rolled out a new initiative meant to protect its future supply chain from investors that might seek to turn U.S. intellectual property into foreign military capabilities.

The “trusted capital” program — first authorized by Congress in 2017 — has already been up and running as a pilot effort in some pockets of DoD. Officials announced Wednesday they had quietly expanded it to a wider pool of vendors and investors in December via an online marketplace, and are now actively seeking more applicants.

The program works by pairing “capital providers” the Defense Department has vetted with small and medium-sized companies who are working on dual-use or military technologies, but need influxes of cash to get their products off the ground.

The main objective is to keep those firms from partnering with investment funds that exist primarily to take an ownership stake in a U.S. company’s intellectual property and then transfer it to China or other potential adversaries, said Ellen Lord, the undersecretary of Defense for acquisition and sustainment.

Keep reading this article at: https://federalnewsnetwork.com/defense-main/2021/01/pentagon-launches-online-marketplace-to-pair-small-firms-with-trusted-investors/

Also see DOD Launches ‘Speed Dating App’ Connecting Vetted Capital With Tech Companies at: https://www.nextgov.com/cio-briefing/2021/01/dod-launches-speed-dating-app-connecting-vetted-capital-tech-companies/171423/

November 13, 2019 By cs

Failure is an option for DoD’s experimental agency, but how much?

Since 2015, millions of dollars have been invested in the Pentagon’s Defense Innovation Unit, the agency watched as some of its projects fell flat, and only about 23% the organization’s completed projects ended up in the hands of troops — but the thing is: DIU is completely fine with that.

DIU’s success statistics, delivered in a July report card to Congress, are the first long-term numbers to come out of the Defense Innovation Unit (formerly the Defense Innovation Unit-Experimental) since its inception.

The metrics, which also address time-to-contract and other areas, highlight a vexing dichotomy currently playing out in the Defense landscape: How can the world’s largest military field state-of-the-art technologies faster to counter China and Russia without compromising oversight and opening the door for waste?

While successful DIU experiments ended up, or will end up, as technologies that will protect service members from drones and detect cyber vulnerabilities on DoD networks, 77% of completed prototypes DIU invested in failed to make it to contract or have yet to make it to contract. That leaves millions of taxpayer dollars on the table, which can sometimes be a hard sell for lawmakers. Congress remains at least marginally skeptical of the program built to convert private cutting edge technology for military use.

Keep reading this article at: https://federalnewsnetwork.com/defense-main/2019/10/special-report-failure-is-an-option-for-dods-experimental-agency-but-how-much/

January 22, 2013 By AMK

Contractors spoke, SBA listened: Rules for R&D funds altered

Contractors with outside investors can tap research funds set aside for small businesses, thanks to a new rule from the Small Business Administration, though an outcry from the small business community led to some restrictions.

First, some background. As reported in May, the SBA proposed allowing small businesses that are majority-owned by venture capital and private equity firms or hedge funds to particulate in two popular programs: the Small Business Innovation Research Program and the 1992 Small Business Technology Transfer Act. Those small business have not before qualified for these programs.

The Small Business Innovation Research program, or SBIR, was established to strengthen the role of small businesses in federally funded research and development. The Small Business Technology Transfer Act, knowns as STTR, requires federal agencies with R&D budgets of more than $1 billion per fiscal year to fund small businesses.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2012/12/firms-sound-off-on-new-rule-allowing.html?ana=&page=all

October 26, 2012 By AMK

Analyst: It’s a myth that market competition drives down weapons cost

Critics of Pentagon waste point to the uncompetitive defense industry — dominated by a handful of conglomerates — as the reason why the U.S. military overpays for weapons. If only there were a truly competitive, free, market, prices would come down, experts have argued.

Reality often trumps that theory, however. Some of the most hair-raising Pentagon acquisition programs — Future Combat Systems, Expeditionary Fighting Vehicle, Joint Strike Fighter come to mind — were competitively awarded after lengthy evaluations and technology trials. Yet, these programs today are held up as poster children for Pentagon acquisitions gone awry.

A respected defense budget analyst now offers a numbers-based hypothesis for why competition in military acquisitions is overhyped as a cure-all for the chronic cost overruns in Pentagon weapon systems.

“While competition has an intuitive appeal as a way to drive down costs in defense acquisitions, this is not always the case,” says Todd Harrison, a senior analyst at the Center for Strategic and Budgetary Assessments, a nonpartisan Washington, D.C., think tank.

“Competition can, under certain circumstances, drive up acquisition costs by incentivizing contractors to bid higher,” Harrison contends in a paper titled, “The Limits of Competition in Defense Acquisition,” published last month by the Defense Acquisition University.

Keep reading this article at http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=935.

The Defense Department on Wednesday rolled out a new initiative meant to protect its future supply chain from investors that might seek to turn U.S. intellectual property into foreign military capabilities.

Since 2015, millions of dollars have been invested in the Pentagon’s Defense Innovation Unit, the agency watched as some of its projects fell flat, and only about 23% the organization’s completed projects ended up in the hands of troops — but the thing is: DIU is completely fine with that.

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