Just a glimpse

Ever wonder what it takes to make it through the valley of death? Break your corporate interest into the Department of Defense (DoD)?

Well strap in. It's not easy.

Organizations like Defense Innovation Unit (DIU) and the US Air Force's (USAF's) AFWERX would love to tell you that they are making things easy for small businesses to get into the defense industrial base (DIB). That's partially true. They do make it easier than the "traditional" way to enter into the DoD. But they hardly make it easy. Because easy isn't an option for you, and it's not an option for anyone you are going to work with in the government. It's not an option for them either.

First, the folks at Rogue are amazing for building this:

How To Sell Technology to the Government | Blog at Rogue

A short framework for thinking about selling technology to DoD

Blog at Rogue

Literally one of the best blogs on the subject I've ever seen, even if there are a few shortcuts in there, and some things weren't explained to the level of detail necessary (like the unwieldy Joint Capability Integration & Development System (JCIDS) process - which is very germane to all requirements generation, and involves some rather absurd staffing processes depending upon the organization and/or dollar figures involved, or how hard it is to get something on the program objective memoranda (POM) because of what the program element monitor (PEM) parade really is like).

Bottom line is if you're a small business or a non-standard looking to get into defense, it's not easy. A lot of us came from defense and then headed to industry thinking we knew a whole lot about... Whatever it is we did. But even if we came from finance or contracting or at the other end of the spectrum as a Special Operations Forces (SOF) snake-eating warrior, the truth is that the government is massive and the acquisitions system is so ridiculous there's an entire University dedicated to teaching government folks internally how "the process" works. Very few people know how it all works.

To really make it, the Rogue blog's use of the "fairy" as a way to get a Congressional add on the markup is kind of missing the forest for the trees in how the National Security Counsel --> President's Budget process works. Congress actually micro-manages a ton of the line-items regardless of how the President's Budget is submitted, so building runway through that process is NOT a bad idea, but it is horrible to do that without doing the other things mentioned on that blog.

Ideally, you find a program manager (PM) who:

1. Has access to end users that can help develop your project. If you're selling a built thing, this is more like business development. If you're selling software though, this actually means a PM willing to manage agile DevOps (or, more likely, DevSecOps, because the authority to operate (ATO) process is going to force that function) and put your designers and engineers in front of operators for iterative feedback loops and managing the design thinking and agile software processes.
2. Has access to agile contracting. Winning a small business innovation & research (SBIR) award isn't easy. You have to do a lot of paperwork to even be eligible. Then it's a hyper-competitive process, especially for the Army and Air Force/Space Force who have broadly opened up the Open Topic process and generate massive numbers of solicitations. The Air Force has a very "bullet-proof" evaluation system from a protest perspective - the evaluation process is open to the entirety of the Department of the Air Force (DAF), so there's no favoritism, but there's also no semblance of objective relativity between evaluations. Something rejected one cycle can be excellent/excellent/excellent the next cycle, based entirely on random number generation for who will see them and how competent that evaluator is. Basically, it's a total crap-shoot. For the Army, there is a SMALL dedicated team of evaluators. They are all very competent. They are also grossly overworked, so your pitch to them has to win them over in less than a minute of screentime. Wall of text? Doesn't matter if you've figured out how to win the entire war, you're going to lose the submission when those poor souls only have a few seconds to evaluate if your proposal is even worth reading. However, it's worth it to win a competitive award because once you've won, you're "in." As the Rogue blog showed in step two, building that runway, getting a SBIR itself isn't much. $50k-$1.25m but given the expected output, you won't really make any money on said SBIR. The value, if you find the right PM, is that those SBIRs can lead to a Phase III Indefinite Delivery, Indefinite Quantity (IDIQ) award. That itself gets you nothing, monetarily. But it unlocks a ton of doors.
3. Has access to funding mechanisms across the future years development plan (FYDP). As the Rogue Blog notes, if you're not scratching an itch for a funded and validated requirement that's already been POM'd for but isn't programmed against an awarded contract, there's basically only budget dust remaining to fund you, even if you have that mythical Phase III IDIQ. And finding a POM'd requirement that isn't programmed against an awarded contract is harder than finding Jimmy Hoffa's body. Even new requirements with huge buzz like Joint All Domain Command and Control (JADC2) already either have primes assigned against them or consortia multi-award IDIQs, or else programs like Replicator don't have real money nor Congressional permission to do any new-starts (and in spite of DIU claiming to be innovative, are trying to only solve Replicator problems at the Acquisition & Sustainment level by using programs with funding and a landing zone inside an existing program of record (POR). If you've already got a POR, you already cracked this nut and can stop reading now - you won.)
   
   So how do you solve this? You attack the very top of the pyramid, the Congressional add, with an existing IDIQ in place and an end-user already lined up. Given funding, flexible PM, a valid contract, and an end-user that will put your stuff in use, you can actually solve real-world problems and get paid for it handsomely. But that still won't get you a POR.
4. Access to a requirement process and ability to validate those requirements against those who write the POM relative to your end-user. If you've managed to get a Congressional add, an IDIQ, an end-user who is actively using your product and contributing to its development, and have a PM who put that together, you'll have one or two lucrative years out of the program, but sustaining it will require more bureaucratic layers. You need to be attacking that front at the same time so that as your SBIR + Congressional Add on an IDIQ funding dries up, you've got a POM'd allocation on the FYDP out in budget year + 2 already lined up. Ideally, it'll be a seamless transition (you'll keep using the same IDIQ until the ordering period ends) and, voila, profit.

The Rogue blog kind of failed to fill in a ton of the queep. When they said the PM was busy, and that's why it was hard to find the right person, they weren't kidding. I've been that PM. My phone blew up on nights and weekends, there's companies I passionately care about who care about the warfighter as much as I do who are running the risk of bankruptcy, and there is no magic wand to save them or solve that warfighter's problem.

For this next part, I'm going to explain a problem and a solution from beginning to end, twice. One is how the process works for established Defense primes, who have billions of dollars in research and development funding and are publicly traded. We'll use a fictional radio company, and we'll call them K4Teeter, because I wouldn't want to offend any real companies with even remotely similar names. The second is for a small business making software defined radios, and we'll call them stagrd because that sounds made up and I couldn't find anything at stagrd.com, and their process dealing with AFWERX and DIU trying to work on Replicator.

K4Teeter

Background: the company K4Teeter makes a plethora of radios in use by the DoD, including the AN/PRC-711H (again, a totally fictional radio, not based on anything real). They're a Fortune 500 company with several billion in assets, and have acquired many smaller companies over the years as well as large defense-oriented mergers (K4 Technologies and Teeter Communications were once rivals but merged several years ago). Importantly, they have significant investment in research & development (R&D) that allows them to do internally funded R&D (IRAD) that gives them a lot of advantages over innovative small businesses. This is not their smartest move with their money however. While their engineering core of the company is managed by traditional engineers who are radio and electronics geniuses, many of them working their entire careers between academia and K4Teeter itself, their entire business operations and especially their sales team are mostly made up of military veterans with experience in the jobs that actually used these radios. This isn't to be confused with senior leadership in the company who is also military veterans, except they are those with senior command experience and lots of time at higher headquarters and the Pentagon. Everyone knows their part and knows how the game is played. This is where K4Teeter's investment is really advantageous.

So, if K4Teeter internally develops some new technologies - lets say, they abandon their previously internally developed network technology to link their radios together digitally (their infamous "High-frequency Enhanced Linear Network Alignment Waveform 2 - or "HELNAW2"), and instead license a vastly superior mobile ad-hoc network (MANET) made by a small business in San Diego. Additionally, K4Teeter develops a fairly crappy new mission manager software by iterating on the previously built crappy mission manager software they had built for HELNAW2, just supporting the basic MANET features they licensed. They also shrink their radio and make it more power efficient.

What this allows K4Teeter to do is play the slow term big payoff process...

The first step is to deploy their business development (BD) team and generate buzz at multiple layers. They'll seed prototype radios into some cutting edge SOF units, and they'll demonstrate them at some selected large units, while also talking to higher headquarters (such as a Major Command (MAJCOM) in the USAF) and discuss with their requirements and budget folks (the A5 and A8, respectively, in USAF). Simultaneously, they'll discuss this with the system program office (SPO) up at the acquisitions executive, and get the program adopted. It will take a long time; from the first radio being built to going to the warfighter, it's several years.

1. Radio technology developed by an engineer. May take years. While this is going on, older radios are still being actively sold/upgraded/maintained in parallel business units. We're not going to count the IRAD time, just the government time, so this timeline isn't relevant.
2. BD team begins generating buzz at the end units, the MAJCOM and the SPO. This is a slow burn - will take between 90-180 days. During this time, the initial requirements documents are going to be written.
3. Nothing will actually move until the requirements working group (RWG) convenes. In the active-duty USAF, this is usually done once per year for each given mission design series (MDS), and is done on an arbitrary date selected by the A5. In the Air National Guard (ANG), it's usually done in conjunction with the ANG Weapons & Tactics (WepTac) conference. At the RWG, they will have a submission, either as a Form 1067 - or as some sort of amendment proposal to an initial capabilities document (ICD) or capabilities development document (CDD), though the latter two are unlikely. Usually the 1067 will get brought up, everyone around the room will debate it - whenever a group of operators are put into a room to discuss equipment or tactics, techniques and procedures (TTP), if you have six operators, you're going to get at least seven different opinions - and they'll decide whether the requirement is valid or not. For step 2 + 3, we're now well over six months, and probably close to a year where zero income has been generated for K4Teeter.
4. The validated requirement there at the RWG is a begrudging first step. It now must staff through O-6 levels at the MAJCOM (and not just one signature; for example, it may have to staff across the A3, A5 and A8) and the SPO. This will take over a month by itself, sometimes multiple months. We're at 8-14 months at this point.
5. Assuming the requirement is validated, it doesn't have any money assigned unless there's an existing pot set aside for tech refresh. Most well written 1067s will be validated as a requirement (unless a similar requirement was already validated). What is rare, is for money to be allocated anytime soon. In all likelihood, the new requirement will fall down the pecking order, or, if you're lucky and technology is amazing, this will trigger a re-programming request, which itself will take months. For K4Teeter, they've played this game and know what the available POM looks like relative to their existing tech-refresh budget. Most likely is that this will result in the A3, A5, and A8 discussing the priorities for the upcoming POM request that will take place during the PEM parade. The A8 will then build out a quad chart for the radio and speak on behalf of the requirement as all the MDS representatives speak before the portfolio leads.
6. Because K4Teeter knows what funds are available over the relative timeframe of the upcoming FYDP, and because their executive leadership team also knows how to "massage" the senior leadership staff at the MAJCOM A5 & A8, as well as at Headquarters, Air Force (HAF) A8 (the HAF A5 isn't relevant to this type of acquisition), they will get POM'd for. Over years +2 from the budget year.
7. The radio capabilities themselves from the 1067 will be based on existing technologies with very small incremental updates. Things like better size, weight and power (SWAP) features, or, like as mentioned, one new MANET waveform. The 1067 itself won't be written for the actual K4Teeter radio because legally it can't be. But it'll be written for these very specific capabilities. Basically, they'll write the 1067 for "tissues" because it'd be illegal to write the word "Kleenex" but it'll be obvious they want Kimberly-Clark version of tissues. This works well for K4Teeter two reasons:
   1. It means that the differences between the existing radios used by the operators are small; it doesn't "upset the apple cart" and the large group of retirees working in the SPO and at the A3, A5 and A8 will all be comfortable with the requirements and funding. They'll push it forward because this is both new and better, but old and comfortable. And most importantly, they won't have to do any hard work.
   2. Because they allow the same types of messages to be transmitted corresponding to given military standards (MIL-STDs), use most of the same waveforms other than maybe one or two new features (that have buzz from some venerated SOF operators who got to experiment with them out at Nellis Test & Training Range (NTTR) or at the National Assessment Group (NAG)), and because the features of the radio directly map to joint capability areas (JCAs), the 1067 requirements can be easily mapped. This will mean the 1067 can also be used to derive key performance indicators (KPIs) and key performance parameters (KPPs) which allow for test plans to be managed by existing traditional test organizations relative to existing technical standards for developmental testing (DT) and existing concepts of operation (CONOPs) for operational test (OT).
      
      Of course, it unfortunately also means it doesn't really improve things significantly for the operator. These radios aren't game changing.
8. Some low-rate production units will be acquired later in this year and sent through the operational test & evaluation (OT&E) process. This entire process will take several months. First, radios will go through DT to see if the radio actually does what the 1067 and the associated KPPs relative to the JCAs work. Then, they'll be used in OT by test experts against canned CONOPs also mapped against the JCAs. Depending upon if it's conventional or Special Operations Command (SOCOM), the standards will be different, but K4Teeter's efforts will most likely pass; the bar is low.
9. With a passing OT&E record, the following year, the incremental improvement will begin moving forward. There will be an authority to operate (ATO) process taking several more months while the procurement funds eventually trickle in during year +2 from the original ask. Ultimately, K4Teeter will begin getting paid relative to their efforts about three years after they begin their efforts moving out of engineering and into production.

This requires a LOT of funding from IRAD, a full-court press against multiple levels of the team - from end-user operators up through various O-6 and above leadership roles from a comprehensive BD team, and a large amount of funds to pay all of those employees for years prior to the large payoff at the end. Of course, that profit will fund the next cycle, and the successful meeting of contractual goals will be reflected on their Securities and Exchange Commission (SEC) filings which will raise stock prices and generate the real income by which the K4Teeter executives are measured against as their options mature and investment portfolios flourish. Their government income isn't trivial, but their modest profitability relative to government expenditures is justification for great stock performance.

One way to think about it is that K4Teeter has, through decades of bi-directional influence between the defense industrial base (DIB) and Congress, have created the policies for the Federal Acquisitions Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS). DIB companies like K4Teeter have actually mastered the acquisitions system as seen below:

stagrd

This is a much sadder story, not just because the company has so many more pitfalls, but because the potential capability for the warfighters is so much higher and yet will most likely go unfulfilled. Due to the nature of JCIDS and the FYDP, evolution of system development is based on slow evolution. Commercial growth is based on being market disruptive, and if that benefits the warfighter, it often does it at speeds the DIB primes don't operate at.

We'll imagine that stagrd is a software company with experience with commercial off-the-shelf (COTS) radios in various pieces of hardware, especially cell phones and wifi terminals. They've managed to create software defined radio (SDR) software that uses the various radios in modern cell phones to solve an extremely difficult US military problem, and have been highly successful in their lab with their tools.

Their ability to even break into government at all is going to be a wild ride. They may get exposed through a collider like AFWERX used to host but has now quit doing, they may be "discovered" by a market researcher for some of the focused organizations like National Security Innovation Network (NSIN), or they may end up facilitating an "accidental" discovery by a regional mission acceleration center (MAC) that focuses on specific technologies or regional companies working to get into the dual-use space. Other scenarios include sending BD team members - which may also be the founder and the Chief Executive Officer (CEO) given the size of the company - to events like South by Southwest (SXSW) or Fed Supernova (FSN) in Austin, to SOF Week in Tampa, the Air Force Association (AFA) National Convention in Washington, DC, or any number of similar events. Seeing Federal attendees like AFWERX and DIU at the Consumer Electronics Show (CES) in Las Vegas - which overlaps with the Combat Air Force's (CAF) WepTac that has its own industry nights dominated by defense primes - are all probable locations for innovative tech to interact with the DoD. For the purposes of this blog, we'll assume that the CEO of stagrd has a family friend who knew someone that worked at DIU five years ago and is going to reach out that way. The stagrd CEO will email his friend asking if he knows if anyone in defense would be interested in this technology, and given the game-changing capabilities, the friend will find his old contact from DIU on LinkedIn who will then get a few blurbs in his email and be very excited. Of course, he's since moved on to a line unit as a pilot, and actually has zero impact in the acquisitions community, so will reach out to a friend he knows that still works at DIU in a different portfolio.

Eventually, there will be a contact between stagrd's CEO and someone in DIU's cyber portfolio, who will see the value of the product. However, this will not result in any instant traction. It'll lead to a series of nearly comedic incidents.

DIU itself has tragically little money for anything not related to Replicator in 2024/2025. But even then, Replicator is a minefield. The ability to do a "new start" is hamstrung by policy from Congress and interpretations of statutes by the Office of the Undersecretary of Defense for Acquisition & Sustainment (OUSD/AS). Because stagrd's technology, while incredibly novel and low-cost for communications isn't being directly procured by a system program office (SPO) associated with Replicator, and because the product isn't fully realized for government use, it requires investment that DIU simply can't facilitate. The relationship internally at DIU between the technology facing portfolios - who actually are brilliant and understand both market capabilities and warfighter needs - and the procurement arm that are beholden to traditional program executive offices (PEOs) is dramatic and borderline unworkable. It's why no real compelling "game changing" delivery for Replicator has occurred yet, even though the original developers of the CONOPs included acquisition plans, and still haven't delivered anything relevant to the US INDO-PACOM unified combatant command (UCC).

DIU's technology team will however see the value in the program and try and get it into the DoD. They'll connect stagrd to NSIN, if applicable to a regional MAC, and to service based innovation organizations. The service organizations are suffering however. As of late 2024, the US Navy is gutting NavalX and moving all relevant functions to the Office of Naval Research, and essentially killing NavalX. AFWERX has taken a similar tact and doubled-down on the SBIR program, as the AFWERX Ventures team continues to excel at organizing and executing the US Federal Government's largest SBIR portfolio, but they have effectively terminated "X organization" style leadership throughout the organization and reverted to a micro-managed organization. In particular, the Prime program that enjoyed success with Agility Prime operating in real grand-power competition space with the US's primary near-peer is now a shell of its former self, not even requesting any POM'd funds for fiscal year (FY) 2026. The Spark portfolio continues to try to work on innovation, but internally, and does so with a desperately tiny budget. AFWERX as a pathway to transition itself is effectively dead as of 2024.

Without a landing pad in the services due to AFWERX abandoning innovation beyond just SBIRs, and without a budget capable of executing this type of technology at DIU, stagrd still needs to play well with both as there are no other real alternatives. If stagrd wants a path forward, it's going to get really ugly. The smart answer is to look at organizations like SOCOM and their multiple subordinate elements, albeit probably not using just SOCOM's tools. The simple answer is their close partner, SOFWERX, an organization with a partnership intermediary agreement (PIA) relationship to the SOCOM UCC. However, while SOFWERX does help carry out some contracting for SOCOM, specifically for their Joint Special Operations Command's (JSOC's) capabilities development cells which acts fairly autonomously with their own budget.

To try and look at the "options" for a small business like stagrd, let's examine the landscape of innovative organizations within the DoD and what their advantages and disadvantages relative to a small dual-use software-focused tech company like stagrd.

This list of 17 isn't even remotely complete relative to the options that stagrd has available, but it's pretty representative. What's both accurate and unfortunate is that none of them are really going to be able to help them or the warfighter and the company in any meaningful way. They all have a niche, and none of them are truly good at transitioning dual-use technology into an actual acquisition program. Even offices created for that purpose like the USAF Rapid Sustainment Office (RSO) are myopic in both mission scope - focused on A4 - and in what part of the funnel they serve.

In fact, the "funnel" itself is poorly defined. AFWERX Spark built one funnel to show how grass-roots efforts, whether they originate internally within the Air Force, or from industry, have to navigate in the innovation space.

For stagrd to succeed, they need to adopt a multi-faceted plan of attack across multiple organizations and efforts to bridge gapped funding, extend capabilities to warfighters in timelines that are operationally relevant - something that SPOs in general don't do - and still manage to make enough money to have their warfighter support efforts be worthwhile. Basically, they need to do an "all the things at all the times all at once" effort like K4Teeter did above, but they need to target different organizations because they don't have the funds to be able to absorb all the costs going through the PEO driven process that K4Teeter has mastered. PEOs are not effectively organized for small business to work with government which is why most small business successes with the government are as a sub-contractor to a Defense Prime that has mastered the art of working with the inefficient and inept government PEOs.

As stagrd is a software company with a dual-use capability that isn't based on AI or big data and doesn't need to be hidden behind a SAP wall, we can eliminate NSIC (because they are focused on low-TRL hardware), CDAO (because they are focused on AI/big data), JSOC and the CIA (the juice won't be worth the squeeze getting their tech back out from behind the wall if it's viable). If they don't already have a USAF Spark Cell plugged into them and advocating for them, AFWERX Spark won't be of any value given their lack of budget or ability to actually transition anything to a POR. The CIA may prove to be a viable pathway for funding - through In-Q-Tel - but won't actually be a very valuable in getting sustained income from a customer as they are a venture capital (VC) partnership ran by the US government for dual-use technologies, and not a transition partner to any portion of the DoD even if they have a lot of "ins" with the intelligence community (IC) in general. Organizations like OUSD/RE's Innovation & Modernization or Critical Technologies don't scale or transition; at best they can offer bridge funding if there is an interested PEO with no money available on the POM for the next two years, but that's also facilitated by SBIRs. With NavalX no longer really functional in the way a Defense "X" organization should facilitate operations, there's no clean path for innovation at all with the Navy at this point (which corresponds to how their program offices normally operate and eschew innovation writ-large; there's a reason the Navy has the reputation about innovation it does in the DoD.) This means really, on this list, AFWERX Ventures, DIU Tech Portfolio, Army xTechConnect, and SOFWERX are their short-list of viable pathways in the front door.

But for stagrd to succeed, this is only one part. They need to basically do what K4Teeter does, attacking multiple different parts of the acquisition machine at once, but they have to do it on a tinier budget, and have to pick completely different routes that aren't designed to work together by default.

1. Enter into SBIR rounds with Army xTechConnect and AFWERX Ventures. Really, with any DoD organization doing SBIRs. Ideally, find an applicable specific topic as the competition is less stiff and there's more likely knowledgeable evaluators on the specified technology stack than open topic which is much more competitive. If all else fails, they should go for open topic, but if so, stagrd will probably be better served by opening the wallet to work with a SBIR specialty firm. There's a laundry list of ones to work with. All things being equal, they will significantly improve stagrd's likelihood of victory in a SBIR evaluation cycle.
2. Solicit warfighter input for technical development and work the 1067 process (USAF) or the engineering change proposal (ECP) process (USA). This has two positive outcomes for the company, albeit neither of them come with any money:
   1. Customer feedback to improve their product.
   2. A pathway to get that customer to be their advocate for getting the requirement validated.
3. Find a hard charging PM at an innovation unit with:
   1. contracting authority.
   2. connections to the end-user warfighter.
   3. something better than a bad relationship with the appropriate PEO
      
      Parts a. and b. will be easy; most innovation units either have their own contracting shop or good relations with contracting agencies, and most good PMs at innovation units actually come from the field and have lots of contacts with the operator world for whatever career field they came from. The PEO relationship on the other hand is a little more difficult. Not only do most innovation unit PMs have little to no PEO experience, many of them - as well as in many cases, the entire given innovation unit - have very poor relationships with many of the PEOs. Of course this isn't standard either, but it is something that isn't terribly uncommon. To PEOs, innovation units can be seen as annoyances or threats depending upon the level of myopathy they suffer from, and as PEOs aren't incentivized to work with innovation units in any way, there's no external reason for them to work with said PM. So, stagrd needs to "shop around" with innovation unit PMs to find one that hopefully has a good PEO relationship. If one can't be found, AFWERX Spark can help in the Air Force assuming a Spark-cell relationship can be cultivated (see step 5.)
4. Visit the applicable warfighting command and the appropriate subordinate units at the requirements section and help their active duty personnel develop a warfighter needs statement.
   1. Ideally, stagrd will collaborate with the warfighter from step 2. above and the warfighting command to prepare documentation for formal evaluation.
   2. There is no mistake in going too many places or to too many units with this, especially in a congested market. For stagrd as an example, this isn't a terribly competitive landscape, but for say, a small unmanned aerial system (sUAS) vendor, getting through to as many end users as possible is ideal. It's going to be a packed group of organizations.
   3. At the command level, such as the MAJCOM in the USAF, the active duty personnel will be more amenable to bringing in innovative new technologies while the civilian personnel are more entrenched in their ways and prone to following the PEO's lead. To think of the split of active duty personnel at the headquarters and even at the PEO vs. the civilians at each, the civilians are beholden to a strict set of union rules, a convoluted incentive structure, and aren't incentivized to innovate. At all. Ever. The active duty folks are taking a break from their warfighter tour, probably miss their friends, and are desperate to feel like they are contributing to the fight they've been pulled away from to be stuck in PowerPoint hell. They need stagrd almost as much as stagrd needs them.
5. Engage with a grass-roots innovation section at the edge (not at headquarters.) In USAF, while AFWERX Spark is mostly toothless for transition, especially for software, the Spark cells themselves can help facilitate small-scale transition (they too have no appreciable ability to help grow into a POR, but can help create runway space and facilitate connections.)
   1. Avoid Spark Tank. The team (SAF/MG) that runs it isn't terribly useful to innovative dual-use companies. While Continuous Process Improvement (CPI) is vital, and teaches important skills to Airmen like Lean, Six Sigma, and uses the term innovation a lot, they are not disruptive and instead, evolutionary. The nerve the office once had to say they "own" innovation was laughable given that by definition, they are literally the antithesis of innovation.
      
      More importantly, SAF/MG has an absolutely atrocious record of transitioning any Spark Tank finalists into a POR, whether said finalists received AFWERX Spark assistance or not. This is a spiral into a self-licking ice cream cone.
      
      With Spark Tank, the winners aren't selected based upon user feedback from the warfighter, or from validated requirements by warfighter representatives, or by technologies vetted by deeply connected scouts or technical experts, but rather is based on who has the best pitch deck and presentation relative to senior leader wish lists.
      
      After that, when the general officers (GOs) select the winner, the applicable PEO is told to move forward and help make the winning Spark Tank project a POR, but no money or formal requirements or shifting of the POM across the FYDP is provided. Thus, it never actually moves beyond the stage at the AFA Warfare Symposium in Colorado into the warfighter's hands. stagrd doesn't want to get stuck in this position.
   2. AFWERX Spark can offer the Spark cell some vital access through the Refinery program for the appropriate PEOs. This may be crucial depending on the relationship with the A5, as coordination and cooperation between the MAJCOM and the PEO may not exist, or, more than likely, it does, but not on a timeline of cooperation that benefits the company and the warfighter. Moving a project into a Spark cell will open other doors into AFWERX Spark (the Refinery), into HAF (through the SSG) and lead to other opportunities, though none of these are the "promised land." Additionally, if stagrd can't find an innovation PM up above in step 3 that has a good PEO relationship, finding a good Airman to PEO relationship through AFWERX Spark's Refinery is an excellent alternative.
6. Engage with partners for accreditation. As stagrd is a software company, this is crucial. Working on a pathway towards an ATO is critical. If stagrd's software runs in modern infrastructure - containerized software running in the cloud - their best bet is to partner with an organization like Second Front Systems and use Game Warden and their existing ATO + CtF model. For the government, the advantage is that this is mainly managed outside of government, thus, the costs are handled on a business-to-business (B2B) basis. True, either stagrd has to absorb this through IRAD or through a government contract, but the cost difference between using a dedicated managed service (somewhere between $250k and $475k a year) versus the costs to do it through a greenfield ATO ($1.6m up front, then still several hundred k per year after), or using government infrastructure (use of Platform One as a software development platform can drive costs down significantly, but stagrd will lose absolute control of their intellectual property (IP), have to redevelop all of their code using Platform One tools which may or may not be native; if not, they'll have to invest heavily in refactoring which may drive costs up. While costs do vary, the total annual amount for hosting, developing, and security auditing on Platform One is around $600k per year on average. This is better than greenfield ATOs, but still not as good as using a B2B service like Game Warden. Where Platform One is really an ideal solution is for DoD units - primarily in USAF and USSF - seeking an ATO with their own modest development budget but limited (or non-existent) infrastructure to actually deliver. In this respect, Platform One is a huge game changer. But they aren't very good at working with dual-use small businesses by virtue of their infrastructure, their architecture, or their management (the latter of which isn't their fault, and is in fact, parcel to being a government organization and the incentives therein). For this reason, Platform One probably isn't a good choice for stagrd, and they are certainly a better choice than a greenfield ATO.) Still, investing in a full ATO prior to government award of a full-scale contract isn't a sound business decision either, so stagrd would be better off using sandbox tools from Second Front or a similar company to actually make sure their delivered software has a pathway to production.
   
   No matter what route, stagrd needs to find a pathway to an ATO prior to going to a full production because there's less stimulus for a PEO to move towards a POR without an ATO.
7. Once stagrd wins any SBIR - even just a phase 1 worth only $50k - they have now unlocked the door to contracting. This is where the PM and the contracting officer (KO) can start to really "crush things."
   Up to this point, they've worked with:
   1. The PM at an innovation unit.
   2. A warfighter at the edge to help write their "small R" requirements.
   3. The "big R" requirements active duty folks at the command level.
   4. A company to help them get an ATO and pathway to policy-compliant delivery.
      
      The work with PM now takes center stage. There's a lot of work now to get from the competitively awarded SBIR to a funded and sustainable POR, but for a small business in the dual use space, most PEO's are worthless. In fact, many keep a KO engaged in work for innovation organizations just so that they can maintain legally required minimums of small business associated with their DoD Account Activity Code (DoDAAC). The PM will need to develop a lot of documents and stagrd would be a lot faster at executing if they helped craft these.
8. First, the PM needs an approval to move forward with a phase 3 contract, even if the innovation unit itself will not be funding it beyond a kickoff. A common amount of funds is $5,000 for a kickoff meeting (which can be virtual), and this may be the entire amount of money the innovation unit ever spends on the effort from their own funds, but it needs to exist. But the PM has to create (and then staff) a lot of documents.
   1. The PM needs to create an acquisition strategy plan (ASP) that will get approval from senior leadership (usually an O-6 or above that sits at a Pentagon 3-letter or a senior command 2-letter position). For AFWERX in the USAF, this is usually delegated to the Branch Director, so Prime, Spark, Ventures, etc. For other organizations this approval level may vary, and may not even be required outside of the Air Force. The creation of this additional requirement is excessive bureaucracy so senior leadership can micro-manage low-budget efforts, but nonetheless, bureaucrats need to have a reason to exist. Usually it's a huge document, needs to explain the non-competitive award reasoning, trace through the competitively awarded SBIR phase 1s and 2s that lead to it, explain the roles of all the personalities involved, and there may be education required for the approval authorities who might not understand how a decentralized IDIQ works, that the work orders themselves are where both funds are committed and where deliverables are designated to firm timelines (people with simplistic contract understandings assume this will be pre-negotiated even when it's not their money or execution on a work order; that is actually not how a single-vendor decentralized phase 3 SBIR IDIQ works.) To be clear, the ASP probably shouldn't exist for phase 3 SBIRs and hopefully policy changes to eliminate this requirement.
   2. The PM also has to generate a letter of direction for their KO. This is boilerplate and simple, and also has a statement about potential damage to the ozone layer (I'm not making that up) that also has to be done.
   3. The PM has to craft a few other documents - a document for the financial manager (FM) to certify availability of funds for the KO - and a few other easy documents, and there will be many follow-on documents, but the biggest deal one that the PM and stagrd have to work on is to craft a statement of work (SOW). The SOW is a huge deal, and it must be written to account for many things.
      1. For the sake of the legality and the KO's edification, the lines of effort (LOEs) within the SOW must be directly tied to expanding and growing the work done during the competitively awarded SBIR phase 1s or phase 2s.
         
         Remember: the Phase 3 doesn't have to be derived from a single phase 1 or phase 2, but can be derived from all work that the company ever performed in competitively awarded SBIRs. Also, there's no time limit on this; if stagrd did something five years ago on a phase 1 and last year on an un-related direct to phase 2, both of those can be tied to the phase 3 and included as their own distinct LOEs or used in combination to define legally justified derivative LOEs from the previously performed work.
         
         The PM and stagrd should get on a call and go through the milestones from the previous competitively awarded SBIRs to define the LOEs.
      2. For the sake of stagrd ever getting paid, the LOEs should also tie to some "big R requirements" from the target landing zone PEO's aligned requirements. This is done by stagrd getting the PM and the A5 (or the equivalent in a non-DAF service) to discuss the language in approved requirements documents like the 1067 (DAF), an ICD, CDD, or any of their approved derivative products like a requirements definition package (RDP) or even a capabilities drop (CD). If stagrd has already been working this staffing from the requirements side, it should be easy.
      3. Most importantly, stagrd needs to tie the LOEs to warfighter needs. The "small R" requirements are the most important because they actually win wars, even if they don't get on the POM.
      4. The organization of the SOW is critical. The LOEs relative to legality derived from the previous SBIRs should be as loose as stagrd can get away with relative to the innovation PM and KO's guidance; ideally, stagrd wants to be able to drive a truck through the LOEs by making them broad, but still tied to competitively awarded SBIR milestones. However, for a decentralized phase 3 SBIR IDIQ to really have a lot value, what stagrd, the innovation PM and KO need to build is a B-table of repetitively purchased items and pre-price them (stagrd can even apply inflation adjustments by year over the period of performance (POP) for the IDIQ). By pre-pricing them on B-table as firm fixed price (FFP) options, other KOs in the government can execute purchases against the IDIQ with no negotiations, no price evaluation, etc., as it's been done up-front during the initial IDIQ award process. This will give the IDIQ a ton of value for stagrd to "shop around" the DoD and get funds onto contract.
      5. The B-table items when possible should be directly linked to identified key system attributes (KSAs) or key performance parameters (KPPs) that the A5 identified in the requirements documents. This is also especially useful if they've been attributed to joint capability areas (JCAs) that the organization is responsible for. Ultimately, all the line units within USAF that have a commander on G-series orders have a designed operational capability (DOC) statement, a document written at the SECRET or TOP SECRET level, that ties all of the things the unit does to the JCAs that they are responsible for. The PEO is responsible for delivering capabilities relative to that DOC statement, ergo, making the B-tables aligned to both the big-R and little-R requirements will unlock those funds most successfully.
   4. The SOW will have to be complete prior to the FM releasing the funds availability letter to the KO, even for just $5k.
   5. With the ASP approved, and SOW complete - it may have to be validated by a team at the innovation unit prior to being submitted to the FM & KO - and with the direction letter done, the KO has the ball and will now coordinate the pricing on the B-table between stagrd and the entire innovation unit. There will have to be an independent government cost estimate (IGCE) performed to make sure the amounts pre-negotiated on the B-table are fair and reasonable.
   6. The innovation PM can start working additional documents, many with stagrd's help.
1. This includes writing the contract data requirements list (CDRL) appendix - which is a series of DD Form 1423s for each item. For software development, stagrd and the innovation PM would be intelligent to only include the standard DI-FNCL-80912A Cost Performance Report for monitoring contractual burn rate, and then keeping all other requirements focused on industry standard data. DI-IPSC-82252A, DI-IPSC-82297, DI-IPSC-82298 and DI-MGMT-8200A are probably a minimal set of documents that benefit the government and do not impose unrealistic demands on stagrd. Excessive program management oversight that doesn't benefit future deliverables is just a waste of everyone's time and effort.
2. Additionally, if stagrd is going to do anything with any higher level of security concern than controlled unclassified information (CUI), they'll need a DD Form 254. This will be massive, take a ton of work - especially if including Top Secret (TS), sensitive compartmentalized information (SCI), alternative or compensatory control measures (ACCM) - popular with SOF - or special access programs (SAP) - popular with the IC. If stagrd doesn't already have a facility clearance (FCL), it will be during this process that the innovation PM will do the FCL sponsorship. If the contract will require TS/SCI, the PM will either become the SCI contract monitor (CM) (assuming they've completed the training and are certified for such a role) or will appoint, in writing, an SCI CM. The PM will also have to write all the appendices to the DD Form 254 which can be excessive. The DD Form 254 is not a requirement for contract award, but must be completed prior to stagrd doing any classified work. Thus, it behooves them to begin working on this prior to award as the staffing and approval of the document can take months or even years depending upon the agencies involved.
9. Now that stagrd has figured out the basics of the SOW, they need to figure out the money, both short-term and long-term. As noted above, there probably won't be an existing POM entry on a program element (PE), so they'll have to coordinate with the innovation PM and the active duty A5 (in the DAF) personnel they've been working with to find a future landing-zone PEO's PM and the cognizant A8 (or other service equivalent). This will potentially create funds in budget year (BY) + 2, i.e., in about two to three years. That's the earliest. For an Air Force sale, this can be pre-researched by digging through the Presidential budget requests and finding the associated line item by scouring the Exhibits. Often it's associated with a MDS for a full "platform based" weapon system, but many of the items in the budget are just associated with either a PE or a specific program. By associating a requirement and a solution with a long-term target PE, stagrd can figure out where long-term POM'd funds for a POR are going to come from. This will be a separate PE from the innovation unit, though that one may be important as well.
   1. To work on out-years, stagrd needs to interface with the gaining PEO and the appropriate A5 and A8 to make sure funding to keep their work going makes the POM. In the meantime, they'll have a big gap between the end of performance of their phase 1 or phase 2 SBIR and when they POM kicks in.
   2. To bridge that gap there's a few funds, like the "Accelerate Procurement & Fielding of Innovative Technologies" (APFIT), though it's mostly been exploited by defense unicorns and has a miserable rate of awarding to innovation unit partners. Thus, stagrd's best bet at this point is working with a lobbying firm and getting a Congressional Add inserted into an appropriations bill. Coordinating with the innovation unit PM to ensure the appropriation is on the correct PE and is the correct "color" of money is critical.
10. Getting all the documentation together can be a pain.
    1. The innovation PM at this point has done the following:
       1. Wrote direction letter
       2. Wrote, staffed, and defended the ASP
       3. Wrote and staffed the SOW and coordinated all the LOEs.
       4. Wrote the DD Form 254 and its appendices including the SCI documentation and possibly the FCL sponsorship memo.
       5. Shepherded the IGCE over the line.
       6. Wrote all the CDRL requirements.
       7. Possibly coordinated with a Congressional staffer regarding a Congressional add onto their PE.
       8. In addition to all this, the PM is still doing day-to-day things for any other given contract like sponsoring email accounts and going through the common access card (CAC) sponsorship process. And sponsoring anything else, like access to the Tactical Assault Kit (TAK) software repository or whatever. Basically, this person's life is already a nightmare, but stagrd is going to have to manage the relationship carefully because they need performance, but can't run the risk of getting back-burnered; the PM isn't getting a raise for executing well, and isn't getting fired for slow-rolling a company, so they are only doing it well and performing high on behalf of stagrd if they genuinely care about the warfighter and getting effects to the end units.
    2. The KO, with their warrant, is doing as much if not more work, especially because any given KO for an innovation unit is probably managing literally dozens of contracts, all with multiple requirements at any given moment. The KO writes the actual contract, does all the financial and workorder negotiation, shepherds the contract through legal and registers it in all the horrifyingly inefficient government contract management databases.
    3. The FM has cut the financial authorization letters for the initial workorder and ensured senior leadership can tie the requirement for the contract to a given line-item from the PE.
11. At this point,
    1. The "receiving" PEO probably has requirements that the innovation PM doesn't normally care about such as a market research report. Instead of relying on a slammed government PM, it'd help stagrd to reach out and see what they'd need to transition from the innovation unit to the PEO.
    2. A supporting document (just an Excel spreadsheet) that can tie the following together would be helpful for all the future PMs:
       1. The LOE as written in the SOW.
       2. The derived milestone from a competitively awarded phase 1 or phase 2 SBIR. Denote the contract number and if possible, the SBIR cycle information, as well as the paragraph number for the milestone and a brief description.
       3. The approved requirement, including the requirement document information (signature date, document type, document name)
       4. The derived KSAs/KPPs and their associated JCAs
       5. The associated fund line from the exhibit R-2 through R-4 for a given program element for a Congressional Add (if there is one)
       6. The associated fund line from the exhibit R-2 through R-4 for the long-term POR
    3. Additionally, denote all the responsible parties:
       1. The innovation PM.
       2. The PEO's PM.
       3. The KO, and their supervisor, and if they've got a buyer, the buyer too.
       4. The FM.
       5. The SCI CM (especially if it's someone other than the PM)
       6. Because this is software, stagrd will need to keep track of:
          1. The authorizing official (AO) who will grant the ATO and/or CtF
          2. The information system security manager (ISSM) and/or information system security officer (ISSO) as well as applicable security control assessors (SCAs)
          3. If stagrd is working with an intermediary, a lot of this is taken care of for them, and instead, their PM just needs to coordinate with the PM for the hosting body whether it be Platform One, Game Warden, or another alternative.
          4. Who will be the Information System Owner (ISO) - who must be appointed at the same level as the ASP approval, (a MAJCOM 2-letter or HAF 3-letter, typically an O-6). The PM will staff/write the appointment letter, and may be the ISO themselves.
          5. To comply with the Clinger-Cohen act, the ISO and/or PM will also need to confirm that the program will be entered into a database such as the Information Technology Investment Portfolio System (ITIPS). If an ITIPS portfolio doesn't exist, this too will have to be created, has associated training requirements, and a long-lead time. In other words, it's also excessive bureaucracy.
       7. The test director. Oh, yes, things get tested. Even software delivered as a continuous integration/continuous delivery (CI/CD) program using agile methodology.
          1. Which test agency will perform the testing
          2. What the testing will look like relative to end-users

The above 11 steps are going to take a lot of time to get over the line. Some things like the Congressional Add and the POM are going to be things that don't pay off for over a year, but stagrd needs to start working on those almost as soon as they finish slide #15 for the initial SBIR push.

What's really sad is that the 11 steps above for stagrd seem harder than the nine steps for K4Teeter and the truth is, they are. There's less lawyers involved, and its all "even" and "level" for small businesses, but the government doesn't make it easy for stagrd, or really, for themselves. The problem is, what stagrd is developing as a dual-use company is actually from a warfighter's perspective VASTLY SUPERIOR to what the prime, K4Teeter, is offering. And stagrd can be served financially a heck of a lot better by avoiding government and just selling in the commercial sector. The only reason that stagrd should even consider the government isn't how nice $1.25m in non-dilutive capital is for a SBIR. It's because if the US doesn't win in a near-peer fight for the western pacific, hedge funds and even the concepts of democracy as opposed to fascism are a risk for all of us, including everyone at stagrd, or more realistically, any VC that might invest in them.

Hopefully policy changes will make this easier on companies trying to break into defense.