SOCOM will bring VCs for roundtables to better understand startup culture

While the defense industry has seen increased interest from private investors in areas such as autonomous systems or artificial intelligence, selling technology to the Pentagon has been challenging.

Investing in the development and education of the acquisitions community, specifically focusing on educating contracting officers who make the public sector more accessible for startups, is crucial to addressing the issue.

“We definitely have a communication gap right now. We speak one language on the DoD side, the [Defense Industrial Base] pretty much understands it, but the startup culture — not so much. There’s a lot of just talking past each other,” Melissa A. Johnson, U.S. Special Operations Command acquisition executive, said at the Potomac Officers Club Defense R&D summit last week.

“What I’m focused on is how to close that communication gap. So it’s really a lot of investment in building relationships. And that might seem a little trite and almost overly simplistic, but it is where I’m putting a lot of my energy.”

Johnson said her goal is to bring in venture capitalists for round tables on a regular basis to educate the government on the types of questions that the Pentagon should be asking the startup community.

“I think the more you see of going in and helping the startups in the VC community to speak the language, whether it’s from an operational or from an acquisition side, I think we’re gonna start seeing this converge a little bit more. But it’s a journey; this is not going to change overnight,” Johnson said.

“What I’m seeing is the amount of VCs and startups is rising exponentially. So it’s going to take some time. Just keep coming to the table asking the questions, put the government in the hot seat, ask us the hard questions so it forces us to do the critical thinking to come back and give clear and concise answers.”

In fiscal 2023, VC-backed companies had less than 1% of the $411 billion DoD contracts awarded.

While the DoD acquisition process is designed for procuring complex platforms and startups have to navigate a complex procurement environment, the tools such as Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulation Supplements (DFAR) contracting, including Other Transaction Agreements (OTAs) are already there for DoD to move quicker and adopt emerging technologies more rapidly.

“We utilize those other transactional agreements, which is a great venue. I don’t think it’s a panacea, but it does allow us to do some things very rapidly. I still believe you can use FAR-based contracting and do it very quickly. The commands have done it; we’ve done source selections on FAR-based in six months or less. So I don’t think it’s one or the other,” Johnson said.

The leadership, however, needs to educate and empower the acquisitions and program offices to use all the acquisition options and tools available to them under current regulations to expedite the adoption of new technology.

“Every time that I’ve seen a tool coming to light, there’s always a propensity for the institution to come in and want to put more attention on it and maybe put a little bit of chokehold on it. I don’t think we should be doing that either. I think if we have a tool that’s available to us, we ought to be able to utilize it and empower the teams at the lowest appropriate level, let the PMs go do that without a lot of the oversight,” Johnson said.

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