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Office of Small Business Programs for the Department of Defense

Office of Small Business Programs for the Department of Defense . Victor Ciardello Director, Small Business Technology and Industrial Base The Society of American Military Engineers Washington DC Post 2007 Small Business Conference October 18, 2007. DoD FY2006 Small Business Performance

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Office of Small Business Programs for the Department of Defense

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  1. Office of Small Business Programs for the Department of Defense Victor Ciardello Director, Small Business Technology and Industrial Base The Society of American Military Engineers Washington DC Post 2007 Small Business Conference October 18, 2007

  2. DoD FY2006 Small Business Performance The Need for Small Business Mentor-Protégé Program Small Business Innovation Research Program/ Small Business Technology Transfer Program DoD Office of Small Business Programs

  3. Department of Defense FY2006 Prime Contract Awards *Source SBA Goaling Report $ =Billion

  4. Department of Defense FY2006 Subcontract Awards *Source SBA Goaling Report $ =Billion

  5. DoD FY2006 Small Business Performance The Need for Small Business Mentor-Protégé Program Small Business Innovation Research Program/ Small Business Technology Transfer Program DoD Office of Small Business Programs

  6. Need for speed & flexibility to address emerging and evolving threats Consolidating industrial base Budget pressures Less R&D investment in industry Increasing emphasis on/need for joint capability acquisition The Need for Small BusinessImperatives demand technology… Challenges make it harder to get The Central Challenge: Where will innovation come from and how will we get it?

  7. The SYTEX Group, Inc. STASYS Ltd. (UK) Sippican Holdings, Inc. Affiliated Computer Services, Inc. (ACS) OAO Corp. COMSAT Corp. General Dynamics–Ft. Worth Lockheed Martin MEL Lockheed XonTech, Inc. Telos Corp. Martin Marietta Corp. Technical and Management Assistance, Inc. GE Aerospace R.O.W. Sciences, Inc. Space Systems Division (General Dynamics) Tisoft, Inc. NYMA, Inc. Sylvest Management Systems Corp. LTV–Missile Business GM Defense Librascope Federal Sys Grp (Sterling Software, Inc.) Motorola Integrated Info Sys Federal Data Corp. Ford Aerospace Galaxy Aerospace Fairchild Weston Systems Inc. Comptek Research, Inc. Honeywell International Corp. (Australia) Primex Technologies Inter-National Research Institute (INRI) Honeywell-Electro-Optics Boeing Australia Ltd. Santa Barbara DPC Technologies, Inc. GTE Government Systems Corp. Units Loral Corp. Aerospace Group (Australia) Allied Signal, Inc. (Comm Systems) Gulfstream Aerospace Logicon, Inc. IBM Federal Systems Syscon Corp. NASSCO Holdings, Inc. Hughes Electronics General Dynamics Unisys Corp Defense Systems Raytheon Applied Technology Associates Computing Devices International, Inc BET PLC's Rediffusion Simulation Geodynamics Corp. Lucent Advanced Technology Systems General Dynamics Missile Division Lockheed Martin Defense Sys, Armament Sys Magnavox General Dynamics Space Business Northrop LTV–Aircraft Operations REMCO SA Bath Iron Works Conquest, Inc. Raytheon General Dynamics Westinghouse El. Defense SIGNAL Corp. STC PLC–Navigation Systems Jeppesen Sanderson, Inc. Grumman Trident Data Systems TRW-LSI Products Inc. Autometric, Inc. Boeing Northrop Grumman Ryan Aeronautical Hughes Electronics Satellite MRJ Technology Solutions Corporate Jets Alvis Logistics–EDD Business Rockwell E-Systems ERIM International, Inc. Kistler Aerospace Corp. Boeing Co. Pacific-Sierra Research Corp. HRB Systems Inc. Teledyne Ryan Aeronautical Chrysler Techn. Airborne DatumCom Corp. Litton Precision Gear Taratin McDonnell Douglas Veridian Corp. Texas Instr. El. Defense TASC (Primark) Digital System Resources, Inc. JPS Communications, Inc. SVS, Inc. 1990 1991 1993 Continental Graphics Corp. Spectrum Astro, Inc. Solipsys 1992 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 PRC (Black & Decker) Varian–Solid State Devices Hawker de Havilland Ltd. (Australia) Photon Research Associates, Inc. Tripoint Global Communications, Inc. General Instruments–Defense Engineering Technology, Inc. Frontier Systems, Inc. Litton Industries Avandale Industries Newport News Shipbuilding TRW BDM International Inc. Over Two Decades of Consolidation: What were over 100 “name plate” primes in the1980s are now five firms… Sources: DM&A, Washington Technology, Company reports, and CSIS Analysis. Federal Services Defense Hardware Commercial IT Chart supplied by the Center for Strategic & International Studies (CSIS)

  8. Key: DoD Functional Capability Areas = Air Force = Army = DoD = Navy LPD 17 • Deployment • Distribution • Sustain • Medical • Mobility • Logistics C2 AESA • All source intelligence • Environmental Data • Own Force Info • Predictive Analysis • Knowledge Management ATIRCM/ CMWS F-22/35 sensors Global Hawk AWACS sensors JSTARS sensors E2CReproduction Battlespace Awareness MC2A sensors SBIRS High/Low NPOESS JSIMS MP RTIP sensors SM 2 MMA sensors Longbow radar PAC-3 • Personnel & • Infrastructure • Protection • (OPSEC - • missile defense, • electronic protection) • Computer Network • Defense • Counter and Non- • Proliferation • Consequence • Management C-17 Land Warrior JLENS MTHEL GPS CV-22 AAAV Protection MH60-R/S Focused Logistics Chem Demil THAAD GCSS MV-22 NTW BMDS FMTV CH-47F ATIRCM SBL • Land, Maritime, Air, • Space Operation • Joint Targeting • Conventional, • nuclear, • computer network, • electronic attack • Psychological • Special Ops • SEAD • Military Deception MPF(F) LHA MEADS EELV T-AOE(X) ABL C-130 NAS F-35 MIDS-LVT C-5 Bradley Upgrade Adv EHF CSAR MC2A (C4) Stryker GBS AIM-9X Command & Control Force Application LCS MMA (C4) F-18 SDB AMRAAM Javelin F-22 AWACS (C4) MUOS FCS DDG-51 • JBMC2 • Communications • & Computer • Environment CEC Excalibur JTRS WIN-T JDAM FCS (C4ISR) Comanche Tomahawk

  9. Warfighting Capabilities, Technologies, and Industrial Capabilities: The Increasing Need for Small Businesses For the industrial capabilities assessed, ~36% of the companies with relevant products have less than 100 employees. Source: Booz Allen Hamilton and ODUSD(IP)

  10. The Mentor-Protégé Pilot Program was established on November 5, 1990 (Public Law 101-510) in an effort to respond to concerns, raised by DoD prime contractors, that many SDBs did not possess the technical capabilities to perform DoD subcontract requirements, making it difficult for these prime contractors to achieve their SDB subcontracting goals.

  11. National Defense Authorization 2005 Changes to Public Law 106-65, Subtitle D, Section 841 New agreements through Sep 30, 2010 Extend participation through Sep 30, 2013 • Section 842 • Protégé eligibility extended to: • Service-Disabled Veterans (SDVOSB) • Qualified HUBZone small businesses

  12. A Qualifying Mentor must be: Performing under at least one active approved subcontracting plan negotiated with the DoD or another Federal agency be eligible for award of Federal contracts A Qualifying Protégé must be one of the following: A Small Disadvantaged Business (SDB) concern certified by SBA, or A qualified organization employing the severely disabled, or A Woman-Owned Small Business (WOSB) A Service-Disabled Veteran-Owned Small Business (SDVOSB) A Qualified HUBZone Small Business Concern Mentor-Protégé Program Eligibility

  13. MPP Funding FY1992 – FY2007 Millions

  14. Direct Reimbursed MP Agreements Direct Reimbursement of cost of developmental assistance: Identify Specific Contract Vehicle/Contracting Officer Endorsement Minimum of 50% Technical Transfer Required use of an HBCU/MI/SBDC/PTAC Direct cost reimbursement of allowable costs outlined in Appendix I, including: Direct labor costs (for assistance by Mentor firm employees) Assistance provided by HBCUs/MIs/SBDCs/PTACs Other costs Detailed Cost Breakdown Military Services/Other Defense Agencies may have additional requirements Military Services/Other Defense Agencies Approval Type of MPP Agreements

  15. Credit MP Agreements Credit toward SDB subcontracting goals: No Military Service or Other Defense Agency approval required More focused on business infrastructure/business development Costs incurred under Credit Agreement May be applied (in the following multiples)towards the SDB subcontracting goal under any Federal Agency Subcontracting plan: (FAR 19.703) 4x for assistance provided by HBCUs/MIs/SBDCs/PTACs 3x for assistance by Mentor firm employees 2x other costs Type of Agreements

  16. Mentor-Protégé ProgramTypes of Developmental Assistance Types of Developmental Assistance: • Technical Transfer, including CMMI, ISO9000 or Six Sigma Certifications • Business Infrastructure Development • Award of subcontracts under DoD contracts on a non-competitive basis • Progress payments (up to 100%) • Advance payments • Loans • Investments in the protégé firm that have a need in exchange for ownership interest (10% or less)

  17. 153 Current Active Mentor-Protégé Agreements 94 Reimbursable Agreements 59 Credit Agreements NUMBER OF MENTOR-PROTÉGÉ AGREEMENTS

  18. Participationby State – FY07 Mentor and Protégé Participants Has Participants No Participants P Protégé Participants M Mentor Participants WA P-7 M-2 ME MT P-3 ND P-1 VT MN P-1 NY P-1 M-1 NH OR SD P-3 WI P-1 MI P-2 M-1 AK P-5 RI M-1 CT P-3, M-5 ID WY MA P-3, M-3 PA P-6 OH P-2 M-1 IA NE P-2 M-1 NJ P-4, M-3 NE P-1 M-1 NV P-1 IN M-2 MD P-13, M-5 IL P-5 M-4 IN WV P-2 VA P-28, M-21 UT P-2 M-1 WV CO P-5 M-4 KS P-2 M-1 DC P-5, M-1 MO P-3 M-2 CA P-34 M-7 KY NC P-4 NC TNP-5, M-1 OK P-2 AZ P-4 M-2 AR SCP-2 M-1 AR NM P-2 M-1 AL P-14 M-8 GA P-2 M-1 MS TX P-10 M-6 LA P-1 M-1 HI P-2 FL P-14 M-3

  19. Mentor-Protégé Program Participation by Eligibility1991-2006

  20. Protégé Industry Sector FY 2007

  21. Active Robotics Protégés AnthroTronix Epsilon * Geodetics * Kuchera Defense RE2 Stratom Sullivan Mesa Robotics Referentia Lorimar Group, Inc. Potential Robotics Protégés Holman Industries Defense Technology Solutions, LLC Photon-X Shee Atika Technologies LLC Digital Artefacts Mentor-Protégé Robotics Initiative

  22. Service-Disabled Veteran-Owned & Veteran Owned Protégés 16 firms entered Program as SDVOSB Protégés: • In addition there are: • 7 additional SDVOSBs Protégés that entered the Program as an SDB • 35 Veteran-Owned Protégés

  23. Nunn Perry Protégé Awardees Revenue growth ($)(Cumulative) 12 awardees 8 awardees 10 awardees Nunn-Perry Award Year

  24. Nunn Perry Protégé Awardees Employee growth (#)(Cumulative) 12 awardees 10 awardees 8 awardees Nunn-Perry Award Year

  25. SBIR Organized for- profit U.S. business, located in the US At least 51% U.S.- owned by individuals and independently operated 500 or fewer employees Principal Investigator’s primary employment with small business during project STTR Formal Cooperative R&D Effort (Minimum 40% by small business, 30% by U.S. research institution) U.S. Non-profit Research Institution (College or University; other R&D center) Intellectual Property Agreement - Allocation of Rights in IP and Rights to Carry out Follow-on R&D and Commercialization SBIR-STTRProgram Eligibility Criteria Broad purpose: Ensure small businesses receive share of federal R&D and leverage the unique innovative character of small business

  26. DoD is about Half the Federal SBIR Program Largest of 11 Participating Federal Agencies SBIR FY06 Budget $1.13B STTR FY05 Budget $130M

  27. Phase I: Project Feasibility Generally 6 months, not exceeding $100,000 Phase II: Project Development to Prototype Generally 2 years, not exceeding $750,000 SBIR/STTR Program Structure SBIR/STTR Funds: SBIR/STTR Does Not Fund: • Phase III:Commercialization in Military and/or Private Sector • Sale of product or service • Additional R&D of technology • Manufacturing/production start-up • Marketing start-up/marketing • Training workforce to manufacture or sell new products

  28. Key Technology Areas: Focus of SBIR Investments Number of Topics Source: SBIR & STTR solicitations, FY02-FY06

  29. DoD Office of Small Business Programs (703) 604-0157 www.acq.osd.mil/osbp DoD Mentor-Protégé Program www.acq.osd/sadbu/mentor_protege

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