WASHINGTON — A fledgling five-person software start-up has just wrapped up their pitch to what could be a key investor. The pressure has been intense, but the customer decides to bite, sliding a credit card through a Square reader to award money to the company’s Paypal account.
This isn’t an episode of Shark Tank, or a successful bid to get investment dollars from a Silicon Valley angel investor. The customer in this scenario is the Air Force — or at least, its acquisition executive would like it to be.
During the Air Force Association’s annual conference, Will Roper, assistant secretary of the Air Force for acquisition, technology and logistics, will announce a series of “Startup Days” targeted toward involving startup companies in Air Force acquisition by rapidly awarding contracts in less than 24 hours.
“From the company’s view, it will be a single day. From our view, we could probably turn it as quickly as a few days to a week — we put a call out, someone submits their idea, we analyze their idea, we check their company profile, we then invite a subset that have met the criteria,” he told Defense News in an exclusive Sept. 7 interview.
“But then, when they come in to pitch their idea, they have a reasonable expectation of leaving with funding. We’re ready to go or not go on a single day,” he continued. “And the contract length? One page.”
When Defense News spoke with Roper, he had just gotten the green light to move ahead with this new way of awarding contracts. The effort remains in its early stages, and dates for Startup Day have not been chosen, although Roper believes the service could hold a series of Startup Days as soon as the end of this year or early 2019.
The exact format is still being worked out as well: Program managers will be able to suggest precise technical problems that they’d like to see solutions for, but he’d also like to give companies the latitude to pitch their products for requirements the Air Force doesn’t even know it has.
Companies will submit proposals, which will be evaluated by Air Force program and contacting officials who will also analyze the company’s profile — its number of employees, business type, product maturity and potential impact. But the goal is to have the actual events structured like a meeting with an angel investor, not the typical PowerPoint-laden gatherings of military officials and defense primes.
“We’ve got to make this look more like Kickstarter than a defense industry day,” Roper said. “We may even put them on contract swiping a Square reader. We have government purchase cards that we’re able to use for small purchases — up to $150k per transaction. That may be the mechanism we use because most companies that are startups, I’m going to guess, have a Paypal account.”
An industry day geared specifically for start-up companies is just the latest way the Air Force is trying to harness a commercial technology boom where innovation has often been led by startups. Last year, the service announced the creation of a new organization called AFWERX that it began to help engage elements of the private sector that don’t usually work with the government.
However, even with AFWERX in operation, it takes the Air Force six to eight weeks to award a contract at its very fastest. And that’s still too slow of a pace to enable it to work effectively with startup companies, Roper said.
“There’s this artificial ceiling that small companies can’t reach to work with the government simply because they’re too small to wait for a paycheck. If they’re not on contract with us now, they’ve got to work with an investor fast enough to fund cash flow rates that startups need to grow,” he said.
Roper doesn’t expect all investments to bear fruit, but efforts like Startup Day have other advantages, he said. It gets Air Force contracting officers more comfortable with executing rapid contracts, potentially gives program managers a more effective way of spending their small business dollars and allows the service to have a voice in the kinds of technologies that cutting-edge companies develop.
“I hope that will mean that every year when we do this — if it’s successful, we’ll do it every year—companies will have us on their radar screen and think, ‘The Air Force is a great way for us to get from being a company of five to a company of 50...and then we’ll go off and become billionaires working with Amazon and Google,’” he said. “But this way they’ll know us and their products and projects will have been influenced by us, hopefully for the betterment of the Air Force.”
Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.