There is a great misconception among the startup community that government contracts are too slow and too complex to pursue.
Many startups don’t realize their products could have government applications, yet even when they do, the federal procurement process is often a mystery. Whitepapers, proposals, and contracting mechanisms are intimidating phrases for companies used to pitches and applications. The federal procurement process can take more than a year, often making federal contracts too risky for startup companies that need funding decisions to be made within weeks or even days.
The truth is, most startups don’t know how accessible government contracts can be. They don’t realize the Department of Homeland Security’s (DHS) Science and Technology Directorate (S&T) offers something different and fast. During a recent Industry Day, William N. Bryan, Senior Official Performing the Duties of the Undersecretary of S&T, spoke to startups, explaining why S&T’s Silicon Valley Innovation Program (SVIP) is for them.
What is SVIP?
SVIP was established to reshape how government, startups and industry collaborate to find solutions for homeland security use-cases.
SVIP expands DHS S&T’s reach into the innovation community to find new, previously inaccessible technologies that can help strengthen national security. However, SVIP is not a traditional research program. Instead, it focuses on funding and harnessing the commercial R&D ecosystem to identify and co-invest in existing technology that can be used to enhance the Homeland Security Enterprise.
“DHS S&T started SVIP to engage the community of innovative talent that the government has not historically been able to get to,” said Melissa Ho, SVIP Managing Director. “And, to be successful, we must show startups we understand their needs and rapid pace.”
SVIP offers up to $800,000 in non-dilutive funding over four phases to each selected startup that can provide solutions to specific topic calls. Qualifying startups must have less than 200 employees and cannot have had a contract with the government in the prior 12 months totaling more than one million dollars. If a startup is selected, they join a portfolio of companies already undergoing rigorous examination and testing as they develop a market-ready product.
How is SVIP Different?
By using a streamlined procurement process under the DHS Other Transactions Authority (OTA), SVIP publishes funding opportunities called Innovation Other Transaction Solicitation (OTS)—an alternative procurement agreement process that is simple and fast. Unlike typical procurements, awards under the OTS take an average of 45 days to complete, allowing DHS to mimic the pace of startups.
Why is SVIP Important?
SVIP bridges the technology development gap between DHS S&T, startups and small businesses, and DHS operational components. Through SVIP, startups and other small technology businesses can access non-dilutive funding, guidance from subject matter experts, direct access to operational end-users during prototype testing, and a legacy federal partnership to draw in future investors, providing them a unique experience and resource in the development of their products.
For DHS S&T, sought-after commercial products can be provided to DHS operational components and end-users at a rapid pace that matches the rapid development of threats and challenges to the homeland security mission. SVIP enables a collaboration between DHS S&T and startup industry that is good for small businesses and good for the homeland security mission.
“It’s important that all government institutions find a way to work with commercial industry, particularly [the] innovation community,” said Chris Pietrzak, Assistant Chief at U.S. Customs and Border Protection (CBP). “They’re bringing capabilities to market that change the world every day, and many of those are applicable to our mission, or a FEMA mission, or whatever the case may be, and if we don’t continue to track it and bring it in, we’ll fall behind.”
Does the Model Work?
Dave Twining, CEO of Planck Aerosystems, an S&T SVIP performer, said “SVIP is the most efficient and effective government program I’ve ever worked with. SVIP is great because they really understand what a small innovative company like Planck Aerosystems needs: quick contracting, direct customer engagement, excellent communication, and they move very quickly.”
SVIP’s program statistics speak for themselves:
In the past two and a half years, 27 companies have received SVIP awards with more awards approved for contract. SVIP has also connected with more than a thousand startups and released 13 funding opportunities. Through the program, more than $10 million has been awarded to portfolio companies and SVIP has collaborated with multiple DHS operational components, including CBP and the Transportation Security Administration. This new model is working, and SVIP has more topic calls, awards, and product prototypes coming this year, Ho said.
How Can Your Startup Get Involved?
Company fitting the qualifications above and with a technology solution to one of SVIP’s solicitations, should apply to our program.
To apply, companies submit a 10-page application, after which they are notified of whether they have moved to the next round. The second round consists of a 15-minute oral pitch to subject matter experts, who will inform the startup of their funding decision on average within 24 hours. From that point, companies are awarded a contract within an average for 45 days. Award selections occur quarterly.