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 Office of Small Business Programs
• DoD FY2006 Small Business Performance
• The Need for Small Business
– Mentor-Protégé Program
– Small Business Innovation Research Program/ Small Business
Technology Transfer Program
Department of Defense
FY2006 Prime Contract Awards
Total Eligible
Dollars
Small
Business
Dollars
Small
Business
Percentage
$235
$51.3
21.8%
SDB
Dollars
SDB %
SDVOSB
Dollars
SDVOSB
%
WOSB
Dollars
WOSB
%
HUBZone
Dollars
HUBZone
%
$14.7
6.3%
$1.6
0.7%
$6.90
2.9%
$4.7
2.0%
$ =Billion
*Source SBA Goaling Report
Department of Defense
FY2006 Subcontract Awards
Total Eligible
Dollars
Small
Business
Dollars
Small
Business
Percentage
$106.6
$39.6
37.20%
SDB
Dollar
s
SDB %
SDVOSB
Dollars
SDVOSB
%
WOSB
Dollars
WOSB
%
HUBZone
Dollars
HUBZone
%
$5.1
4.80%
$0.7
0.70%
$5.80
5.50%
$1.8
1.70%
$ =Billion
*Source SBA Goaling Report
DoD Office of Small Business Programs
• DoD FY2006 Small Business Performance
• The Need for Small Business
– Mentor-Protégé Program
– Small Business Innovation Research Program/ Small
Business Technology Transfer Program
The Need for Small Business
Imperatives demand technology…
Challenges make it harder to get
• 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 Central Challenge: Where will innovation come
from and how will we get it?
Over Two Decades of Consolidation:
What were over 100 “name plate” primes in the1980s are now five firms…
The SYTEX Group, Inc.
STASYS Ltd. (UK)
Sippican Holdings, Inc.
Affiliated Computer Services, Inc. (ACS)
OAO Corp.
COMSAT Corp.
General Dynamics–Ft. Worth
MEL
Lockheed
Martin Marietta Corp.
GE Aerospace
Lockheed
Martin
Space Systems Division (General Dynamics)
LTV–Missile Business
Librascope
Ford Aerospace
Fairchild Weston Systems Inc.
Honeywell-Electro-Optics
Loral Corp.
IBM Federal Systems
Unisys Corp Defense Systems
XonTech, Inc.
Telos Corp.
Technical and Management Assistance, Inc.
R.O.W. Sciences, Inc.
Tisoft, Inc.
NYMA,Corp.
Inc.
Sylvest Management Systems
Federal Sys Grp (Sterling
Software,
Inc.)
Federal
Data Corp.
Comptek Research, Inc.
Inter-National Research
Institute (INRI)
DPC Technologies,
Inc.
Logicon, Inc.
Syscon Corp.
Applied Technology Associates
Geodynamics Corp.
General Dynamics Space Business
Northrop
LTV–Aircraft Operations
Westinghouse El. Defense
Grumman
Ryan Aeronautical
Alvis Logistics–EDD
Business
Kistler Aerospace
Corp.
Northrop
Grumman
Teledyne Ryan Aeronautical
Taratin
TASC (Primark)
PRC (Black & Decker)
Varian–Solid
State Devices
General
Instruments–Defense
Litton Industries
Avandale Industries
Newport News Shipbuilding
TRW
BDM International Inc.
GM Defense
Motorola Integrated Info Sys
Galaxy Aerospace
Primex Technologies
Santa Barbara
GTE Government Systems Corp. Units
Gulfstream Aerospace
NASSCO Holdings, Inc.
Computing Devices International, Inc
Lucent Advanced Technology Systems
Lockheed Martin Defense Sys, Armament Sys
General
Dynamics
Bath Iron Works
General Dynamics
SIGNAL Corp.
Trident Data Systems
MRJ Technology Solutions
ERIM International, Inc.
Pacific-Sierra Research Corp.
DatumCom Corp.
Veridian Corp.
Digital System Resources, Inc.
Spectrum Astro, Inc.
Tripoint Global Communications, Inc.
Engineering Technology, Inc.
Honeywell International Corp. (Australia)
Boeing Australia Ltd.
Aerospace Group (Australia)
Allied Signal, Inc. (Comm Systems)
Hughes Electronics
BET PLC's Rediffusion Simulation
General Dynamics Missile Division
Magnavox
REMCO SA
Raytheon
STC PLC–Navigation Systems
TRW-LSI Products Inc.
Corporate Jets
E-Systems
HRB Systems Inc.
Chrysler Techn. Airborne
Texas Instr. El. Defense
JPS Communications, Inc.
Solipsys
Photon Research Associates, Inc.
Conquest, Inc.
Jeppesen Sanderson, Inc.
Autometric, Inc.
Hughes Electronics Satellite
Rockwell
Boeing Co.
Litton Precision Gear
McDonnell Douglas
SVS, Inc.
Continental Graphics Corp.
Hawker de Havilland Ltd. (Australia)
Raytheon
Boeing
Frontier Systems, Inc.
1990
1991
1992
1993
1994
1995
1996
Sources: DM&A, Washington Technology, Company reports, and CSIS Analysis.
Chart supplied by the Center for Strategic & International Studies (CSIS)
1997
1998
1999
Federal Services
2000
2001
2002
2003
Defense Hardware
2004
2005
2006
Commercial IT
DoD Functional Capability Areas
AESA
ATIRCM
F-22/35
Global sensors AWACS / CMWS
JSTARS
Hawk
sensors
sensors
•All source intelligence
•Environmental Data
•Own Force Info
•Predictive Analysis
•Knowledge Management
E2C
Reproduction
NPOESS
SM 2
•Personnel &
Infrastructure
Protection
(OPSEC missile defense,
electronic protection)
•Computer Network
Defense
•Counter and NonProliferation
•Consequence
Management
MC2A
Battlespace SBIRS sensors
High/Low
Awareness
MP RTIP
JSIMS
MMA
sensors
PAC-3
•Deployment
•Distribution
•Sustain
•Medical
•Mobility
•Logistics C2
MTHEL
Longbow
radar
JLENS
sensors
GPS
CV-22
ATIRCM
SBL
MEADS
MPF(F)
LHA
ABL
EELV
T-AOE(X)
C-130
MIDS-LVT
MC2A (C4)
•JBMC2
•Communications
& Computer
Environment
NAS
F-35
Adv EHF
Command &
Control
MUOS
CEC
GBS
Stryker
MMA
(C4)
SDB
AWACS
(C4)
FCS
WIN-T
C-5
Bradley
Upgrade
AIM-9X
FCS
(C4ISR)
CSAR
LCS
Force
F-18
AMRAAM
Application
Javelin
F-22
DDG-51
Excalibur
JTRS
= Air Force
= Navy
= DoD
MH60R/S
Focused
MV-22
Logistics
FMTV
CH-47F
NTW
= Army
AAAV
Chem
Demil
GCSS
Protection
THAAD
BMDS
Key:
LPD
C-17 Land 17
Warrior
JDAM
Comanche
Tomahawk
•Land, Maritime, Air,
Space Operation
•Joint Targeting
•Conventional,
nuclear,
computer network,
electronic attack
•Psychological
•Special Ops
•SEAD
•Military Deception
Warfighting Capabilities, Technologies, and Industrial Capabilities:
The Increasing Need for Small Businesses
# Warfighting
Capabilities
# Technologies
Priority Critical
Technologies and
Components
Assessed
Battlespace
Awareness
357
270
72
Command & Control
189
293
58
Force Application
787
212
61
Protection
440
277
64
Focused Logistics
271
364
58
2,044
1,416
313
Functional
Capability
Total
For the industrial capabilities assessed, ~36% of the companies with
relevant products have less than 100 employees.
Source: Booz Allen Hamilton and ODUSD(IP)
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.
National Defense Authorization 2005
Changes to Public Law 106-65, Subtitle D,
Section 841
New agreements through
Extend participation through
Sep 30, 2010
Sep 30, 2013
Section 842
Protégé eligibility extended to:
Service-Disabled Veterans (SDVOSB)
Qualified HUBZone small businesses
Mentor-Protégé Program
Eligibility
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
MPP Funding FY1992 – FY2007
$45
$44.4$44.3
$40
$35
$30
$30.3
$3.0
$0.4
$3.0
$4.5 $25.9
$25.8$25.9
$26.4$25.5
$25.4 $2.5
$24.5
$20
$15
$19.5
$18.3
$25.8
$20.9
$10
Program Funding
Withhold
Omnibus Reprograming
F08
F07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
FY99
FY98
FY97
FY96
FY95
FY94
$0
FY93
$5
FY92
Millions
$25
$32.3$31.8
$29.3
Type of MPP Agreements
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 Agreements
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
Mentor-Protégé Program
Types 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)
153 Current Active
Mentor-Protégé Agreements
94 Reimbursable Agreements
NUMBER OF MENTOR-PROTÉGÉ
AGREEMENTS
100
59 Credit Agreements
80
59
60
40
31
20
11
18
10
6
5
10
2
1
0
MY
AR
E
VY
RC
NA
O
F
AIR
A
DIS
D
OS
A
NG
nt R
i
o
J
ob
A
m
MD
gra
o
r
sP
c
i
t
o
A
NS
M
dit)
e
CO
r
O
C
S
A(
M
DC
Participation by State – FY07
Mentor and Protégé Participants
WA
P-7
M-2
AK
P-5
ME
MT
P-3
ND
P-1
ID
CA
P-34
M-7
UT
P-2
M-1
AZ
P-4
M-2
CO
P-5
M-4
NM
P-2
M-1
NE
NE
P-2
P-1
M-1
M-1
KS
P-2
M-1
OK
P-2
HI
P-2
Has Participants
No Participants
Protégé Participants
Mentor Participants
OH
P-2
M-1
IA
MO
P-3
M-2
IL IN
IN
P-5 M-2
M-4
WV
WV VA
P-2 P-28, M-21
NC
NC
P-4
SC P-2
GA M-1
P-2
M-1
TN P-5, M-1
AL
P-14
M-8
VT
NH
PA
P-6
KY
AR
AR
LA
P-1
M-1
NY
P-1
M-1
MI
P-2
M-1
MS
TX
P-10
M-6
P
M
WI
P-1
SD
P-3
WY
NV
P-1
MN
P-1
FL
P-14
M-3
RI M-1
CT P-3, M-5
MA P-3, M-3
NJ P-4, M-3
MD P-13, M-5
DC P-5, M-1
Mentor-Protégé Program
Participation by Eligibility
1991-2006
Employs
Severely
Disabled
0.6%
SDVOSB
1.5%
HUBZone
1.1%
WOSB
5.3%
SDB
91.5%
Protégé Industry Sector
FY 2007
R&D, 1%
Unreported,
11%
Construction,
8%
Service, IT,
55%
Manufacturing,
25%
Mentor-Protégé
Robotics Initiative
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
Service-Disabled Veteran-Owned
& Veteran Owned Protégés
16 firms entered Program as SDVOSB Protégés:
Alliance of Architects
and Engineers
Information Innovators, Inc.
Stratom, Inc.
Brigadier Construction
Services, LLC
Maintenance Inspection
Services (MIS)
Tompco, Inc.
Chequamegon Bay
Engineering, LLC
Oak Grove Technologies
Veterans Construction Inc.
Damar Machine
Company
QTechnology International,
Inc.
Washington Square
Associates, Inc.
Defense Manufacturing
& Supply (DMS)
Regulus Corporation
EnVetCo
Sonju Industrial
In addition there are:
•7 additional SDVOSBs Protégés that entered the Program as an
SDB
•35 Veteran-Owned Protégés
Nunn Perry Protégé Awardees
Revenue growth ($)
(Cumulative)
200
180
160
140
120
100
80
60
40
20
0
12 awardees
$191.0
8 awardees
10 awardees
Start of
Agreement
$121.0
$96.8
$80.1
$49.0
$44.8
2005
2006
Nunn-Perry Award Year
2007
End of
Performance
Period
Nunn Perry Protégé Awardees
Employee growth (#)
(Cumulative)
1400
10 awardees
1200
12 awardees
1272
1000
Start of
Agreement
1237
964
8 awardees
800
739
600
400
572
521
200
0
2005
2006
Nunn-Perry Award Year
2007
End of
Performance
Period
Protégé Share of Total DoD Prime Contract Awards FY2003-FY2006
.96%
1.16%
1.05%
$250
$2.3
Billions
$200
$1.8
1.47%
$3.4
$2.2
Total Protégé
Prime
Contract
Aw ards
$150
$100
P ro tégé % o f
To tal Do D P rime
Co ntract A wards
$187.5
$194.1
$219.3
$233.9
Total DoD
Prime
Contract
Aw ards
$50
$FY2003
FY2004
FY2005
FY2006
Protégé Share of Total DoD Small Business Prime Contract
Awards FY2003-FY2006
4.69%
5.46%
$60
4.69%
4.42%
P ro tégé % o f To tal
Do D Small B usiness
P rime Co ntract
A wards
$2.3
$2.4
$50
$2.2
Total Protégé
Small
Business
Prime
Contract
Aw ards
$1.8
Billions
$40
$30
$20
$53.9
$42.0
$44.8
FY2003
FY2004
$51.2
Total DoD
Small
Business
Prime
Contract
Aw ards
$10
$FY2005
FY2006
Protégé Share of Total DoD Small Disadvantagted Business
Prime Contract Awards FY2003-FY2006
12.00%
13.36%
11.54%
10.61%
$18
$1.7
$16
$14
$1.4
$1.6
$1.6
Billions
$12
$10
$8
$6
$14.7
$11.6
$11.7
FY2003
FY2004
P ro tégé % o f To tal
Do D Small
Disadvantaged
B usiness P rime
Co ntract A wards
$14.6
Total Protégé
Small
Disadvanted
Business
Prime
Contract
Aw ards
Total DoD
Small
Disadvanted
Business
Prime
Contract
Aw ards
$4
$2
$FY2005
FY2006
Average Award Dollars Per SDB Contractor
FY2003-FY2006
$7
Millions
$6
$6.21
$5.29
Protégé Award
$6.13
$5
$4.80
$4
$2.63
$3
$1.97
$2
$1
$1.57
$0.33
$0
FY2003
FY2004
FY2005
FY2006
Other Small
Disadvantaged
Business
Award
SBIR-STTR
Program Eligibility Criteria
• 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
Broad purpose: Ensure small businesses receive share
of federal R&D and leverage the unique innovative
character of small business
DoD is about Half the Federal SBIR
Program
DoE
4.9%
NSF
4.4%
Others*
3.0%
NASA
5.4%
NIH
27.6%
DoD
54.7%
Largest of 11
Participating
Federal Agencies
SBIR FY06 Budget
$1.13B
STTR FY05 Budget
$130M
SBIR/STTR Program Structure
SBIR/STTR Funds:
• 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 Does Not Fund:
• Phase III:
Commercialization in
Military and/or Private
Sector
– Sale of product or service
– Additional R&D of technology
– Manufacturing/production startup
– Marketing start-up/marketing
– Training workforce to
manufacture or sell new
products
rP
la
Ch
tfo
em
rm
-B
s
io
In
fo
D
ef
rm
en
a
t io
G
se
ro
n
un
Sy
d
st
&
em
Se
M
s
a
at
V
er
eh
ia
ls
ic
le
&
s
Pr
oc
es
se
s
Bi
om
ed
ic
al
Se
ns
Ba
or
ttl
s
El
es
e
pa
ct
ce
ro
ni
En
cs
vir
on
m
Sp
en
ac
ts
e
Pl
at
Hu
fo
rm
m
an
s
Sy
st
em
s
W
Nu
ea
cle
po
ar
ns
Te
ch
no
lo
gy
Ai
Number of Topics
Key Technology Areas:
Focus of SBIR Investments
1600
1400
1200
1000
800
600
400
200
0
Source: SBIR & STTR solicitations, FY02-FY06
DoD Office of Small Business
Programs
(703) 604-0157
www.acq.osd.mil/osbp
DoD Mentor-Protégé Program
www.acq.osd/sadbu/mentor_protege