PRIMES MAY NEED TO RE-VET SUBS AS BANKS FAIL
Small business technology companies can offer innovative solutions and provide a prime contractor with both small business points and a technological edge. They also may have less consistent funding, especially if their backers become concerned with the state of financial markets and start removing their support. All companies doing business with the federal government must be financially sound. Supply chains and project fulfillment can suffer if a company loses access to capital. The time for a prime contractor to double check the stability of their subs is before a crisis occurs. It is notable that the Pentagon recently expended considerable resources to shore up critical small business partners and was prepared to act in case the FDIC did not. “You certainly would have seen the national-security implications for autonomy for AI, for cyber space, a lot of the sectors which are so vibrant right now and could be used to better effect by the Defense Department,” said Michael Brown, a venture partner at Shield Capital in a recent Defense One article. This time the FDIC did act. Future bank runs, interest rate fluctuations, and the vagaries of venture capital, however, mean that regular reviews of the books of your small business partners are definitely a best practice. The Silicon Valley Bank collapse offers an “opportunity to really get serious about growing that connective tissue between the national security enterprise and the commercial capital markets…and show that we’re good and sophisticated partners,” said Michael Madsen, acting director of the organization that acts as conduit between startups and industry earlier this week. No prime, or government agency, wants to lose access to critical technology at a time when the US is doing everything it can to maintain its innovation edge. Make sure your small business partners are financially sound.