ESTABLISHED CONTRACTORS SHOULD KEEP AN EYE ON THE PENATGON’S SILICON VALLEY OUTPOST
Large amounts of contract dollars aren’t likely to flow through the Defense Innovation Unit – Experimental (DIUx) in the next two years, but that does not mean that what happens there won’t impact how DOD buys from traditional contractors. According to an article in Defense One, how DOD does business there may be more important than how much business goes through the unit. One change may be changes to ITARS rules that govern whether and how companies can export technologies that are used for national security purposes. The DIUx initiative may also return DOD more solidly to commercial off the shelf (COTS) solutions, something that it has been stepping away from via the increased imposition of specialized rules that, in turn, have discouraged participation by commercial firms. Defense officials are also seeking to facilitate partnerships between start-ups and larger companies. To DOD, this as an opportunity for using the best of both worlds. Contractors, however, may see it as an opportunity for acquisitions. If your major customer is establishing relationships in the Silicon Valley, you may want to look there as well.