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Having a small business that works in defense, I can tell you the upper tiers of military recognize and are worried about diverse production and innovation. Bu

by mNovak 7y ago

Having a small business that works in defense, I can tell you the upper tiers of military recognize and are worried about diverse production and innovation. But, there's an issue called the "Frozen Middle", where the middle managers, decision makers, and contract officers will still pick the mega-primes because they're perceived as safe, in an environment were compliance and liability is extreme. So, it's hard for (very) small businesses to get a secure foothold, and god forbid they start winning bigger contracts, because the Primes will come muscle them out. Not mentioned in the article is the issue of blatant technology theft by the Primes from small business. This is very well known in the industry, and a huge issue because typically the Primes are the gatekeepers to integration on a weapons platform.

nickpsecurity 7y ago
You totally left off corruption at military level. The "Revolving Door" of the Pentagon where the big ones keep hiring the very people that issue them contracts and letting them go back. They get cozy six-figure jobs or other perks for issuing contracts starting in the millions. Last write-up with lots of detail I saw here was this one on SAIC: https://www.vanityfair.com/news/2007/03/spyagency200703 https://www.vanityfair.com/news/2007/03/spyagency200703 There's also the Congress side where the contracts they're pushing bring jobs to their districts. One joke, which might be true, about the B2 was that the ridiculously-expensive project kept getting support since part of it is made in every state. I never confirmed if that one was true, though. Just remembered it as a funding strategy. ;)
- mjbmitch 7y ago
  In case anyone hasn't heard about SAIC in a while, they now go by Leidos.
  - nickpsecurity 7y ago
    Thanks! Just made a few headlines make more sense to me.
robertAngst 7y ago
>because the Primes will come muscle them out. Over and over people mention this phenomena. I am not sure why its okay, or that people even suggest giving these organizations more money.
- zdragnar 7y ago
  Regulation- the kind that creates red tape- favors the biggest companies. One of my favorite clients had a software product that their contacts in the military said stood head and shoulders above what they were currently using. Unfortunately, they were not the people in charge of procurement, and didn't have the clout necessary to make inroads enough to land a contract that would keep the company afloat. In the end, they pivoted to market their software to commercial enterprise clients (think data analytics) and they've been going ever since. It's a shame, really. The flip side, of course, is that a lot of the same regulations I bemoan as red tape exist because someone, somewhere, bought something that either completely failed, or the supplier wasn't big enough to support the military's scale. I've seen businesses make similar reactions- every time there's a mistake, layer on another new process or documentation requirement. There's got to be a middle ground somewhere between the needs of auditing, accountability and avoiding regulatory capture, but I don't really have a good answer for what it is.
  - ngold 7y ago
    I always think of the two kids that got rich gaming the new Internet bidding process to buy tons of ammo that went to the military in george jrs. Iraq war that was completely useless.
- peteretep 7y ago
  > I am not sure why its okay, or that people even suggest giving these organizations more money Nobody ever got fired for buying IBM
  - raverbashing 7y ago
    They better start doing that then
bsder 7y ago
> So, it's hard for (very) small businesses to get a secure foothold, While I can't speak to the what the big guys do, the government itself is an enemy of the smaller businesses from what I have seen. Every government contract I have seen always has the equivalent of "We can cancel this contract and quit paying you money at any time." That misaligns the incentives immediately. 1) A small company can't commit a significant fraction of its resources and risk getting yanked. Any small company that does is run by an idiot. 2) From the small company perspective, the primary useful goal is to do nothing as long as possible while collecting as much money as possible and deliver as little as possible to fulfill the contract. The ideal outcome is to do nothing and have the government actually yank the money and default on the contract. The secondary outcome is to collect all the money and do all the work in the last month of the contract. 3) The small company will pile everything into change orders and charge the government a fortune up front on those. The problem here is that those are rational behaviors when the government behaves that way in its contracts.
- evancich 7y ago
  This is 1000% wrong. You wrote: "We can cancel this contract and quit paying you money at any time." That is an incorrect statement. The link below tells you how a DoD contract can be canceled. http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/49.htm http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfar... If you meet your SoW, you will get paid. The FAR is very, very clear on this issue. 1) All of my resources are committed to the gov and I am not an idiot. 2) This is simply not true. It doesn't matter what flavor of contract you have: time and materials, cost plus fixed fee, etc. You have milestones and deliverables that are defined by your SoW. If you don't meet the milestones, you will not get paid. There is no incentive to "do nothing and wait for the last month of the contract" 3) This is an especially idiotic statement. These are called ECPs, which are a contract mod, which if there are enough of, the contract can get re-competited. Adding ECPs is a very, very bad idea. You clearly have no idea what you are posting about wrt to gov contracts Source: I own a small R&D company that works for the DoD and IC
  - bsder 7y ago

by mNovak 7y ago

nickpsecurity 7y ago

You totally left off corruption at military level. The "Revolving Door" of the Pentagon where the big ones keep hiring the very people that issue them contracts and letting them go back. They get cozy six-figure jobs or other perks for issuing contracts starting in the millions. Last write-up with lots of detail I saw here was this one on SAIC: https://www.vanityfair.com/news/2007/03/spyagency200703 https://www.vanityfair.com/news/2007/03/spyagency200703 There's also the Congress side where the contracts they're pushing bring jobs to their districts. One joke, which might be true, about the B2 was that the ridiculously-expensive project kept getting support since part of it is made in every state. I never confirmed if that one was true, though. Just remembered it as a funding strategy. ;)

mjbmitch 7y ago
In case anyone hasn't heard about SAIC in a while, they now go by Leidos.
- nickpsecurity 7y ago
  Thanks! Just made a few headlines make more sense to me.

robertAngst 7y ago

>because the Primes will come muscle them out. Over and over people mention this phenomena. I am not sure why its okay, or that people even suggest giving these organizations more money.

zdragnar 7y ago
Regulation- the kind that creates red tape- favors the biggest companies. One of my favorite clients had a software product that their contacts in the military said stood head and shoulders above what they were currently using. Unfortunately, they were not the people in charge of procurement, and didn't have the clout necessary to make inroads enough to land a contract that would keep the company afloat. In the end, they pivoted to market their software to commercial enterprise clients (think data analytics) and they've been going ever since. It's a shame, really. The flip side, of course, is that a lot of the same regulations I bemoan as red tape exist because someone, somewhere, bought something that either completely failed, or the supplier wasn't big enough to support the military's scale. I've seen businesses make similar reactions- every time there's a mistake, layer on another new process or documentation requirement. There's got to be a middle ground somewhere between the needs of auditing, accountability and avoiding regulatory capture, but I don't really have a good answer for what it is.
- ngold 7y ago
  I always think of the two kids that got rich gaming the new Internet bidding process to buy tons of ammo that went to the military in george jrs. Iraq war that was completely useless.
peteretep 7y ago
> I am not sure why its okay, or that people even suggest giving these organizations more money Nobody ever got fired for buying IBM
- raverbashing 7y ago
  They better start doing that then

bsder 7y ago

> So, it's hard for (very) small businesses to get a secure foothold, While I can't speak to the what the big guys do, the government itself is an enemy of the smaller businesses from what I have seen. Every government contract I have seen always has the equivalent of "We can cancel this contract and quit paying you money at any time." That misaligns the incentives immediately. 1) A small company can't commit a significant fraction of its resources and risk getting yanked. Any small company that does is run by an idiot. 2) From the small company perspective, the primary useful goal is to do nothing as long as possible while collecting as much money as possible and deliver as little as possible to fulfill the contract. The ideal outcome is to do nothing and have the government actually yank the money and default on the contract. The secondary outcome is to collect all the money and do all the work in the last month of the contract. 3) The small company will pile everything into change orders and charge the government a fortune up front on those. The problem here is that those are rational behaviors when the government behaves that way in its contracts.

evancich 7y ago
This is 1000% wrong. You wrote: "We can cancel this contract and quit paying you money at any time." That is an incorrect statement. The link below tells you how a DoD contract can be canceled. http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/49.htm http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfar... If you meet your SoW, you will get paid. The FAR is very, very clear on this issue. 1) All of my resources are committed to the gov and I am not an idiot. 2) This is simply not true. It doesn't matter what flavor of contract you have: time and materials, cost plus fixed fee, etc. You have milestones and deliverables that are defined by your SoW. If you don't meet the milestones, you will not get paid. There is no incentive to "do nothing and wait for the last month of the contract" 3) This is an especially idiotic statement. These are called ECPs, which are a contract mod, which if there are enough of, the contract can get re-competited. Adding ECPs is a very, very bad idea. You clearly have no idea what you are posting about wrt to gov contracts Source: I own a small R&D company that works for the DoD and IC
- bsder 7y ago