Whenever I was in a tight spot in a war zone I always thought, “why don’t I have a gun?”
As a humanitarian I was supposed to rely on more expensive solutions like fleets of security officers or UN Peacekeepers flying $50 million Boeing CH-47 Chinook helicopters. They were never around when the bullets started flying.
I can’t help but equate that experience with the conflict against Iran. As diplomacy stops and starts, we are using up several frontline munitions, including our Patriot interceptor missiles — which take three years to build and cost $4 million — while Iran fires off Shahed drones, produced at a clip of 200 per month at $35,000 each.
Sixty-five years ago, when President Dwight Eisenhower delivered his historic “military industrial complex” speech, he also said, “a vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action.” Recently, former Secretary of Defense Robert Gates made news when he complained, “Ukraine is going to produce seven million drones this year. Come on. Why can’t we do that?”
I have one answer – the Pentagon continues to fail America’s small businesses and ignore their technology that could benefit national security by offering less costly solutions.
Bipartisan support for small businesses
Multiple past administrations, Republican and Democrat, have acknowledged that the Pentagon’s sclerotic procurement practices and embrace of a few government contractors weaken our military industrial base. But while there is broad bipartisan support for opening up defense programs to small businesses, the data indicates otherwise.
The number of small businesses serving the Department of Defense has precipitously declined, falling 43 percent between 2011 to 2020, according to a study by the Government Accountability Office.
The reasons are well known.
First, procurement consolidation limits opportunities for smaller players, with mega deals usually awarded to the “bigs” – as we call them. Here’s a recent head scratching example: defense tech is a high priority for the Pentagon. Says Secretary of Defense Pete Hegseth “Simply put, the United States must win the strategic competition for 21st century technological supremacy, artificial intelligence, autonomous systems, quantum hypersonics and long-range drones …”
Yet a recent analysis by the Ronald Reagan Institute found that less than 1 percent of Pentagon contract spending went to defense tech and that 88 percent of those contract dollars went to just three companies — SpaceX, Palantir and Anduril.
The second obstacle is a culture of defaulting to prime contractors. Regardless of the worth of a small business’s defense tech, you’re in David versus Goliath territory battling Elon Musk, Peter Thiel and Palmer Luckey.
Even with advances to streamline Federal Acquisition Regulations, small companies are at a disadvantage. It is challenging for a small company to bid on a very large contract and compete with a contractor the size of Boeing on things such as qualifications to manage a multi-million dollar project.
Add the cost of implementing a plethora of requirements, such as getting your “Cybersecurity Maturity Model Certification,” tack on the financial toll of government shutdowns, and small business owners start eying the exits, preferring the stability of the commercial world to the chainsaw wielding instability of government contracting.
So, the trend continues — fewer venders to shore up America’s military industrial base even as the world pivots to newer, cheaper forms of asymmetric warfare.
Ukraine demonstrates effectiveness of small businesses
Patriotic Ukrainians have staved off an aggressive Russia with “mom-and-pop” workshops. Recent long-range drone strikes on a major oil refinery inside Moscow was just one example of the way the Ukrainians have been able to MacGyver their way through war. Their prowess comes from Ukrainian small businesses, which prototype and build millions of unmanned aerial, ground and sea vehicles.
But America has entrepreneurs and small businesses aplenty if we just free them from the Procrustean bed we have laid for them.
Heven AeroTech, is a dronemaker based in Virginia that makes hydrogen powered drones offering up to three times longer flight durations. This is weaponry we could use for extended airborne surveillance or monitoring; they come with fuel cells that operate silently.
But when Heven AeroTech’s owner, Michael Buscher, went to Fort Hood in Texas to talk about deploying his drones, the unit’s commanders said they wanted the war-fighting technology but didn’t have the funding.
“Everybody is talking about streamlining procurement processes, and we think that’s absolutely fantastic,” Buscher told INC magazine recently. “However … those dollars are not quite reaching those procurement officials so they can execute on the vision. The rhetoric is certainly there. I’ve yet to see it put into action.”
Shortfalls in key munitions and the Pentagon’s mystifying decades-long inability to unshackle itself from bureaucracy and reliance on a handful of big contractors represent a worrying drag on American power.
It’s well past time to do away with the “I love small business” rhetoric and use contract dollars to fuel the creativity and productivity of America’s small business contractors.
