Three Pentagon offices tell startups to show working hardware

The Space Development Agency, the Defense Innovation Unit and the Commercial Space Operations office told startup founders at Silicon Valley Space Week’s MilSat Symposium on Wednesday to bring operational hardware rather than just ideas. The three offices addressed founders together during the symposium’s Wednesday afternoon session, delivering a consistent demand for demonstrated hardware instead of concepts.

SDA Director GP Sandhoo said too many companies arrive with ideas instead of mature technology. He made the remark while addressing founders at the symposium, arguing that vendors must show hardware that works rather than presenting concepts. Sandhoo’s position is that the Pentagon needs proven systems, not untested proposals.

Drawing on more than 30 years in the field, SDA Director GP Sandhoo estimated that SBIR and STTR awards have yielded only single-digit numbers of successful firms. SBIR and STTR are small-business research award programs. He called the small-business programs a lifeline for many companies while questioning how often they produce winners. His estimate spans his experience watching small companies compete for government research awards across more than three decades.

Sandhoo pointed to early aviation and auto industry history, saying successful companies built, showed and then sold their products rather than succeeding because of government funding. He used the historical examples to argue that commercial success comes from building and selling products, not from government subsidies.

Sandhoo said SDA’s demonstration standard is lower than many founders assume. A C-plus or B-minus showing on one or two satellites can be enough to buy a plane or a tranche, he said. He framed the threshold after comparing successful private firms to early aviation and auto companies that did not rely on government funding.

DIU senior adviser Maj. Gen. Steven Butow, known as Bucky, said 90% of DIU contracts go to non-traditional companies. But DIU is not the customer, he said, because the unit prototypes and validates technology while portfolio acquisition executives make the purchases. That division of labor separates DIU’s technical validation work from the actual buying decisions made elsewhere in the Pentagon.

For firms on DIU contracts, the Bridge program provides concierge services covering facility and personnel clearances, SCIF access and the authority to operate on government networks. A SCIF is a secure facility for handling classified information. Butow described the services as help with the usual walls companies face when working with the government. He asks companies in their first DIU effort about their path to revenue, and he said DIU is most concerned about the companies in the room because they lack runway without budgets.

Col. Tim Trimailo, director of the Commercial Space Office at Space Systems Command, said startups face a catch-22 because they cannot get a contract without a clearance and cannot get a clearance without a contract. He described the problem as a barrier that keeps new firms from beginning classified work with the government. Trimailo leads the Commercial Space Office, known as COMSO.

COMSO’s ACES program, announced the previous week and built on DARPA work, lets COMSO attach security classifications to SBIR projects, use cooperative agreements or no-cost contracts, and help with facility clearances. Trimailo said the effort does not bypass current procedures but starts the clearance process earlier.

Momentus chair and CEO John Rood said SBIRs cannot fund a small business, although winning one competitively demonstrates to investors that an idea has merit. He said the government system centers on large contractors. Rood also said Momentus relies solely on cash and that every quarter is a survival quarter. He served as under-secretary of defense for policy and has worked at Lockheed Martin and Raytheon.

The Space Development Agency was established in 2019 to speed up deployment of U.S. military space systems by avoiding the Pentagon’s traditional slow bureaucracy. It was set up as a semi-autonomous body to escape the Pentagon’s slow procurement pace.

SDA’s primary mission is to develop hundreds of missile warning and data relay satellites in low-Earth orbit, collectively called the Proliferated Warfighter Space Architecture, to detect, monitor and target ballistic and hypersonic missiles. The strategy called for fielding new tranches of tracking and data transport satellites every two years, using satellites and sensors from many companies, with launches expected about once per month.

The Pentagon plans to shutter SDA and fold it into the Space Force‘s procurement pipeline under program acquisition executives as the agency launches its first operational satellite batches. Drafts of the current National Defense Authorization Act, backed by lawmakers in both chambers, include provisions to close the agency.

Much of SDA’s mission will continue under another Space Force organization, with missile warning and data relay satellites eventually joining the Pentagon’s planned Golden Dome missile shield. The shift keeps the architecture’s warning and transport roles inside the Space Force even as SDA closes.