Four Steps To Follow To Enter The Defense Industrial Base

“BREAKING DEFENSE” By CDR Adam Stein

“If you start with a solving a problem, build the right relationships, use the tools to get funded, and plan ahead to stay relevant, you can make a real difference — fast.”

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“Breaking into the defense industrial base can be tedious. The process is slow, opaque, and often seems to favor legacy systems and established vendors. But that’s beginning to change — and for those who can move quickly and solve real problems, the opportunity to move is now.

The Department of the Navy, like the rest of the Department of Defense, is finally beginning to adapt its acquisition posture. Budget toplines are expected to remain constrained, and as a force we no longer have the luxury of winning through mass alone. Software, artificial intelligence, unmanned systems, and digital integration are now critical warfighting enablers — and must be available before the next major conflict begins.

It is apparent that time and situational awareness are already decisive metrics in combat. Examples from the Black Sea, investments being made in China, or even the recent inadvertent shoot-down of an F/A-18 are indicators that we must be investing now in order to win the next fight. If your company is building technology that helps us move faster, think smarter, strike harder, or survive the enemy’s best efforts, we want to work with you. But we need you to meet us where we are — with urgency, realism, and partnership.

With senior leadership now clearly pivoting towards rapidly acquiring digital difference-makers, I offer here a four-step guide to navigating the system and getting your capability into the fleet at the best possible speed.

Step 1: Solve A Real Problem

The most successful companies don’t show up with a solution in search of a problem. They start with observed lethality gaps or unfilled requirements and accept the challenge of resolving them, often investing their own Independent Research and Development (IRAD) dollars to connect a mature solution to a valid requirement.

Unfortunately, these solutions may not be enough in the modern fiscal environment. While doing your market research, consider identifying potential divestments as budget offsets to your sponsors. The Navy budget is largely spoken for, with major staffs having millions (or billions) of dollars in unfunded requirements.

Study warfare development documents to understand lethality gaps or unfunded priorities that aren’t yet in the budget, and be strategic about your approach. If your capability enables us to divest from a legacy system or avoid a costly process, you’re no longer just a vendor — you’re a strategic enabler. Help your Navy sponsor tell a better story to their resourcing chain, and you improve your chances of long-term success.

Step 2: Build And Align To Your Network

The Navy makes it easier than ever to connect and get real time feedback from leadership. Your company should take advantage of that.

Attend trade shows, AI summits, and industry days, where you should engage with panelists and learn what commands operate in the space you aspire to support. Use LinkedIn to find program managers, requirement officers, or Fleet experimentation leads and ask questions. Many of us want to help, and a tremendous amount of productive discussion can take place at an unclassified level.

You need to align with the priorities of your mission area sponsors, which you can only do if you build your network and ask the question. For example, the Surface Navy has formed a Surface Requirements Group (SURFRG) that identifies tactical needs and hosts periodic industry days to pursue solutions — if that’s your target audience, make sure to be there.

But also: Understand that each organization is slightly different. Some Program Executive Offices (PEOs) own full acquisition authority. Others work in tandem with OPNAV (Office of the Chief of Naval Operations) resource sponsors or Fleet Commanders. Knowing where the decisions are made — and who holds the money — will help you get traction. Take some time to review the Navy’s recent budget submissions when looking for a resource sponsor — a large portion of the Navy’s budget is aligned under our platforms (ships, submarines, aircraft) — so if your technology benefits the platforms, it could be better place to start than more niche sponsors.

Step 3: Get Smart On How To Get Funded

Once you’ve aligned to a problem and built relationships, there is an array of proven vehicles to seek funding. None of these solutions explicitly include annual recurring revenue (that will be covered in Step 4), and they can act as seed money to get your foot in the door.

• Accelerate the Procurement and Fielding of Innovative Technologies (APFIT) : Direct procurement dollars (typically $10–$50 million) for transition-ready tech, and this year software-only solutions are being considered. Services nominate projects annually — and you can still get in for this year (packages due in July)!

  
  

• Small Business Innovation Research (SBIR)

  • SBIR Phase I: Proof of Concept (~$50K–$275K), 6-12 month timeline.

  • SBIR Phase II: Prototype development ($750K–$1.8M), typically 12–24 months.

  • SBIR Phase III: Commercialization using other DoD dollars. No funding limit; must be based on prior SBIR.

    
    

• Tactical Funding Increase (TACFI) / Strategic Funding Increase (STRATFI) : Bridge between SBIR and scaled production. More focused on Air Force and Space Force, but Navy solutions can apply as well. Requires matching funds from you as an industry partner. TACFI, up to $2M; STRATFI, up to $15M+.

  
  

• Defense Innovation Unit (DIU) Commercial Solutions Opening (CSO): Funded by the Office of the Secretary of Defense directly, DIU embraces rapid prototyping contract mechanisms using Other Transaction Authority to match industry with a service need. Typically scoped at delivering minimum viable products in 6-24 months, with funding levels that can reach up to $100M.

  
  

• Fleet and Type Commander Engagement: Naval Component Commands such as US Fleet Forces Command (USFFC), and Type Commanders (TYCOMs), such as Commander, Naval Surface Forces, can fund emerging capabilities from within their Operations & Maintenance, Navy (OMN) accounts — often referred to as “taking it out of hide” — depending on the categorization of funding as an investment or an expense as defined under the Financial Management Regulations (FMR). While these commanders must still use Navy contracting authorities contained in FMR, they can often move quickly on pilots by leveraging internal dollars and streamlined acquisition routes.

  
  

Step 4: Stay Funded

If you have successfully launched a pilot, your next challenge is to overcome the budgetary valley of death and achieve sustainment funding. The Navy’s budget cycle plans 2.5 years ahead, so depending on the source of your pilot funding there may be slim years before scaling with congressionally appropriated funding through the Program Objective Memorandum (POM). To make your technology part of the future force, you must help your sponsor:

• Align to a validated requirement or Program Element (PE). With emerging capabilities, this may involve writing new requirements that help us stay ahead of our adversaries.

  
  

• Justify inclusion in the Program Objective Memorandum (POM). Every line item in the budget is competed for and prioritized, and new starts are often treated skeptically by the bureaucratic frozen middle that have long-standing unfunded requirements.

  
  

• Ensure a holistic funding picture, inclusive of costs for lifecycle data, tech refresh plans, and training is included when required.

  
  

• As stated previously, don’t be shy about recommending divestments that your technology enables. Constrained top line growth makes this a necessity.

Last Word

The path is neither straightforward nor painless, but it can be extremely rewarding for you, our industry partners, and importantly for our Sailors in the fight. If you start with a solving a problem, build the right relationships, use the tools above to get funded, and plan ahead to stay relevant, you can make a real difference — fast.

The Navy needs partners who think boldly, move quickly, and solve warfighting problems. If that’s you, then we’re already on the same team — welcome to the fight!”

Trying to enter the defense industrial base? Here’s four steps to follow.

ABOUT THE AUTHOR

CDR Adam Stein is a career surface warfare officer who commanded USS Delbert D. Black (DDG 119) and served on USS Spruance (DDG 111), USS Tortuga (LSD 46), and USS Antietam (CG 54). Ashore, he has served at Navy Personnel Command (PERS 41), Navy Installations Command (CNIC), the Office of the Chief of Naval Operations (OPNAV N4), and the Joint Chiefs of Staff (J-5). He is currently the Future Ships and Digital Transformation branch head for the Navy’s Surface Warfare directorate, OPNAV N96.