[something123]

In my own experience working in defense, there are tons of small businesses working on contracts, the government is forced to spend so much money on small business that they often simply throw away money. I worked on R&D for a military system which I 100% knew the gov't didn't care about and threw in the garbage.

All the big projects force the big guys to subcontract to smaller companies

The problem is actually completely different:

There is no way for a "little guy" to become a midsized company b/c the government is completely incompetent and relies on the huge defense contractors for guidance. The gov't has VERY little internal expertise - so if you have a brilliant new idea that is perfect for a midsized company to execute (which will often have to be on an existing platform built by one of the big companies) they have to go to the big companies to see if it's feasible. The big companies ofcourse say it's impossible and then (if it actually was a good idea) they steal the idea and implement it themselves.

So unless you can go from doing SBIRs (ie. under 200 employees) to build a whole tank on your own - you're fucked

[drewpc]

"the government is completely incompetent and relies on the huge defense contractors for guidance"

This is the catch 22 of any business. If you don't know something, either you hire people with that knowledge or you contract it out. If you can't properly supervise the work/project/acquisition because you don't have enough depth of knowledge, then it's very hard to get a good solution. In the end, the government is at the mercy of private industry because the government can't be the best at everything.

[something123]

I don't really see the catch 22. The gov't could have the best if they payed appropriately (which they don't, and they end up with a lot of lazy people that are there for the retirement benefits)

The governement ultimately does have experts, but there are too few and they're spread too thin. They end up not having enough knowledge to make unilateral decisions

They also are often in semi-indepedent roles competing again the small businesses. Think of the JPL or all the "Labs" (Lincoln, Lawrence etc.) or the teams at MIT. They have their own agendas which doesn't hold technology acquisition as it's focus ( it's more about supporting the funding of their lil corner)

[rhodysurf]

Its true, but as long as you aren't chasing the next billion and you have a solid product, SBIRs aren't a bad deal and you can win sub contracts from the larger companies and agencies.

[something123]

Of sure. And small businesses keep chugging away and can make their millions.

But I think the implicit goal was to have a certain mobility in the market where new more nimble player can float to the top and crusty old companies can sink. And the system doesn't accomplish that. If it did, maybe it would justify all the incredible waste involved

[shas3]

The other problem with SBIRs is that products and sales are usually not deliverables for the money that the government gives via SBIR grants. So it is hard to scale up without other investment.

[something123]

Yep, and because all the projects are done with zero enthusiasm and only because they have a small business budget to blow, they often have no inclination to consider a Phase II or III