Why doesn't Google apply? :) They get $1 million to improve Android security - and they can just do it and integrate it into the next release for everyone!
The SBIR program is the largest Federal source of non-dilutive seed-stage funding available. The program is highly competitive, but this funding is available exclusively to small (e.g., < 500 employees) businesses.
The intent of the program is to drive technology development and new business creation and spur innovation in areas to meet identified national needs (in this case a need by the Navy).