Draft defense policy bill language released in the House this week contains a provision that would allow service secretaries to highlight a select number of small business research efforts they believe deserve greater attention within the Defense Department and Congress given their potential importance to their respective military branches.
An Entrepreneurial Innovation Project designation by a service secretary would require the secretary of defense to include the spending estimates for each project in the next future years defense program, which is provided to Congress, have its own heading as part of any programming proposals sent to the defense secretary, and be considered as part of the DoD’s strategic planning process, known as the Planning, Programming, Budgeting, and Execution (PPBE) system, according to the draft House Armed Services Committee (HASC) bill.
The draft provision would also require the defense secretary to submit to Congress an annual report describing each designated Entrepreneurial Innovation Project and the progress of each effort.
The designation would show the projects are “highlighted for additional support from Congress potentially, or just demonstrate in the event they don’t make into the unfunded priorities list, service secretaries still have a way of indicating that certain projects are really important overall across the board to the service,” a congressional staffer told Defense Daily on Wednesday. “And then that helps with the dialogue they might have with Congress in the event the PPBE process wasn’t able to accommodate that project in a timely fashion for congressional, and DoD, and overall federal budget cycles.”
Under the draft language, which will be included as part of a markup next Wednesday by the HASC of its version of the fiscal year 2025 defense authorization bill, each service secretary would designate at least five programs as Entrepreneurial Innovation Projects. Eligible programs would be those that have advanced to the commercialization phase of the Small Business Innovation Research or Small Business Technology Transfer contracts.
“I’m not going to say this solves the valley of death” for startups and other commercial companies trying to do business with DoD,” the staffer said. “It absolutely doesn’t. But it’s supposed to help with some of the communication around how certain innovative projects receive additional attention from Congress and DoD via the service secretary elevation.”
The Entrepreneurial Innovation Project provision is based on the DoD Entrepreneurial Innovation Act (H.R. 273) introduced in January 2023 by Rep. Ken Calvert (R-Calif.), chairman of the House Appropriations Defense Subcommittee, and Rep. Rob Wittman (R-Va.), chairman of the HASC’s Tactical Air and Land Forces Subcommittee. The bill was not included in the FY ’24 National Defense Authorization Act.
DoD already has various innovation units designed to help startups and non-traditional defense companies mature their commercially-developed solutions and potentially become established programs, which gives them a sustained revenue stream, a key ingredient for small businesses crossing what is commonly referred to as the “valley of death” between development and production.
The Entrepreneurial Innovation Project is “another tool in the toolkit” like the Pentagon’s Defense Innovation Unit and respective service innovation arms to bolster the “innovation ecosystem” within DoD, the staffer said.