Yes, start-ups can do government contracting

Silverside just submitted 25 pages of representations and certifications to the DARPA contracting officer. Among the statements in these “reps and certs” that we authenticated: we do not subcontract with firms owned by the government of a terrorist country, and no founder is delinquent in paying federal taxes.

Good. We can sign off on that. But what is a start-up doing spending hours reading ten-point font minutiae? Well, it turns out that the federal government loses an estimated $40 billion (http://www.dodig.mil/iginformation/archives/finalwebsnips.pdf) annually in procurement fraud. Understandable, then, that the federal government has earned a reputation among start-ups as requiring impossible levels of administrative and compliance infrastructure.

If there is one thing that a start-up generally lacks, it is back-office infrastructure. Founders are the HR department; accounting is outsourced; time sheets are as laughable as a 40-hour workweek.

A recent Boston Herald article adequately outlines this fundamental burden of government contracting that Silverside, among many, has faced. But the article only delivers the retrospective picture.

The reality: government research agencies want the nimbleness and innovation that start-ups deliver. Last week, ten companies (including Silverside) participated in a meet-up that brought together government program managers and new companies working on robotics, drones, and other defense-relevant technology. “We don’t want you to become government contractors” was a sentiment repeated by each of the four reps from the Office of Naval Research, DARPA, and the Dept. of
Homeland Security.

What these agencies want—and are working to develop—are funding vehicles that match the rapid pace of start-ups. How to get funds to companies developing critical technology…without the 7-18 month delay? How to meet the spirit of government accountability requirements without making small companies play dress-up in the clothing of established corporations?

So yes, the government likes to keep close track of its money. Yes, this is a heavy burden for start-ups, which often outsource as much back office work as possible in order to maximize technical hires. But smart people are working hard on this, and stay tuned for change.

In the meantime, let this one start-up declare that it is possible to be nimble and small and take government funding. It just requires sympathetic help of DARPA contract officers, DCAA auditors, and DCMA managers that answer our phone calls, decipher FAR regulations, and generally go out of their way to help Silverside deliver technology in the comfortable clothing of a start-up.