In Stay Sharp Episode 138, How SMBs Can Break Into the Defense Industrial Base, co-hosts Juliann Grant and Jonathan Scott welcome two returning guests: Steve Nichols, head of the public sector and defense group at Razorleaf, and John Biagioni, President of Lampin Corporation, the critical component manufacturing expert. They share their perspectives on how small and medium sized businesses (SMBs) can gain a toehold in the network that provides the U.S. government with defense-related materials, products, and services—aka, the Defense Industrial Base (DIB).
The DIB Isn’t Just for Big Companies
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The simple definition of the DIB is the Department of War (DOW) and its supply chain, Steve explains.
Participation comes with a lot of requirements for being part of the supplier network, from cybersecurity to cost assessments and more. But it’s important that SMBs are part of it, Steve says, “Because you get a lot of innovation that’s happening out in those types of businesses.” He adds, “You have small and medium businesses that are coming up with some really, really critical approaches, ideas, different types of things … and you want to make sure that those make it to the front of the pack as fast as possible.”
John says the goal now is, “To create a civilian manufacturing network that can augment the existing defense industrial base.” With defense budgets skyrocketing around the globe, it’s clear, “We’re going to need more people, not less, and that’s why it’s so important that we look at broadening the supply base,” he adds. We’re already seeing supplier shortages, for example when we hear about it taking too long to build submarines. The question is why.
SMBs have historically found it challenging to participate in the DIB. Part of the reason is that requirements to be part of the DIB are stringent. While Steve suggests the requirements aren’t wrong, he agrees they could be modernized or adjusted to achieve the same outcomes. “While no system in itself is really that difficult to get into or to manage,” he explains, “when you layer ten systems onto it, and now someone has to get into ten. Then they’ve got to log in every thirty days. Then they have to keep it up to date. Then they have to certify,” the overhead for SMBs might not be something they’re willing to take on. Especially since John estimates the average of cost of achieving CMMC level 2 is $50,000 to $200,000. But there’s a possibility many are missing out on. Instead of getting the certification first, he says, “They don’t realize they could actually put that into their first bid, and charge that off against it.”
Another reason for low SMB participation in the DIB is “friction” with regard to information, such as poor requirements, no drawings, or no material specification. There’s a lot of work that needs to occur to enrich the government’s data to make bidding and delivering parts a less risky proposition. On the flip side, John says, some of the processes and systems you must put in place to be on the DIB will strengthen your company and capabilities and encourage growth on the commercial side of your business as well.
How an SMB Can Get to the DIB
John suggests SMBs start by joining groups around the DIB and other sub-IBs, like the quantum industrial base or the marine industrial base—even on LinkedIn. “Every one of those guys are running onboarding programs, how to build their supply base,” he explains. “There are resources inside each one of those, so probably you could get a piece of from each that could help offset the demand.” Some states, for example, offer capital grants to help SMBs go after a CMMC attestation. The key is really the connections you start making in industry as a potential subcontractor that could potentially take on some of the small stuff. Because that helps your business and everyone up the supply chain as well.
Steve’s suggestion is to figure out how to be the “Easy” button for larger contractors, the way Razorleaf is who they think of when they see the words “digital engineering” in a bid or the way right-angle gear drives sends everyone to Lampin. He says, “We are the easy button, not trying to take them over, but trying to make them successful too. It is relationships. And when they see a couple keywords, you want the phone call.”
Learn More About Tackling the DIB
The full podcast contains more discussion and details on a variety of topics, including the “uber-ization” of the DIB and how SMBs can play a big role, what the hidden DIB is all about, where to start trying to make connections at large prime government contractors, and more.
Be sure to check out Stay Sharp Episode 138: How SMBs Can Break Into the Defense Industrial Base and join us each week for a new podcast.
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