David Shahady, director of the Air Force Small Business Innovation Research and Small Business Technology Transfer Program, knows a thing or two about competition – both athletically and the business variety.
A seven-time Ironman triathlete, he has been racing for almost 19 years – although he had never won a race until recently when his 18-year-old daughter and 16-year-old son joined him in a triathlon they participated in as a relay event. He did the swim, his daughter did the bike and his son did the run. Together, they won their division with a first-place medal.
“For me, that epitomizes the thinking that I’m the big dog, but until I partner with two more creative, fresher entities, I haven’t succeeded and so I look at it the same way – the big Air Force needs to partner with other smaller individuals in order to cross the finish line first,” Shahady said.
He became the director of the SBIR/STTR program three years ago. The program, designed to foster the national economy, build up the industrial base and foster getting creative, innovative things out the door to the warfighter faster, is run on about 3.6 percent of the overall Air Force research, development, test and evaluation budget as set by Congress.
“The program has done well over the years, but it sort of had a stagnant feel to it so I came in with a perspective that we needed to treat this like a venture capital program,” Shahady said.
New and unique partnership opportunities for SBIR began when the Air Force started opening innovation storefronts such as AFWERX, MGMWERX, SOFWERX and the Defense Innovation Unit, he said.
“We started finding out that a lot of the things that we thought were the way we had to do business were not true,” Shahady said. “The biggest thing that concerned us was that people weren’t coming to work with us because they said we’re [the Air Force] hard to work with, there’s too much bureaucracy, there’s never a return, it takes too long to get a contract, and when you do get one, you don’t get paid.”
Shahady and other Air Force officials came up with the idea of a “Pitch Day” as an experiment to see how they could streamline the acquisition process.
“We started with things like doing more open topics, going out and saying, ‘here’s a broad area of problems the Air Force is facing. If you have any ideas that can help us in this area, send in a proposal.’”
That process change yielded receipt of more proposals, but officials also wanted to make it easier for businesses to submit their proposals. Previously, companies would end up preparing huge binders full of information for their proposal.
“We knew they didn’t want to write all that information, and we didn’t want to read it either, so we sought a way to consolidate that down to maybe five pages of critical information and perhaps a set of slides as a way to communicate a proposal,” said Shahady.
Officials then simplified how proposal evaluations were done so they could be completed faster and collect more information while providing better feedback to organizations.
SBIR officials joined at one time with contracting and finance officers and program managers who took all the proposals they had received and set forth to see if they could evaluate the proposals and award contracts right away. Their first couple of sprints were done with AFWERX.
“The first one we did resulted in 50 contracts in 50 days. The next time we did a set of proposals, we did 50 contracts in 50 hours,” Shahady said.
These successes resulted in senior Air Force acquisition officials encouraging even bigger events, so the SBIR team initiated what they called a Pitch Day.
“This time we wanted to go beyond just awarding – we wanted to know if we could award to somebody and pay them right away on site,” Shahady said.
Three program executive officer organizations participated, with each of them having their own call for proposals.
“We received around 400 proposals across those programs and the PEOs then downsized those to 60 proposals, each with solicitations opening in December and closing Feb. 5,” he said. “Officials then sent out invitations Feb. 14 to the 20 businesses from each group that made the cut to invite them to the inaugural Pitch Day in downtown New York City.”
Each of the companies had a representative come in to meet with the PEO that invited them and they provided a five-minute presentation, responded to five minutes of questions, followed by five minutes for PEO deliberation for each company.
The companies selected to receive an award signed a simplified, one-page contract, swiped an SBIR government purchase card on their phone, and were paid 50 percent of the value of their contract.
“The process took three to 15 minutes. This was a record-breaking thing to get people on contract that quickly,” he said. “It was not a rubber stamp either.”
For example, one of the groups thought they already knew who would be their No. 1 choice. After listening to all the presentations, they chose a different one. Out of the 60 companies that actually pitched, 51 of them received a contract.
“The whole push of Pitch Day was to try to show that the Air Force can do business at the speed of innovation,” Shahady said. “The next day we invited all the prime contractors, the venture capital folks we have contacts with, to come in and have the same opportunity to watch the companies and see if there is an opportunity to make investments in some of them.
“Pitch Day is a streamlined acquisition and contracting process. Typically, for a SBIR, you would have a 90-day solicitation period, a 90-day period for an organization to evaluate the proposal, and then another 90 days before getting on contract, so it was a 180-day process of getting put on contract, and even then it was probably three to six months before you got your first payment,” he continued. “We’ve gotten this process down to under 30 days with initial payment almost right away.
“One of the neat things that came out of our first Pitch Day was that of the people that came in as proposers, over half of them had never done anything with the Air Force before,” Shahady added. “Of the awards, over half of the people that came in were groups of people who we hadn’t pulled in as much, including women-owned businesses, minority owned, Historically Underutilized Zone and veteran-owned businesses.”
Future updates to the initial Pitch Day setup may include allowing people to participate by sending in a video or the use of video teleconferencing or a conference call, he said.
“We have also started to sponsor business development training. Many of these companies are very technically savvy, but they don’t know how to put a business plan together, so part of our initiative was to get them some business acumen,” said Shahady. “We required this as part of their program, so we told them, ‘when you come back for your second phase of this, bring your customer with you. Show us how you are going to get this into the Air Force.’ It forces companies to think less pure technology and more technology and business at the same time.”
Going forward, companies can expect that there will be Pitch Days based on the focus of the Air Force all over the country at different times.
The Air Force SBIR/STTR program is partnering for 12 Air Force Pitch Days through the end of 2019. For the complete schedule, visit https://www.afsbirsttr.af.mil/af-pitch-day/how-to-submit/ .
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