How you can impact the budget
Tune into this webinar to learn more about how policy influences the federal budget and tips on how to plug in as a tech company.
Emily:
Welcome to this Dcode and Invariant webinar. Very excited to have Maia Estes and Lindley with us today. We are going to be talking about how startups can engage with Capitol Hill and navigate the federal market, particularly with how policy drives the budget and vice versa maybe. Invariant is a bipartisan government relations and public affairs firm providing strategic advice to companies, trade associations, nonprofits and individuals on how to make the federal government work for them. So without further ado, I will kick it over to Maia and Lindley to introduce themselves. Thanks so much, guys.
Maia:
Thank you so much, Emily, for having us. We’re excited to be here with Dcode to talk about how policy drives the budget and how folks can make the federal government policy process work for them. I’m Maia Hunt Estes. I like to refer to myself as a recovering attorney. I started my professional career as a corporate transactional attorney specializing in private equity fund formation and the deal work that flows off of that.
I added to that over a decade of experience in both state, local and federal, so deeply entrenched in the public sector as well, and spent a large portion of my time on Capitol Hill working or leading the defense and appropriations and also the NDAA and transportation and infrastructure practice for a member of Congress. So excited to talk to you guys and looking forward to the conversation. Lindley?
Lindley:
Hi everyone. Lindley Kratovil Sherer. I am Maia’s partner in crime at Invariant. We co-chair the defense and appropriations practice group within the firm. So what that means at the most basic level is we work with folks like you, those who are breaking into working with government, and we try to pull back those onion layers and make the process on Capitol Hill less opaque so you understand how you can leverage it for your bottom line moving forward.
Prior to being at the firm, I served over a decade on Capitol Hill, working for a few different members of Congress from all over the country and finished up with a stint as a chief of staff for a member from upstate New York who served on the House Armed Services Committee, so was deeply entrenched in the NDA process from the authorizing perspective and from an office trying to move those policies that meant a lot to both constituents at home and the warfighter.
And then prior to my time on Capitol Hill, I served in the George W. Bush administration in a number of positions in legislative affairs offices, from the Treasury Department to the West Wing. So have been around here longer than I like to admit, but it comes in handy and it grows great relationships and it gets us the opportunity to work with great folks who are really trying to change the world with amazing technology and what you’re doing. So we are excited to be here today and talk to you. Oh, Maia, you’re still on mute.
Maia:
Super excited. So with that, why don’t we go ahead and jump on in. We’re going to jump into a presentation. We’ve got a couple of slides just for visual reference, so let me try and share my screen here, guys. Here we go. Lindley, can you give me a head nod if you can see this?
Lindley:
Yes, ma’am.
Maia:
Okay, so we’re all set. So first off, let’s start by talking a little bit about the fact we are Invariant. What does that mean to us? Emily gave us a very generous introduction, but Invariant is one of the top five lobbying firms. We represent over 150 clients and we really specialize in making sure that those, particularly in the defense and appropriations practice group, we focus and specialize on those that are involved in emerging technologies and making Washington work for our clients.
So as we start off, wanted to talk a little bit about who needs GR, who needs a government relations team. And as we all know as we are in this defense and appropriations space, we know that the largest defense contractors, the big six, if you will, are certainly heavily investing in government relations. And as we’re talking about that, the question is, “Who else is ready for government relations? At what point do you know that you’re ready?”
But our philosophy here is that if you’re doing business with the government, if you have or you’re looking to grow or increase your business with the government or increase your contracts with the government or expand into different agencies or military service branches, that a strong GR engagement strategy is the way to help you navigate everything that is happening both within the agencies but also on the Hill.
And, certainly, if you are looking or if you have participated in the small business innovation research grants, whether that’s AppWorks or In-Q-Tel or DIU or others, it certainly behooves you to be able to engage with Capitol Hill and with the administration in a way that furthers your own policy and business objectives. As we go on and talk about who else that includes, certainly any emerging technology company, anyone that’s presenting new or innovative solutions to recalcitrant problems should think about ways that you’re going to interact with the government.
One of the things that we like to say is that you want to make friends in DC and have friends and relationships in DC before you actually need them. And so part of a good government relations strategy is making sure that you have engaged and shared with the members of the Hill exactly who you are and telling your story rather than having them try and find out who you are through a Google search.
So basically, in short, whether you’re just completed your Series A funding round, whether you’re in the middle of your next funding round, your next Series B, if you are already public, if you have 10 employees or if you have 50, now is the time to begin thinking about how you’re going to employ your legislative strategy. And so, with that, I think one of the most confusing or opaque things to understand about engaging in government relations, whether it’s the National Defense Authorization Act or whether it’s appropriations, is really understanding what the legislative calendar looks like. When is the time to engage? What is the cadence of government policy? And so, with that, Lindley, I’m going to turn it over to you and I’ll pull up a slide for your reference if that’s helpful.
Lindley:
Great. As Maia’s doing that, I think, to level set for you all because I think there’s always often confusion about the calendar, about how fast government works based, especially in relation to how fast you work. And so it’s really great to level set and understand that those budget processes work on very different timelines. What you all often innovate and iterate on in three to six months, it will take the government one to three years.
So understanding how you plug in at the right time, make sure those timelines are meshing. Oftentimes, especially in the defense world, they have budgeted for something three to five years out and you may not have existed three to five years ago. So employing that government relations strategy will help you push and pull into those places where you can to actually get traction and be successful in that engagement.
I’ll also say the things that we should note, and we’ll go into details both on the National Defense Authorization Act and the appropriations bills, but an important thing to remember is these are the two items usually every year that get done. So no matter how partisan things are on the Hill, no matter how much rancor that you think there’s around, these will always get done. The NDAA is oftentimes a bipartisan product, and that is what propels it across the finish line.
Appropriations is the money product and so we have to fund the government one way or another by certain dates so that it, and their 12 individual bills, they will usually always get over the finish line in one form or another. So when we talk about engagement, and I will walk through the calendar, the one thing I think we always stress with our clients is you should be engaging early and often.
So to Maia’s point, it’s great that you start to create relationships on Capitol Hill to let people know what you’re doing, especially if they are your footprint members and you employ their constituents, to let people know that you are there, that you don’t necessarily need their help right away. You want them to know what good work you’re doing, so when they do need to come help you, they already know who you are. And so we engage early and often.
And so we talk about this a lot. In the beginning of the year, you will start to finalize any language that you think might be helpful to you and work for you in either of these bills. There are submission processes for these bills so that you can put your proposed language into different Hill offices and ask them to submit to be included in those legislative vehicles.
So January and February is the time that you are finalizing this. You’re working with your GR professionals to really understand the realm of the possible, what makes sense and what will drive your bottom line, and how can you get there through these legislative vehicles. You also want to start to finalize your outreach strategy. Who are those members you’re going to talk to, be it your footprint members that represent your headquarters or those members that sit on committees of jurisdiction.
Then, by statute, the President should be sending his budget to Capitol Hill the first Monday of February, and it outlines what the administration sees as their budget priorities. This is but a footprint of what the administration wants. Capitol Hill is where the purse strings are, so they will make the final decisions on those funding issues, but the President likes to lay out his agenda or her agenda, as the case may be, and what they’d like to see happen and to give their friends in Congress a roadmap to help them start to grow and build off of.
Then during this time, as offices are getting the budget, they start to and the budgets committee start to put together what they see as the actual budget outline from the Hill’s perspective. This will vary, both in the House and the Senate, but eventually they try to marry the budget up. The interesting thing about all of this and how it works is the budget is not a binding document, so it is again but a roadmap to the appropriations committee when they finally put together legislative text to actually fund government programs.
So, about to say, starting in March, end of March into April, early May is when offices will accept submissions. So that’s when you’ll be sending your text if you have proposed legislative language you’d like to see included. And then following that, they will start to hold what we consider markups in the committees of jurisdiction, so in both the House and Senate Armed Services Committee and the House and Senate Appropriations Committees, they will hold committee markups to actually mark up the legislation they have created.
Your hope is your language gets included in that base text, so you don’t have anything to change, but this is also your opportunity to change something if you either see something in those bills that would hurt you or if what would help you hasn’t gotten in and you want to engage more and see through the amendment process and the mark-up process if you can get it in. Then we’ll fast forward to the fall and that is when conference committees, which is when the House and Senate come together with both of their products to come to a final product, those start to have their conference meetings to work through the problems and differences they have.
This is also when agencies will look at what is left over in their budget, and they have until September 30 to spend dollars in that fiscal year. And so where can they push money out? This is also a great chance for you all to see what possible opportunities are for end of year funding that you can grab here, there, and everywhere. It also lets you know what the agencies are thinking about for the next year and help you, sorry, plot out what would look right and be the next steps in your action plan.
October 1 is when the new fiscal year starts. As we’ve noticed in the past many years, we have not had new appropriations bills done by the start of the fiscal year, so we usually go into what is called a continuing resolution. So they keep the funding levels of the prior fiscal year until they’re finally able to pass those current appropriations bills. That can go anywhere from November to December. And then into this year, we saw we didn’t get our final appropriations bills until six months into the fiscal year. So this is where working with a great government relations team that can guide you through the calendar, that can hold your hand through the up and downs, the quiet periods, the crazy periods, is really, really helpful because you all have a lot on your plate and this isn’t necessarily your sole focus.
And so having great teammates in a GR team to help navigate this process is really helpful. And then, Maia, I think we should start to jump into sort of the more background a little bit on NDAA and appropriations.
Maia:
Let’s talk about it.
Lindley:
Great. So as I mentioned very quickly, the National Defense Authorization Act is done every year. It is the authorizing piece of legislation that tells the Department of Defense how they should be running their programs and how their funding should be done. It also sets the roadmap for the appropriators to then give actual money to those programs. As I mentioned, this is a very bipartisan product, excuse me. It has passed for the past 62 years on bipartisan and very strong votes.
Oftentimes because we are talking about the warfighter, a lot of the politics fall away. So this is always a good vehicle to really push good policy that will help you all, especially in the innovative tech area, to get and push the military and service branches to encourage and grab those new innovative technologies and use them and help the warfighter. Oftentimes, this is the piece of legislation we’re talking about that if the Department didn’t budget for something because it didn’t exist three years ago, this is where you can put your finger on the scale and really drive towards what would help you and work to push along what you are working on and what great products are now in existence that would help the warfighter.
And I think we can cover some examples to really bring this to life for you. So, Maia, I don’t know if you want me to jump into one or if you’ve got one off the top of your head.
Maia:
Sure. So I think when we’re talking about the NDAA, it’s that Congress sends its priorities, its spending priorities and guidelines and directions, as Lindley said, to the Department of Defense. And so, there are a couple of tools or avenues that are available. So report language is one option, where you’re going in asking the Department of Defense or a particular military service branch to give you additional information about a particular topic.
So, for instance, if I was in the process of doing business with, let’s say, the Navy, and I’m doing a lot of good business with the Navy and I have this amazing training tool, which I think has broad applications across all of the other service branches, one of the things that a client could see a company could seek to do is to ask the Navy to report back, ask Congress to ask the Navy to report back on all of the things that they’re doing and ways that they are implementing on innovative training tools, for example.
And once that report is in, it signals that report language is incorporated or included in the larger National Defense Authorization Act. It signals to the Department of Defense to the particular agencies that this is an area of issue for Congress and that this is something that we’re going to have to be accountable for going forward. And it also causes and prompts a review of here are all of the other things, here are all of the things that we’re doing in this innovative training space. And so what can we do to show and demonstrate to Congress that we are being good stewards and that we are observing the priorities that they have set out for us. So that’s one example.
Lindley:
Yeah. One more I would give, too, is oftentimes you all will start working with agencies and you may have SBIRs and so you may have already been in the process of prototyping and going into production of technology. We once had a program from the Department of Defense where they had down-selected a few different competitors for a new program, but they hadn’t looked at other technology that already existed in the Department that had gone through a SBIR and that had been prototyped and been into production.
And so we worked to make sure when they were looking at this program that not only could they look at the down selects, but they had to look and evaluate all the other technology that had already gone through the SBIR and met those prototype and those production metrics. In doing so, it allowed a client of ours to be open for a whole new line of work that really made a difference to their bottom line. So that is the way you could also utilize the processes. Like I said, we did and worked on that through report language because it pushed and gave the Department a directive that they needed to follow when working with this program.
Maia:
So as we’re going to… We anticipate and look forward to hearing questions, more questions about that to get into more specifics. We’re trying to be conscious of time and keep ourselves moving along here. And so we’ll talk a little bit now sort of about the appropriations process and what the opportunities are to engage here. As Lindley mentioned earlier, there are 12 appropriations titles or bills that are produced every year.
And depending on the makeup of our Congress and how cantankerous the atmosphere has become, will depend on how long it takes for the appropriations committees to mark up their spending bills. This is where Congress exercises its power of the purse. For our purposes, the most relevant titles are both within the Defense, the Department of Homeland Security, and State and Foreign Affairs as well. And so one of the things that appropriations represents an opportunity to do is after the President has released his budget, there’s an opportunity then to influence Congress to say, “Hi, Mr. President. This is nice that you put this amount in for border protection and for technology and innovation around border protection.”
We actually think that Congress can then say, “We actually think that we have awareness of programs and innovations that deserve a further or a larger or an increased investment.” And so this is the time in which clients kind of devise what their ask is, what it is that they are recommending to the agencies, in terms of what their new programming may be or what programming increases should happen. And this is the opportunity, then, to go into members of Congress to make the case, to introduce the company and to talk about what solutions it is that the companies are putting forward and then have them assert to include in the bills the increases or additional amounts that we’re trying to move forward with.
So cases in point where this has sort of been successful, you’re all familiar with programs like AppWorks or familiar with programs like the Department of Innovation within the Department of Homeland Security. And so this is an opportunity to, one, to plus up a program from the President’s budget, but it also presents an opportunity to put fencing language around particular buckets of spending.
So if we’re going to plus up the technology and innovation program within the Department of Homeland Security, we may say that, “no fewer than this amount of money can be spent in this particular program.” And I think, Lindley, I don’t know if you want to talk about some examples of that that we’ve seen or new starts that we’ve seen, which is another opportunity for the appropriations process.
Lindley:
I think Maia’s described it really well. They’re oftentimes two different ways that you can go about finding some money. We’ve worked with clients, to Maia’s point, about fencing some money off. So just going in and saying, “In this work and in this program, a certain amount of the money that you’re allotting for should only be used for this specific reason.” And oftentimes when we’re writing it that way, we also have written so that we don’t see a company’s name, but they are the only company that could meet that type of requirement.
And then to Maia’s point, we’ve also worked with clients where they’ve had wonderful technology in the Department of Defense and it’s been fielded for a few years and they’ve wanted to expand it to the Department of Homeland Security. And so we have worked to use one as a past performance for the other and to add money in the other appropriations title in the Department of Homeland Security title. So we’ve worked across the board and pulled all these levers into different ways to try to get money to programs that you all would be poised to work with and would oftentimes be the only ones that could meet such requirements. And that is how we can oftentimes leverage the process to help you.
Obviously, we’re trying to be very mindful of time. Maia pulled together a phenomenal list for you all for us to leave you with before we jump into discussion on if you were ready to engage with GR, if you’re ready to use this process and the policy process and the funding process, what do you need to bring to the table? And my colleague here put together a phenomenal list that is not something you need to have a check on every bit, but it is also a great way to think about where you need to be in your process, in your time in growing your company when you’re ready to engage. So I will send that to Maia.
Maia:
So I think the first thing that, in order to engage in a successful GR strategy, it is incumbent upon each company to define success. So spend some time thinking about what are your one-year goals? What are your three-year goals? Are there any legislative hurdles or any existing policies that stand in your way for you meeting any one of those goals or in order for you to expand or to provide your service or your product to the government, whether it’s the Department of Defense or the Department of Homeland Security or others. Do you have an innovative idea that you’re ready to launch or that you would like to see be created as a pilot program? So, again, this is really about defining success. What does that look like for you?
The second thing that you need to bring to the table is to make sure that you have the time to invest to build relationships on the Hill and in the administration. And so there’s no better storyteller, there’s no better person to explain exactly what it is that your company does than you or someone who is deeply immersed in the day-to-day. And so you have to take the time and set aside the time so that you are creating relationships, cultivating, as we say at Invariant, cultivating your Congressional champions so that people know who you are, they know what you do, and they understand where you want to be and why you are bringing something to the table that is a change maker, a change agent, a differentiator.
The next thing is you really want to understand what it is your customer wants and what it needs. And so this is about making sure that, as you’re talking to your project managers, as you’re talking to your end users, that they are equally excited about the delivery and the execution and what you’ve been providing to them. And it’s an opportunity to have informal conversations with them about what else they would like to see, or if they had just a little bit more money or if they had a little bit more directive or if they had this legislative hurdle cleared, then they would be gung ho and ready to purchase more of the thing that you have.
And so really understanding those existing relationships and what your customer wants and needs is important. And then, finally, as Lindley talked about, when we’re thinking about language and ways to engage within the NDAA, one of the things that’s important is for you to be able to articulate to us what your competitive advantage is. What is the thing that makes what you are putting forward different, special, more cost-effective, and time-saving? What is the thing it is that you’re doing that creates a competitive advantage and differentiates you from all of your competitors? Lindley, anything else you want to add before we flip it over to them for questions?
Lindley:
No, you covered it great.
Emily:
That was wonderful. Thank you so much, Maia and Lindley. I definitely was taking furious notes and learned a lot, so I’m sure that many of our participants were doing the same. We had a few questions come through the chat. Just a note to our attendees, you can use both the Q&A feature and the chat feature, but to kick us off, and this sort of syncs perfectly with that last slide, one of our participants submitted a question. So you recommend to go into members of Congress and talk about these increases and advocate for your company. How do you find the right member? Where do you really get started? Do you literally go into their office?
Lindley:
Great questions because oftentimes I think we forget that we’re in a little bit of a bubble and this is our everyday life. So fantastic questions. I think some of it you can start on your own. Some of it is also engaging government relations specialists who are able to help you with that roadmap. As I mentioned, the idea of footprint members, we consider footprint members to be those that represent where your company is, where your employees are, so your senators and your members of Congress that represent your particular address and where your buildings and your member and your constituents are. That could be multiple, right?
A lot of times, especially coming out of COVID, we’ve had a ton of people who have their employees spread out. And so you actually could have a great and a huge list of your footprint members, which is wonderful. And then we recommend engaging those members of Congress that sit on the committees of jurisdiction, so sit on those authorizing committees that oversee the departments, the agencies that you want to work with, and then those appropriations members that will direct where the money goes. And so, as we mentioned, the appropriations bills are broken out into 12 titles. People sit on the appropriations committee, but then they’re on specific subcommittees. So you can look by subcommittee and where that agency falls and really target those folks.
And then to the next question, do you physically go into the office? Well, yes. More and more now, people are starting to come back. What is actually written into the Constitution, you have your Constitutional right to lobby members of Congress, so you actually go into their offices and meet with both members and their staff who handle these issues for members are oftentimes smarter than their members and actually drive the policy themselves. Great relationships to create. But we are still seeing this embrace of telework, so Zoom and virtual meetings are also still available in many, many offices.
So you can totally take advantage of that piece, depending on where you are. We have a lot of clients all over the country. Boston, Texas, California. I would say we are a hybrid now. We have folks coming into Washington, but we also have a lot of virtual as well. So you can really harness technology for your favor. Maia, what did I miss there?
Maia:
I think you got it all.
Emily:
That’s awesome. Thank you. And where can people find those committee members? Is there a site that they can reference?
Maia:
Sure. So you can go to the House Armed Services Committee or the Senate Armed Services Committee, the Senate Appropriations Committee, and also the House Appropriations Committee. If you put any of those things in, you’ll see the members pop up. And they’ll also give you, as Lindley said, a description in terms of the jurisdiction that each of the subcommittees covers. And then it’ll give you a list of the subcommittee members as well. And so that is a good place to start to understand which subcommittees are covering the issues that you care most deeply about.
Emily:
Awesome, thank you. We have another nitty gritty how-to question. What is the best way to convey your competitive advantage? What have you seen work for your clients? Do people bring in slides, white papers?
Maia:
Yes and yes. I think, as you’ve seen here, slides can work with varying degrees of success, especially if you’re on Zoom. But that being said, I mean one of the things that I think we do really well here at Invariant is that we help you come up with what is your narrative, what is your story? How do you tell that story in most of these meetings are 20 to 30 minutes at the most. So how do you convey who you are, where you’re from, what it is that you’re doing, or what product that you’re putting forward, and why your product or your technology or your innovation matters.
So that’s where a good GR team comes in because they should help you define that narrative. And then, frequently, as we’re preparing, whether it’s report language or whether it’s appropriations requests, in terms of being able to present your request to the members of Congress, we frequently help you… Let me say it differently. A good GR team will help you write and draft a white paper that really allows people to use something as a takeaway, so you can leave that with the offices when you walk away. So if they’ve got additional questions, they’re turning around to convince their member, their senator, their representative, that this is something that is worth them putting their time and effort to, they have something to refer to to understand exactly what it is that you’re asking.
Lindley:
But to Maia’s point about slides, I like to call them the before times. In the before times, sometimes we would go in with our computers in a slideshow, and now we share over Zoom. Sometimes it would be a video. I do think that visuals are helpful, but it’s often, as Maia said, it’s your narrative. Being able to convey it well in an elevator pitch because of the time and making sure you get across, it’s really describing your competitive advantage more to how great you are, not how not great your competitors are. So I think very similar, less salesy than when you’re talking to investors, but you have a lot of those building blocks there.
Maia:
And being able to describe your advantage also comes from understanding your customer really well. So you understand how what it is that you’ve been doing, what you’ve been providing, the iterations that you’ve had to make, the improvements that you’ve made in their processes or in their end product helps you be able to articulate, that is your secret sauce, that’s your competitive advantage.
And so talking to the members of Congress about how that thing is saving the Army money or saving the Army time or increasing morale or increasing readiness is really where your meat and potatoes is. And then when you have the opportunity to be in front of Congressional offices, you want to also leave time for questions. You want to make sure that they understand what it is that you are selling or what it is that you are talking about.
Emily:
That’s super helpful. Thank you. So switching tracks here, we got this question from our audience member. Can you discuss the disconnect the federal government fiscal year and private sector’s calendar year and how that impacts industry’s ability to even work with the government?
Lindley:
So I’m going to start, and Maia, hopefully, is going to tag in here because I know I’m going to miss things. The biggest part, I would say and stress about this is, it’s very frustrating to you as the innovator. You move much quicker. You are more nimble. If you come up with a great idea, oftentimes, in three to six months you have a prototype and you’ve already thought about it. It’s nothing you thought about a year ago.
And the way that our budget systems are set up is, at best, a yearlong process. More often than not, it’s 18 to two-year process and then in the Department of Defense, they get even crazier and they’re a three to five year process. And that is just how, I think, from such a large perspective, how they’ve had to manage it over the years. I think it also makes it, and as you all probably recognized and have dealt with, it makes it very easy for large primes to stay incumbents because they have dealt and been in the system for so long.
As we mentioned before, oftentimes you guys have created something that when they were planning five years ago, it was not even in existence so they didn’t know to put it in that budget. And so that’s where the frustration comes because government does not move at the speed of business, and trying to get those two cycles to marry up is really, really difficult. And that’s why I think some folks get frustrated and just walk away from working with the government.
I think we have created some great tools that have allowed companies to get those footholds. SBIRs, STRATFIs, using OTAs, these are great new products over the last five to eight years that have really been able to give smaller companies footholds. But then,, oftentimes what we see is they get the foothold and then they can’t breach the middle ground to get to the program of record.
And so we work every day to try to make that easier, and how do you take those crawl, walk, run steps so that you can bridge the valley of death to make it to a program of record, to really build up your customer, give your customer what they need in past performance to get to that program of record. Even if it takes three years, if you start and you’re doing the work, you start to understand and burrow into the budget so that you know can plan for the three years.
And that’s why I think Maia laid out for you understanding your business development prospects and thoughts and plan 1, 2, 3 to five years from now because that’s how you lay the groundwork and make the government budget cycle work for you because you’ll be working against those metrics and understanding how to scale up to it and trying to also manage the expectations that come along with it. Maia, did I miss anything there?
Maia:
I think you hit a lot of it. I think the only thing that I would add is that also just being aware that if you go back to the original slide that we talked about in terms of the legislative calendar and you end up under a continuing resolution, what does that mean for you? What does that mean for if you were super successful and you were able to secure a $3 million, $5 million, $10 million plus up for the program, for the thing that you do with fencing language that means you’re the only one that can take advantage of it, but you end up in a continuing resolution at the end of the year, which is unfortunately these days kind of par for the course, having awareness of what that means for you.
Which, generally, what it means is you’re going to have to wait and your new money that’s coming in, your new program funding that’s coming in will not happen until after the President has signed the budget, until Congress has come to an agreement and the President has signed the budget and it’s been enacted. So being able to, as Lindley said, plan around that and understand what it means for when you need to be ready to go and how that affects your other business decisions and other investments that you want to make.
Emily:
That’s great. Thank you so much. We get this question a lot and I’m very interested in hearing you all’s perspective. What’s your advice to founders or even senior executives who view Washington as not worth the effort? We often have portcos sort of come through and they’ve had a lot of commercial success, but they’re having trouble convincing their leadership that federal is really worth the time investment.
Lindley:
So I’ll kick off here. Our CEO says something that’s fantastic, which is very, very true. “In Washington, if you are not at the table, you are on the menu.” So that is why we talk a lot about, even if you’re not necessarily thinking about working in the federal markets, having the relationship and utilizing government relations strategies and having these and creating these relationships on Capitol Hill and in the administration’s important just from a policy perspective.
Even if you’ve got a great commercial business, you have roadblocks. You see what’s happening and what’s making it hard to do your job. And so that doesn’t necessarily mean that you need language and an NDAA in our appropriations bill, but you’d like to be at the table having those discussions with policymakers as they’re trying to smooth out those roadblocks, as they’re trying to make sure that we are creating an economy that’s great for innovators. A.
And so having those relationships, engaging Washington, is important. It doesn’t need to be the 100% of your day. Obviously, especially for founders and senior executives, there is a lot on your plates, but having an eye towards it and being a resource really will pay dividends down the road, just from helping to shape what policies are coming and what you might see and even heading off, I would say, bad things coming quicker than trying to create great things.
Maia:
Yeah, I agree 100%, Lindley. I think I would also say as you look towards what it is that you want to achieve, and I imagine the folks at Dcode filled with companies and with people that are endeavoring to do big things, that are going to be impactful, things that are going to change the way that we live, the way that we operate. And the reality is is that government is usually the source of a lot of those big things. And it is the entity, the venue, the organization, the process that we have to make the amount of investment that is required in order to propel those big things into existence and being and commercialization.
I’m also going to be just slightly hokey. There is also the idea that if you have something that is unique, that it’s going to again change the way that we live our lives, one of the quickest ways to reach and touch as many people as possible is to be engaged with the government as you’re doing it. And then, finally, I’ll say no matter what area you’re in, you’re going to be regulated by the government, and so it behooves you to understand the process, and as we talked a little bit about earlier, to make friends before you need them, to have people know who you are so that you can tell your story your way rather than having someone else say you’re bad because.
Emily:
It’s also, as a line of business, fairly recession-proof if that is something that the company is thinking about. Yeah, that was wonderful. Thank you. Okay, so how is Congress supporting increased innovation and adoption of commercially available solutions, especially in this defense space?
Lindley:
Great. So there’s been a push, I would say, over the last decade or certainly, I would say, since President Obama came into office, to try to short circuit as much as possible the old way to do procurement and the acquisitions process. Everyone recognizes the department, it’s really bogged down in red tape. It takes forever. It takes a lot of resources.
Oftentimes, it’s why the primes are the primes. They have all those resources to put to it. So I think, both in the Obama administration and then married on the Hill, there was big push to create the Small Business Innovation Research grants, SBIRS, to create STRATFIs, to create OTAs which are other transactional authorities, to actually go to market almost directly with commercial, off-the-shelf products that were available. Especially when those products were being used in the commercial space and had past performance and demonstrated use of how the government can do it.
It’s trying to break the cycle. The government likes to build its own. I think we are getting better and better about them understanding that they can really harness what our amazing American innovators have created. And it’s all these little things. I think there’s still a lot more work to do to break down the acquisitions process, but there is great want, especially in Congress, for the Department to be pulling in on these smaller companies on commercially available products faster and quicker to get them into the hands of the war fighter.
And so you’ll see it as a theme, really, through a lot of the budget hearings, a lot of the underlying committee bills and discussions at hearings about, “Why aren’t we doing this?” You’ll also see more members of Congress being willing, not necessarily to vouch for specific companies, but being willing to call over to the Department and say, “I know this exists. Why haven’t you been trying to use this? Why do you feel like you need to recreate the wheel and ask someone to build it when it’s already made?”
And so you have, I think, more folks willing to dive into that pool, especially, I think, you now are starting to get more veterans serving in Congress again, following the last 20 years of ongoing conflict. And those who have been at the front and out in theater are oftentimes the loudest voices for trying to break down these acquisition roadblocks to get folks with more innovation, smaller companies into the process.
Maia:
Look, historically if we’re just talking about the Department of Defense, they’re really good at building big things. That is what the procurement process was sort of designed for. Software, not so much, because if you’re following the same procurement trajectory timeline for procuring software that you’re using for procuring ships, then you’ve already, no pun intended, missed the boat.
And so, again, as Lindley said, you have more veterans serving in Congress, but you also have a Congress on a bipartisan level that is really concerned to make sure that our warfighters are best equipped. Whatever it is that they need, that they are best equipped and that we don’t get that to them two years after we’ve procured it, but that we’re pushing that towards and forward for them as soon as they need it, so that we can continue to maintain our competitive advantage.
And so what the challenge that companies have that don’t want to be on the ship building timeline is to articulate why the thing that you’re pushing is going to make a difference right now in the lives of the men and women that are serving in our military. Because at the end of the day, what you will always find bipartisan support for in Congress and members that are willing to put it all on the line is what can we do to serve our men and women that are in uniform?
And you have, just this year, a really good, or this past NDAA cycle, a really good example of that is the warfighting lab innovative fund, where it’s $100 million fund that has been set aside and they’re going to award projects out of that in order to, again, find and fund those things that are going to allow the United States to maintain its competitive advantage, national security advantage.
Emily:
That’s awesome. Thank you. We probably have time for one last question. So if we did not get to your question today, we’ll follow up and make sure you get an answer. Any hot button issues for members of Congress that the team thinks companies should think about leveraging GR to get ahead of, for example, tech privacy issues, et cetera.
Lindley:
The privacy debate is raging and there are, I think, a lot of points there that members aren’t even sure of and definitely don’t agree on, so it’s going to be a very long and arduous conversation. They’re trying to move a comprehensive privacy bill through Congress this year. I think it’ll be difficult to get done. There’s so many issues involved. And I think also at a point, embedded in there are some AI discussions about how does AI work, and I think this is part of the problem is I don’t think a lot of members of Congress are educated on what AI is, exactly, to understand those issues.
So, one, I think that’s just going to be a longer discussion. So always worth having those discussions, especially as folks who are intimately involved in the technology and these types of issues and the privacy that’s built in, especially around data and what that looks like and how you all utilize data. I also think another big issue that is sort of at the forefront for everyone, will continue to be, but will especially continue to be should majorities change in the election is where are we in relation to China and how is what you’re doing putting us ahead of that game?
And finding those pressure points and having those conversations is really important as well because, oftentimes, I think what so many are focused on to make sure that we aren’t losing our competitive edge. And this comes across the board from what you all are doing sort of here on earth, but also to creating the first lunar site for humans. We are right now in a massive race with China to be the first people there to not just touch down and lift off, but to stay there for a little bit.
So I think all of these issues are at the front of peoples’ minds, I think. Oftentimes, it is also the economy, so anything involving inflation and what you all are seeing as business innovators and how you’ve dealt with supply chain issues and inflation issues are always great parts of conversations that policymakers are going to want to know and understand as you’re living everyday lives.
Maia:
Yeah, I think it’s, one, so important to be in the arena. In this case, the arena is in conversation with the policymakers. It is important to be in the arena so that you can see, spot, share experiences that will help shape and influence, whether it’s the next privacy law or whether it’s the next supply chain piece of legislation, or whether it’s the next piece of chips legislation or any of the other things that are touching your businesses each and every day.
Or whether it’s to understand what proposed tax changes are going to mean for your business or how it may hamper your business. As Lindley said, members of Congress are smart, capable, engaged, committed people, but they don’t have the full benefit of having a 360-degree understanding of what it means to be a small business or what it means to be an innovator. And so being in the arena is important. It is so important. Not just for finding ways to grow your own bottom line or your own revenue, but it’s also important to make sure that the laws get it right so that we are continuing to position ourselves as a country to continue to be able to innovate.
Emily:
That is awesome. Thank you both so much for your time and your wisdom and perspective and answers. This has been a great conversation and definitely helps us and our companies have a place to start. We are going to go ahead and drop a survey link in the chat. Thank you, Emily. Please fill that out if you have the time and, Invariant team, thank you so much for being here.
Lindley:
Thank you, Dcode. This has been wonderful.