The Department of Defense needs to further spur its top contractors to invest in technology innovation startups to advance the development of militarily-relevant capabilities amid power competitions with China and Russia, according to a managing director at veteran-led venture capital and growth equity firm Marlinspike Partners.
In a Breaking Defense commentary, Chip Walter, a nearly three-decade U.S. Navy veteran who transitioned to the industry and led the ventures and partnership program of Northrop Grumman (NYSE: NOC), noted that the 2022 National Defense Strategy calls for innovation and technology investment.
He added that DOD primes must be encouraged to establish more holistic partnerships with early-stage companies.
“To seek the most appropriate solution, I recommend DoD establish a working group to include members from several primes (ones with and without a corporate venture capital program) to work through intended and limit unintended consequences of the incentives,” wrote Walter.
The retired Navy captain also floated the idea of some part of prime investment becoming an allowable expense for the contracyor if a startup innovation migrates into a program-of-record.
“If we want to deliver the world’s most disruptive technology into the hands of the warfighter, we need to disrupt the parts of the acquisition system that are stifling it.”
