Pentagon to Space Startups: Bring Working Hardware, Not Just Ideas

Three Pentagon offices delivered the same blunt message to space startups at the MilSat Symposium during Silicon Valley Space Week on Wednesday: demonstrated, working hardware and a credible path to revenue win defense business, not concepts. Officials also described new government help with security clearances aimed at moving startups faster into classified programs.

Space Development Agency Director GP Sandhoo opened by arguing that too many companies arrive with ideas rather than mature technology. He said the small-business research awards many firms rely on rarely produce winners, and that over his roughly three decades of experience, the successes coming out of those programs number in the single digits. For many small companies, he added, those awards have become a lifeline.

Sandhoo pointed to early aviation and the auto industry, saying those industries succeeded in spite of government funding. The successful ones, he said, build it, show it, and then sell it. SDA's bar is lower than founders might expect. A "C+, B-" demonstration on one or two satellites can be good enough to buy a plane or a tranche.

At the Defense Innovation Unit, 90 percent of contracts go to non-traditional companies, said Maj. Gen. Steven "Bucky" Butow, senior adviser to DIU's director. But founders need to understand where DIU sits. "You need to know who your customer is, and we're not your customer," he said, explaining that DIU prototypes and validates while portfolio acquisition executives buy. DIU's Bridge program offers firms on DIU contracts what Butow called concierge services for the usual walls: facility and personnel clearances, SCIF access, and authority to operate on government networks. His first question for a company's first DIU effort is "What's your path to revenue?" The urgency is real, he said: "Right now, when we don't have budgets, the people in this room are the people we're most concerned about, because you don't have a lot of runway."

Col. Tim Trimailo, director of the Commercial Space Office at Space Systems Command, described the clearance catch-22 in a fireside chat moderated by Milbank's Dara Panahy. Startups, he said, cannot get a contract without a clearance and cannot get a clearance without a contract. COMSO's ACES program, Access to the Classified Ecosystem for Space, announced last week and built on DARPA pathfinding work, starts that process earlier. When a program office needs a classified conversation with a company, COMSO can add security classification specifications to SBIR projects, use cooperative research agreements or no-cost contracts, and help with facility clearances. "This is not circumventing any existing processes," Trimailo said.

Momentus Chairman and CEO John Rood, a former under secretary of defense for policy, described the view from the startup side. SBIRs are "insufficient to run even a small business on," he said, though winning one competitively shows investors the idea has merit. The government system, he said, "is really optimized for large contractors." He added: "We only have one kind of money. It's called cash. Every quarter is a survival quarter."

Taken together, the officials signaled a tougher standard for venture-backed space companies counting on defense dollars, emphasizing proven capability over early concepts while trying to remove clearance friction.

The ACES program, announced last week, is the near-term mechanism to watch as program offices begin bringing companies into classified conversations earlier.