Golden Dome, the Trump administration’s gambit to build a next-generation missile defense system, has startups and longstanding defense contractors preparing to duke it out for a piece of a $151 billion multi-year contract.
The process to qualify for the $151 billion contract vehicle, essentially an umbrella program, is stacked against most startups – not because of their tech. Instead, smaller companies may be thwarted by a multi-layered, expensive bureaucratic process used to ensure a company can meet security and other compliance requirements.
Ultimately, Golden Dome may not be the zero-sum battle of emerging tech versus incumbents. The startups that do breakthrough will be those that are able to convince the biggest defense contractors to take them on as subcontractors.
The Pentagon’s Missile Defense Agency released last week a draft solicitation for a $151 billion, multi-award contract, the prelude to the government’s forthcoming defense tech-buying spree.
The 10-year contract, called SHIELD, or Scalable Homeland Enterprise Layered Defense, acts as an umbrella that will be used to buy technology for the Golden Dome system. That program, which the White House likened to Israel’s Iron Dome, will encompass systems that span space, land, and sea to protect the continental United States against a variety of missile threats.
In order to build out this system, the government will be looking to purchase a range of cutting-edge technology, like space-based interceptors, ground-based radars, and terrestrial and sea-based systems capable of taking out an enemy missile in flight. The first hurdle for companies hoping to win one of the contracts is to qualify for the umbrella program, or vehicle.
Getting onto the $151 billion vehicle doesn’t guarantee federal dollars; instead, companies will compete for contracting work on individual task orders. The final request for proposals will be released sometime in the fourth quarter of this year, though that hasn’t stopped companies from already starting their lobbying efforts.
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Bryce Dabbs, CEO of consulting firm Approach Venture, told TechCrunch that he estimates between 5% and 10% of the pot could realistically go to non-traditional vendors – not by startups competing as a prime contractor, but rather through “teaming and subcontracting arrangements,” he said, noting that not all startups are equal. For instance, SpaceX and Anduril, while backed by venture capital, are already at the scale of small primes, and the opportunity for smaller startups will likely look considerably different.
A startup with a compelling technology would need to collaborate with a defense prime, like Northrop Grumman or Lockheed, to provide a capability that the prime doesn’t currently offer in-house.
That’s because many early-stage companies lack facility clearances, personnel, IT security, or other requirements to perform highly classified government work – and the pre-solicitation warned that these barriers to entry will be in place for would-be suppliers.
Venture-backed companies like Anduril and SpaceX will be able to meet these security and compliance requirements, but everyone else will likely need to sub under a prime in order to compete.
Dabbs said his firm is seeing more early-stage founders reference Golden Dome in their decks, and that the program is frequently referenced when VCs do diligence on startups Approach supports. But the investors “may not fully understand how government procurement or larger contracts work,” he said.
Meanwhile, more mature and cash-rich startups like SpaceX and Anduril are better poised to compete with the legacy defense contractors, also sometimes called, such RTX (formerly Raytheon), Lockheed Martin, Boeing, and L3 Harris.
Reuters reported earlier this year that a team composed of SpaceX, Palantir, and Anduril has already started meeting with federal officials. Lockheed, meanwhile, launched a “Golden Dome for America” page on its website highlighting how it might contribute to the effort.
FAR, not fair
William Greenwalt, senior fellow at American Enterprise Institute and former deputy undersecretary of defense industrial policy at the DOD, was less optimistic. “I am not overwhelmed by the prospects for non-traditionals to gain anything at all from this,” he said.
That’s because of the structure of the contract, which is being run under the Federal Acquisition Regulation (FAR) and the Competition in Contracting Act (CICA).
While FAR requires “full and open competition,” the pathway’s high compliance standards implicitly keep newcomers out. Instead, Greenwalt said the program should be done as an Other Transaction Authority (OTA), which gives the DOD more flexibility to work with non-traditional vendors and fund prototypes with follow-on production opportunities.
“A CICA IDIQ contract is about the dumbest way to do this if you want innovation as it will preclude non-traditionals from bidding. This should be done as an OTA — plain and simple,” he said.
Trump appointed General Michael Guetlein, second in command of the U.S. Space Force, to spearhead the initiative. He will be in charge of finalizing the program’s final architecture, which the White House wants to be in place in just three short years. That timeline favors technologies that are ready to be deployed now, not still being worked out in R&D labs.
“Golden Dome is a bold and aggressive approach to hurry up and protect the homeland from our adversaries,” he said in May.
