Fallon, Houlahan, Rosen, and Blackburn Introduce Bipartisan, Bicameral Legislation to Incentivize Investment in Defense-Focused Small Businesses

Representatives Chrissy Houlahan (PA-06), and Senators Jacky Rosen (D-NV) and Marsha Blackburn (R-TN), and I introduced the Investing in American Defense Technologies Act, which would establish a federal public-private partnership to invest in defense-centric small businesses. This bipartisan, bicameral legislation would create a new Department of Defense public-private partnership program to fuel investment in innovative small businesses developing advanced defense technologies critical to our national security. Senators Rosen and Blackburn are members of the Senate Armed Services Committee, and Representatives Houlahan and Fallon are members of the House Armed Services Committee.

There is currently a lack of available private capital supporting defense-focused small businesses, stunting growth and innovation in the field. The number of small businesses in the defense industrial base has shrunk by over 40% in the past decade. At the same time, defense-focused small businesses face the “Valley of Death,” the point when cutting-edge technologies die due to lack of funding before they can win a contract to produce software or equipment at scale. This legislation would accelerate the development, transition, and acquisition of advanced technology for national security by creating incentives for trusted private capital to invest in U.S. small businesses.

The public-private partnership set up by the Investing in American Defense Technologies Act will help the Department of Defense innovate at levels never seen before. Providing this incentive will leverage new technologies from businesses that have traditionally been excluded from the process. I’m proud to join my fellow Armed Services Committee colleague Representative Houlahan, and Senate companions, Senators Rosen and Blackburn, in this effort.

“Small business involvement in the defense industrial base has shrunk by over 40% in the last decade; this is a problem we need to address to ensure our forces remain agile and competitive,” said Congresswoman Houlahan. “DoD agrees on the need to reduce barriers to new entrants into the defense industry, and I am encouraged by their efforts. However, I believe we need several pathways to accelerate the adoption of the critical technologies these companies provide. The challenge these small businesses and non-traditional defense contractors face is funding – how do they scale their capabilities and turn them into DoD programs? DoD simply does not move quickly enough, causing these small businesses to run out of capital.  Without private capital investment, small businesses hoping to bring their technology to our war fighters face real financial challenges. That is why I am proud to work with Senator Rosen to provide a bipartisan and bicameral solution to address this issue. I also was proud to offer the SBIR/STTR two-year extension for inclusion into the National Defense Authorization Act for Fiscal Year 2023, which is another vital program to encourage technological innovation within the defense industrial base. Small businesses are the heart of America. We need to think creatively to ensure the innovative solutions they offer can be adopted to address our nations’ greatest challenges.”

“To stay ahead of our adversaries, it’s critical that the United States maintains its technological competitive edge by investing in our defense-focused small businesses,” said Senator Rosen. “That’s why I’m introducing this bipartisan, bicameral legislation to leverage our nation’s entrepreneurial and innovative spirit to accelerate the adoption of advanced defense technologies.”

“America is home to the world’s best innovators. Their groundbreaking technology gives our troops the tools they need to fight and win,” said Senator Blackburn. “This legislation will establish new enabling tools for the public-private defense partnerships necessary for the United States to counter ongoing threats posed by the new Axis of Evil.”