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Tech startups struggle to tap $82 billion in federal contracts

December 27, 2016 By Andrew Smith

tangherlini-would-be-a-way-better-gsa-administrator-12-2016Jason Wagner’s cyber startup sells a digital platform federal agencies need. But lacking the heft or connections of a major defense contractor, it would be more trouble than it’s worth for him to seek a coveted federal contract. And he’s not alone.

During 15 years as a contract employee for intelligence agencies, Wagner saw cybersecurity analysts waste time transferring data for their investigations across multiple computer applications. So last year he started Tensor Wrench, which makes such information-sharing easier.

Now with a team of six, his customers include General Dynamics Corp.’s Mission Systems division, which helps run communications systems used on satellites, and by law enforcement. But he still hasn’t put the biggest potential buyer — the federal government, which spent $82 billion this year on information technology, about eight times Apple Inc.’s research and development budget — on his list of prospective clients.

“The government is a big juicy target,” Wagner, 38, said in an interview. “It’s tempting, but you got to figure out how much time you want to invest and whether you can afford that. When we added everything up, the answer came back: not now.”

Many cyber startups make similar calculations in weighing whether to do business with the government, where they face a complex and slow procurement process that can strangle smaller companies. Amid rising cyber threats, the gap in getting the latest technology tools is particularly worrisome for federal civilian agencies, from the Department of Veterans Affairs to the Department of Agriculture.

Keep reading this article at: https://www.bloomberg.com/news/articles/2016-12-08/tech-startups-struggle-to-tap-82-billion-in-federal-contracts

Filed Under: Contracting News Tagged With: 18F, bureaucracy, cybersecurity, federal regulations, IT, start-up, technology

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