DAVE TEMELES, PRESIDENT OF THIRD COAST FEDERAL, INC. AND A PARTNER WITH SOUTHBANK LEGAL
Five years ago, my wife and I moved with our 9 children to South Bend, Indiana. After spending nearly all of my trips around the sun in the DC area, I was happy to trade the frenetic pace of life inside the beltway for a family-friendly, community-focused life in Indiana. On the work front, I was fortunate to join SouthBank Legal, an entrepreneurial and altruistic law firm that was excited to help Indiana communities and businesses leverage Federal R&D and contracting awards to drive innovation and job and wage growth. We began meeting with businesses in the South Bend – Elkhart Region (SBE Region) about federal opportunities as soon as I arrived and quickly realized that convincing Midwestern small businesses to join the Federal marketplace was going to be a monumental lift.
It is no secret that doing business with the Department of Defense (DoD) is difficult. Over the past decade, the U.S. industrial supply base has shed 40% of its small business participants. Indiana has been no exception, shrinking from 1,100 defense contractors in FY 2010 to approximately 400 in FY 2020. As highlighted by the COVID-19 pandemic, a robust, redundant and agile industrial supply base is critical to national health and security. Congress and DoD are acutely aware of the problem but seemingly incapable of fixing it. DoD is saddled with budgeting, appropriations, procurement and contracting rules and procedures that make the process of becoming a defense contractor seem like alchemy to the uninitiated. DoD even has its own language comprised of an alphabet soup of acronyms and a taxonomy of terms that are foreign to the commercial sector. In order for DoD and Indiana to grow the industrial supply base, we need to find a way to bridge the widening gap between DoD and industry.
Many of the small businesses we met were understandably reluctant to pursue Federal contract work. They were inundated with commercial customers and they had neither the time nor the appetite to figure out how to navigate a completely foreign marketplace. We noticed, however, that many of these businesses were incredibly innovative and that they were receptive to the idea of pursuing Federal funding to accelerate their R&D efforts.
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide $3.7B in non-dilutive R&D funding annually to businesses of 500 or fewer employees. SBIR|STTR proposals are generally easier to prepare than most FAR-based proposals. In addition to the funding, the programs provide awardees with access to world class R&D talent, IP ownership and Phase III contracting vehicles to facilitate the Government’s acquisition of products and services resulting from the R&D. DoD issues nearly half of the SBIR|STTR awards.
Based upon our interactions with business, we saw the opportunity to use the SBIR|STTR programs to bridge the DoD-industry gap. We launced an SBIR|STTR Accelerator to provide businesses with the support they need to identify suitable innovations and to craft and submit compelling proposals. At first, the Accelerator was largely informative, but it has matured to include a variety of hands on services. Participants typically progress through the Accelerator over several months, but we have been able to go from innovation conceptualization to submission in as little as five weeks. We have matched businesses with commercial experts, as well as faculty at Indiana University, Notre Dame, Purdue University and Tuskegee University. By all accounts, the Accelerator has been a success. In FY 2016, the SBE Region had $0 in SBIR|STTR awards. In FY 2020, the SBE Region had $6.5M in Phase I and II awards and a $9.5M Phase III award. In addition, participants were winning millions in DoD FAR based prime and subcontracts. FY 2021 appears to be equally successful. A nascent Federal ecosystem driving millions in new revenue and dozens of new high paying technical jobs is taking root.
Given the success in the SBE Region, we have partnered with IN3, The Dimension Mill, Radius, ROI and others to launch a second Accelerator in the Bloomington-Uplands Region. We also are meeting with AFWERX, AFRL and the Navy to explore how we can use the Accelerator to connect DoD programs with innovative teams of industry and academia that are currently out of DoD’s reach. We believe that the Accelerator model will play a critical role in supporting Governor Holcomb’s imperative to triple defense awards in the state by 2025 by drawing hundreds of Indiana small businesses into the DoD supply base. But as you know, Federal contracting is a team sport. In order for this to work, we need a robust team. Please reach out if you want to participate in or support the Accelerator effort as an innovator, service provider, LEDO or sponsor, or if you would like to share your insights and recommendations.
Dave Temeles, President of Third Coast Federal, Inc. and a partner with SouthBank Legal
Dave has been representing Federal Contractors and tech companies on a variety of legal and consulting matters for more than a quarter century. He consults with companies on a range of issues around research and development funding, contracting vehicles, contracting strategies, small business certifications and set-aside qualification, pricing and indirect rates calculations and methodologies, regulatory and compliance matters, and proposal development.
University of Notre Dame (BBS, Accounting)
Washington & Lee University Law School (JD, magna cum laude)