Startups bring innovation to defense industrial base

New tools, longstanding partnerships and additional resources could be the keys to bolster the defense industrial base.

The War Department is diversifying its inventory by working with startups and playing the long game through extended agreements with established contractors.

"I do think these are unprecedented deals," Undersecretary of War for Acquisitions and Sustainment Michael Duffey said. 

"Nobody's been able to deliver the quality and the performance that Tomahawk and the Patriot provide for our war fight."

The War Department has been announcing multi-year weapons production contracts. 

Some agreements extend as long as seven years, including a $22.9 billion deal with Raytheon for Tomahawk missiles, a $1 billion framework with Northrop Grumman and Lockheed Martin for THAAD components and a $58.62 billion contract with Lockheed Martin for Patriot Missile Segment Enhancements. 

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"In the case of Patriots, it was a three-times production increase over what we were producing this past year," Duffey said. "We have a lot of new entrants that are bringing new great technology into the industry."

The War Department is also investing more in new technology. The Department of War Innovation Unit works with commercial companies and startups to adopt new weapons and defense capabilities. Its budget has skyrocketed to nearly $1 billion in recent years.  

"I think the startups are going to be kind of the future. The primes have their purpose. They build the big weapon systems. They build aircraft carriers. But it takes a long time to move that ship in the right direction," Rep. Michael McCaul, R-Texas, said. 

"The startups, just like we saw in Ukraine, have this ability of innovation to move at a faster speed and a more innovative technology, more creativity in the process, out-of-the-box thinking that we desperately need for our defense industrial base."

Rocket Lab is one newer company that has increasingly been working with the War Department. Since the company was founded in 2006, it has received more than $2 billion in government contract awards. 

"I would say we've moving up the food chain, and now we are amongst the preeminent missile and missile defense test programs in the United States," Vice President of Global Launch Services at Rocket Lab Brian Rogers said.

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Rocket Lab has worked with the Department of War Innovation Unit to test its Haste Launch Vehicle, which the company says will help the U.S. accelerate future hypersonic capabilities. 

"We've already done a number of launches," Rogers said. "We got a lot more in the hopper, and it's all kinds of different technology applications."

Defense technology company Castelion says one of its priorities is speeding up the manufacturing timeline.

"We believe that it's much faster if you just go out and build the object you're trying to build into inner manufacturing, and then you find all of the problems in that process, and you correct them," Castelion Co-Founder and CEO Bryon Hargis said. "One of the things that we based the company on is really what worked in the Apollo era when we got to the moon as a country in under a decade. A lot of those practices have fallen out of favor. We're going back to what worked, and we're just implementing that again."

The War Department is investing in that strategy with a multi-year agreement to eventually field Castelion's Blackbeard Hypersonic Weapon.

"It's just the agreement to have a future agreement," Hargis said. "If we meet those performance targets that we set out and said we could do, the department is saying they're gonna come in and buy a tremendous amount of munitions."

Castelion has secured $500 million in U.S. military contracts over the past 18 months and recently announced $1 billion in funding. 

"The future is very bright. We have a tremendous opportunity with this administration and what the department is doing to bring in new entrants," Hargis said. "The key thing that I think has been missing in the past decades is that we do not build enough, we do not go test enough, and they're correcting that. And that's going to lead to tremendous innovation in this space."