The Power of Access: How to Build DoD Relationships that Unlock Defense Innovation Funding

Introduction

Strong proposals from companies with innovative and relevant dual-use technology can win SBIRs, OTAs, and BAAs on their own merit. However, companies that consistently win AND secure follow-on funding and move toward major DoD contracts usually have one added advantage: they build strategic DoD networks.

This isn’t about gaming the system or knowing someone’s cousin. It’s about understanding that defense innovation funding, whether it’s AFWERX SBIR, Army xTech, a DARPA BAA, Air Force OTA, or any other non-dilutive defense funding program, exists within a relationship-driven ecosystem. The government wants innovative solutions, but they also need to trust that you understand their mission, their constraints, and their operational realities.

Here’s what we’ve learned from helping dual-use technology companies navigate DoD funding: relationships across the DoD dramatically strengthen your chances and help enhance the attention your technology and company receive. Another critical reality: the people who can fund your technology or push it forward don’t know about you. They don’t know your technology exists. Building relationships converts your proposal from words on paper into a solution from someone they know and trust.

The opportunity for defense funding is massive and expanding, more reason to build your defense network now.

In this guide, we’ll show you exactly how to build those DoD relationships, why they matter at every stage of the funding lifecycle, and give you a concrete 180-day action plan to start building your network today.

The DoD Innovation Funding Landscape

Understanding the Budget and Programs

The Department of Defense operates with a budget approaching $850 billion and climbing toward a trillion. Within that, the DoD R&D budget hit $152 billion in FY2024. However, not all of that R&D funding goes to businesses, much of it supports the DoD’s intramural budget for internal labs and facilities.

The SBIR program currently represents 3.2% of the extramural R&D budget, the portion that goes to businesses rather than internal DoD operations, with an additional 0.4% allocated to STTR. Together, that translates to close to $2 billion annually earmarked exclusively for small US-based tech companies. The remaining extramural budget goes to other programs that fund businesses, such as BAAs, OTAs, and other R&D funding mechanisms.

In other words, SBIR and STTR are significant, but they’re just one slice of a much larger funding ecosystem available to innovative companies.

The DoD funds innovation through multiple pathways, each designed for different stages of technology development and different types of companies:

SBIRs/STTRs (Small Business Innovation Research/Small Business Technology Transfer): Phased funding specifically for small businesses to develop and commercialize innovative technology. Phase I awards range from $75K-$250K to prove feasibility. Phase II ranges from $750K-$2M to develop prototypes and demonstrate viability. Phase III is the ultimate goal of the DoD SBIR program, sole-sourced contracts for production and deployment without further competition.

BAAs (Broad Agency Announcements): Formal research solicitations used by government agencies (especially DoD) to fund early-stage R&D in broad technical areas. BAAs are used for basic, applied, or advanced research where topics are intentionally broad rather than prescriptive requirements. They’re strongly focused on scientific and technical merit and are commonly issued by DoD labs, DARPA, ONR, AFRL, ARL, and other research organizations.

OTAs (Other Transaction Authorities): Rapid, non-traditional agreements that bypass standard Federal Acquisition Regulation requirements. Designed for speed and flexibility, particularly useful for dual-use technologies and companies without traditional government contracting experience.

CSOs (Commercial Solutions Openings): Fast-track mechanisms for acquiring commercial technology that can be adapted for defense use. These emphasize speed to deployment over lengthy development cycles.

Innovation Challenges: Competitions like Army xTech, AFWERX Challenge, and NavalX Tech Bridges that provide prize funding, visibility, and direct access to defense stakeholders. While individual prizes may be modest, the networking value and follow-on opportunities can be substantial.

Each mechanism serves different needs, but all share a common characteristic: relationships matter. Understanding which program fits your technology is step one. Building relationships with the people running those programs is what turns understanding into funding.

The SBIR Expansion: A Generational Opportunity for Small Businesses

There’s a proposed increase that would move SBIR funding from 3.2% to 7% of the DoD R&D budget. That’s not a minor adjustment, it’s potentially $4 billion or more annually, effectively doubling the current allocation.

What this means for small businesses:

Double the number of topics. More opportunities to find alignment between your technology and DoD needs. More shots on goal across all services and agencies.

Larger award sizes. As the overall budget grows, individual awards are likely to increase, providing more runway for development and demonstration.

Phase IA funding. A new micro-investment stage allowing SBIR funding agencies to offer more awards to test out small business performers before committing to full Phase I. This lowers the barrier to entry and gives more companies a chance to prove themselves.

Potentially permanent authorization. Instead of periodic reauthorization battles, SBIR could become permanent law, enabling true long-term strategic planning for defense-focused companies.

This is a generational expansion of the SBIR program, meaning significantly more opportunities for small businesses. And it’s already a massive opportunity for businesses of all sizes through other programs like BAAs, OTAs, and CSOs.

Why DoD Networking Is Strategic (And Worth the Investment)

It’s a great opportunity. But it’s one with serious competition. Winning initial awards is challenging. Advancing from Phase I to Phase II requires more than good technology, it requires demonstrated value and often a champion who believes in your solution. Transitioning from R&D funding to production contracts or programs of record is even more demanding.

Building a strong DoD network is what separates companies that win once from companies that build sustainable defense businesses. When you have relationships with program offices, technical points of contact, and end-users, your proposal isn’t coming from a stranger. It’s coming from someone they know, someone who understands their mission, someone they’ve already started to trust.

And it’s worth the effort. Companies that received DoD SBIR funding generated $28 billion in sales to the DoD, but the real story is in dual-use markets, where they generated nearly 5x that in total sales. SBIR funding can lead to substantial business, both in defense and in the private sector. The initial award is the entry point to building credibility, proving your technology works, and establishing relationships that compound over time.

Network isn’t a nice-to-have. It’s strategic.

Want help building your defense network strategically? Schedule a discovery call with Grant Engine to assess fit and identify relevant programs for your technology.

Two Pathways to Defense Funding

When we talk about defense funding or doing business with the DoD, we’re referring to one of two pathways. Both ultimately require a strong defense network, the question is how and when you build it. The primary difference lies in where you are in your technologies development and who’s funding that development.

The Science & Technology Pathway (R&D Funding)

Unlike traditional DoD contracts where you deliver a finished product, the Science & Technology pathway pays you to do the R&D. You don’t have to come with a ready-developed solution, the DoD funds your development through programs like SBIR, STTR, BAAs, OTAs, and innovation challenges. This is brick-by-brick building. You’re developing your technology while simultaneously building relationships with program offices, technical points of contact, and end-users. Each interaction, each milestone, each deliverable strengthens both your solution and your network.

Here’s an important distinction: this pathway doesn’t immediately equal business contracts. It’s funding for development. You’re getting paid to prove feasibility, build prototypes, and demonstrate value. The business comes later, often through Phase III sole-source contracts or through leveraging your DoD validation in commercial markets.

Another upside to this pathway is cross-agency leverage. Your Army SBIR Phase I becomes your calling card with the Air Force. Your DARPA BAA work opens doors at SOCOM. You’re building a network and track record that compounds across the entire DoD ecosystem. You can win a Phase I with one agency and use that credibility to pursue Phase III opportunities with a completely different agency.

The Contracting Pathway (Traditional Contracting)

The contracting pathway requires mature, commercially-ready technology. You’ve already funded your own development. You have a solution that’s ready to deploy, and now you’re competing for production and deployment contracts.

This pathway offers larger contracts and more predictable revenue. But there’s no R&D funding included, you’ve spent your own capital to get to this point. And without established relationships, you may not even know opportunities exist.

Starting with Science & Technology

Many innovative dual-use companies start with the Science & Technology pathway to build credibility and relationships first. They use SBIR or BAA funding to prove their technology works in defense contexts, establish relationships with key stakeholders, and build the past performance that makes them competitive for larger contracts.

The Common Thread

The Science & Technology pathway pays for your R&D and allows you to build the relationships. The contracting pathway demands you already have the tech and the network. But ultimately, both pathways require a strong network to thrive.

The AFWERX Open Topics Structure

AFWERX Open Topics is designed to allow any dual-use technology company to apply for Air Force SBIR funding. Here’s how it works:

Phase I: $75,000 for 3 months. This isn’t a traditional feasibility study. The purpose of AFWERX Phase I is to fund your business development efforts as you work to secure a Customer Memorandum from an Air Force stakeholder, essentially proving that they see direct use and value that your tech development could help them address.

Phase II: $1.25 million for up to 21 months for the actual development of that technology. You work directly with the Air Force customer and end-user who signed your Customer Memorandum to build and adapt your solution to fit Air Force needs.

Direct to Phase II (D2P2): $1.25 million for up to 21 months. This pathway is for companies that already have a signed Customer Memorandum from an Air Force customer and end-user. You skip Phase I entirely and go straight to prototype development.

The AFWERX Customer Memorandum Requirement

To advance from Phase I to Phase II, or to qualify for D2P2, you must secure an AFWERX Customer Memorandum signed by an Air Force stakeholder. This isn’t optional. It’s written into the program structure as a hard requirement. The Customer Memorandum requires signatures from both a Customer and an End-User:

The Customer: The organization that will manage future procurement or sustainment of your solution, who will handle funding, contracting, and logistics for Phase III awards.

The End-User: The organization that will actually use your developed solution or primarily benefit from it, the warfighters who need your technology.

Without Air Force connections, Phase II is simply not accessible. You can win Phase I based on technical merit and commercialization potential. But if you haven’t built relationships during those 3 months, if you can’t identify stakeholders who understand your value and are willing to formally commit to working with you, you’re stuck.

Most companies won’t be ready to deploy or commercialize their tech solution at the end of Phase II or D2P2. That’s why the defense industry refers to this stage as the Innovation Valley of Death, many companies need more funding and more development time to get to operational readiness.

One of the great things about AFWERX is the program offers a solution to this valley of death through TACFI and STRATFI. But accessing these programs requires even deeper network development.

TACFI (Tactical Funding Increase): Focused on transitioning smaller-scale, tactical capabilities at the operational level. TACFI provides $375,000 to $2 million in additional SBIR funding over two years. For every dollar of SBIR funds, you must secure matching funds from either other government sources (non-SBIR) or private investors at a 1:1 ratio. This means you need to either further develop your defense network to secure government matching funds, or leverage private investment, and often both.

STRATFI (Strategic Funding Increase): Focused on large-scale, strategic capabilities at the Air Force level. STRATFI offers $3 million to $15 million in SBIR funds over four years. The matching requirements are more substantial: for every $1 of SBIR funds, you need $2 from other government sources, OR $1 from other government sources plus $1 from private investors.

Here’s where your network becomes critical: STRATFI often requires getting a new Customer Memorandum from a higher-ranking Air Force stakeholder, think Program Executive Office (PEO), MAJCOM, or AFMC Center level with signatories at O-6/GS-15 or above. And since STRATFI requires government matching funds, you’re essentially turning your Air Force contact into an investor, convincing them to use their budget to help your technology advance to a contract. That’s a significant relationship milestone that goes well beyond initial customer validation.

Both programs require that you have an active Phase II or completed Phase II within the last two years. And both build on—and demand expansion of the relationships you established to get that initial Customer Memorandum.

The Broader Lesson

AFWERX explicitly requires network access through the Customer Memorandum. But the underlying dynamic applies across DoD funding programs.

Need help identifying the right Air Force stakeholders for your technology? Grant Engine can help you build those strategic relationships. Schedule a discovery call.

13 Proven Strategies to Build Your DoD Network

Building a DoD network isn’t mystical or about knowing the right people from the start. It’s systematic. Here are 13 strategies that work, whether you’re starting from zero or looking to deepen existing relationships.

1. Map Your Existing Network
You’re closer to DoD connections than you think. Start by listing everyone you know with military or defense backgrounds: veterans, advisors, investors, employees. Ask about their DoD connections and request warm introductions.

Use LinkedIn strategically, second-degree connections matter. Most founders skip this step entirely and waste months making cold contacts when they’re just two connections away from the right program office.

One warm introduction beats 100 cold emails.

2. Research by Location
Proximity matters in defense relationships. Identify bases, labs, and test facilities within driving distance. Program offices often prefer local partners for practical reasons: easier testing, demonstrations, and iterative collaboration. They may also have pride in local companies succeeding.

Service labs like AFRL, ARL, and NRL. Test ranges and proving grounds. Major bases with innovation offices. Start with what’s drivable, face-to-face meetings build stronger relationships than video calls every time.

3. Understand End-Users vs. Customers
This distinction is critical and will save you months of wasted effort.

End-Users (Warfighters): Use the technology operationally. Care deeply about what you’re developing because it can directly affect them. Don’t control acquisition budgets.

Customers (Program Offices): Control funding and acquisition decisions. Respond to validated requirements. Harder to access initially.

Important point: Sometimes end-users and customers are one and the same, but often they are two distinct entities.

The winning approach: Start with end-user conversations. They care about solutions because the technology directly impacts their mission and their lives. Ask them: “Who funds solutions in this area?” Then get introduced to the program office WITH end-user validation already in hand.

When a warfighter says “I need this” that carries weight with program offices.

4. Research DoD Technology Priorities
DoD publishes exactly what they need. Read the National Defense Strategy, service modernization strategies, PEO technology roadmaps, and recent SBIR topic patterns. Study DoD budget documents and GAO reports on capability gaps.

When you can “As stated in the Army Modernization Strategy…” speaking their language. Or when you quote a general that says your tech is something the military is in need of, you’re aligning with their documented needs, not making a cold pitch. It shows you’ve done your homework.

5. Research by Technology Responsibility
Almost every technology domain has specific program offices and program managers responsible for it. Find who owns yours.

BAAs and SBIRs have TPOCs who are often responsive and willing to engage. Tell them about your technology and what you’re hoping to solve. For SBIRs, this needs to occur during the pre-release period, which is typically around a month before the “official release.”

An added benefit to reaching out to the TPOC: they familiarize themselves with your tech, and when you submit a proposal they already have that familiarity and attention. This is surgical targeting, not spray and pray, reaching out to the specific people with budget authority in your domain.

Search SBIR.gov for recently closed topics related to your technology. Reach out with: “I saw your recent topic on X, we’re developing Y, could we discuss potential fit for future work?”

They’re actively working on this problem and have budget authority. It’s warm outreach based on their documented need. Time it right: 2-4 months after a topic closes, as they’re evaluating awardees and planning next cycles.

7. Win Competitions

The competitions tend to offer relatively small funding amounts, so you may be thinking it’s not worth it. But Army xTech, AFWERX Challenge, and NavalX Tech Bridges are network accelerators that provide direct access to stakeholders, credibility, and valuable networking opportunities.

One of our clients won their first DoD funding from an xTech competition, and in the 2 years following that small win, won over $3 million in funding. This tracks with the data: Army xTech awarded $29 million in prizes that led to $285 million in follow-on contracts, a 10x multiplier effect.

xTech Impact:
$29M in Prizes led to $285M in Follow-On Contracts

Treat competitions as relationship-building events. Focus on the connections you make and the feedback you receive. Follow up regardless of outcome.

8. Reply to RFIs

Requests for Information are the government’s market research on industry capabilities. Most companies ignore them, that’s a mistake.

The purpose of replying to RFIs is that the search for information can then be converted into an RFP or Request for Proposal, a funding opportunity where you may be a front runner as the result of piquing the interest of the contracting officer with your RFI response.

Find them on SAM.gov by filtering for RFIs. Be concise, address their questions directly, and request a follow-up conversation.

Primes received ~$24B between 2015 and 2021 with small businesses.

Major defense contractors received $24 billion working with small businesses between 2015 and 2021. There’s a real ecosystem here.

Primes provide: established relationships, cleared facilities, contract vehicles, past performance credibility. You provide: innovation, specialized tech, speed, lower cost, and SBIR eligibility they can’t access on their own.

The progression: Prime subcontracts your SBIR, helps you win, you execute with their support, and this opens doors for larger contracts down the line.

10. Attend DoD Events

Face-time matters. Industry Days give you direct access to defense program managers, DoD tech scouts, and upcoming requirements. Tech Demonstrations let you prove your value hands-on. Innovation Summits help you understand the broader DoD vision and network at high levels.

Research attendees beforehand and schedule meetings in advance. Try to keep it simple and clarify the impact on the end-user, or ask questions about their needs so you learn to better understand the end-user. Translate the interaction into a concrete follow-up such as a meeting or demonstration. Follow up within
48 hours.

11. Market Your Wins

Your SBIR win is your best marketing asset. Immediately market it to OTHER DoD agencies with the message: “We’re solving problem X for Agency Y, could this help your mission?”

Government validation from one agency validates trust in your company and need for your solution while offsetting the risk with another agency’s investment. One Phase I can cascade into multiple opportunities through direct outreach, LinkedIn posts, press releases, and conference presentations.

12. Leverage AFWERX

AFWERX exists specifically to connect innovators with Air Force stakeholders. Use their Prime Portal for direct stakeholder access. Attend Fusion Events, regular virtual showcases. Tap into the Spark Cell Network with innovation cells at every base.

AFWERX has both funding opportunities such as the Open Topic program and also hosts industry events. Use AFWERX as a networking platform whether you’re pursuing funding or just building relationships. Think of it as your front door to the Air Force.

Power phrases that resonate: “Enhances warfighter readiness,” “Supports operational requirements in austere environments.”

The test: If a warfighter reads your proposal, would they nod or be confused? Speaking their language builds trust immediately and makes it easier for champions to advocate for you internally.

Your 180-Day DoD Networking Action Plan

Days 1-14: Foundation

Research DoD priorities and strategies. Read the National Defense Strategy, your target service’s modernization strategy, and recent SBIR topics, BAAs, OTAs, and CSOs in your technology area. If you’re a small business, you should probably start with SBIRs.

Identify key TPOCs, local DoD contacts, and contacts by technology interest. Search SBIR.gov and recent BAA announcements for Technical Points of Contact who work in your domain. Map out nearby bases and labs and identify relevant personnel. Create your initial outreach list.

Internalize DoD language. Start using terms like “warfighter,” “operational environment,” and “mission readiness” in your internal communications. Practice speaking the language before you need it.

Map your existing network. List everyone with military or defense backgrounds. Identify potential warm introductions to program offices or end-users.

Days 15-30: Outreach

Develop shareable materials tailored toward the DoD. Create a one-page overview of your technology that emphasizes mission impact and operational benefits. Use DoD language naturally.

Contact identified DoD contacts. Reach out to TPOCs, local contacts, and technology-aligned program offices. Make it your goal to better understand the end-user and their challenges, not just to pitch your solution.

Respond to relevant RFIs. Set up alerts on SAM.gov for RFIs in your domain. Respond to at least one with a thoughtful, concise submission.

Attend initial DoD events. Register for at least one virtual Industry Day or AFWERX event. Research attendees beforehand and prepare specific questions.

Leverage warm introductions. Follow up on any connections from your network mapping. Request 15-minute introductory calls or schedule demos.

Days 31-90: Engagement

Update your materials as you learn. Refine your messaging based on conversations with end-users and program offices. Adjust your pitch to address the challenges you’re hearing about.

Participate in competitions. Apply to Army xTech, AFWERX Challenge, or NavalX competition if timing aligns. Even if you don’t win, treat it as a networking opportunity.

Deepen TPOC relationships. Have follow-up conversations with the most responsive contacts from your initial outreach. Share updates on your technology development.

Explore prime partnerships. Identify 5-10 prime contractors working in your technology space. Reach out through their small business liaison offices or teaming contacts.

Visit local DoD contacts. Schedule face-to-face meetings at nearby bases, labs, or test facilities. Attend their open houses or innovation events.

Days 90-180: Momentum

Leverage AFWERX. Apply to AFWERX Open Topic or attend AFWERX Fusion Events. Use their resources to connect with Air Force stakeholders.

Pursue SBIR Phase I/II or larger contracts. By now you should have enough relationship development to identify the right opportunities. Submit strategically with TPOC pre-engagement.

Refine your pitch based on feedback. You’ve had dozens of conversations by this point. Adjust your messaging based on what resonates with end-users and program offices.

Schedule recurring touchpoints. Set up quarterly check-ins with your top 5-10 contacts. Keep them updated on your progress.

Market your wins. If you’ve won any competitions or awards, immediately market them across DoD. Reach out to program offices in other services.

The Key: Consistency Over Perfection

You don’t need all 13 strategies, and you’ll probably find some are more useful than others for your needs. Pick 2-3 that fit your current stage and resources, then implement them consistently over these 180 days.

Remember: The 7% SBIR increase means 2X the opportunities are coming. Companies building networks now will be positioned to capture a disproportionate share of that expansion.

Not sure where to start? Grant Engine can help you build a customized DoD networking strategy for your technology. Schedule a discovery call.

How Grant Engine Helps You Leverage Relationships and Win Funding

DoD non-dilutive funding is certainly not a fit for everyone, and that’s okay. But if it seems like it is and you’re interested in either increasing your wins or establishing your first one, Grant Engine can help.

Our 3-Step Process

Step 1: Strategy & Planning We analyze the opportunity landscape to find the best fits for your technology. We assess strategic fit and competitiveness honestly, not every opportunity is worth pursuing. Then we help you decide which programs to target based on where you are in your development and what
relationships you need to build.

Step 2: Create Agency Buy-In This is where network becomes critical. We help you build relationships with decision-makers and champions, engage in business development activities, and establish alignment before you submit. It’s not always possible, but when you can, it’s worth the effort.

Step 3: Proposal Preparation We don’t just advise, we lead the entire writing process and manage execution from start to finish. We tailor the narrative toward the end-user in the respective funding agency, ensuring your proposal speaks directly to their mission and operational needs. We’re hands-on throughout, building the qualified team, coordinating with your technical experts, and delivering a proposal that positions you to win.

The Difference

This strategic, relationship-driven approach is one of the reasons our win rate is 2-4x the national average. We apply a level of professionalism and client-first attitude to everything we do, focusing on helping you build a sustainable defense
business, not just win one-off awards.

Recap

The opportunity for defense funding is massive and expanding, but it’s competitive. We’ve covered the scale of DoD R&D funding, the two pathways to access it, why network separates winners from wishful thinkers, and 13 practical strategies to build your defense network systematically. Whether you’re pursuing AFWERX, DoD SBIR, xTech, a BAA, or an OTA, a strong network transforms one-time awards into recurring revenue and opens the pathway to larger contracts. Start building those relationships now so you’re positioned to leverage the opportunities ahead. The window is open. The budget is growing. Start building your network today.

Is This Right for You?

We can schedule a time to see if there’s alignment and identify relevant programs that could net funding while helping you stay aligned with your current product roadmap.

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