Reserving the Right to Refuse Service, Silicon Valley Sells Tech Abroad

Reserving the Right to Refuse Service, Silicon Valley Sells Tech Abroad © Flickr/ Paulo

04:55 23.04.2016Get short URL

According to Defense One, at least three Silicon Valley companies have turned away from US military contracts in favor of foreign buyers. American tech companies cite unreasonable demands, including overly long decision-making cycles, and a rapacious hunger by the Defense Department for the blueprints and schematics of proprietary technology.

Defense One names three companies; Liquid Robotics, Savonix and Hytrust, that have sold high-tech suitable for military purposes to foreign clientele. According to representatives of these companies, despite their best efforts to support their country, the US Department of Defense is fast becoming an unwelcome customer. The reasons include taking too long to make decisions, and, most notably, too many demands for proprietary information that is often then offered to third parties as part of a clumsy attempt by the Pentagon to create competition.

“We’re in almost every country in Asia. And they make decisions, rapid decisions. And we’re in, selling our platform. And if we’re in, selling our platform and we’re not selling it to our government at the same pace, that worries me,” said Liquid Robotics CEO Gary Gysin.

The Pentagon, like a sloth, makes the opposite of “rapid decisions,” sometimes taking up to a decade. According to Mylea Charvat, the Savonix founder: “[investors] don’t want a sale cycle that’s [even as long as] nine to 18 months.”

“So just think of that, in the context of the prime contract process with the United States government, that can take a decade.”

According to business observers, these appropriations methods cause Silicon Valley companies to sell their state-of-the-art products to European, African and Asian countries instead.

Another, more troubling, obstacle for companies is the Pentagon demand for proprietary information. “They want you to go into the kind of detail that would make a patent officer blush,” states Charvat. According to her, the information is typically revealed to third party groups, in an effort to create artificial competition.

“What they also want to do is show this to all these other companies and see if they can do it too,” she says.

A program, seen by many as a personal initiative by US Secretary of Defense Ashton Carter, called DIUx (Defense Innovation Unit Experimental), aims to address these concerns. If the program succeeds, it could close the gap between the DoD and Silicon Valley contractors. However, according to the House Armed Services Committee, “that outreach is proceeding without sufficient attention being paid to breaking down the barriers that have traditionally prevented nontraditional contractors from supporting defense needs, like lengthy contracting processes and the inability to transition technologies,” which, in simple English, means the US DoD is having difficulty doing business with the brightest kids in the room.

Leave a Reply