Empowering Innovation: Collaborating with Small Businesses in Public Sector IT
Federal agencies are under increasing pressure to modernize IT systems, strengthen cybersecurity, and deliver digital services more effectively. At the same time, small businesses continue to drive innovation across artificial intelligence, autonomy, cybersecurity, and emerging technologies.
During Leadership Connect’s February 19 webinar, Empowering Innovation: Collaborating with Small Businesses in Public Sector IT, leaders from the Department of the Air Force, NASA, and industry explored how agencies are broadening the industrial base, navigating procurement reform, and building partnerships that accelerate mission delivery.
Couldn’t attend the session live? Watch the whole webinar here and make sure to follow our events page to get in on the next conversation. Below are the key themes that shaped the discussion!
Expanding the Industrial Base Through Structured Pathways
Broadening participation in federal contracting remains a priority across agencies. Programs such as AFWERX, SpaceWERX and SBIR were highlighted as structured pathways that help small businesses move from early-stage innovation to operational capability. These programs are designed not only to fund prototypes, but to transition companies into sustainable participants in the defense acquisition ecosystem.
At NASA, small business engagement is anchored in statutory requirements under the Small Business Act and the Space Act, but it is also tied directly to acquisition modernization and industrial base resilience. Efforts include stronger integration between small business offices and acquisition teams, more consistent outreach, and data-driven supply chain analysis to identify capability gaps.
Where Agencies Are Investing
Technology priorities remain highly visible for firms that know where to look. Within the Department of the Air Force, focus areas include artificial intelligence, autonomy, open system architectures, command and control, advanced materials, and resilient space systems. These priorities reflect the growing complexity of mission environments and the need for scalable, interoperable systems.
NASA emphasized publicly available tools such as NASA TechPort, acquisition forecasts, research solicitations, and active contract listings as key resources for industry. Federal appropriations language and congressional signals also reinforce continued investment in AI and IT modernization.
For small businesses, alignment begins with disciplined market research. Monitoring forecasts, responding to RFIs, and tracking expiring contracts are foundational steps in positioning for opportunity.
Dual Use Technology and Responsible Adoption
Artificial intelligence served as a central example of dual use technology. Agencies are increasingly prioritizing commercially developed solutions where possible, reserving limited research and development resources for uniquely government-specific requirements.
Commercial adoption can accelerate capability delivery, but it must be paired with thoughtful system architecture and risk management. Lower-risk applications, such as data processing or workflow support, may move more quickly. Higher-consequence uses require additional oversight, testing, and governance.
The emphasis was on balance. Speed is important, but mission assurance remains paramount.
Preparing for Federal Procurement
Successful engagement in federal procurement rarely begins with a solicitation. Preparation often starts well in advance through capability marketing, NAICS alignment, early outreach, and participation in industry events.
Small business specialists play a central role in helping firms understand agency requirements and readiness expectations. Resources such as APEX Accelerators, vendor databases, and recorded webinars provide additional support for navigating registration, compliance, and positioning.
The consistent message was that preparation is ongoing. Companies that engage early and consistently are better positioned when formal opportunities are released.
Alternative Contracting Pathways
Beyond SBIR, agencies utilize multiple acquisition mechanisms to reduce barriers to entry and accelerate innovation. Other Transaction Authorities were discussed as a tool for increasing flexibility, particularly for companies less familiar with traditional FAR-based contracts.
At the same time, modernization efforts aimed at streamlining the FAR are intended to simplify duplicative requirements and improve efficiency. Small business participation continues across both traditional and alternative pathways.
Diversifying contracting strategies across multiple vehicles and mechanisms increases resilience in a competitive environment.
Navigating Consolidation and Contract Vehicles
Procurement consolidation, including GSA’s OneGov strategy, is reshaping how agencies purchase technology. Fewer contract vehicles and award slots increase competition and heighten the importance of strategic positioning.
Subcontracting and mentor-protégé arrangements were identified as viable long-term strategies. Partnering with established primes can provide past performance credentials and sustained revenue streams that support future prime opportunities.
At the same time, open system architectures create opportunities for specialized vendors to contribute within larger programs. Decisions about prime versus subcontractor roles should reflect capability maturity, available resources, and long-term growth objectives.
Relationships and Long-Term Positioning
Across agencies and industry, trust emerged as the defining factor in successful partnerships. Demonstrated performance, responsiveness to mission needs, and consistent engagement build credibility over time.
Industry days, small business outreach events, peer introductions, and mentor-protégé programs all contribute to relationship development. Listening carefully to articulated requirements and aligning solutions accordingly strengthens positioning.
Federal contracting is built on performance and relationships developed incrementally. Long-term participation depends on both.
Key Takeaways for 2026
Agencies are modernizing procurement and strengthening industrial base participation at the same time. Structured pathways, commercial technology adoption, and acquisition reform are shaping a more dynamic environment.
For small businesses, preparation, diversification, and relationship building are essential. For agencies, transparency and sustained engagement remain critical to expanding participation while maintaining mission performance.
Innovation in public sector IT will continue to depend on collaborative execution, clear communication of priorities, and disciplined acquisition strategy.
Follow up resources from our panelists:
- Doing Business with NASA (OSBP): Overview of how to engage with NASA and access resources to facilitate your pursuit of business opportunities with the agency.
- NASA TechPort: Explore NASA’s Technology Portfolio Management System to locate information on technology investments, technology development, innovation initiatives, and funding opportunities.
- NASA SBIR/STTR Program: Learn about funding opportunities for small businesses to develop new technologies and innovations for NASA missions.
- AFWERX: The innovation arm of the Department of the Air Force, connecting American ingenuity with the DAF’s most pressing challenges and accelerating emerging technologies.
- SpaceWERX: The U.S. Space Force innovation hub focused on forming collaborative partnerships to accelerate space capabilities.
Continue the Conversation
Watch the on demand webinar to hear the full discussion and explore additional Leadership Connect resources for insights on public sector procurement, policy, and innovation.
Stay connected to upcoming Leadership Connect events as we continue convening leaders across government and industry to support modernization with clarity and confidence.
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