Partners Erik Swabb, Seth Locke, and Barry Hurewitz examined how defense tech companies can leverage robust compliance programs to gain a competitive advantage as Silicon Valley’s influence, including significant venture capital investment, mixes with the traditionally highly regulated defense industry environment.
Excerpt: "Defense contractors are subject to complex and often onerous requirements. Government contracting compliance covers a wide range of areas, including strict accounting requirements, certification of cost or pricing data, procurement integrity, industrial security, export control, foreign sourcing or country of origin, certification to regulations, subcontracting and supply chain risk management, cybersecurity/privacy, and conflicts of interest and ethics, to name only some of them.
"This burden of doing business with the government, however, also presents a significant business opportunity. Companies that make timely, appropriately scoped investments in compliance not only reduce risk, but they also distinguish themselves from competitors and strengthen their positions with current and prospective customers, suppliers, industry partners, employees, investors, potential acquirers, and – importantly – regulators.
"This dynamic is particularly important for emerging defense tech companies. Companies that treat compliance as a competitive advantage, rather than merely as a cost center and obstacle, are more likely to scale and succeed in the defense sector. Done correctly, investing in compliance can offer a number of benefits."