Partner Erik Swabb and counsel Elizabeth D’Aunno discussed procurement fraud and other compliance challenges facing technology companies entering the defense business in an Expert Analysis article published by Law360.
Excerpt: In some ways, the prospects for a technology company entering the defense business have never looked better. Last year saw record global military spending exceeding $2 trillion for the first time, while the U.S. spent $801 billion on the military.[1]
New defense technology companies, such as Anduril Industries Inc.[2] and Epirus Inc.[3], have raised hundreds of millions of dollars at valuations surpassing a billion dollars. They are also starting to win major government contracts.[4]
The war in Ukraine is spurring greater interest in technology with defense applications, such as artificial intelligence,[5] drones[6] and commercial space systems.[7] In June, NATO launched an innovation fund that will invest €1 billion in early-stage startups and other venture capital funds.[8]
That said, defense contracting is not for the fainthearted. Companies face many challenges from the so-called Valley of Death,[9] a term referring to the difficulty of transitioning promising technology from the research-and-development phase into large-scale procurement, to sweeping government data rights claims[10] to other bureaucratic obstacles.[11]
