The Defense Department is actively working to strengthen small business procurement with its new Accelerated Payments program and the new Rapid Innovation Fund, according to Andre Gudger, OSDBU director for the department.

DOD is on track to accelerate $60 billion in payments to small businesses this fiscal year, Gudger told an industry group on June 15. That represents an increase from the $40 billion in payments to small firms that were expedited last year under the accelerated payments program, he said.

The DoD on Nov. 18, 2011, adopted the final rule amending the Defense Federal Acquisition Regulation Supplement to speed up payments to all small vendors, with no change to pricing or other terms. Under the provision, eligible small contractors may be paid 1/3 faster.

“We pay small businesses faster than what the contract says,” Gudger said, calling it the “largest win for small business in 20 years.”

The goal of the program is to maintain cash flow to small companies to reduce their needs for credit and maintain job stability.

“Small businesses do more with more. The more we give them, the more they will do,” Gudger said. “These investments create jobs.”

Gudger also encouraged small businesses to apply for federal work under the new DOD Rapid Innovation Fund and the Small Business Innovations Research program.

Congress approved $200 million to seed the rapid innovation fund in fiscal 2012. The goal of the fund is to develop innovative technologies quickly to meet critical national security needs, including cybersecurity, advanced microelectronics, advanced materials, energy security and independence and improved manufacturing.

DOD released a presolicitation notice for the rapid innovation fund on June 11 (Number HQ0034-RIF-12-BAA-0001) stating that a Broad Agency Announcement will be released on July 9 requesting white paper responses.

Following evaluations, proposals will be invited and the winners may receive up to $3 million. While the program is open to all sources, preference may be given to small businesses with the appropriate capabilities, the notice said.

While the notice did not specify a set-aside for small firms, Gudger said the fund and the SBIR program hold rich opportunities for small businesses.

“These are two areas where we will make huge investments at DOD,” Gudger said. “This is where small businesses can win—you can be a prime.”

Gudger recommended that if a small contractor has not developed an innovation on its own, the business owner should visit a local university to see if any available technology might be commercialized. Often the academic developers need business help to bring their innovations to market.