High-growth cybersecurity startups have received a total of $9 billion in venture capital funding in the past six years, according to the National Venture Capital Association.  The private sector has rapidly adopted the cybersecurity solutions developed by these emerging companies; however, the federal government has been missing out on these innovations due to its cumbersome and confusing procurement process.
Two bills recently approved by the House Committee on Homeland Security aim to jumpstart a prohibitively slow and complex procurement process for innovative cybersecurity technologies.  According to industry insiders, by the time innovators win government contracts, cybersecurity needs have often evolved, requiring products to be adjusted to stay effective.
Texas Rep. John Ratcliffe, chairman of the Subcommittee on Cybersecurity, Infrastructure Protection and Security Technologies, introduced the Leveraging Emerging Technologies Act of 2016 and the Support for Rapid Innovation Act of 2016. House Majority Leader Kevin McCarthy recently indicated that the House may soon consider them.
  • The Leveraging Emerging Technologies Act of 2016 directs the Department of Homeland Security (“DHS”) to address homeland security needs by engaging with “innovative and emerging technology developers and firms, including technology-based small businesses and startup ventures.” Specifically, the bill requires the DHS to develop a strategy to engage small businesses and startup ventures developing new security technologies, including by:
    • ensuring that innovative and emerging technologies can be included in current and future federal procurement contracts;
    • coordinating with venture investors, particularly those funding small businesses and startup ventures, to assist with commercializing innovative and emerging technologies; and
    • addressing existing barriers to small businesses and startup ventures in the federal government’s acquisition process.
  • The Support for Rapid Innovation Act of 2016 expands the Homeland Security Act’s rudimentary framework that already encourages joint federal-private sector efforts to develop and acquire cybersecurity technology. Specifically, the DHS, through oversight from the Under Secretary for Science and Technology, would be required to engage in partnerships and commercialization that “introduce new cybersecurity technologies throughout the homeland security enterprise.”
Nimble startups are well-positioned to address the ever-changing cybersecurity landscape.  And the rapid deployment of venture funding into this space attests to the demand for innovative solutions.  It remains to be seen whether these bills, if ultimately signed into law, can make the federal government faster on its feet and able to benefit from (and provide support to) private sector innovation.