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. Last Updated: 07/27/2016

U.S. Scouting for Technology

SAN FRANCISCO -- In its search for the next surveillance system, bioterror vaccine or robot warrior, the U.S. military has decided to take a peek into the garage.

Through a program that recently emerged from an experimental phase, the U.S. Defense Department is using some of the nation's top technology investors to help it find innovations from tiny start-up companies, which have not traditionally been a part of the military's vast supply chain.

The program provides a regular exchange of ideas and periodic meetings between a select group of venture capitalists and dozens of strategists and buyers from the major military and intelligence branches. Government officials talk about their needs, and the investors suggest solutions culled from technology start-ups across the country.

It is in some ways an odd coupling of the historically slow-moving federal agencies and fast-moving investors, who deal in technologies that are no sooner developed than they are threatened with obsolescence.

But the participants argue that the project -- called DeVenCI for Defense Venture Catalyst Initiative -- brings together two groups that have much to gain from each other and that have had trouble finding easy, efficient ways to work together.

Those on the military side of things have adopted the Silicon Valley vernacular to explain the idea of systematically consulting investors to find new technology.

"We're a search engine," said Bob Pohanka, director of DeVenCI, adding that the program was a chance for military procurement officials to have more intimate contact with investors who make a living scouring laboratories and universities for the latest innovations.

Venture capitalists "have knowledge of emerging technology that may be developed by companies as small as two guys in a garage," Pohanka said. "These are companies that are not involved in the [Defense Department] supply chain."

For the investors, it is a chance to get closer to a branch of government with vast spending power that is a potential customer for the start-ups they have backed. That can be particularly valuable because the venture capital industry, far from enjoying the success of the dot-com boom, has languished in recent years and is looking for new markets and sales opportunities.

The military is "like a Fortune No. 1 company," said E. Rogers Novak, managing director of the venture capital firm Novak Biddle Venture Partners, and one of the investors who consults with the government. "We may get a customer and the [Defense Department] gets something that helps them."

The project is in its early stages, having convened three meetings since October. And there are questions about whether a bureaucratic and careful system built around long-term relationships between the military branches and their contractors can be compatible with the quicker culture of Silicon Valley.

"Most of these companies wouldn't dream of approaching the government because they've heard about a three-year procurement process," Pohanka said.

He said he tells the venture capitalists and start-ups that the Defense Department signs 6,000 or more contracts a week with various companies. "There are more than ample opportunities."