Defense Diversification Program

SBANE and MassDevelopment are proud to introduce the “Defense Diversification Program”, an opportunity for Massachusetts defense-dependent businesses to diversify their product line and manufacturing processes to other industry verticals through high-powered private consulting expertise. Funding for this program has been provided through the Office of Economic Adjustment within the Department of Defense.

This is a competitive matching grant program of up to $10,000 per company to assist companies in finding the support and guidance to increase the opportunities to successfully transition their defense legacy business to other industrial and technology verticals.

Important Dates to Know

  • Applications are now being accepted (please click the link to access online application)
  • We will have a rolling admission to the program until all the funding has been allocated
  • Projects must be completed by May 1, 2017

This is a competitive, one-time, matching grant program, which requires the eligible defense candidate company to pledge a dollar for dollar cash match up to $10,000. For example, if the project will cost $20,000 to hire a person or agency to institute lean manufacturing in a plant, then you will be required to send a $10,000 certified check to SBANE for 50% of the project cost. Total project costs can exceed $20,000, however SBANE will only match up to $10,000. SBANE will pay the third party directly so it can track the progress and benchmarks that have been established at the outset by the recipient company. SBANE must submit reports on its expenditures to MassDevelopment and the Office of Economic Adjustment of the Department of Defense.

Please note, SBANE cannot pay for work that has already been done, the projects must be on a go forward basis from the date of grant award. 

In order to be eligible for the Defense Diversification Program, your business must be a prime defense contractor or subcontractor to a defense prime, deriving a minimum of 10% of sales from the Department of Defense (including STTR and SBIR projects).

Consultants will be selected by the eligible companies. Companies must hire a third party consultant; current employees CANNOT be substituted for a consultant. There is a possibility that your company may want to hire multiple consultants to fulfill your objectives. This is a viable strategy as long as the tasks do not exceed the $10,000 company cap. While this is not an inclusive list, here are some examples of the types of projects that would be considered,

  • Assisting in establishing and executing a commercialization strategy
  • Certifications (medical or pharmaceutical)
  • DCA Accounting
  • Developing a manufacturing strategy
  • Financial restructuring of bank debt
  • Marketing or Branding Programs (excluding website development)
  • Lean Manufacturing
  • Legal/Advocacy of new products to federal government

Interested companies will be asked to fill out a online application and submit that along with a detailed statement and a consultant proposal.

The company statement should include an executive summary describing the company’s capabilities and the number of jobs the company supports, an explanation of any impact of defense budget reductions or impending budget restrictions, how the company plans to diversify and should discuss in detail the impact the proposed project will have on the company. Important details to include would be projected job growth, improvements in efficiency, higher projected sales.

Additionally, ff there has been an impact due to DOD budget restrictions or reductions, the company will need to provide documentation of a historical loss of at least 5% in sales (over the last 12-24 months) that is attributed to a defense sector cut or a cancellation of a contract.

The consultant proposal should also include the scope of services, a task statement, projected outcomes and a project timeline. Consultant contracts CANNOT be substituted for a detailed proposal.

Applications should be very thorough! The applications are vetted by SBANE staff and if we feel information is missing, we will reach out for additional documentation. After the vetting process, each eligible application will be sent to a committee for final review before awards are made. 

SBANE will handle all project payments and will ask each consultant to fill out a W-9 form. Once the equivalent cash match is received, SBANE will accept invoices for work done after date of award announcement. Failure to submit a cash match on a timely basis will result in a termination of the grant and recapture of the funds. Along with each invoice, consultants must submit a benchmark report. This report will include what tasks were completed, where in the project that places them based on the submitted timeline and what the next steps in the project will be. At the completion of the project, SBANE requires a final report, detailing any and all results that company will see as a direct result of the project.

  • Consultant Invoices need to be sent to SBANE by the 15th of the month
  • After a thorough review, invoices are then set to MassDevelopment for payment
  • Once SBANE receives the matching funds, payments are made directly to consultants within 5 business days

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