WASHINGTON – Due diligence plays a vital role in defending national security and safeguarding the integrity of the U.S. Army’s innovation ecosystem. As the Army Small Business Innovation Research and Small Business Technology Transfer Program continues to partner with small businesses to accelerate emerging technologies, due diligence protects the federal government against malign technology risks.
Over the past decade, more than half of the FBI’s Section 702 intelligence targets were malicious foreign cyber actors – many seeking to compromise American innovation and defense systems. These threats often surface through tactics such as front companies, undisclosed foreign ownership, and covert partnerships aimed at infiltrating emerging technologies and weakening national security.
Intelligence community findings, including this FBI analysis, inform the SBIR and STTR Extension Act of 2022 (Public Law 117-183), which requires federal agencies to establish and enforce due diligence protocols for small businesses applying for federally funded awards. These measures address security risks tied to the nation’s innovation ecosystem and protect sensitive defense interests.
In Fiscal Year 2024, the Army SBIR|STTR Program awarded more than $387 million to 309 innovative small businesses, with additional funding expected in FY25 and beyond. To safeguard these investments and the national security impact they carry, the Army SBIR|STTR Program’s Due Diligence Team performs standardized reviews across all proposals submitted for Army SBIR|STTR funding.
The Army SBIR|STTR Due Diligence Team
Under the Office of the Assistant Secretary of the Army for Acquisition, Logistics, and Technology, the due diligence team assesses risk factors linked to foreign countries of concern, verifies company ownership, and ensures that taxpayer-funded innovations support U.S. defense priorities without compromise.
“Due diligence is how the Army protects our innovation pipeline from hidden risks,” said Adam Beasley, Army Innovation Programs chief of security and due diligence team lead. “As the program works with small businesses, we ensure that the technologies we invest in align with U.S. interests. The due diligence team’s job is to make sure that national security starts at the source.”
Since August 2024, the due diligence team has completed nearly 4,000 due diligence reviews on small business proposals – each one a key checkpoint in defending U.S. technological integrity. These assessments go beyond red tape and paperwork; they serve as a shield against malign foreign influence.
“The due diligence review process is a cornerstone in preserving national strategic advantage and strengthening the credibility of the Army SBIR|STTR Program while protecting small business innovations,” said Zeke Topolosky, Army SBIR|STTR program manager. “By analyzing a range of risk factors, the due diligence team ensures Army investments go to small businesses committed to safeguarding sensitive defense technologies.”
Due Diligence Risk Domains
The due diligence process spans three core domains: Foreign Ownership, Control, or Influence; Cybersecurity; and Integrity/Fraud, Waste, and Abuse. Each domain identifies unique vulnerabilities that may impact a company’s eligibility for Army SBIR|STTR funding.
The Foreign Ownership, Control, or Influence review focuses on threats such as sabotage and unauthorized technology transfer. It examines how foreign countries of concern may influence a company’s ownership, governance, and/or intellectual property. Foreign ties across these dimensions can raise red flags regarding potential influence or access to defense innovations.
Cybersecurity assessments revolve around the potential for data compromise or theft. The due diligence team evaluates a company’s digital infrastructure and practices for vulnerabilities that could expose classified or proprietary data.
The final domain – Integrity/Fraud, Waste, and Abuse – examines regulatory and legal history, investor transparency, and public records for signs of prior misconduct. Discrepancies or concerning financial entanglements may signal increased risk of unethical fiscal practices.
By proactively identifying these risks, the Army SBIR|STTR Program not only protects the integrity of its innovation pipeline but also strengthens the broader national defense ecosystem. In an era of growing foreign adversaries leveraging deceptive methods to gain access to U.S. technology, due diligence remains essential. Through its due diligence team, the Army builds trusted partnerships, safeguards taxpayer dollars, and upholds its mission to ensure technological superiority and national security.
About the Program
The U.S. Army SBIR|STTR Program, established under the Small Business Innovation Development Act of 1982, invests in small business-led research and development to support Army readiness and modernization. The Office of the Assistant Secretary of the Army for Acquisition, Logistics and Technology manages the program and aligns innovative small businesses with critical Army priorities. By accelerating innovation and fostering collaboration, the program helps the Army maintain its technological edge and drives economic growth across defense and commercial markets.
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