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Students vs. Startups Episode 32: How the Federal Government can Access Commercial Innovation

Students vs. Startups Episode 32: How the Federal Government can Access Commercial Innovation

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Featuring Woden LLC

Read Time: 15 minutes

Welcome to Episode 32 of Students vs. Startups. This week, moderator John Gilroy talks with the Principal at Woden LLC, Camron Gorguinpour. With a background in Astrophysics and Physics from Berkeley, Camron Gorguinpour and Woden LLC serves as a broker for innovative models for companies and the government to do business with each other leveraging the underutilized authorities and abilities. Read to learn more about Woden LLC, as well as how your company can benefit from their services!

[audio src="https://easternfoundry.files.wordpress.com/2017/08/students_vs_startups_podcast_episode_32-final.mp3"][/audio]

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Transcript:

John Gilroy: Welcome to Students vs. Startups. Showdown on the Potomac.  My name is John Gilroy and I'll be your moderator today, let's have a big round of applause for show number 32. When I was growing up, 32 was Jim Brown's number so everyone knew the name of the running back Jim Brown number 32, we all know that. We are sitting in the offices of Eastern Foundry and we took over a conference room as everyone knows and what we do is we have a table, we have students on one side of the table, we have startups on the other side of the table. The students assess the startups' questions and 26 minutes later we all walk out of here as friends. It's a nice fun little podcast.

Like to start up by introducing our students. We have the world famous Maura Imparato in studio today, Maura how are you?

Maura Imparato: Wonderful. How are you?

John Gilroy: Tell us about your background please.

Maura Imparato: I have a Master’s degree from Georgetown in Technology Management. I am an IT Management Consultant for healthcare firms and I'm glad to be here.

John Gilroy: Good, good, good. Chris your background please.

Chris Davis : I am a current Masters in-

John Gilroy: A wannabe.

Chris Davis : Yes. A Masters student in Technology Management in Georgetown School, continuing in studies but I've also worked for many years at Georgetown in the IT department especially working in IT support.

John Gilroy: Good, good. I have a lot of experience for all the questions here. And on this side of the table, we have a gentleman by the name of Camron Gorguinpour and he represents a company called Woden W-O-D-E-N and he's got just a magnificent background. Give us maybe one hour of your background, it's so fascinating.

Camron G.: My name is Camron Gorguinpour I am the Principal at Woden LLC. By background I'm a California kid I grew up near Los Angeles, went to school at Berkeley, got my undergrad degrees and Astrophysics and Physics from Berkeley, stayed at Berkeley for grad school, got a doctorate in Bioengineering. I've been somewhat of a startup junkie pretty much since I was an undergrad although maybe a little bit different since. When I started undergrad at Berkeley, I actually started a nonprofit organization that did a lot of science and education type of work in Oakland California and then I went and joined the Obama campaign in 2008, which is kind of like a startup environment working on the campaign if anybody has ever done political work, that's what it feels like. I created and managed a state delegate race in Virginia in 2009, which was also a startup.

I finished my PhD in 2010, got a phone call from the White House in the Summer of 2010 saying, "Hey do you want to interview for a job at the Air Force?" I'm like, "Yeah, I would definitely like to-"

John Gilroy: When the White House calls.

Camron G.: Yeah sure, why not. I like to say I bought a suit and went to the Pentagon and they were very nice and I ended up getting a job as what's called the Scheduled C political appointee. Pretty low level political appointee and when you're an appointee in the government at that level, pretty much everybody is called a special assistant to someone. So I was the Special Assistant to the Assistant Secretary of the Air Force for Installation Environment and Logistics.

IMG_1846 Camron Gorguinpour, Principal at Woden LLC

John Gilroy: Let's have an applause for that, I want a title like that. That's two business cards right? That's two business cards for that title.

Camron G.: That job part of my boss's portfolio was all of the Air Force's energy policy.

John Gilroy: That's huge.

Camron G.: Yeah it's a bit of work and that's not even the biggest part of that portfolio.

John Gilroy: Do you know they have 27 people just manage fuel consumption alone for the Air Force, it's way ...

Maura Imparato: A lot of planes.

Camron G.: A lot of planes. We consume a lot of fuel on the Air Force. So a month under the job, this would be in November of 2010, my boss sends up a meeting with his counterparts in the Army and Navy, Secretary of Defense's office and the Department of Energy to talk about electric vehicles. They decide collectively that they really want to use the Defense Department's buying power, what's called a Non Tactical Vehicle Fleet 200,000 vehicles around the world, normal cars, trucks, buses. They wanted to see if they can make an impact on the electric vehicle market. So everybody was into it and then it came time to say who's responsible and everybody looked at the watches and-

John Gilroy: The new guy.

Camron G.: They didn't really have any spare staff sitting around except for my boss Dick because I was a month on the job and me with my Doctorate in Human Space Flight they said, "You're the guy." Get the Defense Department up to speed on electric vehicles. It became sort of a startup within the Defense Department,

"I created out of nothing the DOD Plugin Electric Vehicle program, which evolved into a large scale research and development activity I look at ways to affect the overall value proposition for electrifying the fleet."-Camron Gorguinpour, Principal at Woden LLC 

We actually created the Los Angeles Air Force space as the first federal facility to replace its entire fleet of general purpose vehicles with plugin electric vehicles and it was what's called the largest grid demonstration in the world at the time. So using the batteries in the vehicle to provide services back to the electrical utility and generate a revenue that you can use to offset the cost of electric vehicles.

I did that and that was fun and people seemed to like it, I put together I think what's now over $40 million into that program spanning all manner of federal agencies and state agencies and utilities and obviously the auto makers. I did that and then in 2014 I was like, "Well okay, that seems to be pretty well in hand." And I was looking for something else and that's where we came up with, actually we, it was me in conversation with a different assistant secretary this one. The assistant Secretary of the Air Force for acquisition, still a bit shorter and we wanted to create a new function within the Air Force, really within the Defense Department. So there's a lot of work can you hear acquisition reform as a term that's throwing around, everybody wants to fix the way that the government does business because we suck to work with.

There were at the time a lot of really good efforts, DOD's big one was called Better Buying Power, a series of reforms to improve the quality of procurement but we wanted to do like swing for the fence and stuff. I wanted to go out and come up with bold ideas that we know we're going to strike out a lot but those things that succeed are going to be paradigm shift in the way the government does business. That's where we came up with this position for me called Director of Transformational Innovation and I reported directly to the assistant secretary for acquisition so the senior procurement executive for the Air Force and we just started trying stuff.

They handed me the Air Force's signature acquisition reform effort called bending the cost curve, which we developed into this huge portfolio 20 something all different things each trying a different approach to affecting some facet of defense acquisition, so it's been the spectrum.

John Gilroy: Okay. Turn the bang! Woden.

Camron G.: That's right we're going to talk about what I'm doing now. As an appointee in the Obama administration I was out of a job in January 20th, so I fled the country for five weeks to Columbia, enjoyed Summer in the middle of Winter. Came back and some colleagues of mine and I started this company Woden and we consider ourselves sort of a broker. A broker for innovative models for companies and the government to do business with each other leveraging a lot of the underutilized authorities and abilities that I observed when I worked for the Air Force that frankly if the department used them more, a lot of the Incs around whether or not the government really accesses commercial innovation would be significantly diminished.

That's what we do,

"we identify opportunities to use flexible contracting and acquisition tools to help build business relationships between our clients and the government that otherwise would not be possible."- Camron Gorguinpour, Principal at Woden LLC 

John Gilroy: All right I'll let Chris jump in here. It's hard to top that story, Chris?

Chris Davis : Yeah. I was reading a little bit about your company online and now blanking on what the acronyms stands for but I noticed you were focusing on the OTA program, can you talk a little bit about what that is.

Camron G.: OTA isn't a program, OTA is an authority, it's called Other Transaction Authority and so people refer to it as an OT when you execute it. Basically OT is the defense department and actually other agencies have the authority as well, it's to get out of jail free card for doing commercial type contracts that otherwise wouldn't be possible. So when the department decides, "I'm going to use OTA." They have the ability to ignore almost all federal acquisition law and regulation. In fact the guidance from the Secretary of Defense's office is start from a blank sheet of paper and draw a transaction that makes sense for that specific circumstance. So you think about all the co-op challenges that companies face a lot of startups in here that might want to do defense work in retro property regulations, auditing rules, general time to award.

A lot of the bureaucratic impediments to doing business with the government go away when the department evokes OTA. That was one of the things that when I was with the Air Force, we did a lot of training sessions and I actually created the whole OTA concession vehicle with the Air Force 3 search lab last year and so the use of the authority is actually picking up. That's one of the central things that my company is working on, in fact every month this year, there has been either a quest for information or a quest for proposals to create large scale Other Transaction Vehicles from Army, Air Force, Navy, Special Operations command. We see it as sort of emerging market place to do novel business but just evoking OTA alone doesn't really get you everywhere you want to be. OTA in and of itself is a very agile contracting tool but it doesn't resolve a lot of the other impediments within the defense acquisition space dealing with certification and accreditation of information systems as an example that can be huge barriers.

Our company looks at OTA as part of that solution but we also look more wholistically, how do you work through an acquisition strategy that really captures the full value.

John Gilroy: Maura.

Maura Imparato: I have a question. As a shy person, how do you get your clients? How do you from day to day build up your business and convince the government to change its ways? You just explained something really great but everyday you got to think about building your business.

Camron G.: We're new, we just started in March. Most of the clients that we're engaged with and the partners are focused on specific opportunities. Friday I just submitted our third government proposal in a month, which made the last three weeks really interesting. But the point is that the business there to go after these types of special government arrangement. Companies need to understand how to use those vehicles once they are created. Part of it is just going after the contracts and part of it is working with clients to understand even if we're not the awardee on those opportunities, so we can actually consult the companies and advise them on how to use the vehicles appropriately.

John Gilroy: I'm going to just spell out two words for our listeners all across the country, all across the world that this year we notice words but people don't. MITRE are reminder and Noblis N-O-B-L-I-S these are the information broker brokers to the federal government. Aren't they Camron?

Camron G.: I love MITRE - - - -

John Gilroy: To compete with them?

Camron G.: No, mine is a federally funded research and development center and so we wouldn't be competing with them for any of the opportunities that we're going for. In fact I think that when I was with the Air Force was a good and trusted partner ... I'm on the industry side right now so I can advise the government but I can't really direct them, the FFRDCs are in a stronger position to provide more concrete actionable advice to a government program. I'm certainly happy to do that.

John Gilroy: Excuse me listeners don't know that term FFRDC you want to ...

Camron G.: Sure Federally Funded, Research and Development Center FFRDC is a special type of organization that's been contracted by the federal government and they're sort of a trusted agent-

John Gilroy: This one right here as well.

Camron G.: For different things. So, the FFRDCs that people are most familiar with are the National Labs that the Department of Energy manages. Lawrence Livermore, Lawrence Berkeley, Los Alamos those are the ones that people have heard of but different federal agencies have different FFRDCs.

John Gilroy: Chris.

Chris Davis: So you've mentioned with this other transaction authority that a lot of these rules are out the window but through some terms out there that actually seem like they're probably good rules to have there for a reason, audit protection, intellectual property regulation. With this authority then what protects people who might be on the other side of those ...

IMG_1859 Chris Davis

Camron G.: You're right that those rules exist for a reason but the intellectual property provisions mandated by federal acquisition organization regulation are something like 25 to 30 pages long. And that most government officials have no idea what they mean in fact the current regime of intellectual property rules I don't believe have ever been tested in court. When I was with the Air Force we did a study, this might have changed, this was at the end of 2015, we did the analysis. We found that across the entire Air Force that there were exactly 16 intellectual property lawyers only eight of which were dedicated to acquisition specifically. So now you have eight IP lawyers trying to interpret 25 to 30 pages worth of provisions on ... I forgot the total number of procurements.

It's now over 100,000 procurements a year. Those provisions are helpful, they're important for your baseline activities. But they're also a huge impediment for companies like Google, Apple. The mainstream of commercial industry aren't going to sit and try to interpret 20 to 30 pages worth of IP provisions. So important, yes but what the OTA language does is it causes program officers and industry to sit and actually hash out a mutual understanding of the provisions and what they mean. And as for auditing, ask any company that's had to deal with government auditing of what is sensible and fair. I think you'll find that easing up on the auditing rules can help.

John Gilroy: Maura.

Maura Imparato: I'm interested to know what is your marketing plan, it seems very complex and it like only applies to a few people, they're the IP lawyers whoever is working with procurement. The people who understand procurement, very small number of people.

Camron G.: It's a challenge because it doesn't take long as it seem to get way into the weeds on what one authority means or doesn't. Where we have a target rich environment in terms of our market potential for companies and people who would like to do business with the government and find it to be incredibly onerous. In fact prohibitive in most cases, that's our market right? So it includes nontraditional defense contractors and traditional defense contractors who look at the system and say, "Oh God there's got to be a better way to do this." And there is, you can contact us at .one and I'll be happy to walk you through it. But in a nutshell really what we're getting at, is that nobody in their right mind looks at the system and says, "Yeah that's an awesome system." Their first acquisition process.

"We come up with novel business ideas that are actually executable and so and one thing on nontraditional defense contractors, this is a term that exist in statute, nontraditional defense contractors."- Camron Gorguinpour, Principal at Woden LLC

When you read the statute and you figure out what it means, it is literally every company in America minus 50. Those are nontraditional defense contractor. Apple is a nontraditional company compare to the defense department.

Maura Imparato: I've heard about that, the generals like the iPads, that's I mean ... military-

Camron G.: They do it was a great triumph when I got a government issued iPhone and then they restricted all the apps you could use there.

Maura Imparato: Lucky you.

Camron G.: But it was still a step up for sure, but this is the point as the defense probably misses out on most of America's intellectual capital based on the rule sets that are currently in place as applied but what our company really argues is that the rules as applied aren't actually the rules. There are a whole myriad of authorities and I know TIA is one of them, there's rapid contracting authorities, rapid prototyping authorities, rapid fielding authorities. Today was a big day, the Senate Armed Services committee just released their 2018 National Defense Authorization Bill. Everybody was celebrating but there's language in there that specifically allows the department to waive laws if they prohibit competition. So there's specific authority once it passes congress to waive whatever law that is a barrier to competition.

I think the companies and the government need to really think hard about how to actually use those authorities because there's a plenty of authority on the book that just go completely unused and so our job is to go and help companies and the government figure out to use the authorities they have.

John Gilroy: Well Camron I'm going to jump out of this technical talk and go to more practical business aspects. I have a friend who started a company and he said that, "If you don't own 51% of a company you own nothing." So you partnering with someone I assume it's a 50/50 tell me about this partnership and why didn't you do it alone and why did you partner with someone?

Camron G.: Right now there's two of us there will be three next ... One month is July so next month there will be three partners in our company. Why didn't I do it alone? Because it's a lot of work to start up a company and I happen to have a pretty good network of really smart people who have dealt with the same issues that I'm dealing with. So Lach Litwer is the gentleman who I am partnering with currently and then we'll announce the third person next month. Doing a startup in any space is tough but doing a startup when you're really specifically going after really hard business problems and you need to be creative, it helps to have other people around that you can share ideas.

John Gilroy: Maura.

Maura Imparato: Speaking of partners, how does your girlfriend feel about this two change? How is that funding?

Camron G.: She's very supportive, luckily as a political appointee you know when your job ends and so I was able to ensure that I have sufficient resources within my means for the long while, so very supportive is the answer.

Maura Imparato: Wonderful.

IMG_1856 Maura Imparato

John Gilroy: Chris.

Chris Davis : Where does Woden make money? I saw in your site you're looking for companies to partner with and to put theses consortium together but dos no fees and from these companies is it simply taking a cut or is there ... What is your role?

Camron G.: So part of our business model is proprietary so as related to the OTA consortia, it's true that if we're awarded a management role to manage one of those consortia, companies can join at no cost which is a differentiator from other firms who manage these things. Our money comes as basically a percentage of dollar value that flows through from the government to the members of the consortium. So the consortium members actually don't ever really feel that financial burden. It's a general rule of thumb we focus on keeping our upfront cost low but with success fees because we understand that the work we do involves innovation and so we feel that the risk that we're putting forward and the risk that companies are taking by pursuing innovative acquisition strategies should be rewarded once successful and so that's generally how we structure our business approach.

John Gilroy: I love the crystal ball questions because no one has a good answer it's tough. Five years from now, okay so five years from now where do you see yourself Camron?

Camron G.: Probably back on a beach in Columbia . . . but no, I think that our company is designed to remain small and nimble. I don't think we're ever going to be or would want to be like 100 person firm or anything like that. I think that we perform best as a small group that focuses on partnerships between different companies and federal agencies and so I think that in five years as certainly as these OTA vehicles get traction again whether or not we manage them or are consulting companies to use them, I think that there's going to be a growing amount of business and growing interest from companies who see these stuff and see the interest and really want to figure out how to maximize the value. I see a lot of more of that happening and then yeah, I think we'll probably want to broaden out a little bit into other aspects of defense. I got my star in the energy space, Lach also got his star in the energy space so we'd like to sort of broaden out the portfolio a little bit over time but right now we're pretty well focused on nuts and bolts acquisition stuff.

John Gilroy: Last podcast I talked about a business got ahead in Foundry Silicon Valley Innovation Program. Innovation is pretty easy as you sit on the coffee shop and you say innovate, innovate but I think it's difficult even if you're selling donuts and stuff to innovate. But in a situation the military where you have ... There's not a lot of room for failure here I mean this is difficult to innovate and collaborate and do things so is this the big challenge? Do you think heaven is just been convincing people that there's a better mouse trap?

Camron G.: The funny thing is that failure is subjective in most cases and so when I look at the myriad of contracts that are executed every year using the traditional federal acquisition regulation and I see that we're now shutting out the vast majority of American industry in doing business with the department. Through a lens that's a failure. Yes it's true that one of our central challenge is working with the government and frankly industry, there are plenty of companies that we've spoken to-

John Gilroy: Large organizations hard to deal with.

Camron G.: That can't quite wrap their brain around, what does all this mean? When really all it is, is providing flexibility to the very things that traditional defense contractors normally cite as problems. Here's a mechanism that we can alleviate those problems and it's still hard to get them sometimes to really wrap the brain around it. So absolutely I think it's a type of thing that we're going to have to demonstrate through example and people will start to see how it can actually take shape.

John Gilroy: You've recently wrote an article and the people listening to this, where can they find that article you wrote?

Camron G.: That article is on the webpage for the Center for Strategic and International Studies it's titled the Circular Firing Squad Defense Acquisition Rhetoric.

John Gilroy: The Circular Firing Squad, boy you got to love that title.

Camron G.: It's gotten some pretty good feedback so far but that article is actually about how the measure of acquisition performance within the Defense department actually focus on secondary factors that aren't really indicative of whether or not our defense acquisition system works. They focus more on contracts than they do on outcomes. So CSIS is one approach you can find us on LinkedIn Woden LLC, W-O-D-E-N LLC or off at Twitter handles @wodenllc and we'll have the article posted there and as you know because you were nice enough to read it and give me some feedback. I have another article that's being drafted and we're working in getting that published.

John Gilroy: It's got a title, what's the title of the next one?

Camron G.: That one is actually maybe more germane to this conversation, it's called, On Diversifying the Defense Supply Base and Otherwise.

John Gilroy: Diversity very, very important many of aspects. Well great we're running out of time here, I'd like to thank our sponsor the Radiant Group. If you're interested in getting involved in geo space for projects contact the Radiant Group.

We're hosted by Eastern Foundry a community of government contractors who are bringing innovative solutions to the government marketplace. For information go to eastern-foundry.com.

If you would like to participate as a student or a startup contact me johngilroy@theoakmontgroupllc.com Thanks for listening to Students vs. Startups. Showdown on the Potomac.

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