Innovation labs grow in popularity among GovCon players

More government contractors are establishing innovation centers and internal R&D organizations as they put more emphasis on bringing new solutions to the government customers.

Government technology integrators of all shapes and sizes are increasingly starting internal research-and-development organizations with “Labs” somewhere in the title to create an environment for employees and customers to create and experiment with new technologies before they get rolled out.

This is a way for all parties to embrace at a small scale the idea of “fail fast, fail forward” as part of the innovation processas government customers push to integrate technologies at a quicker pace, executives have told us over recent months.

One of the most high-profile instances of this came in the form of a recast of sorts by Perspecta, the company created last year through a merger of three companies including the former Vencore.

That combination turned what was then Vencore Labs -- also inherited through an acquisition -- into what is now Perspecta Labs, but with more resources and capacity as part of a $4 billion public sector IT company. Perspecta Labs’ work has already translated to some wins for the one-year-old integrator.

Another example is seen in FAST Labs, the advanced research-and-development organization of BAE Systems’ U.S. subsidiary that noted defense market analyst Loren Thompson publicized in an April article for Forbes in the wake of a restructuring there.

FAST Labs resides within BAE Systems Inc.’s electronic systems sector but supports the entire organization, including the intelligence and security sector that houses much of the company’s services and systems integration work. But the FAST Labs approach is different than what might be seen across the defense industry, FAST Labs’ general manager Jerry Wohletz told me earlier this month.

BAE instead tries to shape FAST Labs in the way a company such as Johnson & Johnson or Proctor & Gamble would and embraces partnerships with commercial tech outfits as part of its said Wohletz, who also pointed to how the pyramid of innovation and investment has flipped from being mostly government-driven to being commercially driven.

“Most of aerospace and organizations including BAE Systems prior were structured as though the Cold War and Space Race were still going on, where we still focused on government investment… and we didn’t really look towards the commercial side, nor did we do a very good job of interfacing with them and trying to bring those technologies to bear for the defense industry,” Wohletz said.

“There’s a lot of money being invested outside of defense that has applicability to defense, and we’re just opening up our aperture and embracing it,” he said.

Perspecta and BAE are not the only publicly-traded integrators in that Labs group. Last year, ManTech International stood up its ManTech Labs organization that the company’s annual report describes as tasked to “identify, prioritize and incubate cutting-edge technologies to meet our clients’ future technology requirements and to ensure interoperability.”

ManTech’s process of getting a new technology or concept into its lab primarily falls to the company’s group-level chief technology officers, said Yvonne Vervaet, senior vice president of growth and capabilities.

The ManTech Labs organization resides within the office Vervaet leads. She said the company started ManTech Labs in part to ensure each division of the company can stay in the know on what technologists in other units are working on.

For something to get to the lab, however, she said the technology must have a “pretty well-documented set of use cases” in a “pretty understood addressable market.” This is mainly because of ManTech’s resources as a government services company, although Vervaet says ManTech Labs has a “very nice budget.”

“Everybody stays focused on things that are going to be quickly maturable and quickly able to be rolled back out onto programs,” Vervaet said. “We’re not fighting off 36-month monstrous projects.”

The word Labs is not in the title of what Science Applications International Corp. is doing with its Innovation Factory. But Vervaet’s statement about the length of time of projects ManTech Labs works on sounds similar to what SAIC Chief Technology Officer Charles Onstott told me earlier this year when his company gave the factory physical space in its Reston, Virginia headquarters.

Across the market there is a mindset change that in many instances, agile and incremental delivery models are the way to go in a world defined by software as opposed to traditional five-to-seven year development programs.

“It really requires us to rethink the processes that we use in how we deliver, it makes us rethink how we measure success and then in how we think about what we will bid,” Onstott said in March.

The Labs approach is not just limited to the large system integrator community, however. Octo Consulting and SAP NS2 are examples of middle tier companies that have created similar organizations to embrace the new way of quickly prototyping an offering and rolling it out.

Octo received backing from private equity firm Arlington Capital Partners in April and put some of that investment toward bolstering its “O.Labs” organization, CEO Mehul Sanghani said at the time.

“It provides a sandbox environment for our technologists to continue to keep their tools sharp,” Sanghani told me. “They not only have the ability to work with those solutions but also the ability to speak intelligently with customers about its applicability within their mission space.”

SAP National Security Solutions (NS2) started its cloud-based NS2 Labs organization earlier this year and plans to open a physical facility in October to collaborate with government partners on experimentation and prototyping.

“We want to make it a place where people can come work on things, and if we work on something and a good idea pops out the back of it, we’ll commercialize it and make it available,” SAP NS2 President Mark Testonisaid in May.

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