Quality Defense – Using QMS to Win Military Contracts
- Nicholas Zabaly
- 1 hour ago
- 14 min read
How a Quality Management System Can Help Small/Mid-Sized American Manufacturers Integrate into the Rising Defense Industry
Manufacturing has always been a cornerstone of the American economy, but in recent decades, has struggled under the pressures of modernization, offshoring, and a refocusing of domestic economic priorities. However, recent economic developments have given small manufacturers valuable lifelines, and none is more promising than the federal government’s renewed commitment to strengthening the national defense. As other articles in our series of defense-focused publications have noted, since the 2022 escalation of the Russo-Ukrainian War, a dramatic shift in national defense priorities has seen a resurgence in military-related manufacturing, spurred by simultaneous emphasis on new technologies and replenishment of tried-and-true weapons stockpiles. Through the use of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to support small manufacturers and technology developers, as well as via sub-contracting opportunities with larger defense firms, American manufacturers are able to compete for and win military contracts at a level which has been unprecedented in recent decades. But to be awarded these contracts, manufacturers must first invest in implementing or updating their Quality Management Systems (QMS), since both the government and private industry partners require their suppliers to have these systems in place. In this article, we will examine how use of popular Quality Management Systems, such as ISO 9001 and AS9100D, can help manufacturers enter and succeed in the defense sector.
(Note: As of a 2025 Executive Order, the United State Government’s Department of Defense (DoD) has been given the secondary name of the Department of War (DoW), which is sometimes used in official governmental communications. To avoid reader confusion, QMS2GO’s articles on this topic refer to the Department of Defense by its legal name, as defined by Congress. Should the legal name of the Department be changed by Congress, future articles will reflect that change.)
Table of Contents
1. Types of Contracts: SBIRs, STTRs, and Sub-Contracted Work from Defense Contractors
2. Major QMS Standards: ISO 9001 and AS9100D
3. Why QMS is Necessary for Military Contracts
4. How QMS2GO Can Help You Win Defense Contracts
5. Additional References and Resources
Types of Contracts: SBIRs, STTRs, and Sub-Contracted Work from Defense Contractors
To understand what types of manufacturing and technology development opportunities exist within the defense space, it is critical to know what types of contracts are offered. In nearly all instances, military contracts for small and mid-sized companies will come from one of two sources: the Federal Government itself, or a larger defense contractor. Let’s break down these two opportunity categories.
Since the 1980s, the Federal Government has provided emerging and specialty companies the opportunity to compete through the use of specialized, phase-based technology development contracts. These are known as Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) contracts. Both programs arose out of efforts in the early 1980s to reinvigorate flagging American manufacturing and technical development, which had entered an economic malaise and lost ground to Japan and other rising global powers. Put simply, during the 1960s and 1970s, American companies lost sight of the quality and efficiency strategies which they had devised during World War II, while Japan and other nations eager to recover economically embraced them wholeheartedly. This led to the ironic situation of American statisticians, ignored in their own country, helping to enrich America’s economic competitors. Details of this history, and how these quality management systems and best practices can be used in your own company, are detailed extensively in other QMS2GO articles (covering the History of Quality Management, 5S, and more).
To counteract these destructive trends, in the final months of President Jimmy Carter’s administration, the President encouraged bipartisan congressional work to redefine the relationship between government, academia, and private enterprise. Two significant bills emerged in the final months of 1980 as a result of those efforts. The first was the Stevenson-Wydler Technology Innovation Act. Co-authored by Democratic Senator Adalai Stevenson and Republican Congressman John Wydler, this bill was the first major American technology transfer law, and required federal laboratories to participate in, fund, and support technology transfer activities. Although revolutionary, this bill had major problems and compromises which prevented it from becoming fully effective. Foremost among these was a provision that the Federal Government itself (rather than the scientists, research institutions, or companies involved in development) would take annual royalties of 15% from any resultant technologies; this burdensome disincentive stymied free market innovation, and indeed was largely rectified by the National Technology Transfer and Advancement Act of 1995, which strengthened the intellectual property (IP) protections for private industry, and allowed government-employed scientists to increase profits from their own inventions.[1] Stevenson-Wydler was primarily important because it politically enabled and provided the template for further technology transfer bills with far-reaching effects. Less than two months later, the second bill, the Bayh-Dole Act, revolutionized the American government’s relationship with private industry. Co-authored by Democratic Senator Birch Bayh and Republican Senator Bob Dole, this consequential bill allowed small businesses and universities to obtain ownership of patents developed using federal funds. Prior to Bayh-Dole, the U.S. Government had filed over 28,000 patents arising from federally-funded work, and yet less than 5% of these patents were usable for commercial licensing.[2] In effect, the government had inadvertently locked away vast quantities of research, preventing inventors, businesses, and academics from knowing it existed, much less utilizing it for future innovations. Bayh-Dole unlocked this vast archive, allowing licensing and acquisition of patents, and preventing future patents from being isolated. And crucially, unlike Stevenson-Wydler, Bayh-Dole did not require payment of royalties to the Federal Government. Instead, all proceeds derived from the federally-funded research could go to the private industries and public institutions which did the research; the government’s reward was the increase in economic activity (and therefore, tax revenue). To this day, this was the most consequential change in American government policy regarding contracting and technology development, and until recently, the principal of governmental support without financial ownership has been a cornerstone of U.S. innovation policy. Although recent political developments may seek to alter these conditions,[3] fundamentally Bayh-Dole has reflected and upheld a uniquely-American private-public partnership model that recognizes the importance of government, but allows private industry, academia, and self-motivated individuals to transform their inventions into free market results. And the results have spoken for themselves: just between the years of 1996-2020, it is estimated that technology transfers under Bayh-Dole have resulted in $1.9 trillion in U.S. gross industrial output, 6.5 million jobs, 141,000 patents, 554,000 inventions, and 18,000 new startups.[4]
While Carter opened the door for the modern system of federal technology transfers and contracts, it was under President Ronald Regan that the SBIR and STTR programs were established. Study of the SBIR proposal had begun in 1977 at the National Science Foundation (NSF) under the guidance of program manager Roland Tibbetts, and was politically championed by Democratic Senator Edward Kennedy and biotechnology entrepreneur Arthur S. Obermayer, both of whom succeeded in securing funding for the program. Over the next five years, success at the NSF (coupled with the aforementioned congressional bills of 1980) led to belief that the program could be expanded.[5] In 1982, Republican Senator Warren Rudman introduced the bills which established both the SBIR and related STTR programs; they were the first bills that the newly-elected senator proposed. Ever since, SBIR and STTR contracts have been the preferred funding mechanisms for the Department of Defense (DoD) to invest in small businesses. Between the two programs, an average of $1.8 billion per year is invested by the DoD (55% of the $3.5 billion annual total, with the remainder allocated to other governmental departments),[5] and the vast majority of the contracts awarded go to very small companies (64% of all awardees have 20 or fewer employees, and more than 25% have 5 or fewer staff).[6]
Although they are closely related, and are managed and funded under the same federal government mechanisms, there are three main differences between the SBIR and STTR programs. The first relates to the employment of the Principal Investigator (or PI), who is the person tasked with leading an SBIR / STTR project. If the PI is employed by the small business, they will be eligible for an SBIR grant. However, if the PI is employed by a non-profit research institution, it will be necessary for a business to instead apply for an STTR grant (the STTR option is also a possibility for PIs employed by a small business). The second key difference is that STTR grants require the participating business to enter into an agreement with a non-profit research institution, and that predetermined portions of the project budget go to the business and to the institution. An SBIR grant, on the other hand, permits such agreements but does not require them; in other words, a small business may compete for the grant on its own, without needing to involve a research institution. The final difference is the scale of the programs: SBIR is very large (with an annual multi-billion-dollar budget), while STTR is much smaller (with an annual budget in the hundreds of millions of dollars). Full details of the differences between the programs can be found on the government’s official SBIR websites.[7][8][9]
An important final note on the SBIR / STTR programs is that their continuance and funding is dependent upon annual federal appropriations. As such, political situations (such as government shutdowns and policy funding disputes) can potentially disrupt the programs. Historically, the SBIR / STTR programs have been remarkably apolitical and have been renewed with broad support from both political parties. However, in 2025, disagreements over the future direction of the programs led to a protracted freeze on funding and program activity.[10] It remains to be seen if increased politicization will affect the programs going forward, or how changes in policy may affect eligibility, or even the continuance, of these remarkably successful, longstanding, and heretofore bipartisan instruments of private-public collaboration. That said, companies which have previously received a Phase I or II SBIR grant can continue to proceed with and be awarded a Phase III grant, as the funding for Phase III work can be derived from non-SBIR funds.[11]
(This article will be updated as further SBIR / STTR developments occur; please check back with QMS2GO for the latest analysis and insights into quality management approaches to government contracting.)
Although direct government grants have been the primary mechanism for small businesses to participate in military contract work, an important secondary avenue is via sub-contracting opportunities with the defense contractors themselves. Under this system, small companies can provide goods or services to larger entities; often, this is initiated due to a particular specialization area, or for geographical convenience. Companies which have not previously worked as sub-contractors may find it difficult to make connections and enter this field; as a result, SBIR / STTR experience is often a first step which leads to later sub-contracting offers. Alternatively, manufacturers can reach out to local military bases (particularly supply depots) and seek to be put in touch with larger companies which provide key services; this may lead to being first on the list of convenient options when sub-contracting opportunities arise. Large defense contractors are frequently incentivized to invest in their communities, and this can come from collaborating with minority-owned and family businesses. Manufacturers interested in pursuing sub-contracts should seek to differentiate themselves with a relevant specialization, emphasize their community value and unique ownership / demographic aspects, and cultivate strong relationships with local chambers of commerce, supply chain leaders, and military base liaisons responsible for sourcing and contracting. With these steps taken, the chance to compete for lucrative and long-term sub-contracts can be substantially increased.
However, no matter how a military contract is obtained, it must be backed by following a related quality management system. Which systems are therefore the most relevant for military projects?
Major QMS Standards: ISO 9001 and AS9100D
Just as there are many industries in the world, so too are there many QMS standards. However, for defense contracting purposes, the vast majority of contracts can be covered by two standards: ISO 9001, and the related derivative standard AS9100D. So, what are these two standards?
ISO 9001 is the preeminent QMS standard throughout the world. Written to broadly accommodate companies and organizations across all types of industries and focal areas, this standard serves as an overall set of guidelines upon which numerous sub-types of QMS can be created. It is therefore not a standard specifically designed for defense purposes. Due to its ubiquity, however, it is used by nearly all defense contractors, as well as government organizations (including entities within the DoD). The issuing entity of ISO 9001 is the International Organization for Standardization (ISO). The ISO authors and publishes the ISO 9001 standard, but does not take responsibility for enforcing compliance and conformance. Rather, compliance is delegated to the companies and organizations themselves (and confirmed by external auditors who review companies and organizations that use ISO 9001 guidance), while conformance is the responsibility of certification organizations which authorize auditors, companies, and organizations to affirm that a QMS standard follows the ISO’s guidance.
AS9100 Revision D is a derivative of ISO 9001 which has been specifically tailored to aerospace applications. It is designed for defense contracting use cases, and the expectation is that all products developed under its guidance will meet military standards. Due to the fact that aerospace contains additional unique risks which are not present in a generalized ISO 9001 context, the AS9001D guidance emphasizes enhanced risk mitigation, safety requirements and checks, and quality controls which supersede ordinary ISO 9001 recommendations. AS9100D is generally used by specialized defense contractors, and can essentially be considered an ‘add-on’ to ISO 9001; if a company is certified for AS9100D, they can also easily be certified for ISO 9001 without fulfilling any additional requirements. AS9001D is issued by the International Aerospace Quality Group (IAQG), and is published on their behalf by partner SAE International.[12]
The choice of which QMS standard to use will be based on industry, contract, and (if applicable) prime contractor requirements. Generally, however, ISO 9001 will be used for most contracts, while AS9100D will be used for almost all aviation and space-related projects (as well as select non-aerospace contracts which have especially stringent safety constraints). Small and mid-sized manufacturers seeking to enter the defense contracting market should initially consider ISO 9001 as the priority, since this will open the largest possible number of opportunities. AS9100D, which is based upon ISO 9001, can therefore become a secondary focal area (if necessary), since a majority of conformance will have already been achieved by adapting to ISO 9001 guidance.
Why QMS is Necessary for Military Contracts?
In a military setting, trust in your equipment is paramount. Deployment is not equivalent to normal commercial conditions; a failure in these conditions can result in tragic, life-ending consequences. Therefore, the DoD and its contractors have long required suppliers to abide by recognized QMS standards, and to maintain high-quality QMS which are regularly audited for compliance and conformance. Simply put, having a QMS is the minimum standard that the DoD or a defense contractor looks for, in order to have trust in your company and your product.
More broadly, employing a QMS based on an internationally recognized standard can help your organization achieve the level of quality, professionalism, and efficiency necessary to compete for a defense contract in the first place. These are difficult contracts to secure, and even more difficult to maintain successfully. The bar is set high for a reason. As such, setting strong internal quality goals for your company, and maintaining them consistently with regular quality checks, can help ensure that your team is capable of meeting these rigorous requirements.
Finally, a QMS can provide valuable peace of mind – to both you and your clients. In defense contracting, everyone is incentivized to do the best at all times. An unofficial slogan of NASA is that “failure is not an option,” meaning that those in positions of life-and-death responsibility can never accept scenarios where catastrophic failure possibilities are normalized. Yet in practice, this is a burden which can be overwhelming, especially for companies new to defense contracting. How can one accommodate a situation where failure cannot occur, particularly when the very ideas of innovating and exploring new possibilities are rife with failure risks? Having a QMS can help mitigate these concerns. With a QMS, the possibility to fail, learn, and adapt remains – while mitigating the possibility of catastrophic failure that can result in tragedy. Therefore, a QMS can help companies abide by the spirit of this oft-quoted slogan, and ease some of the fear of consequential failure that can prevent smaller manufacturers from entering this important sector.
How QMS2GO Can Help You Win Defense Contracts
If your company is eager to explore the defense contracting space, but the burden of incorporating or significantly updating a QMS is an impediment, QMS2GO can help.
First and foremost, QMS2GO’s software is trained on the core standards (ISO 9001 and AS9100D) that defense contracting relies on. With QMS2GO, learning and cross-checking company practices against these standards has never been easier. And QMS2GO’s AI-powered assistant allows quality managers to easily create compliant documentation and reports, automatically matching a company’s intentions with the QMS standard’s requirements.
QMS2GO also features a robust conformance module, which is isolated from the interactive part of the software. This conformance module evaluates whether your company’s QMS practices properly conform with the selected QMS standard. If they do not, the software can alert you about the non-conformance, and either help you correct it internally, or schedule an external audit to reveal the core problem. QMS2GO can thus guide your company and team into properly applying a QMS that conforms to industry and international standards.
Finally, QMS2GO is created by a team which has competed for and won defense contracts. The executive leadership of the company has also been engaged in manufacturing, product development, and materials science pursuits, and has been awarded millions of dollars in SBIR contracts by the DoD. This firsthand experience from the manufacturing side has informed the design of QMS2GO, with features, functionalities, and programmatic awareness incorporated to specifically deal with the frequent requirements, questions, and challenges of defense contracting. While other QMS software exists, there is no other AI-powered program on the market which has been created by manufacturers, for manufacturers, with defense contracting applications in mind. This unique approach, combined with our support team and responsive development feedback, will ensure that QMS2GO will not only work for your needs, but evolve with them over time as your company advances in the defense contracting sphere.
Entering into a new market can be intimidating, especially when it combines lucrative returns with substantial responsibilities. But QMS2GO has your back. Our low-cost, high-value solution can ease your way into competing for, and winning, life-changing military contracts. Think of how your company can innovate and change when tapping into these resources – and how it can innovate and change the state of national preparedness and security. On the eve of our 250th Anniversary as a country, this is the time to make a difference for the United States – and QMS2GO can help you make it.
Author
Nicholas R. Zabaly is the Editor-in-Chief of QMS2GO’s research and knowledgebase operations. An experienced researcher and technical writer, he has worked closely with the company since its foundation and serves as its lead article writer.
Additional References and Resources
[1] Department of the United States Navy – Technology Transfer – “About T2” – https://www.navytechtransfer.navy.mil/about/
[2] United States General Accounting Office (GAO) – “Report to Congressional Committees: Technology Transfer: Administration of the Bayh-Dohl Act by Research Universities” (May 1998) (archived on March 23, 2011 via the Internet Archive Wayback Machine) – https://web.archive.org/web/20110323222328/http://www.gao.gov/archive/1998/rc98126.pdf
[3] Information Technology & Innovation Foundation – “Taxing University Royalties Would Deliver Few Benefits, but Great Harms” (Stephen Ezell, October 7, 2025) – https://itif.org/publications/2025/10/07/taxing-university-royalties-would-deliver-few-benefits-but-great-harms/
[4] AUTM – “Driving the Innovation Economy: Academic Technology Transfer in Numbers” (2023) – https://autm.net/AUTM/media/SurveyReportsPDF/AUTM-Infographic-23-DIGITAL.pdf
[5] Center for Strategic and International Studies (CSIS) – “RAI Explainer: the Small Business Innovation Research Program” (Gabriel Athanasia, July 8, 2022) – https://www.csis.org/blogs/perspectives-innovation/rai-explainer-small-business-innovation-research-program
[6] National Research Council Committee for Capitalizing on Science, Technology, and Innovation – “An Assessment of the Small Business Innovation Research Program at the National Aeronautics and Space Administration” (Charles W. Wessner, ed., 2009) – https://www.ncbi.nlm.nih.gov/books/NBK32523/
[7] U.S. Small Business Administration – “SBIR or STTR? Which One is Right for Me?” – https://www.sbir.gov/tutorials/program-basics/tutorial-3
[8] DoD Office for Small Business Administration – “Small Business Innovation Research & Small Business Technology Transfer” – https://www.defensesbirsttr.mil/SBIR-STTR/
[9] University of Nevada, Reno: Sierra Accelerator for Growth & Entrepreneurship – “Deciding Between SBIR and STTR” – https://www.unr.edu/sage/sbirsttr-resource-library/deciding-between-sbir-and-sttr
[10] Air & Space Forces Magazine – “SBIR Contracts, On Hold During Shutdown, Face Long-Term Risk” (Shaun Waterman, November 8, 2025) – https://www.airandspaceforces.com/sbir-contracts-on-hold-during-shutdown-face-long-term-risk/
[11] Government Technology and Services Coalition – Homeland Security Today – “DHS Clarifies SBIR Phase III Process as Federal Innovation Program Remains in Limbo” (Megan Norris, January 23, 2026) – https://www.hstoday.us/procurement/dhs-clarifies-sbir-phase-iii-process-as-federal-innovation-program-remains-in-limbo/
[12] SAE International – “AS9100D – Quality Management Systems – Requirements for Aviation, Space, and Defense Organizations” – https://www.sae.org/standards/as9100d-quality-management-systems-requirements-aviation-space-defense-organizations