Welcome to the March edition of A Capitol View!
More budget uncertainty. Deep cuts to federal agencies and personnel. Trade wars. Reckonings with allies and adversaries alike. And a raft of court challenges.
There is no shortage of proposals and pushbacks this spring in Washington and beyond.
Against this backdrop, SMI is analyzing the evolving priorities of the Trump administration and Congress to calibrate our clients’ federal strategies, seize new opportunities, and leverage our bipartisan coalitions and international networks to protect, revitalize, or initiate programs and public investments that advance national goals.
Shutdown showdown: Most urgently, Congress is trying to get on track to avoid a government shutdown on March 14 with another continuing budget resolution that would carry federal agencies through the end of Fiscal Year 2025 in September (what that would mean for many specific agencies and projects remains unclear).
Meanwhile, the process for Fiscal Year 2026 appropriations requests is in full swing on Capitol Hill, while jockeying is underway for a major tax reform package expected to come up for consideration later in the year.
Some quick links to keep up to date:
What’s in the House’s Full-Year Continuing Resolution?
Chuck Schumer is in a real shutdown mess. Can he lead Democrats out of it?
Reconciliation is the key to unlocking Trump’s agenda. Here’s how it works
And now for a snapshot of what SMI has been tracking in recent weeks:
SMI SPOTLIGHT
BUILDING RESILIENCY: We are thrilled to welcome as Vice President Carla Zeppieri, a former U.S. Navy officer and Capitol Hill veteran, who most recently served as Deputy Assistant Secretary of Defense for Industrial Base Resilience.
“Carla has mastered the policy and budget levers of both the executive and legislative branches, and she has played a leading role in the historic investments that are revitalizing our defense industrial base,” said SMI CEO Bill McCann. “We could not be more excited to offer our clients her unsurpassed knowledge and network at this pivotal moment.”
‘Strong track record’: Said Zeppieri: “SMI has a stellar reputation and strong track record advising business and universities who are developing and producing the most advanced technologies and manufacturing processes for the federal government.”
“I am honored to join the team and excited about this new opportunity to help ensure we have a resilient defense industrial base that is the envy of the world,” she added.
Read more: SMI hires defense industrial base leader Carla Zeppieri
STAR POWER: SMI also brought on board retired Air Force General James “Jake” Jacobson as a senior advisor to support clients across a host of national security portfolios.
Jacobson, who last served as Deputy Commander of Pacific Air Forces, brings deep insights into the needs of U.S. forces in the Indo-Pacific region and our allied partners.
He also previously served as Director of Air Force training and readiness, where he led the development of 20,000 aviators, including managing their training, airspace, and ranges. He was also Inspector General of the Air Mobility Command and as commander of the Air Force District of Washington oversaw IT, drone operations, base operations, and consequence management.
A graduate of the United States Air Force Academy, Jacobson also brings extensive diplomatic experience, having served as the Deputy Foreign Policy Advisor for U.S. Africa Command.
TECHNOLOGY
THINKING BIG: The federal government’s Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) programs have fueled countless technological advancements in national security and public health over the past four decades.
The competitive awards to companies and universities, known as “America’s seed fund,” are up for reauthorization later this year, and SMI clients are front and center in shaping the debate over the future of this critical element of our national innovation ecosystem.
Executives from Triton Systems and Physical Sciences, Inc., two experienced small businesses, took to Capitol Hill this month to testify at a pair of hearings on how best to expand participation in the programs, while also ensuring that merit continues to drive these critical public investments.
In the House: Before the House Committee on Small Business PSI President and CEO William Marinelli offered a series of recommendations on how SBIR/STTR can more effectively help solve the nation’s technological challenges.
Through SBIR, PSI has developed and fielded advanced lithium-ion battery technology to support the U.S. Navy’s unmanned systems; new methods to extract critical rare Earth minerals from coal ash; detection systems that protect our borders from radiological, chemical and biological threats; and ophthalmic stabilization technology that has been sold in 24,000 systems, impacting almost everyone who has ever had an eye exam.
‘The very best technology’: Marinelli stressed that many successful SBIR technologies are intended for “mission agencies” and do not easily scale to a large commercial enterprise backed by venture capital. “PSI focuses on innovating technologies that federal agencies…need to meet critical mission objectives, for which no other stakeholders are positioned to deliver,” he testified.
Marinelli urged Congress to maintain the competitive, merit-based fundamentals of the program, give agencies more discretion to define merit consistent with their missions; simplify the application process; and make the programs permanent.
“There are many, many potential pathways for commercial success for small businesses – and the U.S. government should be open to innovation from all small business sources and not arbitrarily cap or limit participation,” according to his testimony. “Doing so would undermine the ability of the federal government to secure the very best technology for its agency priorities.”
In the Senate: Before the Senate Committee on Small Business & Entrepreneurship Triton’s Executive Vice President Ken Mahmoud also outlined some of the SBIR-derived technologies it has developed in recent years, including for the F-35 and F-22 fighter jet programs as well as advanced hearing protection and paraglider technologies for military personnel.
Mahmoud urged Congress to provide more incentives for prime contractors to transition SBIR technologies; shorten the lengthy contracting process; improve the geographic distribution of awards; step up efforts to investigate recipients to ensure they are protecting against inadvertent foreign involvement or intrusion; and also to make the SBIR/STTR programs permanent.
A first stab: the Senate panel’s Chair, Sen. Joni Ernst, has proposed the first of what is expected to be several bills to reform and reauthorize the SBIR/STTR proposals.
“My legislation streamlines and simplifies existing processes, directs the funding toward projects based on merit, channels funding to help accelerate the most promising projects towards final stage commercialization, protects against waste and abuse, and introduces enhanced protections and accountability tools to prevent these new technologies from getting into the hands of our foreign adversaries,” Sen. Ernst said.
What’s next: We anticipate a House bill from Rep. Roger Williams, Chair of the House panel, and more give and take on any final legislation, including bipartisan efforts to ensure that SBIR/STTR awards remain based on merit and arbitrary limits are not imposed on the number of awards.
“These programs are highly efficient and pay dividends for the American people. They work because they prioritize merit and competition,” said Sen. Edward Markey. “We should not place limits on the number of awards or the amount of funding that go to deserving small businesses.
Plus: Tech bros to the rescue? Reagan Institute 2025 scorecard dings Pentagon on ‘scaling’ innovation
GOVERNMENT REFORM
The DOGE House: The Department of Government Efficiency (DOGE) headed by Elon Musk continues to scour federal agencies for ways to reduce the size of government and personnel.
A flurry of court challenges has slowed or halted many of the edicts, but the slashing effort is also about to become more transparent as a result of a new judicial ruling. And there are signs that Trump is seeking to reign in Musk and ensure that department heads get final say.
“I don’t want to see a big cut where a lot of good people are cut,” Trump told reporters. “I want the Cabinet members to keep the good people, and the people that aren’t doing a good job, that are unreliable, don’t show up to work, etc., those people can be cut.”
Related news:
U.S. Education Department to cut half its staff as Trump vows shutdown
DOGE team welcomed at the Pentagon but some remain skeptical
EPA’s Zeldin terminates $20B in Biden climate grants
Trump’s EPA takes steps to roll back dozens of environmental regulations
‘We need to know why;’ Clyburn demands answers on ‘withheld’ and delayed USDOT funds
MARCHING AHEAD: SMI is closely tracking the breakneck pace of change across agencies and how the moves are impacting clients in the private sector and academia. But new projects are also regularly moving forward.
One example is the Office of Naval Research’s Fiscal Year 2026 Multidisciplinary Research Program of the University Research Initiative (MURI).
The grants are focused on “high-risk basic research and attempts to understand or achieve something that has never been done before,” according to a new solicitation. The program “has regularly produced significant scientific breakthroughs with far reaching consequences to the fields of science, economic growth, and revolutionary new military technologies.”
ICYMI: Hegseth issues edict on DOD software acquisition
DEFENSE
SHIP SHAPE: The Trump Administration’s strategy for defense spending and other national security priorities is coming into greater focus.
A major thrust will be “to resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding,” as the president vowed during his March 4 address to a joint session of Congress.
That includes setting up a new White House “office of shipbuilding,” he said, and “special tax incentives to bring this industry home to America, where it belongs.”
Legislative levers: We also expect an executive order on shipbuilding to formalize the administration’s vision, which coincides with a bipartisan push in Congress to dramatically expand industrial capacity, including via the bipartisan SHIPS for America Act.
That also means greater focus on the needs of the Coast Guard, which was the topic of a recent hearing of the House Committee on Transportation and Infrastructure, which highlighted SMI client Michigan Wheel – “a 100-year-old company that makes propellers and rudders for the Coast Guard’s fastest response cutters,” in the words of Rep. Hillary Scholten. Rep. Scholten recently toured their facility, along with SMI’s Jeremy Steslicki, John Major, and Tasden Ingram.
Meanwhile, Trump’s pick to be Pentagon policy chief, Elbridge Colby, also told senators that developing the U.S. defense industrial base should be a key part of any new National Defense Strategy, “to drive what I would think of really as a national mobilization.”
Related: Labor is key to resolving shipbuilding woes, experts tell lawmakers
Go deeper: The State of U.S. Shipbuilding
More defense manufacturing news: Vulnerabilities to U.S. Clothing, Textile Defense Industrial Base
MINING THE GAP: Another element of the Trump national security agenda is beefing up the nation’s capacity to extract and process critical minerals.
The president plans to name a ”Critical Minerals Czar” to oversee the effort, which will call for processing minerals on military bases for fighter jets, submarines, bullets and other weaponry to reduce heavy reliance on China, Reuters reported.
Another view: What America needs from Ukraine isn’t a mineral deal
ENERGY
‘TARGETED AND PRAGMATIC’: Nearly two dozen House Republicans urged the Committee on Ways & Means to maintain some of the energy tax credits that they maintain are spurring “major investments in domestic energy production and infrastructure for traditional and renewable energy sources alike.”
“The United States continues to produce energy from a myriad of sources that are cleaner and more efficient than anywhere else in the world,” they wrote, adding that “an all-of-the-above energy approach, combined with a robust advanced manufacturing sector, will help support the United States’ position as a global energy leader.”
The move is the latest sign that some of the Trump administration’s attempts to roll back the Biden administration’s energy and infrastructure agenda will meet bipartisan resistance.
The GOP lawmakers requested “that any proposed changes to the tax code be conducted in a targeted and pragmatic fashion” and avoid “undoing current and future private sector investments which will continue to increase domestic manufacturing, promote energy innovation, and keep utility costs down.”
Read more: House Republicans Line Up To Save Biden’s Legacy Climate Law
‘HISTORIC ACHIEVEMENT’: A major milestone for next-generation battery technology came with the announcement that Mercedes Group and SMI client Factorial Energy are integrating lithium metal solid-state batteries into a production vehicle.
The development “marks a historic achievement in electric mobility,” said Siyu Huang, CEO and Co-Founder of Factorial Energy “This breakthrough demonstrates that solid-state battery technology has moved beyond the laboratory and into real-world application, setting a new benchmark for the entire automotive industry.
She added: “Our collaboration with Mercedes-Benz proves that the future of electric vehicles is not just a vision, but a reality we’re delivering today.”
Read more: Passenger car and Formula 1 engineers team up as solid-state battery road tests begin
CLIENTS IN THE NEWS
A 3D-printed submarine? Not likely, but maybe something close
Editorial: UML boosts LINC mission with top-tier designation
