Charleston's Role in the Future of Defense Innovation: What the DIU Bridge Program Means for Local Industry

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The Defense Innovation Unit's newly announced Bridge Program marks a significant inflection point for Charleston's defense and technology ecosystem. With DIU selecting Charleston as one of only ten cities nationwide to roll out the DIU Bridge Program, our region stands at the forefront of a generational shift in how the Department of War engages with the commercial sector.

A New Model for Defense Acquisition

For years, non-traditional defense companies—particularly technology startups and mid-market commercial firms—have faced well-documented barriers to entry into the federal marketplace. Security clearances, access to classified spaces, technology accreditations, and testing infrastructure have historically been bottlenecks that deter commercial innovators from pursuing defense contracts, even when their capabilities are precisely what the warfighter needs.

The Bridge Program is designed to dismantle those barriers. Its three lines of effort—classified infrastructure, cybersecurity accreditation, and test and evaluation—represent a coordinated strategy to compress timelines from years to months and dramatically widen the aperture of companies capable of supporting national defense.

What This Means for Charleston

To anyone in the Lowcountry, Charleston's selection as a government contracting hub is no accident. The region's growing technology corridor, coupled with its established military presence at the newly named Joint Base Lindsay Graham, the Naval Weapons Station, and of course, The Citadel, makes it a natural hub for the kind of civil-military integration the Bridge Program envisions. The new Classified Infrastructure as-a-Service (ClaaS) will provide local and regional technology companies with easier access to secure workspaces; the Commercial Technology Accreditation initiative seeks to enable a cyber secure accreditation of hardware within weeks; and the Integrated Test Team of the Bridge Program provides access testing capabilities not easily accessible to new businesses with the added authority to procure these products for immediate warfighter use.

For government contractors and commercial technology firms across the Southeast, this development fundamentally changes the calculus around pursuing defense work. Companies that previously lacked the infrastructure to handle classified programs may now find a viable on-ramp to defense contracting—one backed by $10 billion in federal investment announced by President Trump in July.

Key Considerations for Companies Entering the Defense Market

While the Bridge Program lowers barriers, companies seeking to take advantage of these opportunities should be attentive to several legal and regulatory considerations:

• Facility Security and Personnel Clearances. Even with commercially operated classified spaces, companies must still navigate the requirements of the National Industrial Security Program (NISPOM) and maintain compliance with Defense Counterintelligence and Security Agency (DCSA) oversight.
• Cybersecurity Compliance. Although CMMC 2.0 requirements were recently suspended to lower the barrier to entry for government contracting, this suspension is unlikely to be permanent—the modern battlefield demands robust cybersecurity, and expediting the growth of cyber-secure government contractors remains a military priority. Companies looking to enter the GovCon space should prepare for these requirements to be reinstated.
• Nontraditional Contracting Vehicles. DIU primarily uses Other Transaction (OT) authority under 10 U.S.C. § 4022 for prototype projects. Notably, Advanced Technology International—based in Summerville—manages the majority of these OT consortia. Companies should understand how OT agreements differ from traditional FAR-based contracts in terms of intellectual property rights, cost accounting standards, and dispute resolution.
• Small Business Status and Set-Aside Contracts. For many new contractors, small business set-asides represent the most accessible entry point into federal contracting. Companies seeking to leverage these opportunities—including 8(a), HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), and Women-Owned Small Business (WOSB) programs—must meet and maintain applicable size standards and certification requirements. The Small Business Administration’s affiliation rules can be particularly complex, as relationships with investors, joint venture partners, or mentor-protégé arrangements may affect size calculations. Companies should evaluate their eligibility early, recognizing that set-aside status offers a significant competitive advantage but carries ongoing compliance obligations.
• Intellectual Property Protection. Commercial firms entering the defense space must carefully structure their IP strategies to protect proprietary technology while meeting government data rights requirements.
• Foreign Ownership, Control, or Influence (FOCI). Companies with foreign investors or international partnerships should assess FOCI implications early, particularly given the classified nature of the work these facilities will support.

Joint Ventures, Teaming Agreements, and M&A Considerations for Government Contractors in the Lowcountry

As businesses grow, strategic partnerships become increasingly important. Navigating the rules around affiliation and control in joint ventures or teaming agreements is critical to ensuring both parties benefit while delivering the best possible product or service to the government.

Similarly, companies considering strategic acquisitions should understand that buying or selling a government contractor involves distinct considerations beyond those in typical commercial M&A. Successfully navigating these transactions requires coordinated expertise across corporate, regulatory, and national security disciplines, with early identification of issues critical to deal success.

Looking Ahead

The Bridge Program represents a deliberate pivot by the Department of War toward speed, commercial partnership, and distributed infrastructure. For Charleston, it is both a validation of the region's growing defense-technology ecosystem and an invitation to build upon it.

As the Bridge Program matures, the companies best positioned to capitalize on this moment will be those that proactively address the legal and compliance frameworks governing classified work, cybersecurity, and non-traditional defense procurement. Charleston's defense industrial community has a rare opportunity to shape how this new model unfolds—and to demonstrate that world-class defense innovation is not confined to the Beltway.

You can read more about this program in the Department of War’s press release here, and on the DIU’s website.

Kyle Wise is a member of Maynard Nexsen’s Government Solutions group, specializing in M&A and regulatory compliance for government contracting businesses. He is also an Apache helicopter pilot in the South Carolina National Guard, where he commands an attack aviation company.