# Approved Is Not Delivered: A Small Supplier's Defense Subcontracting Kit

**Purpose.** A government approval is a permission, not an order and not a shipment. This kit helps a small manufacturer, machine shop, electronics assembler or component supplier get registered for defense work, size the cash needed to survive a delayed purchase order, map long-lead dependencies, and write payment terms that don't leave you financing someone else's funding delay. It also works for any owner who depends on a part that "ships on allocation." Print it and fill it in by hand.

## 1. Readiness checklist

- [ ] Registered (or renewed) in SAM.gov with my legal name and address matching my tax records
- [ ] UEI (Unique Entity ID) obtained and written down in a safe place
- [ ] CAGE code obtained or confirmed
- [ ] NAICS codes reviewed and the ones that match my real work listed in my profile
- [ ] Company website states my capabilities, certifications and location plainly
- [ ] Business email domain checked for basic email security (SPF, DKIM, DMARC)
- [ ] Staff email addresses checked against known breach lists
- [ ] Multi-factor authentication turned on for email, banking and file storage
- [ ] Software and firewalls patched; anyone remote-accessing my systems uses a managed, updated tool
- [ ] Browsed SBIR/STTR topics and noted any that fit my trade
- [ ] Found the small-business liaison contact for at least three prime contractors
- [ ] Every open purchase order marked as approved, funded, or delivery-dated (see worksheet 3)
- [ ] Cash buffer sized for a six-month slip (worksheet 2)
- [ ] Deposit or milestone-billing language added to my standard quote (templates below)

## 2. Worksheet: cash needed to bridge a delayed purchase order

Fill in each line.

| Line | Item | My number |
|---|---|---|
| A | Monthly payroll and overhead tied to this work | $______ |
| B | Months the order might slip (use 6 as a stress test) | ______ |
| C | Cash needed to carry the slip (A x B) | $______ |
| D | Cash I actually have available (cash plus unused credit line) | $______ |
| E | Shortfall (C minus D; if negative, you are covered) | $______ |
| F | Deposit or milestone payments I can negotiate to close E | $______ |

Worked example (hypothetical): a CNC shop has $15,000 a month in payroll and overhead. A six-month slip means 15,000 x 6 = $90,000 to carry. If it has $40,000 available, the shortfall is $50,000, which a deposit or milestone billing needs to cover.

Margin versus carrying cost for held parts:

| Line | Item | My number |
|---|---|---|
| G | Annual revenue from the new customer | $______ |
| H | My margin on that revenue (percent) | ______ |
| I | Annual margin (G x H) | $______ |
| J | Long-lead parts I must hold for them | $______ |
| K | Carrying cost rate (use 8% as a starting point) | ______ |
| L | Annual carrying cost (J x K) | $______ |
| M | This customer as a share of total revenue | ______ % |

If M is above 30%, treat concentration risk as the main question, not margin.

## 3. Worksheet: three-stage order tracker

For each large order, record the stage and the evidence.

| Order or customer | Approved (date, proof) | Funded (date, proof) | Delivery date (written, from whom) |
|---|---|---|---|
| | | | |
| | | | |
| | | | |

Rule: if the Funded column is blank, count the order as a hope, not revenue.

## 4. Long-lead dependency map

| Part, software or certification | Supplier | Lead time quoted | Single source? (Y/N) | Language used ("in stock", "allocation", "approved") | Reserve held ($) |
|---|---|---|---|---|---|
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |

Mark any row with "Y" in the single-source column or with allocation language as a delivery risk. Consider a reserve of about 60 days of spares for those rows.

## 5. Templates

**Deposit and milestone-billing clause (starting text; have it reviewed before use):**

```text
Payment terms. Customer shall pay a non-refundable deposit of [__]% of the order value on acceptance of this purchase order. Remaining payments are due as follows: [__]% on purchase of materials, [__]% on acceptance of first article, [__]% on shipment of each lot. Net [__] days from invoice. If Customer's funding source delays release of funds, delivery dates move day-for-day and Supplier may invoice work completed and materials purchased to date. Supplier is not required to hold capacity or inventory beyond [__] days past the original delivery date without a written extension and a holding fee of [__] per month.
```

**Prime-contractor outreach email:**

```text
Subject: Small-business supplier introduction: [your trade], [city, state]

Hello [name],

I run [company], a [number]-person [machine shop / assembler / supplier] in [city, state]. We make [specific parts or processes] on [equipment], and we hold [certifications, if any]. Our SAM.gov registration is active (UEI [____], CAGE [____]).

I'm writing to ask whether you have a small-business liaison or supplier-onboarding process, and what you look for in new tier-2 or tier-3 suppliers. I can send a capability sheet and two past-performance references.

Would a short call next week work?

[Name, title, phone, website]
```

## 6. Prompts to use with your own documents

Paste your own contracts, parts lists and quotes. Tell the AI to say when it is unsure.

```text
I run a [type of shop] with [number] employees. Here is a draft purchase order [paste]. Explain the difference between a government approval, a funded contract and a delivery date, say which of the three my document shows evidence of, and list questions to ask the prime before I commit capacity. Say where you are unsure.
```

```text
Here is my list of parts and suppliers with lead times and prices [paste]. Flag long-lead and single-source items, estimate cash tied up at an 8% carrying cost showing the arithmetic, and suggest a reserve policy. Flag any missing data rather than assuming it.
```

```text
Using my business details [paste], walk me through SAM.gov registration, getting a UEI and CAGE code, and finding SBIR/STTR topics for a small [your trade] business. Give steps and what to prepare. Mark which steps I should verify on the official sites.
```

```text
My customer's payment depends on a third-party funding source and could slip six months. Here is my quote [paste] and my monthly fixed costs [paste]. Draft deposit and milestone-billing terms, show the cash I'd need without them, and note which clauses a customer might resist. Say where you are unsure about enforceability.
```

```text
Here is my revenue by customer for the last 12 months [paste] and a proposed subcontract [paste]. Score it on margin, payment delay risk and concentration risk, especially if it would exceed 30% of revenue. Show the arithmetic and list the assumptions you made.
```

## Sources

- https://breakingdefense.com/2026/10/us-greenlights-500-patriot-missiles-for-ukraine-with-2-1-billion-to-be-paid-by-allies/
- https://apprised.news/desk/defense/2026-10-31
- https://sofrep.com/news/japan-gets-a-new-missile-assembly-plant-as-u-s-stockpiles-run-low/
- https://www.defensenews.com/global/europe/2026/10/30/open-the-hives-why-france-is-turning-tank-gunners-into-fpv-pilots/
- https://www.ukrinform.net/rubric-polytics/4179912-merz-announces-coalition-of-the-willing-meeting-in-berlin.html

*Informational only. Not legal, financial or security-consulting advice. The worked examples are hypothetical.*