Atlas Space Operations: The Partnership Strategy for Winning Contracts You’re Not Qualified For

Atlas Space Operations: The Partnership Strategy for Winning Contracts You’re Not Qualified For

The catch-22 of government contracting is brutal: you need past performance to win contracts, but you need to win contracts to build past performance. For small companies, there’s an even harder barrier—facility clearances that take years and significant capital to obtain.

In a recent episode of Category Visionaries, Brad Bode, Founder CTO & CIO of Atlas Space Operations, a ground software as a service platform that’s raised over $37 million, shared the partnership strategy that let them compete for opportunities they had no business bidding on alone.

The Clearance Barrier

Small companies face a structural disadvantage with larger government programs. It’s not about capability or innovation. It’s about clearances. “Depending on the government program, you might need a facility clearance, which is the ability to hold classified clearances for your employees. It’s not likely that smaller companies have that,” Brad explains.

Facility clearance isn’t something you can acquire quickly. It requires extensive vetting, physical security infrastructure, personnel security protocols, and ongoing compliance. The process takes months at minimum, often years. The cost runs into hundreds of thousands of dollars before you’ve won a single contract that requires it.

This creates an impossible barrier for startups. You can’t afford facility clearance without contract revenue. But you can’t bid on the largest, most lucrative government programs without facility clearance. The result is that entire categories of opportunities remain locked behind doors that small innovative companies can’t open.

The Past Performance Problem

Even for contracts that don’t require facility clearance, there’s another catch-22. Government buyers weight past performance heavily in contract awards. “That’s one of the things they really look for is past performance on any program, really,” Brad notes.

This makes sense from the government’s perspective. They’re spending taxpayer money on critical programs. They want proven execution. But it creates a chicken-and-egg problem for new entrants. How do you prove you can execute on large programs when no one will give you a large program because you haven’t executed on one before?

Atlas Space solved this initially through Small Business Innovation Research (SBIR) contracts—smaller awards in the $1-2 million range that don’t require extensive past performance. They won their first NOAA contract in Ghana, proved the software worked, and built initial credentials. But SBIRs only scale so far. The really significant opportunities—the $50 million, $100 million programs—remained out of reach.

The Partnership Model

Brad’s solution was counterintuitive for founders trained to own the entire customer relationship: partner with larger aerospace companies to bid on contracts together. “You might partner with a larger company so you can go in on these contracts together to continue to make a name for yourself within the government,” Brad explains.

This isn’t a loose collaboration or a referral relationship. It’s formal teaming arrangements where the large aerospace company primes the contract—they’re the main contractor responsible to the government—and Atlas Space comes in as a subcontractor providing specific technical capabilities.

The large company brings facility clearances, past performance credentials, established relationships with procurement officers, and the infrastructure to handle compliance requirements. Atlas Space brings innovation, specific technical expertise in ground software, and the ability to move faster than the aerospace giant could alone.

What You Trade and What You Get

The economics of partnership aren’t as painful as founders might fear. Yes, you’re giving up revenue. The prime contractor takes their cut. You’re not capturing 100% of the contract value your work generates. But the alternative is capturing 100% of zero because you can’t access the opportunity at all.

More importantly, partnerships provide three things money can’t buy quickly. First, access to opportunities you couldn’t bid on alone. Contracts that require facility clearance or extensive past performance suddenly become accessible.

Second, past performance credentials in your own name. Even as a subcontractor, you’re executing on government programs. You’re building a track record. “You might partner with a larger company so you can go in on these contracts together to continue to make a name for yourself within the government,” Brad emphasizes. That reputation compounds over time.

Third, relationships with government procurement officers and program managers. Working on large programs puts you in rooms you couldn’t access as a small company. You’re building relationships with the people who make contract decisions. That social capital matters enormously in future competitions.

The Temporary Nature of Partnership

Here’s the critical insight: partnerships are scaffolding, not permanent structure. Brad is explicit that this is a phase, not a permanent strategy. “As a small company, it’s not likely that you’re able to prime or be the number one contractor on the larger programs because there’s a lot of hoops that you have to jump through,” he explains.

But as you win more contracts through partnerships, you build the credentials and infrastructure to eventually prime contracts yourself. The facility clearance becomes affordable once you have steady contract revenue. The past performance requirement is satisfied by the programs you’ve executed through partnerships. The relationships you’ve built open doors for direct opportunities.

The partnership phase typically lasts several years. Atlas Space started partnering on larger contracts while building their commercial business and winning smaller direct government awards. Over time, the mix shifted. They eventually created Freedom Space Technologies, a subsidiary that’s 100% US owned with all US employees, specifically to handle classified government work directly.

How to Find the Right Partners

Not every large aerospace company makes a good partner for a small innovative company. Brad’s approach suggests several criteria. First, find companies that recognize gaps in their own capabilities. Large aerospace companies are good at program management, compliance, and established technologies. They’re often not good at cutting-edge software or moving quickly.

Second, target companies that are already bidding on contracts where your capability creates differentiation. If they’re competing for a program that requires ground software innovation, and that’s your core expertise, you make their bid more competitive.

Third, look for companies that have partnered successfully with small firms before. Some large contractors view partnerships as burden. Others see them as strategic necessity and have internal processes to make teaming arrangements work smoothly.

Brad doesn’t provide specifics on which companies Atlas Space partnered with, but the principle is clear: find large contractors who need what you have and are already pursuing opportunities where you add value.

The Dual Strategy

What makes Atlas Space’s partnership approach particularly effective is that they didn’t rely solely on partnerships. They maintained a dual strategy. “You have to have a commercial plan and a government plan,” Brad emphasizes throughout the interview.

While partnering on large government programs, they continued building commercial business with satellite operators. They kept winning smaller direct government contracts through SBIRs and other mechanisms. They maintained multiple paths to revenue so partnerships were strategic choices, not desperate necessities.

This matters because negotiating power comes from alternatives. If partnerships are your only path to government revenue, you’ll accept unfavorable terms. If you have other revenue streams and are selectively partnering to access specific opportunities, you can negotiate from strength.

When to Stop Partnering

The partnership phase ends when you’ve built sufficient credentials and infrastructure to prime contracts yourself. For Atlas Space, that transition is happening now. Freedom Space Technologies represents their move to owning the full customer relationship on government work.

But the decision to stop partnering isn’t binary. Even as you develop the capability to prime contracts, selective partnerships on very large programs or programs requiring capabilities you don’t have in-house can still make sense. The key is moving from “we can only access government through partnerships” to “we selectively partner when it’s strategically advantageous.”

The Principles That Transfer

Three lessons from Atlas Space’s partnership strategy apply beyond aerospace. First, identify structural barriers that lock you out of opportunities—whether that’s facility clearances, regulatory requirements, or established relationships—and find partners who already have those barriers solved.

Second, treat partnerships as temporary scaffolding to build credentials and relationships, not permanent ceilings on your business. The goal is always to develop the capability to own customer relationships directly.

Third, maintain alternative revenue streams so partnerships are strategic choices rather than desperate necessities. Negotiating power comes from alternatives.

For small companies competing with established players, partnerships offer a path through barriers that capital alone can’t solve. Brad’s framework shows how to use those partnerships strategically while building toward independence. The catch-22 of past performance and clearances doesn’t go away. But partnerships provide a legitimate path through it—if you’re willing to share the revenue temporarily to build the credentials permanently.