# Biotechs Face Milestone-Payment Gaps

A small biotech employee raised concerns about covering working-capital costs under milestone-based federal R&D awards associated with ARPA-H and DARPA. Awardees may incur substantial expenses before a milestone is accepted and payment arrives; the poster said reaching the first payment could require several million dollars in available cash. The post includes no replies or firsthand examples confirming how companies finance these gaps, whether acceptance delays have occurred, or what financing products are available.

- The issue is relevant to biotech contractors evaluating whether they can fund work through milestone acceptance and payment, particularly early in an award.
- Procurement teams and industry stakeholders may find it useful to account for payment timing and acceptance milestones when assessing award feasibility and contractor cash-flow exposure.
- The signal points to a possible need for bridge financing, but does not establish that financing options are available or commonly used.

**Jurisdictions:** federal
**Industries:** Healthcare, Defense & Military
**Topics:** Grants & Funding
**Published:** October 19, 2026

### Government Entities
- Advanced Research Projects Agency for Health (ARPA-H)
- Defense Advanced Research Projects Agency (DARPA)
- Biomedical Advanced Research and Development Authority (BARDA)
- Department of Defense (DoD)

### Key Quotes
> We'd have needed a few million sitting around just to get to the first payment and we don't have that.
> — Original poster

### Sources
- [How do small biotechs cover costs between milestone payments on ARPA-H / DARPA type awards?](https://www.reddit.com/r/GovernmentContracting/comments/1x9v0rz/how_do_small_biotechs_cover_costs_between) - reddit-governmentcontracting