FDA Request for Information Signals New Path for VC Firms and their Portfolio Companies in Federal Contracting

On December 17, 2025, the U.S. Food and Drug Administration (FDA) issued a request for information (RFI) on a proposal designed to help the FDA engage more directly with innovative, venture-backed companies focused on biotechnology, medical devices, AI, and regulatory technology.^[i]The RFI includes 19 questions, with responses due by 2:00 p.m. ET on January 18, 2026.

What the FDA is asking for in the RFI

Under the proposed contracting approach, called “Foundational Innovation and RAPID Engagement” (FIRE), the FDA would award contracts to qualified venture capital firms, and then portfolio companies of those VC firms would provide services or products to the FDA as subcontractors.^[ii]The FDA is seeking input from VC firms on the feasibility, structure, and requirements for this novel model, including:

• Barriers VC-backed start-ups face in federal contracting and how FIRE could reduce them.
• Qualifications and compliance expectations, including standards and organizational structures.
• How to maintain competition and access to avoid excluding innovative small businesses not in selected VC portfolios.

For life sciences VCs and their portfolio companies, the RFI process represents an opportunity to help shape the rules of the road for how the FDA engages with venture-backed innovation. 

Why this matters for VC funds and venture-backed life sciences companies

The proposed contracting approach is meant to reduce reliance on traditional “pass-through” intermediaries and procurement friction that can discourage scalable, product-driven solutions and create barriers for early-stage innovators. If implemented, FIRE could be a meaningful new pathway for venture-backed innovation because it would:

• Create direct contractual relationships between the FDA and qualified VC firms.
• Enable portfolio companies within an approved VC’s portfolio to provide products and services to the FDA (as subcontractors).
• Potentially support a broad range of FDA needs (e.g., research, technology deployment, and regulatory innovation).

The FIRE model would also introduce procurement-specific considerations that most funds and early-stage companies do not routinely manage (e.g., organizational conflicts of interest, procurement integrity restrictions, IP/data rights, flow-down compliance, contractor responsibility certifications, etc.). Getting the structure and guardrails right early can help funds and management teams pursue FDA opportunities without creating avoidable friction with financing, commercialization, or future government work.

Recommended call to action for VC firms and portfolio company leadership

1. Keeping in mind that the RFI process is an opportunity to shape qualification criteria, compliance expectations, and practical contracting mechanics, decide whether to submit an RFI response (individually or as a part of a coordinated ecosystem response) by January 18, 2026, at 2 p.m. ET.
2. Inventory “FIRE-ready” capabilities across the portfolio that might be responsive to areas of need at the FDA, particularly in biotech, medical devices, AI, and regulatory technology. A short capability inventory helps funds respond credibly and positions portfolio teams for any subsequent RFI or even work order competitions.
3. Pressure-test structure and conflicts early. If FIRE advances, questions like “who is the prime?” and “how do we manage conflicts and compliance?” will drive speed (or friction) in execution.

How Crowell & Moring can help

Crowell & Moring’s Life Sciences, Government Contracts, and Emerging Companies & Venture Capital teams work together to help venture capital firms and innovative companies engage with industry and federal agencies in a way that is practical, compliant, and aligned with investment objectives and development programs.

Advising VC firms (including as contemplated “prime” awardees):

• Prime/affiliate structuring for a fund environment: Help coordinate with your fund formation counsel to evaluate whether the prime should be the fund, management company, or an affiliated entity; align with governance, LP considerations, and portfolio oversight.
• Portfolio-wide operating model: Build a repeatable approach for work order intake, portfolio company participation, subcontractor selection, and administration.
• Diligence and risk allocation: Advise on how government work may affect portfolio risk (conflicts, disclosure obligations, IP leakage risk, future customer restrictions) and help allocate risk appropriately across fund/company arrangements.

Supporting portfolio companies (as subcontractors competing for work orders):

• “Federal-ready” onboarding calibrated to startups: Establish the minimum viable compliance posture (including registrations, representations, internal controls, and subcontractor compliance) without overbuilding.
• Life sciences + contracting integration: Coordinate contracting deliverables with regulatory and product strategy where work touches clinical data, device software, bioinformatics, or regulated workflows so that government performance supports (rather than complicates) commercialization.
• Supply chain, export controls, and foreign involvement: Identify issues that commonly arise in venture-backed companies (e.g., distributed teams, foreign investors, offshore development, etc.) that might impact government awarded contracts.

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The FDA’s FIRE request for information is an opportunity for VC funds and venture-backed innovators to shape a potentially new acquisition pathway tailored to the startup ecosystem. Crowell & Moring is available to advise life sciences investors and portfolio companies on how to respond strategically while positioning themselves to compete if the FDA formalizes the FIRE model.