Turns out you don’t actually have to hit milestones on grants. The unfortunate reality is grants are typically unrealistic in the same way VC backed startups vastly overestimate their growth curve. In order to win the grant, you’re competing against other ideas. It’s easy to win grants with ideas that aren’t feasible because they sound better than ideas that are actually feasible. It enables incredible amounts of grift once you understand how to exploit the dynamics. Look up SBIR mills
I had the displeasure of submitting a few honest SBIRs at one point in time. Needless to say, they were rejected for not being ambitious enough. It is actually so bad that there is an inverse relationship between your ability to get an SBIR and your ability to produce a commercial product - startups who try and fail are statistically more likely to succeed in the market than startups who get an SBIR (even with the benefit of the money).
I’ve had the displeasure of working for companies that did get SBIRs and firmly believe you are correct that there is an inverse relationship on producing products. The machine knows how to get grants, and it does not care about delivering anything.
Do you have any references on this topic I can look into further? I find it difficult to articulate that particular behavior to management
