Nooks, a company offering classified workspaces and networks for businesses and government contractors and partners, opened its doors this week in Colorado Springs.

The massive 60,000 square-foot space near the University of Colorado at Colorado Springs offers something unique to Nooks’ clients: a sensitive compartmented information facility (SCIF). This is the company’s third location,  with others in Washington, D.C., and El Segundo, Calif.

Company leadership said  its classified-space-as-a-service approach will revolutionize an industry that has been dominated by legacy firms for more than 50 years.

And that domination is not malicious, said Nooks CEO Sean Blackman, it’s simply a byproduct of the government wanting to move faster on classified contracts and going with companies they know have both a clearance and a SCIF.

Furthermore, rules for SCIFs — where sensitive information can be processed, stored and discussed while protecting it from unauthorized access — were written at a time when only 100,000 people in the government had a security clearance, Blackman added. Now, more than 5 million Americans hold some kind of security clearance, including over 1.3 million with a top-secret clearance, according to a report from the Office of the Director of National Intelligence in 2019.

“The traditional contractors, they make incredible planes, tanks and missiles, I’ve flown them, I’ve shot them, but they’re really challenged when it comes to software,” said Blackman, a former Naval aviator who flew F/A-18 Super Hornets. “There’s a whole sector of our economy that’s really good at (software) that’s not being meaningfully engaged in the classified marketplace, all because of an access to infrastructure issue.”

The infrastructure problem is a bad reason to lose the great power competition to China, he said, adding “something needs to be done to change the model, and that’s why we formed Nooks in 2021.”

Nooks first announced its intention to expand to Colorado Springs at the 2023 Space Symposium. The company was offered up to $763,182 in tax incentives approved by the Colorado Economic Development Commission. The company will hire 35 people at an average annual salary of nearly $166,000,  roughly twice the median household income of $83,198 in the region.

The Colorado Springs Chamber of Commerce & Economic Development Corp. says the company will bring a roughly $33 million economic impact to the Pikes Peak region.

Working with leadership in Colorado Springs, at the state level and at the federal level, Blackman and others at the company were convinced that Colorado Springs made an ideal location for expansion.

“The city and the state are so aligned with trying to make this region into a hub for defense technology companies. … We have not seen the level of local support in any other market that we’ve seen here in the Springs,” Blackman said.

Broadly speaking, the thesis for Nooks is to bring the best tech and the best talent to the table, rather than rely on legacy companies with SCIFs. The old ways of one company, one contract, one SCIF are no longer good enough, Blackman said.

Typically, a company bidding on a classified contract must obtain or already have a clearance and have an accredited SCIF. Building and maintaining a SCIF is cost-intensive, even for large companies.

This all but eliminates a startup’s chance to competitively bid on a classified contract.

Offering a SCIF as a service removes that barrier, Blackman said, and opens doors to many more companies than in decades prior.

“(Before founding Nooks) we were the government guys getting tech companies on contract with the DOD,” he said. “And what we found was that as long as the contract was unclassified, we could move very quickly. But the second that contract went classified, unless that company had an existing security clearance and an existing SCIF, we as the government could not give them the work.”

This approach, while effective in the past, hampers the U.S. and its ability to compete globally as the cyber and space industries — as well as the country’s rivals — evolve, Blackman said.

Nooks’ approach offers a way forward, he said.

“And that’s how we win the great power competitions by engaging the best parts of the U.S. economy in the classified marketplace,” he said.