Real Life "Q": Defense Innovation Labs

Entry points to doing business with the DoD

The Department of Defense (DoD) innovation space encompasses a range of initiatives and organizations that seek to accelerate the development and adoption of new technologies for national defense purposes.

Some of the key organizations within this space include the Army Applications Lab, AFWERX, NavalX, SOFWERX, DIU, and DARPA.

A strong understanding of these innovation labs could spell the difference between life and death for startups—particularly early stage startups focused on defense or dual-use technologies.

Before I start, I want to extend a special acknowledgement to Helena Krusec at AFWERX, who put together tons of research on which this edition of Building our Defense is based.

Don’t forget to share it with anyone you think may be building in the defense tech space:

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Army Applications Laboratory (AAL)

The AAL is a part of the Army Futures Command (AFC) and serves as teh central hub for Army innovation, bringing together soldiers, developers, and technology companies to identify and solve complex problems facing the Army.

• TRL (Technological Readiness Level) focus: TRLs 5-7 (sometimes TRL 8/9)

• Award Types: SBIR/STTR (66%); 6.3 RDT&E funding (33%); ~$30M annually

• Award Sizes:

  • Phase I SBIRs: $100K

  • Direct to Phase II: $750K-$2M

• Requirements and Signal Authority: Pre-requirement based cohorts, complementary technologies

• Differentiator: R&D, brings components of capabilities together to create solutions

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AFWERX

AFWERX is a U.S. Air Force initiative that seeks to facilitate innovation and collaboration between the military, industry, and academia to solve defense-related challenges. AFWERX has three main focus areas: Spark, Prime, and Agility. Spark is focused on ideation and brainstorming, Prime is focused on prototyping and testing, and Agility is focused on scaling and implementing innovative solutions.

• TRL focus:

  • TRL 4-6 for SBIR Phase I

  • TRL 6-7 for SBIR Phase II

  • TRL 7-9 for Phase III awards

• Award Types: SBIR/STTR Open Topic (40%); Specific Topic (40%); STRATFI/TACFI (20%); ~$1B annually

• Award Sizes:

  • Phase I SBIRs: $75-100K

  • Phase II: $1.25-1.7M

  • TACFI: $375K-$2M

  • STRATFI: $3-$15M

• Requirements and Signal Authority: Specific topic issued. Open Topic awards must be aligned to “Operational Imperatives”

• Differentiator: R&D and massive scale, translating industry to defense (dual-use)

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NavalX

NavalX is a similar initiative to AFWERX, but focused on the U.S. Navy. It was launched in 2019 and aims to create a more agile and innovative Naby by fostering collaboration with industry and academia, promoting experimentation and prototyping, and developing new technologies in areas such as unmanned systems, cybersecurity, and artificial intelligence.

• TRL focus:

  • TRL 0-3 for SBIR Phase I

  • TRL 2-7 for SBIR Phase II

  • TRL 6-9 for Phase III

• Award Types: SBIR/STTR with some “Other Transactions” from Office of Naval Research; ~$300M annually

• Award Sizes:

  • Phase I SBIRs: Up to $140K

  • Direct to Phase II: $750K-$2M

• Requirements and Signal Authority: Pre-requirement based cohorts, complementary technologies

• Differentiator: R&D, brings components of capabilities together to create solutions

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SOFWERX

SOFWERX is a partnership between the United States Specials Operations Command (USSOCOM), the Doolittle Institute, and private industry that provides a collaborative environment to develop new technologies that can enhance teh capabilities of special operations forces.

• TRL focus:

  • TRL 0-3 for SBIR Phase I

  • TRL 3-7 for SBIR Phase II/III

• Award Types: SBIR/STTR; Broad Agency Announcements (BAA); ~$60M annually

• Award Sizes:

  • Phase I SBIRs: $175K

  • Direct to Phase II: $1.3M

• Requirements and Signal Authority: Solicitations occur in lock-step with requirements development

• Differentiator: Partnership Intermediary Agreements (PIA) relationship, executing 2-5 year programs only, difficult to cross-transfer a program back out of SOFWERX

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Defense Innovation Unit (DIU)

The Defense Innovation Unit is a government organization that was established in 2015 to help the DoD access cutting-edge commercial technologies. DIU works with startups, venture capitalists, and other non-traditional defense contractors to identify and develop new solutions in areas such as artificial intelligence, autonomy, and cybersecurity.

• TRL focus: TRL 6+

• Award Types: “Other Transactions;” Commercial Solutions Openings; ~$80M annually

• Award Sizes: Usually $500K+

• Requirements and Signal Authority: DIU creates its own demand signal

• Differentiator: Provides an immediate pathway to procurement but is limited by customer funding availability and capability set

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DARPA

DARPA, formally the Defense Advanced Research Projects Agency, is perhaps the best-known organization with the DoD innovation space. DARPA has been around since the 1950s and is responsible for many of the most groundbreaking technological innovations in defense history, including the internet, GPS, and stealth technology. DARPA is focused on advancing the state of the art in a wide range of areas—from biotechnology to robotics to space explorations—and has a long track record of pushing the boundaries of what is possible.

• TRL focus:

  • Technical Area 1 (Long Term): TRL 1-2

  • TA2 (Short Term): TRL 3-4

  • TA3 (Near Immediate): TRLs 5-6

• Award Types: SBIR/STTR; Broad Agency Announcements; Other Transactions; ~$4B annually

• Award Sizes: Integrated TA1, TA2, and TA3 effort range is typically $8-10M; individual programs vary

• Requirements and Signal Authority: DARPA has broad authorities to create its own demand signal, so long as its within the law

• Differentiator: Each DARPA program requires “two miracles” to be successful, leading to massive leaps forward in technological capabilities.

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Towards Greater Innovation

The Department of Defense has long been known for its bureaucratic and slow adoption of innovation.

It is working hard to adopt new practices and grant new authorities that allow it to keep pace with industry and to bring in the best technology and solutions for various requirements. These innovation labs taken together represent some of the best tools available to the DoD to do that. They also represent some of the best entry points for companies looking to do business with the DoD.

Determining which one is right for a particular company comes down several factors including the alignment with a specific requirement and whether the proposed capability is a dual-use technology or a defense-focused technology.

Plotting the labs against those two spectra can help a company further focus where it can best enter and create value.

Alright, if you know someone that’s building for defense, please make sure you share this with them and encourage them to

Keep building!

Andrew