USAF Tech Incubator Goals for 2021: What Have You Got?

The Air Force’s technology incubator, which doles out more than 1,000 small research contracts worth up to $50,000 each year, unveiled an advance look at its 2021 programs during its virtual Accelerate event, Dec. 7-11—the first organized by the newly relaunched AFWERX 2.0.

AFWERX 2.0 will emphasize larger ticket research contracts, but seek to leverage USAF dollars spent on technology to attract other investments—both from the private sector and from other government customers, officials said. A new category of funding was unveiled, the single Supplemental Funding Pilot Program, intended to help fill the gap between existing small business research contracts and the Strategic Fund Increase, or STRATFI, funding announced earlier this year.

The single Supplemental Funding Pilot Program, combines the STRATFI funding, of which 18 awards between $3 and $15 million each were announced in March, with the new Tactical Fund Increase, or TACTFI, which will provide $375,000 to $1.7 million sized awards.

Both new funding categories require the recipients to get matching funds from either government or private sector sources, said Steve Lauver, another AFVentures official.

The STRATFI awards this year—$101 million in total—had been accompanied by $102 million in non-SBIR government funding and $342 million in private sector funding, Lauver said.

Since it was founded in 2017, AFWERX has been a flagship for the procurement reforms that Air Force Acquisition Chief Will Roper has championed in the service, designed to bring cutting edge technological innovation to the warfighter at Silicon Valley speed.

AFWERX 2.0 has been moved into the Air Force Research Laboratory, and reorganized into three parts, AFWERX official Jason Rathje said during the Accelerate event, held virtually due to the new coronavirus pandemic. The reorganized effort was designed to self-consciously mimic Silicon Valley venture capital outfits, leveraging its larger, later stage investments, to generate matching funding. AFWERX 2.0, announced by Roper Sept 1, meant “really incredible changes to how we think about working with our industrial base, how we think about working with small businesses, how we scale and grow,” Rathje said.

Rathje heads up the first of three AFWERX elements: AFVentures—building on the Small Business Innovation Research (SBIR, for the private sector) and Small Business Technology Transfer (STTR, for the academic and research communities) contracts that AFWERX has doled out for three years, but adding requirements for matching funding from government or private sources for larger awards. Spark, the second element, is the inward, service-facing side of the AFWERX program, seeking to recruit USAF and government partners for AFWERX start-ups. And, Prime is the third, designed to engage with big tech partners on projects like the flying car.

SBIR phase one contracts pay a company up to $50,000 to spend up to three months essentially looking for Air Force and other customers for their technology. AFWERX issues between 1,000 and 1,500 phase one contracts a year, Rathje said. The minimum application requirement had been reduced to a 25 slide deck. Applicants have to be majority U.S. owned and employ fewer than 500 people.

His presentation was short on detail about the exact kind of technology AFWERX was seeking, but that’s by design. AFWERX has pioneered the use of so-called “open topic” SBIR and STTR solicitations, which Rathje defined as the most open of doors: “Any company with any idea can pitch in,” he said.

Conventional acquisition approaches, which outline warfighter needs and then expect tech companies to provide requisite capabilities, had led to an “increasingly small overlap between realized U.S. Air and Space Forces demand and existing commercial technology supply,” Rathje said. In the post-Cold War era, the U.S. defense establishment had become a decreasingly important player in R&D activity. “At AFVentures, we think of things differently,” Rathje explained, “We start with the supply.” It is AFWERX’s job to understand the capabilities startups can offer and entice them to develop those capabilities for Air Force customers.

“By starting with supply, we’re able to bring in new ideas, different ideas, things that are radically evolved from where we might be thinking about it, because the innovation that you’re doing is happening at such a precipitous pace, that it’s hard for us to keep up,” he told an online audience of entrepreneurs, technologists, and officials. AFWERX 2.0 will also continue to award 300-500 Phase Two SBIR awards each year, up to $750,000 each, he said.

The incubator also released new data about its awards during Fiscal Year 20, which ended Sept. 30, demonstrating the financial and innovation value proposition that its activities represent.