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US DOD’s DIU accelerating DOD adoption of commercial technologies, transformation of military capacity and capability and strengthen the national security innovation base

Historically and during the cold war military technology programs drove many commercial successes like Nuclear power, GPS, Internet, Computers, Jet Engines, semiconductor and integrated circuits, and these were driven by Department of Defense’s comprehensive and well-resourced investment plans.   The internet grew out of a military research project.  Global Positioning System (GPS) is based on network of satellites set up by the U.S. Department of Defense in the 1970s. Radars developed before World War II by military are now used in many civilian applications including air traffic control and weather forecasting. Invention of Jet engines and other aircraft technologies is now enabling the growth of Air travel. Drones which are becoming increasingly popular for surveillance and photography in commercial and civilian use can be traced to the military.


Today the situation has changed radically. The total federal spending on R&D has fallen to 3-4% of the budget, and the private industry spends much more than the government does. Military R&D is also characterized by low levels of productivity of the investment. US Commerce Department estimates that a commercial patent requires on average ten man-years of industrial R&D to be developed,  compared to thousand man-years for the R&D that the Defense Department and NASA contract out or perform in-house.  Commercial innovation has outpaced military innovations in many areas like communications  ICT, IoT, 5G, and Quantum and also become more decentralized.


Over the past several years, there has been a significant increase in Defense Department offices and initiatives focused on engaging the commercial high-tech marketplace including the Defense Innovation Unit, MD5 (now the National Security Innovation Network), SOFWERX, AFWERX, NavalX.


Undersecretary of defense for acquisition, technology and logistics said DoD is no less innovative today, but “now there are many dual-use technologies that are being driven by the commercial sector.” He cited examples such as robotics, used in both the private sector and DoD, and cyber defense, which is an area of concern in both sectors. “Innovation in areas such as big data, analytics, autonomy and robotics is going on in [Silicon Valley] and we want to tap into it,” Work, said. “In terms of cost, capacity and volume, it would be hard for the military to beat what commercial industry is doing,” said Rick Lober, vice president and general manager for Hughes Network Systems’ Defense and Intelligence Systems Division.


DIUx was launched in 2015 by then-Secretary of Defense Ash Carter to bridge the gap between the military and the nation’s tech hubs.  The remit of the DIUX was to field and scale commercial technology across the US military at commercial speeds. In 2017, it was re-designated as the Defense Innovation Unit. It is headquartered in Mountain View, California, in Silicon Valley, with additional outposts in Austin, Texas, Boston and the Pentagon. “DIU’s mission to strengthen U.S. national security by increasing the military’s adoption of commercial technology and to grow the national security innovation base is critical not only to maintaining a strategic advantage over our adversaries but also to the strength of our economy,” the organization said in its recently released 2020 annual report.


Despite having an office in Silicon Valley, DIUX did not get much traction initially. It got its second wind only when its Managing Director, Raj Shah, took a leaf out of the DARPA’s Cyber Fast Track project and instituted measures that accelerated the procurement process from proposal to contract within a 2-year time frame.


The Defense Innovation Unit received nearly 1,000 proposals in response to its solicitations last year. Over the past five years, the unit has leveraged more than $11 billion in private investment, the document noted.


Defense Innovation Unit

The Mission of DIU is to accelerate DoD adoption of commercial technology, Transform military capacity and capability, Strengthen the national security innovation base. DIU partners with organizations across the Department of Defense, from the services and components to combatant commands and defense agencies, to rapidly prototype and field advanced commercial solutions that address national security challenges.


The DIU has a number of different teams, with the Defence Engagement team working with the services to understand their requirements, and another called Commercial Engagement, which is constantly scanning the technology landscape, looking for commercial technologies that would be useful for the military. While the initial phases of this process, involving of shortlisting proposals to prototype development, is relatively smooth and seamless, most of the obstacles arise in the contracting phase, referred to in Silicon Valley parlance as the “Valley of Death”.


DIU is the only DoD organization focused exclusively on fielding and scaling commercial technology across the U.S. military at commercial speeds. In 2016, then DIUx, pioneered a process for awarding prototype contracts through the use of Other Transaction Authority (OTA) leveraging USC Title  for competitive selection of advanced commercial technologies. After a period of rapid prototyping, these solutions are transitioned to the warfighter for outsized impact.


We aim to move from problem identification to prototype contract award in 60–90 days whereas the traditional DoD contracting process often takes more than 18 months. Prototype projects typically run from 12–24 months and are administered according to Other Transaction (OT) authority. Upon completion, successful prototypes may transition to follow-on production-OT agreements or FAR-based contracts.


Many of these small innovative commercial firms lack knowledge about defense systems, organizations, and problems that could benefit from their products and technology, and that is why we have made investments in activities like DIUx in Silicon Valley as a way to help match DOD customers with some of those potential sources of advanced capabilities that are rising from the commercial enterprises, says DOD. And DIUx has demonstrated its ability to do more than fund prototypes ― transitioning two projects into production contracts by the end of 2017.


Many of the challenges that US allies face are the same from increasing traditional threats to terrorist networks like ISIS  to information warfare and cyber. Collaborating together they can offset the defence resource crunch they face while also bolstering future military interoperability. DIUx has taken limited steps to engage U.S. allies and partners. On the government side, these include welcoming a United Kingdom liaison officer and, reportedly, plans to host an Indian military representative. DIUx has also worked with a handful of foreign commercial technology firms, reports Defence news.


Defense Innovation Unit Experimental (DIUx) remains focused on its efforts to accelerate commercial innovation in the U.S. Department of Defense (DoD) to solve the nation’s toughest defense problems.


DIU’s main technology focus areas have been artificial intelligence, autonomy, cyber, human systems and space. In October, it added advanced energy and materials to its portfolio. “We look forward to providing even more high-impact solutions that will bolster our military’s strategic, operational and tactical advantage,” the organization said.


This agency has also established a Defense engagement team to continuously scan DoD for new “high-impact projects and to see out opportunities to scale existing projects.” It also created a commercial engagement team to “regularly assess venture investor portfolios, understand the state of commercial technology and identify which companies might be candidates to respond to DIU solicitations.”Finally, DIU created a formal project decision board composed of core leadership, which evaluates projects based on eight criteria that mirrors the Defense Advanced Research Projects Agency’s approach to projects.


Now DOD is planning to take  DIUx global expecting multiple advantages. U.S. commercial technology companies do not hold a monopoly on innovations relevant to solving vexing military challenges. For example, Israel is a leading global provider of counter-drone solutions. A more internationally oriented DIUx could improve the U.S. military’s access to technologies generated by companies located on the soil of its allies and partners, and simultaneously enable their governments to more effectively harvest U.S. commercial technologies for national defense needs.


DIU progress

The Defensive Innovation Unit (DIU) continued to attract nontraditional defense companies to the Department of Defense in 2019, its annual review shows. Over the course of the year, the agency had added 33 vendors to a rolling list that stretches back to mid-2016, says the report released in May 2020. Overall, DIU says it has worked with a total of 120 companies that otherwise probably would have been outside the DOD’s usual base.


The Silicon Valley-based operation received more than 450 proposals in 2019, 63 of which turned into awarded contracts. DIU’s mission is to seek out innovative technology that has both civilian and military applications. The industry has taken notice, says Nick Sinai, a former deputy U.S. chief technology officer who now works in venture capital.


The agency has undergone several recent changes, most notably receiving its own full contracting authority in early 2019 to expand its ability to partner with the private sector using Other Transaction Agreements (OTAs) to circumvent typical acquisition regulations. Previously the unit had to work with other contracting operations across the military. DIU on average spends over a year developing prototypes with end users before transitioning technology to full use across the military.


The report indicates DIU has helped facilitate the investment of nearly half a billion dollars in prototypes. Much of that money came from different branches of the military, with 11 percent of the prototype funding coming from DIU’s own budget. The prototype and OTA process DIU uses is key to its success. “One of the biggest success stories of DIU, in my mind, is that DIU has helped DoD entities go from prototype to production, using other transaction (OT) authority,” he said.


In 2020, DIU, in collaboration with DoD partners seeking commercial solutions to national security challenges, initiated 23  new projects (a 35% year-over-year increase), bringing our total project count up to 95. Every year, we see a stronger response from commercial companies to DIU solicitations: In 2020, we received a total 944 commercial proposals and increased the average number of proposals per solicitation by 52% compared with 2019. As a result, we awarded 56 Prototype Other Transaction (OT) agreements to companies, the majority of
which are considered small businesses or nontraditional defense contractors. Since DIU began prototype activities in 2016, we have awarded more than 200 Prototype OT agreements to companies across 28 U.S. states and six foreign countries to solve the Department’s national security challenges


A total of $108 million in prototype funding was obligated. Between June 2016 and December 2020, DIU facilitated more than $640 million in prototype funding, according to the report.


Notably, the unit in 2020 facilitated the transition of 11 successful commercial prototypes to its Defense Department partners for large-volume procurement, an increase of 22 percent over the previous year. About 43 percent of DIU’s projects to date have yielded at least one prototype that has transitioned to production, according to the report. Fifty-one ongoing projects have prototypes that will be eligible for transition to production if successfully completed. “What began in 2015 as an experiment to lead Department of Defense outreach to commercial innovators has become a gateway for business between leading-edge companies and the U.S. military,” the report said.


Notable DIU projects

The $451.9 million the DIU helped funnel to prototypes will help save billions in the future by finding emerging technical solutions to DOD challenges, the report claims. A primary money-saving solution is using machine learning to predict when aircraft will need maintenance to avoid malfunctions and extend the lifetime of the aerial vehicles. DIU’s program started with prototyping solutions from the artificial intelligence company C3.ai to begin work with the Air Force. After initial positive result, DIU is working to scale the program across the military, the report highlighted. “2019 saw transformative potential realized in several of our ongoing projects, but none more so than in Predictive Maintenance,” the report said.


Other high-priority projects are developing open-source threat intelligence monitoring solutions and counter-unmanned area systems technology. Much of DIU’s work is with the Air Force, the review shows. The Marine Corps remains the having the smallest share of DIU project funding.


An immigrant from Iran, Banazadeh  builds a special kind of satellite that allows its user to take imagery, even through clouds and at night. What makes it unique is its size. It is just a bit bigger than a shoebox. Unlike the military that builds massive satellites, Capella Space can build satellites that are smaller, cheaper and faster than traditional military satellites. “We like to work with the government because we think we can help the government save money, bring a capability that doesn’t exist, and through that hopefully save some lives,” said Payam Banazadeh, co-founder and chief executive officer of Capella Space.


U.S. Army to start using Uptake’s technology to monitor fighting vehicles

The Department of Defense has signed a $1 million contract to use Uptake’s technology to monitor the condition of U.S. Army fighting vehicles, predicting their failures and reducing unscheduled maintenance. The predictive analytics technology will be rolled out to a subset of the Army’s thousands of Bradley Fighting Vehicles and expand from there, Uptake Technologies spokesman Matt Lehner said. The armored vehicles, which to a civilian might resemble tanks, are used to transport troops and for combat.


The initial contract will last for a year, but Chicago-based Uptake hopes that will be extended, Lehner said. The contract is with the Defense Innovation Unit Experimental, a Defense Department entity charged with finding and integrating commercial technology across the military.


Uptake, launched in July 2014 by Groupon co-founder Brad Keywell, analyzes data for companies in more than half a dozen industries, including agriculture, aviation and mining. In some cases, the company’s technology monitors machines with diesel-combustion engines, such as locomotives or semitrailers. Uptake’s data science technologies have learned from all the data the company has access to, and Bradley Fighting Vehicles, which also use diesel-combustion engines, will gain from that, Lehner said.


“The Army will benefit really from the learning that the models have already done on diesel-combustion engines,” he said. “It’s a big opportunity for us to play a role in keeping some of the most important machines and equipment that the country relies on for security ready to go.”




Customers: USMC Warfighting Lab; Joint Improvised-Threat Defense Organization Company: Sensofusion (Milton, DE and New York, NY) . Due to advancements in Unmanned Aerial Systems (UAS), threats to DoD operations by both state and non-state actors are increasing. DIUx has partnered with several DoD organizations to leverage commercial technology to increase Counter-UAS capabilities.


The project with Sensofusion aims to leverage its unique radio frequency sensor to be paired on an M-RZR unit to provide Marines advanced warning of UAS threats. The mobile system will be capable of passively identifying, tracking, and defeating threats posed by UAS during day, night, and all weather conditions.


Drones that could deliver Blood

DIUX is  is looking for a drone that can carry a modest cargo of blood, through the dark of night toward where it’s most needed. The specs of the solicitation from the Defense Innovation Unit Experimental — the ability to deliver a 5-pound package over 100 kilometers in “austere environments” — strongly suggest that they’re looking at an unmanned aerial vehicle system that supports refrigeration or other means of temperature control.


“These deliveries, ideally automated, will provide essential items to critically wounded military personnel as quickly as possible after an injury occurs,” the April 23 solicitation states. “Ability to sustain a very high frequency of operations over an extended period of time is critical. Speed of delivery, reliability and robustness to failure and interference, response time, and overall delivery throughput are critical.”

Personal Aerial Vehicle (PAV).

Customer: DoD. This project provides small aerial vehicles for tactical operators. These vehicles will not replace current rotary wing assets, but offer a niche capability for specific tactical applications with a low acoustic signature, near instantaneous start/stop, ability to spread an assault force across multiple vehicles, and automated systems for more accurate navigation and landings.

Tactical Autonomous Indoor Drone Expansion.

Customer: Special Operations Forces (SOF) & Naval Air Systems Command (NAVAIR). Company: Shield AI (San Diego, CA and Boston, MA). Given the early success of DIUx’s Shield AI pilot project announced in October 2016, which focused on indoor autonomous mapping, SOF customers have partnered with DIUx to integrate the Shield AI drone with a current Navy Unmanned Aerial Vehicle (UAV) program. Integrating the two UAVs will improve range and capability. This expansion of effort has been awarded, demonstrating DIUx’s ability to rapidly integrate commercial solutions into existing DoD

Human Systems

Non-Invasive Cooling.

Customers: Combat Casualty Care Research P rogram, U.S. Army Institute of Surgical Research. Company: Qool  Therapeutics (Menlo Park, CA). This project seeks to advance the state of the art in therapeutic hypothermia, a key concept in combat injury mitigation. By providing nebulized frozen saline, this technology potentially offers a leap forward regarding improved patient outcomes from cardiac arrest, spinal cord injury, and traumatic brain injury. The expected applications of this technology include systemic cooling of a patient’s central organs (i.e., lungs, heart, and brain), and enhanced delivery of drugs or biologics to the airways.


Information Technology

Digitally Aided Close Air Support Platform. Customer: U.S. Air Force Air Combat Command. Company:  Rockwell Collins (Richardson, TX) . This project creates a standardized platform for Joint Terminal Attack Controllers, forward air controllers, and small unmanned aerial systems to interface with legacy platforms. A single back-end platform abstracts complex messaging protocols and device management features. Future developers and program offices can tailor their interfaces using easy-to-use plugin systems to accommodate capability gaps for each mission instead of re-creating
complex systems.

Hardened Network Defense.

Customer: U.S. Navy SPAWAR. Company: Polyverse (Kirkland, WA). Securing DoD’s complex IT environment against trained, resourced threats demands advanced, layered, and flexible defense-in-depth capabilities to augment or replace existing network security tools. This project will deliver a flexible toolkit with advanced capabilities such as moving-target defense, self-healing containers, binary scrambling, and honey pots/decoy environments. This toolkit will enable SPAWAR to deploy tools that are appropriate for the environment while providing flexibility in a “crawl, walk, run” approach to reduce risk.

Knowledge Management.

Customer: U.S. Navy. Company: Adobe (San Jose, CA); Method (San Francisco, CA). The Navy’s Explosive Ordnance Disposal (EOD) community’s knowledge management systems are outdated, many often relying on non-graphical user interfaces. This project will deliver a knowledge management system for the EOD community that manages knowledge, training, and officer career progression.

Multifactor Authentication for Network Access.

Customer: DoD Chief Information Officer (CIO). Company: Lastwall (Mountain View, CA and Vancouver, BC); Yubico (Palo Alto, CA). DoD’s complex data access environment and evolving threat landscape requires device-agnostic agility, with strong identification and authentication, even when devices or credentials are lost. This project integrates several multi-factor authentication technologies to build an integrated system.


DIUx and DoD CIO have partnered to integrate Lastwall’s authentication platform for seamless, risk-based access. DoD
CIO is also partnering with the Army’s Communications-Electronics Research, Development and Engineering Center to integrate Yubico’s YubiKey multi-protocol authentication devices in DoD’s public key infrastructure.



Advanced Analytics from Synthetic Aperture Radar (SAR) Imagery Customer: DoD. Company: Orbital Insight (Mountain View, CA) The proliferation of large commercial constellations of low-cost Synthetic Aperture Radar micro-satellites has enabled daily imaging of the entire Earth. These new data sources have the potential to yield previously inaccessible insights, however require rapid analysis of massive amounts of highly complex data. In this effort, DIUx is applying commercial capabilities to extract insights from collected imagery and associated data through advanced algorithms. Ultimately, this will enable real-time awareness of both natural and manmade threats.


Nuclear propulsion, reported in May 2022

The United States Department of Defence’s (DoD) Defence Innovation Unit (DIU) has recently announced its intention to develop the next generation of nuclear propulsion for spacecraft. In a recent press release, the DIU has awarded two Prototype Other Transaction (OT) contracts to two companies to develop prototype spacecraft to launch them in 2027 potentially.


The two companies, Seattle-based Ultra Safe Nuclear Corporation, and Avalanche Energy Designs, will be working together to develop the DUI’s planned Nuclear Advanced Propulsion and Power program. Under the agreement, these commercial enterprises will be tasked with building the necessary propulsion components for small spacecraft that allow them to maneuver at will.


“Advanced nuclear technologies will provide the speed, power, and responsiveness to maintain an operational advantage in space,” said Air Force Maj. Ryan Weed, DIU’s program manager for NAPP and the commercial market for nuclear propulsion technology.


Nuclear propulsion might be the way to go when it comes to moving around at will in space. This is because, among other reasons, nuclear propulsion systems have a high thrust-to-weight ratio and are more efficient in operation. This makes it easier to perform rapid maneuvers in space than with electric or chemical systems, which is clearly very desirable.


“Future missions will demand more maneuverability and electrical power to expand the capabilities of spacecraft, allowing for orbital changes, methods to control or facilitate de-orbiting, the transfer of materials between orbits, and solar shadow operations, to name a few, etc.” explained the DUI.


To help with this ambition, Ultra Safe Nuclear’s design is based on its chargeable battery called EmberCore, which it will demonstrate for space-based propulsion applications. The company is also developing a next-generation system with greater power and longer life than a typical plutonium system. For example, it will scale to 10x higher power levels than plutonium systems and provide more than 1 million kilowatt-hours (kWh) of energy in just a few kilograms of fuel.


The other company, Avalanche Energy, has developed another device, called Orbitron, which will showcase the ability to reduce the size of high-power propulsion systems for use on smaller spacecraft. This system utilizes electrostatic fields to trap fusion ions in conjunction with a magnetron electron confinement scheme to overcome charge density limits. “The resulting fusion burn then produces the energetic particles that generate either heat or electricity, which can power a high-efficiency propulsion system,” explains the DUI.


“Nuclear tech has traditionally been government-developed and operated, but we have discovered a thriving ecosystem of commercial companies, including start-ups, innovating in space nuclear,” he added.


Successes in 2020

The following are a few key achievements:
• Adapted the ongoing Rapid Analysis of Threat Exposure (RATE) project to include pre-symptomatic, early warning of COVID-19 infection to cue earlier testing, isolation, and treatment to improve force readiness;
• Deployed winning computer vision algorithms from the xView2 prize competition to assist first responders in conducting post-disaster damage assessment and coordination of humanitarian assistance during the Australia bushfires, California wildfires, and coastal hurricanes;
• Released five new secure, trusted, small unmanned aerial systems (sUAS) for interagency procurement on the GSA schedule as part of our Blue sUAS initiative. These sUAS are the first DIU-facilitated product made available not only across DoD but also across the U.S. government;
• Scaled the Predictive Maintenance solution to additional Air Force and Army partners and aircraft, adding the HH-60 Pave Hawk;
• Transitioned the Air Threat Response solution to DoD partners at the North American Aerospace Defense Command and United States Northern Command in record speeds of 364 days from prototype award to production contract;
• Launched a sixth technology portfolio, Advanced Energy and Materials, which will focus on leveraging proven advancements in energy and materials technology to enhance U.S. military capabilities and strengthen resilience across installations and distributed operations.


We owe much of our achievement in 2020 to the growth of the DIU team, the DoD partners that continue to choose DIU and bring us “wicked” problems, and the extraordinary entrepreneurship and creativity of the commercial companies that work with us. DIU has come a long way in our first five years and, in the years to come, we look forward to providing even more high-impact solutions that will bolster our military’s strategic, operational, and tactical advantage to help deter future conflicts.


“In the last ten months, with a laser focus on solving critical defense problems, DIUx has shown the private sector that the DoD is a reliable, transparent, and fast-moving customer,” said Raj Shah, DIUx Managing Partner. “We have seen a significant increase in the number of companies across the nation that want to work with us on our military’s toughest challenges. Furthermore, venture capitalists have begun to fund companies that are solely focused on DoD as a customer, increasing the impact of every taxpayer dollar.”


The innovative ecosystems will be very good at certain types of technologies and products and we should play to their strength. They’re not the answer to everything. We don’t expect the next company out here to build the next fighter jet. But they may build some of the software that sits on it,” said Shah.



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