AFWERX and innovation in the Air Force

Here’s a short bit from my feature on Government Matters:

In 2019, they [AFWERX] brought in about $1 billion of matching funds. That’s something going to the Air Force strategy. They don’t want to create a new set of prime contractors that are totally reliant on the Department of Defense. Instead they’re moving toward dual-use… They don’t want small businesses that make a business of winning these SBIR awards, staying small, and doing the same thing over and over. They want dual-use companies — private investors believe in the technologies as well — and either they scale in defense and make are able to transform to some degree the force structure, or they fall out.

I get the desire to move to this kind of model. The Air Force doesn’t want to grow baby Lockheed Martins. They want a world where new defense contractors don’t have to segment defense from commercial business, because the way they are done is similar enough. That’s a great idea, its just not feasible in my mind in the current institutional structures. To name just a few barriers: sales and marketing efforts to define requirements, the length of time to secure program funding, the way government demands pricing based on labor and material inputs rather than on the product itself, Earned Value Management and the Cost Accounting Standards.

There’s a ton of data analysis in my Defense News article. You can download my organized and tagged spreadsheet with AFWERX data here. Here’s a slice: