I was pleased to have on the Acquisition Talk podcast Joseph Murray and Andrew Van Timmeren. Joe is the co-founder of Blue Force Technologies, a small aerospace company that is developing a new combat UAV for the Air Force due to fly in 2023. Andrew is a former F-22 pilot and now advises companies on their defense market strategies.
In the episode, we discuss how Blue Force is positioning itself to become a prime contractor with DoD. They are developing a stealthy, high performance, and low cost UAV name is “Fury” — which comes from a mythological Greek creature that punishes mistakes. The title is fitting because the first mission that Fury intends to fulfill for the Air Force is Adversary Air (ADAIR). Currently, the Air Force uses front-line fighters in the role which severely hampers training and due to the wear, tear, and expense.
Fury provides many of the same characteristics of the adversaries they’re trying to emulate. It has a 5,000 pound takeoff weight, similar in size to a T-38 trainer, can operate up to 50,000 feet at Mach 0.95, turn at nine Gs, and boasts low observability. It has a modular design that allows for a range of sensors and weapons integration. Despite the performance, it was built almost exclusively with commercially available hardware, allowing it to target a sustainment cost per flying hour of under $4,000. While it’s often difficult to compare CPFH numbers due to understanding what goes in it, an F-16 is perhaps four or five times that amount and while F-35s and F-22s are perhaps ten times greater.
Certainly top-of-the-line fighters have a number of capabilities that emerging UAVs do not, but not all that capability is needed for many ADAIR training scenarios. Defense against cruise missiles is one example. Andrew explained in his 10 years as a F-22 pilot, he flew zero defense flights against cruise missiles. Instead, cruise missiles were simulated with Learjets — a commercial business jet — which fails to replicate important characteristics.
While Blue Force Technologies has started some engagement with the Air Force’s Skyborg program, it’s initial focus is ADAIR. This is an advantageous place to start because it not only provides a solution to an existing requirement for realistic training, it is a testbed for manned-unmanned teaming that will be critical to the future fight. As Andrew observed: “Maybe the greatest thing you can do from an operator perspective in manned-unmanned teaming is build that trust.”
Open Systems Design
Blue Force Technologies competitive advantage is not just in aircraft design, but in their end-to-end digital process from concept generation all the way through tooling and production. As Joe explained: “Our capability is to rapidly build very high quality aircraft, integrate them, and have a home for these advanced software and sensor systems… we want to use open as a mechanism to counter the traditional kind of stove-piped and closed system development models.”
Fury’s mission systems, computing, and payload bays will be open for other companies to provide their capabilities. Joe added, “Our standard for open is that we can give a technical data package to another vendor and give them the nose of the aircraft and they can integrate a capability into the nose without ever having to come back to Blue Force.”
While Blue Force tightly controls Fury’s flight computer (“it’s the map between the digital world and the physical world”), even there they are positioned to integrate third-party autonomy systems like AFRL/GT’s government-led autonomy core system for the Skyborg program. Containerization of their flight software is an important step towards that goal and closely aligns with the direction government wants to move. Joe says that the Fury might be the “first software-defined aircraft out there that’s available.”
Certainly the strategy dovetails with the government’s renewed emphasis on modular open systems architecture to avoid vendor lock. Yet that isn’t the reason why Blue Force went down the path to open. Instead, it was a drive to be competitive. Blue Force is not vertically integrated like the large primes, meaning they won’t have the best sensors, comms, software, etc., in-house. Opening up the Fury to market participation allows them to move fast and be cost effective.
Breaking into DoD
Blue Force Technologies has been around since 2011, mostly as a tier-one supplier to aerospace customers like Boeing on the H-47 Chinook. One of the difficulties building up business, however, is an inability to control the company’s future when the primes are gating access to customers. The Fury UAV will be their first foray into dealing directly with the government. Here’s Joe on the progression:
From us winning a phase one AFWERX open topic SBIR to us winning a Skyborg IDIQ contract award, which is a phase three SBIR by definition, it was 14 months. I think that the Air Force should stand up and high five because AFWERX demonstrated that they could very quickly.
That journey was not without hiccups. There was a funding gap of nine months between Phase I and II, and they remain in a funding gap even after receiving a Phase III award. Joe advised: “I think any small business needs to be prepared for funding gaps when you’re working with the government, it’s just, it’s a difficult contracting process.”
The pedigree as a tier-one supplier, however, eased several aspects of the transition. Blue Force Tech already has all the accounting systems, inventory control, and other DCMA/DCAA systems that can be a major barrier for new entrants. One major new requirement was security, getting facility clearances, and meeting the DD 254.
Joe gave two pieces of advice for new entrants to becoming a defense prime. First, go to the customer. “If you’re fortunate enough to win a phase one, go to the customers — go to the end users — and listen. They often are willing to tell you ‘these are our pain points.’ These are issues that we’re having that can help to shape your novelty and your innovation.” And second, be persistent. “If you’re disruptive enough, it’s very difficult to say no. So you have to be persistent.”
I would add that companies should also use DoD resources where possible. Certainly the users themselves are a resource to tap, but so are facilities, equipment, and certification processes. Blue Force Technologies, for example, used three million hours of supercomputer time from AFRL last year to analyze the computational fluid dynamics. That would have been “very prohibitive for a small business to go out and buy that number of hours.”
Improving acquisition
Joe explained that the foundation of many commercial companies and new entrants is their data rights and intellectual property. He called the small business innovation research (SBIR) program a “grand bargain” because the company gets a “pittance of money” in exchange for all of their most novel ideas. But the real value in SBIR is preference in contracting in perpetuity for the resulting technology. Government customers can get to the company on a sole source basis without the lengthy justification and approval.
Unfortunately, there is still a reluctance to use the sole source Phase III mechanism stemming from many issues like contracting culture, but a major one is the availability of funding. As Joe observes:
I think that the biggest challenge for the DOD on the whole is that it’s very difficult to plan and to budget for innovation and disruption and novelty. It’s novel and it’s disruptive and it’s innovative because it was not in the plan. Nobody anticipated it being there. And when you go to the POM issue papers it’s best case three or four years out before any significant resources can be had… I would say that the DOD budgeting and acquisition process is a case study in plan continuation bias.
There have been several attempts at stop-gap measures like the Rapid Innovation Fund, Advanced Concept Technology Demonstrations, and new acquisition pathways. Yet Joe provides a very interesting alternative that combines two existing policies.
First, there is a Small Business Administration regulation that requires government, contractors, and FFRDCs to give preference to SBIR technologies. Second, there is the DoDI 3204.01 that describes appropriate uses for reimbursed independent R&D.
Joe suggests that for defense primes who have more than $10 million in IRAD, 50 percent of that should go toward funding SBIR/STTR Phase III transitions from unaffiliated companies. Lockheed Martin alone does over $1 billion a year in IRAD, the total industry sum perhaps passing $10 billion. That funding could hold Phase III transitions afloat and help integrate them into existing systems while DoD funding is lined up over a the next five years.
He is first to admit that such a rule would be greatly protested and may result in unintended consequences. But it would certainly provide a substantial pool of funding for Phase III transitions. DoD could definitely use some out-of-the-box thinking to help solve this most fundamental of problems.
Thanks Joseph and Andrew!
I’d like to than Joseph Murray and Andrew “Scar” Van Timmeren for joining me on the Acquisition Talk podcast. Be sure to check out Blue Force Technologies, including an Air Force Magazine article that highlight them Stealth Adversary Drone Contract Expecting in September. You can find all their DoD contract awards here. Blue Force is also active in the commercial eVTOL space [here, here]. Follow Andrew on Twitter @F22Scar.
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