The Accelerate the Procurement and Fielding of Innovative Technologies (APFIT) fund was one of the bright spots from FY 2022. It provided $100 million to DoD that could go to priorities mature enough for fielding, but were not budgeted for multiple years in advance. APFIT has a minimum award of $10 million, and may only go to companies that received less than $500 million in cumulative DoD contracts.
FY 2022 Awards
USD R&E Heidi Shyu was personally involved in selecting the winners, which included a technology for doubling the field of view of night vision goggles, a new sensor for detecting underwater mines, and a low-cost actuation system for munitions to hit moving targets. Some of these could supplant far more expensive systems already in the acquisition pipeline. You can check out the list of 10 winners in FY 2022 here.
These technologies should not wait two or three years to get procurement funding. This “in-year-of-execution” flexibility is critical to accelerating weapons systems. “I wish I had a billion,” Shyu said, “but I only had a hundred million.”
FY 2023 Updates
For FY 2023, DoD requested another $100 million. Appropriators decided to increase the request by $50 million (APFIT was originally proposed by Rep. Ken Calvert, who will become chair of the House Appropriations subcommittee on defense next year).
Last year, APFIT was dropped into the “colorless” BA 8 pilot project for software. But that wasn’t a great fit, it appears. For FY 2023, Congress moved APFIT from BA 8 into a Procurement line item for “Major Equipment, OSD.”
Selection Criteria
Some venture capital folks have criticized APFIT because only one out of ten recipients were venture backed. In the 2022 GMU-DAU conference, Shyu responded the investor makeup was not part of her selection criteria. Here were the top three criteria for APFIT awards:
- What projects have the biggest impact for the warfighter.
- What projects were truly innovative ideas.
- What recipients have a contract vehicle already in place.
The third criteria deserves a little more explanation. APFIT was a new fund provided in FY 2022. The appropriation was passed 160 days late, nearly 6 months into the fiscal year. Even though procurement funding is three year money, the APFIT program was dropped into the colorless BA 8 pilot in RDT&E for FY 2022.
RDT&E funding has two years to obligate. But Comptroller metrics demand that 90 percent of RDT&E be obligated by the end of the first fiscal year. Otherwise, funding might get swept up for other program priorities or the next year’s request will be cut for “excess to need.” So Shyu was under pressure to select the APFIT winners and get them under contract fast — within six months.
As Shyu said: “I didn’t want to lose the money. Can you obligate it? Do you have a contract in place that I can drop money and you can run?” Winners were announced on July 19, 2022, leaving a scant six weeks to get most of the funding on contract before the fiscal year closed out.
Going Forward
That means there were potentially companies with great technologies and promise, but contractually were unable to get over the finish line in time. That’s not a great way to run an innovation program. Luckily, the FY 2023 funds were moved by Congress into a Procurement line item which will give a little more flexibility. Moreover, the FY 2023 appropriations might get passed less than 100 days late.
It will be interesting to see the outcome of the FY 2022 awards for APFIT. It could be a great case study in why funding flexibility is crucial to technology adoption. The hard part will be getting these firms stable outyear funding. And if they in fact are supplanting existing programs with superior technology, you’ll see the hard discussions happening. Getting new money for something small is one thing. Scaling that and killing inferior systems is quite another.
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