The U.S. Air Force powers innovation through AFWERX, a team of technological advisers that pilot the agency’s Small Business Innovation Research (SBIR) program.

AFWERX is a U.S. Air Force and the Department of Defense (DoD) program that fosters small business technological innovation. Those innovations are funded via competition in the Air Force Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR), encouraging startups to research and develop products and services.

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Entrepreneurs who pilot startups often encounter three significant obstacles:

  • Coming up with the cash to fund their project.
  • Finding the market to fit the product they’ve developed.
  • Landing their first paying customer.

But when those entrepreneurs are developing commercial technology meant for the Air Force, there’s one group that can accelerate the process of overcoming obstacles and help break the sound barrier of innovation.

The Air Force’s AFWERX team runs a Small Business Innovation Research (SBIR) program, awarding contracts to entrepreneurs who aim high.

What Does AFWERX SBIR Stand For?

The acronym AFWERX does not represent a phrase or name abbreviation; “AF” stands for “Air Force,” and “WERX” is shorthand for “work project.”

It represents a U.S. Air Force program that fosters a culture of innovation within the service.

AFWERX, a team of technology advisors within the Air Force Research Laboratory (AFRL), seeks ground-breaking ideas and invests seed money to move projects from the laboratory into production.

The advisors accomplish this by overseeing the Air Force’s arm of the Department of Defense (DoD) Small Business Innovation Research (SBIR) program.

As part of its effort to attract the best and brightest minds in technology, AFWERX hosts tech competitions, issues exploratory contracts to fund research and development, and matches startups with venture capital investors to spur paradigm-shifting ideas. AFWERX also includes sister organizations, including SOFWERX, MGMWERX, and DEFENSEWERX.



What is the AFWERX SBIR Mission?

First established in 2017 by the Secretary of the Air Force and reporting to the Vice Chief of Staff of the Air Force, AFWERX provides an environment conducive to thoughtful, deliberate, innovation.

Through open topic solicitations, small businesses can submit innovative solutions that have yet to be deployed in service to the DoD.

And we’re not only talking about developing wartime technology like fighter jets and bombers—the Air Force is a large and varied organization that requires a wide range of products in the medical field, construction, law enforcement, communications, energy, and more.

Essentially, any innovative technology that could be applied to a small city could have a use in the Air Force.

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What are AFVentures?

The Department of the Air Force’s commercial investment group, AFVentures, is a division of AFWERX that works to expand the number of small businesses working with the Air Force.

It accomplishes this by awarding small startups a development contract to help them survive the complex qualifying process for a defense contract.

Venture capital firms are often hesitant to work with companies that might not develop a high-margin product capable of quickly growing to produce a far greater return than the firm’s initial investment.

AFVentures levels the playing field, finding funding for startups through various programs—including Strategic Fund Increase, which sees AFVentures match a certain amount of funding already received by the startup via a private investor.

AFVentures give the DoD a window into the innovations outside of large contractors such as Raytheon and Boeing—helping the federal government tap into the valuable work being done to address nontraditional concerns, such as cyberwarfare.

Since it launched in 2018, AFVentures has awarded $710 million in contracts to various small business startups. Meanwhile, through the Air Force SBIR/STTR program, AFVentures even found itself on the frontlines of the nation’s response to the COVID pandemic, gathering and deploying valuable ideas about how to battle the virus.

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Who is Eligible for AFWERX SBIR?

The SBIR/STTR programs affiliated with AFWERX share many of the eligibility requirements of other government agencies. These eligibility requirements are as follows:

SBIR

  • Must be a for-profit business
  • Must be based in the U.S.
  • Must have 500 or fewer employees
  • The Principal Investigator must be primarily employed (more than 50 percent) with the small business applicant

STTR

  • Must be a for-profit business
  • Must be based in the U.S.
  • Must partner with a U.S. research institution
  • Must be a formal cooperative research and development effort
  • At least 40 percent of the work must be performed by the small business, with 30 percent of the work performed by the partnering research institution.

AFWERX SBIR Phases

Like other SBIR programs across the federal landscape, AFWERX comprises two main phases for research and development (R&D) and one ancillary phase mainly for commercialization purposes.

AFWERX SBIR Phase I

Most AFWERX Phase I SBIR program funding is awarded in response to open topic Commercial Solution Openings. CSOs are used to acquire innovative commercial projects, with open topics inviting industries to propose solutions to Air Force problems. To view the issues for which the Air Force seeks solutions, check out the AFVentures Focus Areas for Phase I.

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How Much Funding is Awarded in AFWERX SBIR Phase I?

The Air Force describes its AFWERX Phase I SBIR program funding as “small bets,” doling out between 1,000 and 1,500 Phase I awards to the tune of $50,000 each.

 

How Long Is AFWERX SBIR Phase I?

Each AFWERX SBIR Phase I award of $50,000 covers three months.

AFWERX SBIR Phase II

Approximately a third of Air Force Phase I awards have what it takes to transition to Phase II, which AFWERX describes as “medium bets.”

How Much Funding is Awarded in AFWERX SBIR Phase II?

The “medium bets” placed by AFWERX can total up to $750,000 per small business.

 

How Long Is AFWERX SBIR Phase II?

Each AFWERX SBIR Phase II award of $750,000 covers 15 months of prototype development.

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Yes! While AFWERX does not always guarantee the availability of Direct-to-Phase II (D2P2) opportunities, it is a program that is currently being made available.

D2P2 allows AFWERX to award an SBIR Phase II award to a small business, regardless if that small business was awarded any Phase I funding.

This page from AFWERX AFVentures helps to answer D2P2 specific questions.

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These funding sources enable AFWERX to emphasize big-ticket contracts and are intended to help the small businesses substantially increase the dollar amount received in awarded funds.

Highly beneficial but often tricky to navigate, Supplemental Funding Pilot Programs through AFWERX typically appear in two forms, Strategic Funding Increase (STRATFI) and Tactical Funding Increase (TACFI). Additionally, each supplemental funding opportunity has its own requirements and funding amounts.

Both STRATFI and TACFI are intended for companies that have already won an SBIR/STTR Phase II award in the last three years. These companies become eligible to receive additional funding through these supplemental programs to scale their Phase II efforts further.

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One of AFWERX’s Supplemental Funding Pilot Programs, STRATFI awards are between $3 million and $15 million of SBIR funding and cover up to 48 months of performance.

A matching component requires that non-SBIR funding be put up to receive the award. For every $1 of SBIR/STTR funds, companies must also receive $2 of other government funds or $1 of additional government funds and $2 of private funds.

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What is the Tactical Funding Increase (TACFI)?

Another of AFWERX’s Supplemental Funding Pilot Programs, TACFI, awards amounts from $375,000 to $1.7 million and up to 24 months of activity. For every dollar of SBIR/STTR funds, companies must also receive at least $1 of other government funding (non-SBIR/STTR) or $1 of private funding.

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AFWERX Research Topics

“Research topics” refer to the many diverse technology categories small businesses could research in their SBIR program proposal. The technology categories include: 

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Administration

  • Administrative Services
  • Dress and Appearance
  • Health/Physical Fitness
  • Personnel
  • Training/Learning

General Areas

  • Manufacturing
  • Advanced Materials
  • Base Infrastructure
  • Energy and Power
  • Energy and Efficiency
  • Maintenance

Information Technology

  • Artificial Intelligence and Machine Learning
  • Augmented, mixed, and virtual reality
  • Communication and collaboration
  • Cyber Security
  • Data
  • Data analytics
  • Electronics/Microelectronics
  • Emerging Technologies
  • Information Technology
  • Modeling and Simulation
  • Robotics

Mission Readiness

  • Aeromedical Evacuation
  • Air Refueling
  • Autonomy and Autonomous systems
  • Battle Management
  • Cargo Operations
  • Communications
  • Emergency Response
  • Intelligence, Surveillance, and Reconnaissance (ISR)
  • Personnel Transportation
  • Physical Security/ Security Forces

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What is the Air Force SBIR Open Topic?

The federal agencies participating in the SBIR program present a set collection of topics they want you to research and develop into products and services.

While the Air Force takes part in this type of SBIR program solicitation, they also take a unique approach. 

The U.S. Air Force, through AFWERX, allows organizations to propose solutions for their “open topic” research area. This open topic can be any commercially viable technology that the small business believes could be potentially useful to the Air Force. 

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Essentially, Open Topic allows small businesses to solve problems that the Air Force doesn’t know they have.

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AFWERX SBIR Program Success Stories

Though the process of landing an AFWERX SBIR award from the DoD can be grueling, there are plenty of success stories to inspire you along the way.

Lickenbrock Technologies

Total SBIR Investment: $895,000

Missouri-based Lickenbrock Technologies developed Fast Expectation-Maximization Ordered Subsets (FEMOS), a reconstruction algorithm that creates scans with greater resolution and contrast than commercial computed tomography (CT) scans.

Funding through the Air Force AFWERX SBIR program, an investment of $895,000, helped Lickenbrock accelerate the speed of its algorithm to seven times the original speed, significantly reducing the amount of time it takes to finish a scan. 

The SBIR investment improved the quality of the reconstructions and diversified the variety of specimens the system is capable of scanning.

With further development, Lickenbrock Technologies expects $500,000 to $1 million per year in commercial, industrial use profits. 

Specular Theory

Total SBIR Investment: $1.5 million

With SBIR funding, California-based Specular Theory developed a next-generation virtual reality flight simulation training system explicitly designed to guide pilots in the exact science of in-air refueling. 

Traditional air refueling training costs the Air Force thousands of dollars per flight and requires at least two aircraft and two full crews. 

This is where Specular Theory saw an opportunity for improvement. 

The virtual training program reduces the number of failures and helps reduce the number of times pilots must practice in real aircraft. As a result, the cost savings in that area alone are substantial. 

Traditional air refueling training costs the Air Force thousands of dollars per flight, which requires at least two aircraft and two full crews. 

Students often require extra flights to gain proficiency, adding cost and time. This virtual training program is connected to The Air Force SBIR funding allowing Specular Theory to adapt its existing products into an immersive student experience not typically available in consumer applications. 

SBIR invested close to $1.5 million into the project, while the product has pulled in $5 million in Phase III contracts for Specular Theory. 

iNovex Information Systems

Total SBIR Investment: $899,154

The Air Force’s SBIR program supported Maryland-based iNovex Information Systems in its effort to develop an open-source data collaboration platform known as Mobi-SRE. This platform pulls together and analyzes data for the weapon system design acquisition lifecycle. 

With this development, users can better use pre-existing data, accelerate the process, reduce errors, and increase access to more comprehensive and consistent information. 

This reduces the time it takes to get advanced weapon technology into the hands of the boots on the ground—or in the air. 

iNovex Information Systems utilized the investment to research the specific Air Force needs and limitations. Then, they used that information to specifically build and expand the data platform to address those problems. 

The Air Force SBIR invested $899,154 into the project, and the company has received close to $1.5 million in Phase III contracts. As a result, it is positioned to save the Air Force an estimated $5 million.

Are you a small business owner with innovative ideas? Get your AFWERX accounting in order with Team 80.

Get A Free Consultation for Your AFWERX SBIR Accounting Services
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Sarah Sinicki

Partner & Director of Business Development at Team 80 LLC

Sarah is a Colorado native and loves everything about our beautiful state. In her free time you can find her spending time with her husband, two kids and her Yorkie named Marley. She also enjoys paddle-boarding, riding her cruiser bike, and just hanging out with friends and family. Sarah is also an avid Colorado Avalanche fan, so if you ever want to talk about hockey, she’s your gal. As one of the Partners of Team 80, she certainly does have a passion for helping small businesses. She is able to apply her 20 years of experience to tailor an accounting solution for a business owner no matter what industry they might be in.

Been with Team 80: May 2008

Education
Metropolitan State University of Denver
Degree Name: BS
Field Of Study Accounting
Graduated: 1998

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