The Insider

The Army selected 15 small businesses for its initial xTechPrime initiative -- a new program that connects small businesses with technology integrators.

The xTech program was started in 2018 by former Army acquisition chief Bruce Jette as a way to spur innovation by connecting the service with small businesses through prize competitions.

The xTechPrime competition, started in April 2023, “will challenge small businesses to work together in teams with technology integrators to submit their innovative solutions that contribute to the Army’s current modernization goals.”

The Army does about $400 million per year in Small Business Innovation Research (SBIR) activity, current acquisition head Doug Bush told reporters during a briefing Feb. 14 at the Pentagon. Since the xTech program was started, there have been 30 competitions, more than $20 million in cash prizes and 1,374 awards given out, he said.

Through the xTech competitions, Bush said the Army is trying to make SBIR “more focused, faster and targeted.”

“We've got this down by centralizing contracting expertise for small business to, like, 30-day contract awards. I mean, that's a dramatic change from the past where companies might have to wait, like, 200-plus days, which they can't because they're small,” he said.

Matt Willis, the director of Army Prize Competitions and the Army Applied SBIR Program, said the service received 377 submissions for xTechPrime from businesses across the United States, with winners being chosen based on the technical solution they were proposing and the ability to demonstrate a “high propensity for transition and integration into or with an integrator.”

The 15 winning companies were chosen in December, with each receiving $40,000 in cash prizes. This will be followed by Direct to Phase II SBIR prototyping awards of up to $2 million each.

The 15 companies selected were:

• Alitheon -- “Digital fingerprinting to overcome distance and complexity for supply chain security”
• Amprius Technologies -- “Reduce weight, double endurance with Amprius Silicon Lithium-Ion Cells.”
• Atomics -- “Sustainable, molecular data storage”
• AxNano -- “Mobile supercritical water oxidation (mSCWO) for treatment of PFAS in Army waste streams”
• DotBliss -- “Screen-printed, textile-based interactive touch displays with spectral control, electronic sensors with haptic feedback enabling covert communication”
• Enveil -- “Encrypted machine learning model evaluation for model & data integrity”
• FluxWorks -- “Non-contact, lubrication-free magnetic gear integrated motor generator for reduced maintenance, increased survivability, extended range, and enhanced payload capacity of Autonomous Vehicles”
• GDI -- “Scalable 100% Silicon anodes for superior energy storage”
• Latent AI -- “MLOps for optimized and secured edge AI”
• Lunewave -- “Luneburg lens enabled broadband RF signal detection, direction finding and geolocation system in a drone network”
• Mesodyne -- “Light cell power generation for long-endurance, high-reliability autonomous systems”
• Modal AI -- “Soldier borne unmanned aerial 3D geospatial intelligence”
• Neurable -- “Non-invasive brain-computer interface for soldier performance optimization”
• Notch -- “No power, low SWaP, RF metasurface GPS anti-jam system for autonomous vehicles”
• Teradar -- “Enhancing target detection through Teradar’s breakthrough sensor technology for advanced perception.”

Willis said the Army wanted to focus on companies that specialized in focus areas such as climate/clean tech, artificial intelligence/machine learning, autonomy and other research and development programs such as Project Linchpin -- the service’s first pipeline for AI/ML.

“We really wanted to broaden the aperture and widen the funnel for small businesses contributing to the Army tech base while, you know, really foundationally changing the value proposition for these companies,” he said, speaking at the same roundtable.

The prototyping awards will begin either this month or next month, and will last 18-24 months each, Willis said.

“And there might be an opportunity at the end of that either to have another follow-on award to broaden the R&D, or if the prototype is ready and capable, to be integrated into a system. Then the Army can directly fund that follow-on contract,” he said.

To date, the Army has awarded more than $20 million through the xTech program, and that has yielded nearly $180 million in follow-on contracts, Willis said.

“Essentially for every one dollar in cash that we’re providing, the Army is going back and investing $8 in follow-on research and development,” he said.

SAN DIEGO -- Navy Secretary Carlos Del Toro today questioned the defense industry’s commitment to delivering naval capabilities on time and on budget, suggesting some unnamed companies are prioritizing stock prices and executive compensation over necessary capital investments, and promising to take legal action to ensure taxpayers receive adequate return on investment.

“Through initiatives like the Taxpayer Advocacy Project, I have directed our contract community and Office of General Counsel to ensure that we will leverage all legal means at our disposal to ensure that the American people are getting what they paid for,” Del Toro said, though he provided few additional details on this new initiative.

Speaking to a room full of defense contractors during the West 2024 conference, Del Toro congratulated companies for record profits, pointing to quarterly financial statements. But, he said, industry needs to deliver key warfighting capabilities -- including submarines, ships and aircraft -- on time, on budget and without excuses.

“You can't be asking for the American taxpayer to make greater public investments while you continue to goose your stock prices through stock buybacks, deferring promised capital investments, and other accounting maneuvers that -- to some -- seem to prioritize stock prices that drive executive compensation rather than making the needed, fundamental investments in the industrial base at a time when our nation needs us to be all ahead flank,” he said.

Del Toro’s comments break from the typical talking points of senior Navy officials, who generally emphasize the partnership between defense contractors and the service and promote collaboratively tackling industrial base issues.

But as the Navy faces heightened pressure to maintain an advantage over China, industry is struggling with often-cited workforce and supply chain issues, and key weapon and shipbuilding programs like the Virginia-class submarine face significant delays.

Now, the Navy is serious about holding industry accountable for poor performance and misconduct, according to Del Toro, who said he has directed a “deep dive into holding individuals accountable” for these offenses too.

This Wednesday INSIDER Daily Digest has news from the Air and Space Force Association's annual Warfare Symposium out in Colorado as well as the AFCEA West Conference in San Diego.

The Air Force is warning of the negative effects of a full-year continuing resolution on the service:

Air Force paints ugly budget picture of full-year CR

The Air Force and Space Force will lose a combined total of $6 billion in modernization investments and suffer $13 billion in lost buying power if Congress cannot pass a fiscal year 2024 defense appropriation and opts for a yearlong funding patch, according to a new fact sheet.

More news from the AFA Warfare Symposium:

Kendall: Air Force having 'hard time' negotiating E-7 Wedgetail contract with Boeing

DENVER -- Senior Air Force leaders disclosed that negotiations with Boeing to contract for the first E-7A Wedgetail aircraft have been "difficult" due to non-recurring engineering development.

Space Force creating Space Futures Command to handle capabilities requirements

DENVER -- As part of the Air Force's organizational shakeup, the Space Force will create a new field command to streamline requirements generation for the young service.

Air Force to down select for CCA program in coming months

DENVER -- The Air Force is on track to down select for the first increment of Collaborative Combat Aircraft in the coming months, but budgetary constraints may only allow for two vendors instead of a preferred three, service Secretary Frank Kendall said today.

We also have coverage from this week's AFCEA West Conference out in San Diego:

Red and Black Seas demonstrate mounting tactical challenges to defending ships, naval officials say

SAN DIEGO -- Two ongoing naval conflicts, one playing out in the Red Sea and other in the Black Sea, have illuminated a single critical lesson: the Navy and Marine Corps must rapidly advance their techniques and tactics to stay abreast with the rapidly changing "character of war," especially when it comes to defending ships from missiles and drones, service officials said.

CNO: Navy on track to begin operationalizing a hybrid manned-unmanned fleet as early as FY-29

SAN DIEGO -- The Navy is making progress in the development of a hybrid manned-unmanned fleet, according to the chief of naval operations, who said the service is on path to begin widespread integration and operationalizing of unmanned platforms as early as fiscal year 2029.

SAN DIEGO -- The Marine Corps is preparing to test a semi-submersible, autonomous vessel prototype designed to covertly resupply ground forces with missiles, the head of Marine Corps Combat Development Command said today.

According to Lt. Gen. Karsten Heckl, the service has been developing a prototype “Autonomous Low-Profile Vessel,” or ALPV, over the past year, and will test the vessel in an operational setting for the first time during the upcoming Project Convergence Capstone 4 exercise this spring.

The ALPV is specifically designed to carry two Naval Strike Missiles for the Navy/Marine Corps Expeditionary Ship Interdiction System (NEMESIS) -- a robotically controlled, anti-ship missile capability consisting of a medium-range cruise missile launcher mounted on a Joint Light Tactical Vehicle.

The ALPV will rely on its stealth and low signature to avoid detection and deliver missiles to forward-deployed Marines, Heckl said during the West 2024 conference here. The platform’s goal, he said, is to enhance lethality and strengthen supply logistics.

While the Marine Corps has practiced deploying and recovering the ALPV from multiple surface vessels over the past year, Project Convergence will mark the first time it is tested within the operational context of an exercise.

According to Heckl, the Marine Corps found inspiration for the ALPV in an unlikely place: drug trafficking.

Government Counter-narcotics bodies, like the Florida-based Joint Interagency Task Force South, struggle to detect similar vessels used to smuggle drugs into the United States via the ocean, he said.

Like the developing Landing Ship Medium, the ALPV is part of the Marine Corps push to strengthen its logistics networks as part of force design modernization. While the effort is still in its early developmental stages, Heckl said the Marine Corps envisions eventually procuring a variety of low-cost ALPV variants customized for specific payloads.

The Navy -- looking to increase the performance envelope of a sea-skimming target -- has asked Northrop Grumman to conduct a study into the target's capabilities.

Under a contract to be awarded in the first quarter of fiscal year 2025, Northrop Grumman will “perform a study to increase the performance envelope of the GQM-163A Coyote Supersonic Sea-Skimming Targets (SSST),” according to a notice posted Monday.

The Coyote target is used by the Navy to train and qualify systems and crews on naval vessels, according to a 2022 Northrop Grumman release. The Coyote was originally designed as a Mach 2.5+ sea-skimming target but was later improved to reach Mach 3.5+ as a diving target from an altitude over 50,000 feet.

Naval Air Systems Command awarded the Coyote program to Northrop Grumman in 2000 -- a contract worth over $329 million. As of 2022, the company had delivered more than 145 targets to the Navy.

U.S. Central Command continues to face attacks from Houthi rebels based in Yemen -- mostly unmanned surface vessels and anti-ship cruise missiles targeted against Navy ships and merchant vessels transiting the Red Sea. The improvement of the Coyote’s performance envelope could prove useful in the Navy’s mission of continued deterrence against Houthi attacks.

Without an approved appropriations bill all F-35 Joint Strike Fighter engine modernization efforts, "to include the Engine Core Upgrade (ECU) and Power and Thermal Management Upgrade (PTMU), will be delayed," a spokesman for the the F-35 Joint Program Office is warning.

Inside Defense has the story, now available to all.

The Air Force has awarded autonomy startup Xwing military approval to fly cargo missions across California after successful completion of the AGILE FLAG 24-1 Joint Force exercise, the company said in a Friday news release.

This designation of airworthiness via a military flight release in unrestricted airspace marks the first granted under the Air Force Research Laboratory's AFWERX Autonomy Prime program.

“Xwing had to meet the rigorous safety and the technical standards necessary to transparently integrate its autonomous aircraft into the National Airspace System (NAS),” the announcement said. “Xwing proved its dynamic capability for rapid and cost-effective dispersed logistics, delivering mission-critical, time-sensitive cargo to multiple operating stations, demonstrating the potential of autonomous operations as a force multiplier within Agile Combat Employment (ACE).”

Autonomy Prime is an arm of the AFWERX program, which intends to bring small businesses and startups to the table to address the Air Force’s top priorities, including autonomy, and strengthen the industrial base. The goal is to better facilitate the transition from research and technology to operational capability.

Over the span of nearly two weeks, Xwing worked with Air Combat Command and Air Mobility Command to transport mission critical cargo between eight different public and military airports, racking up 2,800 autonomous flight miles across California and 22 overall hours in the air.

“AGILE FLAG was an opportunity to showcase autonomous light cargo logistics and demonstrate operational relevance and increased technical readiness,” AFWERX Autonomy Prime deputy branch chief Kate Brown said in a statement.

Meanwhile, the ACE concept encourages improved distribution among the bases to ensure that one is not singularly targeted and that each is capable of defending itself when faced with pacing threats. The Air Force has said that autonomy will play a major role in this and future efforts.

“We saw first-hand during AGILE FLAG that the use of Xwing’s autonomous aircraft eliminated the need to fly a larger aircraft such as a C-130 to deliver critical cargo to the warfighter on short notice,” said Maxime Gariel, president and co-founder of Xwing. “When you fly missions autonomously, you operate with the speed and efficiency required for dispersed ACE operations, delivering cargo and personnel at a much lower cost and risk.”