Defense organizations rally together to urge lawmakers to pass DIU funding

By Georgina DiNardo  / October 24, 2023

Both the House and Senate Appropriations committees received a letter from the Silicon Valley Defense Group today urging them to keep the House-approved provision providing the Defense Innovation Unit $1 billion to establish a hedge portfolio in the fiscal year 2024 Defense Appropriations Act.

The hedge portfolio in question is called the Non-Traditional Innovation Fielding Enterprise (NIFE).

The letter was on behalf of 63 defense and dual-use organizations and was addressed to House and Senate lawmakers all on the Appropriations committees. On the Senate side were Chair Patty Murray (D-WA) and Vice-Chair Susan Collins (R-ME), while on the House side were Chairwoman Kay Granger (R-TX) and Ranking Member Rosa DeLauro (D-CT).

Although the FY-24 defense authorization bill has yet to be signed into law, the letter thanked the FY-24 bill’s DIU provisions, stating that they helped with the creation of the NIFE.

According to the letter, a RAND report published this year found that the Defense Department does not have a “common strategy or policy guidance for technology innovation” when it comes to the commercial technology pipeline. The letter also claims the report found the department does not have “systematic means to identify commercial business partners,” halting industry access to opportunities through which they could better comprehend commercial technology’s ability to help in defense missions. The letter cites this inability leading to acquisition officials failing to adopt technologies quickly at scale across the services.

“Since its inception in 2015, the DIU has worked to accelerate the adoption of commercial technology to strengthen the national security of the U.S. and its allies,” the letter states. “In its FY2022 Year in Review report, DIU noted that it more than doubled its transitioned technologies to 17 and awarded $1.3 billion in contracts with an average of 142 business days to award a prototype Other Transaction (OT). Additional funding provided by the NIFE would enable DIU to accelerate fielding of innovative capabilities to the services and the combatant commands at speed of relevance.”

The Silicon Valley Defense Group uses the pacing challenge posed by China as an important indicator for the Defense Department to make larger investments in the private sector in emerging technology areas.

“With increasing worldwide conflict and the rise of near-peer competitors, the Defense Innovation Unit should be empowered to acquire the latest and greatest technologies coming out of the startup ecosystem,” said Bilal Zuberi, general partner in Lux Capital, one of the organizations behind the letter. “This provision represents a clear opportunity for Congress to promote the development of emerging defense and dual-use innovations and help the U.S. better compete in this era of techno-security competition.”

The letter itself called for a closer relationship between government and industry to face worldwide competitors.

“Increased collaboration with non-traditional and commercial industry begins with greater connectivity within the Department,” the letter said. “We believe the enactment of these provisions, coupled with the robust funding proposed by the House bill, will lead to greater coordination across the Department and serve as a powerful demand signal to non-traditional and commercial companies to work with DOD.”

The letter comes on behalf of 8VC, Airbus Ventures, Albedo, Aloft VC, Anduril Industries, Apex, Applied Intuition, Astranis, Bazze, Beacon AI, Booz Allen Ventures, Caffeinated Capital, Cambium Inc., Castelion, Craft, Crosslink Capital, Dedrone, DFJ Growth, Elroy Air, Epsilon3, Firehawk Aerospace, FlightWave Aerospace Systems, Founders Fund, Forward Deployed VC, Gecko Robotics, General Catalyst, Hadrian Hermeus, Latent AI Inc., Lavrock Ventures, Lightspeed Venture Partners, Lux Capital, Mach Industries, Marque Ventures, Maybell Quantum, Merlin Labs, Morpheus Space, Nominal, Oglethorpe Capital, Palantir Technologies Inc, Point72 Ventures, Primer, Privateer Space, PsiQuantum, Ravn, Rebellion Defense, REGENT, RRAI, Saronic Technologies, Second Front Systems, Shield Capital, Silent Ventures, Slingshot Aerospace, Solestial, Snowpoint Ventures, Umbra Space, Ursa Major Technologies, Vannevar Labs, Varda Space Industries, Venus Aerospace, Vine Ventures, X-Bow Systems and ZaiNar.

“Through coordinated efforts and robust funding, Congress has an opportunity to send a resounding message to the private sector: the Department of Defense is eager to embrace new and emerging technological innovation, ushering in a new era of national security preparedness,” said Sam Gray, Silicon Valley Defense Group’s executive director.