Microsoft and Anduril announced today that the two companies intend to partner on future development and production of the Army's Integrated Visual Augmentation System, pending Defense Department approval.
The Army awarded Microsoft a $22 billion contract in 2021, including a task order in December 2022 to develop the 1.2 variant of IVAS -- the latest iteration of the night vision system.
Under the proposed partnership, Anduril would assume oversight of IVAS production on the existing contract, as well as future development of hardware and software, according to an announcement from the companies. Also under the agreement, the cloud computer platform Microsoft Azure would become Anduril’s “preferred hyperscale cloud for all workloads related to IVAS and Anduril AI technologies.”
Robin Seiler, Microsoft’s corporate vice president for mixed reality, told reporters Monday that Anduril has “demonstrated new capabilities and manufacturing processes that can quickly scale in a cost-efficient way.”
“And this is what IVAS needs. And this is why we are partnering with Anduril to take this program to the next level,” she said.
For now, Microsoft will remain the prime contractor, Seiler said. Microsoft will submit a novation request to the government, and if approved, Anduril would then become the prime contractor on the existing IVAS contract, she said.
Under a novation agreement, the government may recognize the transfer of a contract from the contractor to a third party.
The existing IVAS contract would not need to be restructured, according to Seiler.
Tuesday’s announcement follows a partnership these two companies announced last September, in which Anduril said it would integrate its Lattice software platform into IVAS, with the goal of providing the system with “rapid AI-enabled situational awareness capabilities to enhance soldier safety and operational effectiveness.”
Seiler emphasized Tuesday that IVAS is not meant to be a “static piece of hardware,” but must evolve.
“And so, as we started working together on Lattice, and as we started understanding where the future of IVAS needs to go, this partnership became very natural,” she said.
The Army plans to conduct an operational assessment of IVAS 1.2 in fiscal year 2025, which will inform a full-rate production decision by the fourth quarter. However, former service acquisition chief Doug Bush said last year that “the potential for future competition is there.”
Anduril founder Palmer Luckey said Tuesday that his company has invested around $900 million into its first hyperscale manufacturing facility, Arsenal-1 in Ohio.
Arsenal-1 won’t be used for prototyping activities, but Luckey said the plan is for large-scale manufacturing of IVAS to eventually take place there.
Luckey said Tuesday that Anduril is also among the companies interested in IVAS Next, which is the next planned variant of the night vision system. His company has already participated in an Army industry day, with plans to participate in another one Tuesday.
“I think the Army is being pretty smart in tackling where this stuff eventually is going to go far down the road today. Normally you would see something like IVAS Next, not even being thought about until long after the first instance of IVAS has been deployed,” Luckey said.
“I think they're thinking about this correctly, which is a program that needs to continue to move quickly. You’re turning to more of a family of systems, leveraging commercial technology that might not have been part of the first tranche.”
Microsoft, through its partnership with Anduril, will also be part of the IVAS Next effort, Luckey said. However this effort will be separate from the proposed novation on the current IVAS contract, he said.