Defense Innovation Unit Launched 23 Projects Last Year, Up One-Third

Five years after it was established as an experimental component, the Defense Innovation Unit in 2020 solicited more projects and transitioned more capabilities to Defense Department customers for procurement than ever. 

DIU began work on 23 new projects—a 35% year over year increase—and pushed 11 completed prototype projects—two more than in 2019—to DOD, according to its recently released annual report. Those 11 successful projects represent more than a third of DIU’s total output: since 2015, DIU has successfully transitioned 26 commercial solutions. 

The 2020 transitions include a situational awareness platform built by data firm Kinetica, which was awarded a contract worth up to $100 million to support North American Aerospace Defense Command and U.S. Northern Command. In a first, DIU partnered with five companies under the Blue sUAS small drone project to provide both DOD and the entire federal government with “trusted sUAS capabilities.” 

DIU in 2020 also signed a memorandum of agreement with the Cybersecurity and Infrastructure Security Agency to better coordinate technology investments and added a new technology portfolio for energy and materials, bringing the total number of portfolios up to six. DIU’s other areas of focus include artificial intelligence, autonomy, cyber, human systems and space. 

By primarily working with companies that aren’t considered traditional defense contractors, DIU aims to bring the best of commercial industry’s tech innovation to the department quickly using the other transaction authorities. OTAs allow DOD to circumvent normal contracting regulations, and such awards have increased by 712% since 2017, according to a recent analysis by the Center for Strategic and International Studies. 

Dan Nidess, a contractor who works as a product manager with DIU, told Nextgov in a recent conversation that DIU’s speed sometimes surprises its DOD component partners. DIU aims to make contract awards within 60 to 90 days, though it's currently averaging closer to 150 days. This speed added to the flexibility provided by the nebulous OT authority is foundational to DIU’s success. 

“We also realize that kind of in the nature of best practices in terms of developing out capabilities, we're going to learn a lot along the way, and we're going to get to a point several months into the prototype where we think, hey, part of the direction we're going needs to be shifted a bit, or we didn't think we needed this, but we are going to need it,” Nidess said. OTAs leave room for these kinds of adjustments, according to Nidess. 

Still, DIU is not built to solve one of the biggest hurdles preventing greater adoption of innovative technologies at DOD: the so-called valley of death between when innovative technologies emerge and when the budgeting process catches up to fund those technologies. 

“Once a company has a successful prototype with DIU, sometimes there's an issue of how do we get that scaled within the department, and that often requires budget dollars from our DOD partner, customer to scale that solution,” DIU Director Mike Brown said during a November webinar. “So we'd love to see more budget flexibility, their innovation funds would be an answer, or just program offices having more flexibility of how they spend their dollar.” 

In a recent hearing before the Senate Armed Services Committee, retired Gen. Hawk Carlisle, president and chief executive of the National Defense Industrial Association, and former Google chief executive Eric Schmidt decried the two-year period between pilot program and program of record status.

“So if you want to do something new, you have to plan it and then it starts two years from the time you get it because that's when you get the money for it,” Schmidt said. Schmidt also chairs the National Security Commission on Artificial Intelligence and previously chaired the Defense Innovation Board. 

Carlisle added small businesses, in particular, can’t survive for two years “on a promise.” More than 75% of DIU awardees are small businesses.