A Comparison of Small Business Innovation and Research (SBIR) Investment Methods

Despite the uptick in the speed of innovation cycles, the DoD acquisition process lacks the mechanisms to benefit from them. The current mechanisms of acquisition, including the Joint Capabilities Integration and Development System (JCIDS) process and the Defense Acquisition System (DAS), seem designed for full-rate production programs that take decades of development (Spataro, 2018). In response to this inability to adapt to a shifting innovation landscape, defense officials have been experimenting with alternatives to the legacy systems which (hopefully) provide timely and continuous delivery of capability to the warfighter in a way the current system cannot. One of those experiments for the Unites States Air Force (USAF) is an organization called AFWERX, and AFWERX has a program called the AFWERX Open Topic program (AOT) which seeks to disrupt and improve upon legacy methods of Small Business Innovation and Research (SBIR) investment.

The AFWERX Open Topic (AOT) program uses funding from the United States Air Force’s (USAF) Small Business Innovation and Research (SBIR) budget to adapt commercial technology to USAF needs. The AOT approach to small business investment is markedly different from that of legacy SBIR investment methods. This research is a comparison of processes and outcomes for AOT and legacy SBIR. The first axis of comparison is on commercialization rates at-casinos.com. Applying a legacy definition of commercialization on a sample of AOT contracts, we found AOT’s commercialization to be 37% (compared to an 8.8% for legacy SBIR). We caveat this finding by pointing out the ways a commercialization comparison of the two SBIR methods might be appropriate. The next comparison considered the military capabilities each process invested in. AOT contracts were binned into Joint Capability Areas (JCA) to create an AOT military capability portfolio (MCP) which was then compared to a legacy SBIR MCP. Results suggest legacy SBIR invests at higher rates in the Force Application JCA while AOT investment rates are higher in the Force Integration and Command & Control JCAs. The final comparison considers the success of AFWERX’s strategy of creating technical centers (or ‘front doors’) in regions known for being bastions of innovation (i.e., AFWERX Austin) by a simple test of differences between AOT and legacy regional SBIR participation rates. In Texas and Washington District of Columbia (DC), regions with AFWERX centers, AOT participation rates were statistically higher than legacy SBIR.