AFWERX New Fiscal Year | All About AFWERX Funding | SBIR SELECTED BUT NOT FUNDED

AFWERX is an Air Force initiative that aims to spur innovation and bring new technologies to the military. AFWERX provides funding opportunities for small businesses and startups through numerous grant and contract opportunities, such as, but not limited to, the SBIR and STTR programs, the AFWERX Challenge, and the TACFI and STRATFI programs. Most of these programs offer non-dilutive, equity-free, debt-free funding for businesses to conduct research and development on innovative solutions that can be used by the military.

October is the start of the new fiscal year, which holds significance for AFWERX as it often coincides with the implementation of enhancements and improvements to the numerous funding programs and renewed funding availability. AFWERX is a multilayered organization that offers a wide variety of support to small businesses and entrepreneurs. While AFWERX is best known for their open topics and SBIR/STTR contracts, they also offer a significant number of equally successful advanced funding opportunities. In this blog, you will learn about the many advanced funding opportunities available within AFWERX beyond their Phase I SBIR and STTR opportunities and the many funding path

• AFWERX Divisions
• Advanced Funding Opportunities
• Phase II SBIRs/STTRs
• STRAFI + TACFI
• Phase III SBIRs/STTRs
• OmniSync AFWERX Success Stories

AFWERX Divisions

AFWERX is divided into three divisions, each with their own programs, funding opportunities, networking opportunities, and more. Some are more well known, such as AFVentures, since this division manages the AFWERX SBIR/STTR program, however, each has its own unique support. AFVentures, AFWERX Spark, and AFWERX Prime are three key programs under the AFWERX umbrella that focus on different aspects of fostering innovation, driving collaboration, and accelerating the development and adoption of new technologies.

1. AFVentures:

AFVentures is an initiative within AFWERX that aims to bridge the gap between small businesses and startups with innovative technologies and the Department of Defense (DoD) market. AFVentures combines various funding mechanisms, including the Small Business Innovation Research (SBIR) program, the Small Business Technology Transfer (STTR) program, and new initiatives like STRATFI and TACFI. This initiative provides financial support, mentorship, and connections.

2. AFWERX Spark:

AFWERX Spark is a program that focuses on empowering airmen and space professionals to drive innovation within their organizations. It encourages grassroots innovation by providing resources, tools, and training to develop entrepreneurial skills and a culture of innovation. Under the umbrella of AFWERX Spark is the AFWERX Challenge. The AFWERX Challenge hosts competitions and events where the winners of these competitions can receive awards ranging from contracts to non-dilutive funding and investment opportunities. AFWERX Spark promotes bottom-up innovation, idea generation, and experimentation by fostering an open and collaborative environment.

3. AFWERX Prime:

AFWERX Prime is a platform that connects innovators, entrepreneurs, and industry partners with the Department of Defense. It closely supports the AFWERX Spark division and offers a collaborative space for discovering and developing innovative solutions to address the unique challenges faced by the Air Force and Space Force. Through innovation challenges, events, and workshops, AFWERX Prime provides opportunities for collaboration and partnership between the military and non-traditional sources of innovation. This program helps bridge technology gaps, facilitates access to cutting-edge solutions, and enables the rapid integration of emerging technologies into military operations.

Together, AFVentures, AFWERX Spark, and AFWERX Prime play significant roles in fostering a culture of innovation, driving collaboration, and accelerating technology development within the Air Force and Space Force. By providing financial support, mentorship, resources, and platforms for engagement and partnership, these programs facilitate the integration of cutting-edge technologies and innovative solutions into military missions, ultimately enhancing operational capabilities and addressing complex challenges more effectively.

Advanced Funding Opportunities

The Air Force faces unique challenges and requirements that demand innovative solutions and advanced technologies. To support the development and adoption of cutting-edge solutions, AFWERX offers several advanced funding opportunities for startups, small businesses, and entrepreneurs. Among these opportunities are the Direct-to-Phase II SBIRs/STTRs, Phase II SBIRs/STTRs, STRATFI, TACFI, AFWERX Challenge, and Phase III SBIRs/STTRs, which provide funding, guidance, and resources to support the development, refinement, testing, and deployment of innovative technologies. Most of these require the submission of a Memorandum of Understanding (MoU) document in the application package that is signed by multiple Air Force stakeholders interested in the technology. Applicants will usually find these MoU letter writers during their Phase I period of performance. Applicants may also reach out to TurboSBIR’s team for support regarding this requirement.

Phase II

The AFWERX Phase II program is a crucial stage in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) processes. It provides funding to small businesses that have successfully completed a Phase I contract and have demonstrated the feasibility of their innovative technology or solution. An AFWERX Phase II SBIR/STTR contract has an average success rate of 30-40% with an average award amount between $750,000 and $1.25 million.

During Phase II, selected companies have the opportunity to further develop and refine their prototypes or proofs of concepts. The goal is to advance the technology to a more mature stage and demonstrate its potential for military applications. This phase typically involves a deeper exploration of the technology's capabilities, further testing and validation, and an evaluation of its potential impact on Air Force operations.

The AFWERX Phase II program supports a wide range of technology areas, including but not limited to aerospace, artificial intelligence, data analytics, cybersecurity, robotics, communications, health and human performance, and energy solutions. These technologies are expected to have the potential for significant impact on Air Force mission and needs.

In addition to financial support, the AFWERX Phase II program provides companies with access to resources, mentorship, and connections to government agencies, defense contractors, and other relevant stakeholders. This helps facilitate collaboration, knowledge sharing, and guidance throughout the development process.

The duration of Phase II contracts can vary, but typically they last for a period of up to two years. At the end of Phase II, companies are expected to have more mature technology, ready for further development and commercialization.

When applying for a Phase II contract, many small businesses and entrepreneurs run into a problem where their proposal is “Selectable - Not Funded”. This, in its own way, is unique for AFWERX and does not mean that the proposal has failed. AFWERX awards funding until all available funding is exhausted. A selected but not funded proposal means that while the proposal met all requirements and was viewed as viable, it was unable to be awarded funding due to insufficient award availability. While they may not be funded by SBIR or STTR funds, the technology and proposal can be considered available for “adoption” by other Air Force organizations or DoD departments.

Download: Selected Not Funded Playbook: What does it mean and now what?

Direct-to-Phase II

AFWERX offers the opportunity to apply directly for a Phase II SBIR/STTR award without having previously been awarded a Phase I award. This is referred to as a Direct-to-Phase II or a D2P2. Organizations that can demonstrate having already completed “Phase I-like" feasibility studies using internal or other external funding are eligible to apply. Previously unsuccessful Phase II applicants often also utilize this avenue.

The Direct-to-Phase II process is intended to accelerate the development of innovative technologies that align with the needs and missions of AFWERX. The SBIR and STTR Direct-to- Phase II eligibility criteria vary between different agencies. AFWERX requires that the small business have a solution ready to prototype, have identified an Air Force end user and customer, and have a signed customer memorandum in hand to apply.

When AFWERX releases their open topic solicitations, a D2P2 may be available. It is important to review each solicitation cycle carefully in order to identify any D2P2 opportunities. Being awarded a D2P2 comes with all of the same benefits and supports a normal Phase II provides. A D2P2 has a period of performance for up to 21 months (about 2 years) and an award maximum of $1.25M in SBIR funding. Additionally small businesses can receive access to mentorships, network connections to government agencies, additional company resources, and more.

The primary difference between a Phase II and a D2P2 award is the application process and eligibility criteria. You can read more about what an AFWERX D2P2 entails here: Direct to Phase II (D2P2) FAQS

STRATFI + TACFI

The AFWERX STRATFI (Strategic Funding Increase) and TACFI (Tactical Funding Increase) programs are both part of the AFVentures initiative, aimed at bridging the gap between Phase II and Phase III for small businesses that have been awarded a Phase II contract within the last two years[1]. These programs were developed to help address the "Valley of Death" challenge faced by small businesses in transitioning their innovative technologies from the research and development stage to the commercialization stage[1]. While they have similar goals of providing additional funding to companies after Phase II, there are differences in their focus and scope.

The STRATFI program focuses on funding projects that have strategic-level impact by addressing broader, higher-level challenges faced by the Air Force and Space Force[2]. It aims to catalyze relationships between end-users within the Air Force and Space Force, acquisition professionals, private-sector innovators, and investors[3]. STRATFI funding is typically larger than TACFI (see below), as it concentrates on projects that are resource-heavy but have the potential to bring significant and disruptive change to the military domain. [4]

On the other hand, the TACFI program concentrates on transitioning smaller-scale, tactical capabilities at the operational level[2]. It seeks to support projects that have immediate applicability and can rapidly enhance existing systems or processes[4]. TACFI focuses on technologies that can be implemented quickly and provide near-term operational benefits to the Air Force. [24]

These programs have an application window, just like the SBIR/STTR program. It is strongly encouraged to maintain contact with your Air Force users and AFWERX because they will send eligible companies an early notification announcement to their TPOC (Technical Point of Contact). You can also track the cycle window on the STRATFI/TACFI website.

AFWERX Challenge

The AFWERX Challenge is an innovation program led by the United States Air Force (USAF) that seeks to connect and collaborate with entrepreneurs, startups, and industry partners to tackle challenges and drive technological advancements in the aerospace and defense sectors.

One of the significant benefits of participating in the AFWERX Challenge is the financial support offered to startups that have not received other funding via alternative pathways. Through the challenge, startups have the opportunity to compete for funding, which can provide the crucial financial resources needed to advance their innovative projects. It is important for startups to approach the AFWERX Challenge strategically and ensure that their solutions align with the specific challenges and needs outlined by the USAF. AFWERX Challenges are not an open topic but rather innovation competitions with specific needs and wants. By thoroughly understanding the requirements and expectations of the AFWERX Challenge, startups can maximize their chances of success and leverage the financial benefits it offers. There may be times where an AFWERX Challenge opens that perfectly aligns with your product that has already been awarded another form of AFWERX funding. An example of this is a company that had a cooling and heating item that had just recently been awarded a SBIR. ERDCWERX held an arctic challenge that awarded additional funding on top of the SBIR funding.

Phase III

The Phase III program is an initiative that aims to facilitate the transition of commercially viable innovations developed under Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Phase II contracts to Phase III, where these technologies can be commercialized and integrated into the operational needs of the Air Force.

Phase III represents the transition phase between the development and commercialization of innovative technologies. It involves the integration, testing, and deployment of the technology within relevant military systems or platforms. The goal is to have effectively developed a market-ready product or service that addresses the needs of the Air Force and its mission. A large goal in the process of securing Phase III funding is to become a program of record.

Under the Phase III program, selected companies that have completed a Phase II contract have the opportunity to continue working with any government agency, including the Air Force and receive non-SBIR/STTR funding to further develop and deploy their innovative solutions. These Phase III contracts and agreements can awarded directly by the Air Force organization that is benefitting most from the innovative technology or through other government agencies to support the operationalization and commercialization of the technologies.

One large issue startups run into is that sometimes you may have to wait on securing a Phase III because of the agency budget or company progress. Other times, a company may experience only a one-off product purchase from the agency or an AF office. It is up to the company to find additional consumers, like additional AF offices or offices of another DoD agency. Another route is the company may have to make incremental sales. If you are struggling to secure a Phase III, any agency can do a Phase III with your company. If you can't get a Phase III immediately through the Air Force, you can reach out to other divisions of the DoD.

Innovative solutions and advanced technologies are vital to addressing the critical challenges and needs of the Air Force. The AFWERX Phase II, STRATFI, TACFI, AFWERX Challenge, and Phase III programs are designed to accelerate the development and commercialization of these solutions, reduce barriers, and catalyze progress. By supporting startups, small businesses, and entrepreneurs, AFWERX aims to foster innovation, collaboration, and growth while also enhancing the capabilities of the Air Force. These programs offer a unique opportunity for those with innovative ideas and technologies to make a difference and contribute to the national security and defense of the United States.

AFWERX Success Stories

OmniSync has helped several organizations successfully secure AFWERX SBIR funding. OmniSync itself has won five AFWERX SBIR awards, two Phase I awards, two Phase II awards, and a Phase III award. In one of our Phase II awards, we work closely with the AFRL and AFWERX to support the 39th CONS by developing and providing our custom artificial intelligent-powered workflow automation software, designed to streamline a part of the complex acquisition process. You can read more about our most recent award here: https://www.turbosbir.com/education/blog/afwerx-omni-sync-innovation-collaboration/

With our extensive experience working with AFWERX, we have supported many organizations through their own successful application processes. For example, Xplosions Tech was awarded a Phase I SBIR in 2022 for their computer vision system for calorie tracking to encourage adherence to customized weight-loss regimens. Another company, Montuno Health, was awarded a Direct-to-Phase II in 2023 for their technology platform.

These successes came from the hard work of these startups and the support of our technology and team. We offer expert consultation and writing services, as well as extensive customized and researched resources. If you are interested in learning more about the AFWERX SBIR/STTR program, we have curated a simple and informative playbook to get you started: Selected Not Funded Playbook: What does it mean and now what? If you would like to learn more about how our team can further support you through your funding journey, feel free to reach out to us at TurboSBIR.com

References
1. AFWERX SBIR/STTR Program Overview.
2. AFWERX AFVentures enhances SBIR/STTR program to increase tech transition.
3. AFWERX. STRATFI/TACFI - AFWERX.
4. AFVentures. STRATFI-TACFI - AF.