26 février 2020 | International, Aérospatial
The Air Force's new investment strategy is designed to "catalyze the commercial market by bringing our military market to bear," says Roper.
By THERESA HITCHENS
PENTAGON: The Air Force will roll out the final stage in its commercial startup investment strategy during the March 13-20 South By Southwest music festival, granting one or more contracts worth at least $10 million to startups with game-changing technologies, service acquisition chief Will Roper says.
The first-of-its kind event in Austin, called the Air Force Pitch Bowl, will match Air Force investment with private venture capital funds on a one to two ratio, according to a presentation by Capt. Chris Benson of AFWERX at the Strategic Institute's Dec. 4-5 “AcquisitionX” meeting. So, if the Air Force investment fund, called Air Force Ventures, puts in $20 million, the private capital match would be $40 million.
AFWERX, the Air Force's innovation unit, has one of its hubs in Austin.
“This has been a year in the making now, trying to make our investment arm, the Air Force Ventures, act like an investor, even if it's a government entity,” Roper explained. “We don't invest like a private investor — we don't own equity — we're just putting companies on contract. But for early stage companies, that contract acts a lot like an investor.”
The goal is to help steer private resources toward new technologies that will benefit both US consumers and national security to stay ahead of China's rapid tech growth, Roper told reporters here Friday.
The Air Force wants to “catalyze the commercial market by bringing our military market to bear,” he said. “We're going to be part of the global tech ecosystem.”
Figuring out how to harness the commercial marketplace is critical, Roper explained, because DoD dollars make up a dwindling percentage of the capital investment in US research and development. This is despite DoD's 2021 budget request for research, development, test and evaluation (RDT&E) of $106.6 billion being “the largest in its history,” according to Pentagon budget rollout materials. The Air Force's share is set at $37.3 billion, $10.3 billion of which is slated for Space Force programs.
“We are 20 percent of the R&D is this country — that's where the military is today,” Roper said. “So if we don't start thinking of ourselves as part of a global ecosystem, looking to influence trends, investing in technologies that could be dual-use — well, 20 percent is not going to compete with China long-term, with a nationalized industrial base that can pick national winners.”
The process for interested startups to compete for funds has three steps, Roper explained, beginning with the Air Force “placing a thousand, $50K bets per year that are open.” That is, any company can put forward its ideas to the service in general instead of there being a certain program office in mind. “We'll get you in the door,” Roper said, “we'll provide the accelerator functions that connect you with a customer.
“Pitch days” are the second step, he said. Companies chosen to be groomed in the first round make a rapid-fire sales pitch to potential Air Force entities — such as Space and Missile Systems Center and Air Force Research Laboratory — that can provide funding, as well as to venture capitalists partnering with the Air Force.
As Breaking D broke in October, part of the new acquisition strategy is luring in private capital firms and individual investors to match Air Force funding in commercial startups as a way to to bridge the ‘valley of death' and rapidly scale up capability.
The service has been experimenting with ‘pitch days' across the country over the last year, such as the Space Pitch Days held in San Francisco in November when the service handed out $22.5 million to 30 companies over two days. Roper said he intends to make “maybe 300 of those awards per year,” with the research contracts ranging from $1 million to $3 million a piece and “where program dollars get matched by our investment dollars.”
The final piece of the strategy, Roper explained, is picking out the start-ups that can successfully field game-changing technologies.
“The thing that we're working on now is the big bets, the 30 to 40 big ideas, disruptive ideas that can change our mission and hopefully change the world,” Roper said. “We're looking for those types of companies.”
The Air Force on Oct. 16 issued its first call for firms to compete for these larger SBIR contracts under a new type of solicitation, called a “commercial solutions opening.” The call went to companies already holding Phase II Small Business Innovation Research (SBIR) awards. The winners will be announced in Austin.
If the strategy is successful, Roper said, the chosen firms will thrive and become profitable dual-use firms focused primarily on the commercial market.
“The, we're starting to build a different kind of industry base,” Roper enthused. “So, we've gotta get the big bets right. Then most importantly, if you succeed in one of the big bets, then we need to put you on contract on the other side, or else the whole thing is bunk.”
https://breakingdefense.com/2020/02/air-force-to-pump-new-tech-startups-with-10m-awards
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By: Aaron Mehta and Joe Gould WASHINGTON — The Trump administration has made a final decision to withdraw from the Open Skies Treaty, sources confirmed to Defense News on Thursday. The news was confirmed by U.S. President Donald Trump midday, followed by a formal announcement by Secretary of State Mike Pompeo that the administration will make a formal notification on Friday, kicking off a six-month clock before a formal exit occurs. “We may, however, reconsider our withdrawal should Russia return to full compliance with the Treaty,” Pompeo said in a statement. What “full compliance” means, however, is unclear. Chris Ford, assistant secretary of state for international security and nonproliferation, told reporters there are “many variables” as to what that would entail, particularly as a number of American complaints about Russian activities involve behaviors that, Ford acknowledged, are “not in fact violations of the treaty.” As an example of the latter, Ford pointed to restrictions on flights over Kaliningrad. Russia has in the past restricted the length of flights over the city, which is not a direct violation but contradicts the confidence-building nature of the agreement, Ford said. That Russia will sometimes loosen those restrictions, such as earlier this year for an Open Skies flyover by Estonian, Lithuanian and American observers, is proof that the Kremlin “clearly regards its Open Skies legal obligations as something akin more to guidelines, or options, for them,” he argued. “It's the combination of all those things that has led to this decision. And so were Russia to return to compliance, we would have to presumably make that decision at the time about what to do with it, do in response to that, on the basis of the circumstances that have changed at that time,” Ford said. “Just as our decision now has many variables, we have to sort of see what the net impact of Russian behavior at that time in the world is. But that's a conversation we would very much like to have, if Russia would give the world the opportunity to see that happen.” In a statement released online, the Russian Ministry of Foreign Affairs called the move “very regrettable" and hit at the Trump administration's “general policy” of going after arms control agreements. International discussions The administration Thursday morning began informing the other 34 members in the agreement, which allows mutual reconnaissance flights over the member nations, including Russia. An emergency meeting of NATO members is scheduled for Friday in Brussels, per multiple reports. The move, first reported Thursday by The New York Times, was not a surprise, as administration officials signaled to European allies toward the end of last year that unless major changes were made to the overflight agreement, the U.S. would consider withdrawing. However, there had been little movement in the months since, giving advocates hope that a decision to exit the treaty had not been finalized. “It was pretty clear from meetings that it was basically a done deal and it was just a matter of when,” one European source said. Allies generally argue the treaty is a valuable channel for transparency and dialogue between Russia and the United States, the world's top two nuclear superpowers. Critics of the treaty have argued that the U.S. gets better intelligence from satellite systems and that the funding to replace the aging OC-135 aircraft can be spent elsewhere. A second European source acknowledged that Russia has not always complied with the treaty, but said there was a sense that those issues could be resolved. The source predicted that those NATO members who are also part of the treaty will remain, but was unclear what Russia will do next. “If you're Russia, you can stay in and take the moral high ground, say, ‘We still honor international treaties, even if America doesn't,' or you can say the treaty is diminished beyond usefulness and you pull out. I don't know which they'll do, but neither is good for NATO," the source said. The source added that while it is true the U.S. gets its best intelligence from its satellites as opposed to OC-135 flights, focusing entirely on that is “selfish” because “a lot of NATO allies rely on Open Skies for visibility into what goes on in Russia.” The Pentagon released a statement late on Thursday, saying “The United States has been in close communication with our Allies and partners regarding our review of the Treaty and we will explore options to provide additional imagery products to Allies to mitigate any gaps that may result from this withdrawal.” Key Democrats and arms control advocates quickly denounced the administration's withdrawal plans as dangerous and destabilizing to America's relationships with allies, with former CIA director Michael Hayden, a frequent Trump critic, decrying the move as “insane.” Conservative voices applauded the move as Trump standing up to Russia's violations of the treaty. Sen. Tom Cotton, R-Ark., expressed his belief the funding that would have gone into repairing the OC-135 should now go toward broader nuclear modernization. House Armed Services Committee Chairman Adam Smith, D-Wash., and House Strategic Forces Subcommittee Chairman Jim Cooper, D-Tenn., blasted the administration for defying a requirement in the 2020 defense policy law that Trump first give Congress 120 days' notice. Multiple communications with Congress on the issue had “gone unanswered,” they said. “The Administration's decision to withdraw the United States from the Open Skies Treaty is a slap in the face to our allies in Europe, leaves our deployed forces in the region at risk, and is in blatant violation of the law,” they said in a joint statement. “This decision weakens our national security interests, isolates the United States since the Treaty will continue without us, and abandons a useful tool to hold Russia accountable." When signing the defense policy legislation into law, Trump indicated he didn't consider himself bound by the requirement, citing his executive powers. “I reiterate the longstanding understanding of the executive branch that these types of provisions encompass only actions for which such advance certification or notification is feasible and consistent with the President's exclusive constitutional authorities as Commander in Chief and as the sole representative of the Nation in foreign affairs," the president's Dec. 20 signing statement read. Throughout its term, the Trump administration has been skeptical of arms control agreements. The U.S. and Russia walked away from the 1987 Intermediate-Range Nuclear Forces Treaty last August, and officials have expressed skepticism about renewing the New START nuclear agreement with Russia, which expires in 2021. https://www.defensenews.com/global/europe/2020/05/21/trump-admin-to-withdraw-from-open-skies-treaty/