A Different Kind of Competition

The Army’s xTechSearch competition creates an innovation pipeline to the small business ecosystem to enable next-generation technologies from nontraditional suppliers.

 

by Dr. Matt Willis 

“The Army needs that private-sector innovation. We need to adapt and accept commercial technologies in a greater fashion.”
—Dr. Bruce D. Jette, assistant secretary of the Army for acquisition, logistics and technology

In the little more than a year and a half since its inception, the Army Expeditionary Technology Search (xTechSearch) competition has attracted a wide variety of technologies from nontraditional defense contractors that may never have come to the Army’s attention without it. One such technology was first-round winner Adranos Inc.’s rocket fuel: it has the potential to increase a rocket’s range by 40 percent, which fits perfectly with the Army’s No. 1 modernization priority of improving long-range precision fires.

Kicked off in June 2018, each iteration of the prize competition has four phases. Each phase results in successful competitors receiving increasing monetary awards for advanced technology achievements relevant to the Army. The top prize was $200,000 for xTechSearch 1.0. The Association of the United States Army’s (AUSA) 2019 Annual Meeting and Exposition will feature the grand prize winner of xTechSearch 2.0, who will receive $250,000, and the 12 semifinalists for xTechSearch 3.0, who will each receive $120,000.

Over the last year, xTechSearch has evaluated more than 500 potential technologies and awarded $4.1 million in total prizes to 102 small businesses. The competition has proven to be a viable mechanism to rapidly screen and assess technologies; a traditional request for proposal process may take six to nine months to evaluate just a handful of contractors.

The modest prizes awarded to competitors in the first two phases are not only incentives to spur innovation, but they also function as working capital to help the companies—who are usually not particularly well-funded—take part in subsequent phases. The decision to make the search into a prize competition was meant to help lower the bar to participation and take contracting out of the picture. The Phase III awards are meant to provide funding to help the participants continue developing their technology and offset travel costs for the proof-of-concept demonstrations. The grand prize is meant to help them further continue the development of their technology.

While the prizes are small by DOD standards, for many contestants they are much-needed injections of funding. But when the competition is over, a frequent concern is, “What next?” Without a deal for their technology, what do competitors do to continue development? The answer just may be a program enacted in the 1980s to encourage domestic small businesses to engage in federal research and development: the Small Business Innovation Research (SBIR) program.

MUCH MORE THAN MONEY
xTechSearch was designed to institutionalize an innovation ecosystem that fosters continued engagement between the Army and small businesses. As part of the xTechSearch program, the competitors receive mentoring on the Army’s research and development (R&D) process, its laboratories and technology-transfer and partnership opportunities.

For instance, xTechSearch invites representatives from the Army’s Office of Small Business Programs and technology transfer experts from the Army’s labs to provide briefings on the various ways industry can partner with the Army, such as through cooperative R&D agreements, commercial test agreements (in which Army labs test private-sector technologies) and the SBIR program.

Participating companies also benefit from public exposure and business development opportunities at the AUSA meeting in October in Washington, which hosts more than 700 exhibitors and 31,000 attendees, and the AUSA Global Force Symposium and Exposition in Huntsville, Alabama, in the spring, which hosts more than 200 exhibitors and 6,800 attendees. At these events, AUSA provides free admission for the xTechSearch competitors and an Innovator’s Corner, where companies in Phase III of the competition are given space to exhibit their technology or concept and time to make a formal presentation of their technology and concepts to attendees.

The value of the Innovators’ Corner may be equal to the monetary prizes. Presence at AUSA’s Innovators’ Corner is a major incentive for the selected companies, providing opportunities for business development and networking. These can serve to identify new ways to use and develop their technologies, and to make connections for partnerships and contracts. It provides participants with exposure they would not otherwise have, as the competition gives them bragging rights and credibility.

AUSA also provides space for the proof-of-concept demonstrations, where companies in Phase IV of the competition demonstrate the viability of their technologies. The time that contestant companies are not making presentations or staffing a display table is open for conducting business development with the exposition’s exhibiting companies.

OPENING THE DOOR
The key value proposition for the xTechSearch competition is generated by essentially eliminating bureaucratic barriers to collaboration, thus facilitating direct and continuous dialogue with the private sector. The contest also provides extended contact time and transparency among Army scientists, engineers and partnership experts and each company in the competition. During the pitch events with Army leaders, companies often learn how they can pivot existing commercial products to support an Army need.

The xTechSearch competition fundamentally realigns typical acquisition metrics (cost-schedule-performance) with new foundational values, including progressive non-monetary (e.g., exposure) and monetary awards (e.g., prizes) to create a novel industry incentive to participate. The competition creates a multitude of business development and collaboration opportunities, through knowledge learned about the Army and exposure to defense contractors at each AUSA event, albeit at a much lower dollar value and participation cost than traditional contracts. The use of “prize competition” authority under 15 U.S.C. Section 3719 eliminated the use of contracts and reduced paperwork by requiring only that the winners at each phase of the competition submit an invoice to the government for payment with no requirements attached to their prize monies.

UNDERSTANDING THE COMPETITORS
At the conclusion of xTechSearch 1.0―while 2.0 was still underway―the xTechSearch staff surveyed 163 of the participants from xTechSearch 1.0 and 2.0 who had taken part in at least Phase II (technology pitches) of the competition. One survey question was: “What did your company feel was the most valuable part of xTechSearch?” The answers broke down into four common themes:

• Exposure. The competitors welcomed the opportunity to present their technologies to a large audience of potential clients and partners, as well as the opportunity to network and make contacts for collaboration and potential partnerships.
• Feedback. The competitors were encouraged by rapid, candid feedback and assessment of their technologies, and suggested steps forward from Army scientists, engineers, program managers and cross-functional teams, along with opportunities to learn what the Army’s modernization needs were and how to better work with the Army.
• Funding. While the size of the xTechSearch prizes was relatively small, it allowed many of the small companies to continue developing their new technologies.
• Credibility. Formal Army recognition of the competitors’ innovative technologies provided credibility and prestige, particularly in the DOD and Army business spaces, and made a noticeable difference in business development when talking with potential customers outside of the competition.

Dr. Amit Mehra of NOVI LLC, who participated in xTechSearch 2.0, said that he had “nothing but praise for this effort, as well as broader initiatives within the government to facilitate and simplify interactions with commercial entities outside of the typical R&D and procurement channels.”

 

The competition is a platform to create considerable change on a budget of less than $5 million per year with a simple commitment to build trust and collaboration through conversation. Conversation among the Army and the small companies does not necessarily promulgate immediate business development. In fact, several companies that were not successful in xTechSearch 1.0 modified their technologies and have since applied and advanced to subsequent stages of xTechSearch 2.0 and 3.0. The result was the development of partnerships with Army or other service laboratories to take their technologies in directions they had not anticipated. “Failure” can work to the benefit of both the government and the company.

Companies also noted that the xTechSearch application and presentation process focused their research on competitive technologies and the Army’s requirements to better position their products for DOD consideration. Jonathan Friedland, president of Megaray LLC, who participated in xTechSearch 1.0, said, “When I saw the caliber of participants, it is incredible how many breakthrough technologies exist that, if not for xTechSearch, may never land up on the Army’s radar.” Even the grand prize winner of xTechSearch 1.0, Adranos Inc., was able to develop new uses for its technology. “Prior to xTechSearch, we failed to realize how significant of a role our solid propellant could have on the DOD’s hypersonic initiatives,” said Chris Stoker, co-founder and CEO. “We now believe that our propellant could be used to increase the range of not only any systems using solid rocket motors but numerous air-breathing systems, such as cruise missiles, as well.”

A STEP BEYOND
A common concern among many small business competitors was that, while the competition was helpful in getting their companies in front of interesting audiences and being able to say they were a finalist for the early stages of commercialization and government engagements, the follow-on “what next” step was missing.

Several competitors added that while engagement with industry and the government can be a tough process, just how they would continue innovation and commercialization after xTechSearch was unclear. The biggest challenge to working with the government is the final step of awarding a contract. One competitor, Dr. Leaf Jiang, CEO of NODAR Inc., suggested that xTechSearch “open up follow-on activities, perhaps through SBIR topics.”

These comments provided the impetus to take a closer look at other programs, such as the SBIR and Small Business Technology Transfer programs. Such programs may help companies get a contract and decrease the time between technology innovation and fielding to the hands of the warfighter. Companies applying for SBIR funding must show how their technology or concept will provide a solution to a SBIR topic identified by Army laboratories, program executive offices or other organizations.

Previously, the SBIR topics were meant to scope the problems down to specific individual needs. XTechSearch took the opposite approach by broadening its topics to the Army’s six modernization priorities, plus medical and engineering needs, to attract innovative ideas that otherwise would have been overlooked. The result was the inclusion of the SBIR research topic, “Expeditionary Technology Search (xTechSearch) Dual-Use Technologies Applicable to Army Modernization Priority Areas,” for technology solutions with both commercial and defense applications. (For additional information on the Army 19.2 SBIR proposal submission instructions, go to https://smallbusiness.ll.mit.edu/sbo/sites/default/files/forms/01_Army_19.2_SBIR.pdf). Companies were required to articulate how their technologies have an advantage over existing commercial technologies outside defense.

AN EFFECTIVE SUPPLEMENT
The SBIR program targets the same constellation of small, imaginative high-tech U.S. businesses as does xTechSearch. It provides the opportunity to respond to critical Army needs with innovative solutions. The goals of both programs are to widen the innovation aperture by increasing the number of potential companies engaging with the government. The addition of the SBIR topic opened a path for potentially adding up to 30 months of funding and support for the xTechSearch competitors (noncompetitors may also apply for SBIR funding under this topic).

The SBIR is a three-phased program that directly funds early-stage R&D by small companies. Eligible projects must fulfill an R&D need identified by DOD and have the potential to be developed into a product or service for commercial or defense markets. The xTechSearch topic was unique in that, rather than defining a prescriptive technology gap, the topic requested novel dual-use technologies that provide a benefit to both the Army and the commercial sector. The phases of the SBIR program are similar to the phases found in xTechSearch:

• Phase I (project feasibility) determines the scientific, technical and commercial merit and feasibility of the ideas submitted. Phase I contracts are typically $56,000 to $167,000 over a period of six months (amounts quoted are from the 2019-2 SBIR release).
• Phase II (project development to prototype) is the major R&D effort, funding the prototyping and demonstration of the most promising Phase I projects. Phase II contracts are up to $1.5 million and usually span 24 months.
• Phase III (commercialization) is the ultimate goal of the SBIR program. Small businesses obtain funding from the private sector or government sources outside the SBIR program to commercialize the Phase II project for sale in the military and private sector markets.

SBIR is a good supplement to xTechSearch because the purpose of both is to help small companies identify, develop and commercialize their new technologies, with the goal of getting contracts with DOD, the organic defense industrial base or the nontraditional defense industrial base. While both progress along similar process lines, xTechSearch and SBIR can create technology development synergy for the nontraditional defense companies.

The competition’s easy application and subsequent partnership sessions demystify working with Army laboratories and, through use of the AUSA expositions, provide many avenues to potential collaboration, partnerships and contract opportunities with DOD laboratories and commercial industry. The SBIR program provides the opportunity for significantly greater amounts of funding and time to continue the development of a company’s novel technology while following up on the contacts made during the xTechSearch competition.

 

CONCLUSION
The mantra of the xTechSearch team has continuously been that while winning the xTechSearch grand prize is great, the real victory for xTechSearch competitors is eliminating bureaucratic barriers, gaining a better understanding of the Army and exploring potential contract opportunities.

xTechSearch has been successful in introducing and engaging with companies that previously would not have considered working with the Army. As xTechSearch conducts its third iteration, 21 companies have participated in two iterations and two companies have participated in all three. Four companies—Lumineye, Halomine Inc. (previously named Antimicrobial Materials Inc.), AKHAN Semiconductors and MELD Manufacturing—used lessons learned from xTechSearch 1.0, including understanding the spectrum of Army modernization challenges, to advance as xTechSearch 2.0 finalists. Great Lakes Sound and Vibration partnered with another company to compete again in xTechSearch 3.0. Other participants have leveraged the contacts they made at xTechSearch to partner with Army organizations. For instance, Advanced Hydrogen Technologies Corp., which participated in xTechSearch 1.0 and 2.0, is now partnering with the U.S. Army Research Laboratory to test its advanced armor manufacturing technology.

SIGINT Systems LLC, which has participated in all three xTechSearch iterations, connected with the Program Executive Office for Aviation at the 2019 AUSA Global Force Symposium and is now partnering with that organization to conduct an advanced technology demonstrator, which is scheduled to fly in March 2020. Finally, United Aircraft Technologies Inc. has leveraged contacts from xTechSearch to partner with British Aerospace to use United Aircraft’s technology in its aircraft. United Aircraft Technologies is also evaluating licensing opportunities with the U.S. Air Force Research Laboratory.

The Army’s victory is that the technology developed through DOD and commercial contracts will eventually find its way back to the warfighter, either in its current or in an improved form. Adding an xTechSearch topic to the SBIR program is a good first step by xTechSearch to evolve and provide additional time and funding for companies to continue to develop their technologies while finding DOD and commercial partners to carry their technologies into production.

For more information, go to the xTechSearch website at https://www.xtechsearch.army.mil/ or the Army SBIR website at https://www.armysbir.army.mil/

MATT WILLIS is director for laboratory management in the Office of the Deputy Assistant Secretary of the Army for Research and Technology. He holds a Ph.D. and an M.S. in chemical engineering from the University of Illinois at Urbana-Champaign and a B.S. in chemical engineering from Cornell University. He is Level II certified in science and technology management and is a member of the Army Acquisition Corps.

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This article is published in the Fall 2019 issue of Army AL&T magazine.

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