DIU’s innovation efforts continue to expand, annual report shows

The Defensive Innovation Unit (DIU) continued to attract nontraditional defense companies to the Department of Defense in 2019, its annual review shows.

Over the course of the year, the agency had added 33 vendors to a rolling list that stretches back to mid-2016, says the report released Tuesday. Overall, DIU says it has worked with a total of 120 companies that otherwise probably would have been outside the DOD’s usual base.

The Silicon Valley-based operation received more than 450 proposals in 2019, 63 of which turned into awarded contracts. DIU’s mission is to seek out innovative technology that has both civilian and military applications. The industry has taken notice, says Nick Sinai, a former deputy U.S. chief technology officer who now works in venture capital.

“From my perspective, DIU is firing on all cylinders,” Sinai told FedScoop. “They are putting out more solicitations for commercial technology than ever before – across a range of topics, include AI, autonomy, cyber, human systems, and space commercial technologies.”

The agency has undergone several recent changes, most notably receiving its own full contracting authority in early 2019 to expand its ability to partner with the private sector using Other Transaction Agreements (OTAs) to circumvent typical acquisition regulations. Previously the unit had to work with other contracting operations across the military. DIU on average spends over a year developing prototypes with end users before transitioning technology to full use across the military.

The report indicates DIU has helped facilitate the investment of nearly half a billion dollars in prototypes. Much of that money came from different branches of the military, with 11 percent of the prototype funding coming from DIU’s own budget. The prototype and OTA process DIU uses is key to its success.

“One of the biggest success stories of DIU, in my mind, is that DIU has helped DoD entities go from prototype to production, using other transaction (OT) authority,” he said.

DIU was started by then-Defense Secretary Ash Carter in 2015 as “Defense Innovation Unit-Experimental.” In 2018, DIUx dropped the x and became a more permanent fixture of the DOD’s technology acquisition system. Past DIU leaders have called for its funding to be increased by a factor of 10.

“Now is the time to supercharge DOD access to innovation,” Raj Shah, DIU’s founding managing director, told lawmakers in February. 

The $451.9 million the DIU helped funnel to prototypes will help save billions in the future by finding emerging technical solutions to DOD challenges, the report claims. A primary money-saving solution is using machine learning to predict when aircraft will need maintenance to avoid malfunctions and extend the lifetime of the aerial vehicles. DIU’s program started with prototyping solutions from the artificial intelligence company C3.ai to begin work with the Air Force. After initial positive result, DIU is working to scale the program across the military, the report highlighted.

“2019 saw transformative potential realized in several of our ongoing projects, but none more so than in Predictive Maintenance,” the report said.

Other high-priority projects are developing open-source threat intelligence monitoring solutions and counter-unmanned area systems technology. Much of DIU’s work is with the Air Force, the review shows. The Marine Corps remains the having the smallest share of DIU project funding.