Acquisition Reform That Works & No One Has Heard Of

For the last two-and-a-half years, a little known Air Force experiment in commercial acquisition has achieved astonishing results.

The program, known as “Open Topic”, is at a turning point. Will the other services – with their combined $1.8 billion annual small business innovation research budget – embrace the changes it has proven actually work.

Congress and the new Pentagon leadership must act now and expand the program to the Army and Navy, and the defense agencies. Scaling the program up will not cure all the department’s innovation woes but it will send an important message to our next generation of entrepreneurs that the Pentagon really is open for business.

What is the program? In 2018, the Air Force’s then-newly established AFWERX organization launched “Open Topic” under its federally mandated Small Business Innovation Research (SBIR) program. The SBIR program began in 1982 with the purpose of providing research funds to small businesses to stimulate technological innovation, meet federal research and development needs, and increase private-sector commercialization.

Over the last 30 years, the SBIR program, which advertises itself as “America’s Seed Fund”, has provided nearly $50 billion to small businesses across the country.  However, there is growing concern that while still useful, the program has stagnated and is not attracting the type of high-growth emerging technology companies necessary to compete against upstart Chinese rivals.

This is because the SBIR program now relies on the creativity of DoD and the services to generate the requirements – and only those specific research topics that make it through their internal bureaucracies become eligible for small business to apply their technologies against.
To address these concerns, a small group of pioneering Airmen experimented with a new approach.

Rather than relying solely on research ideas generated from within the upper echelon of the Air Force, AFWERX provides “Open Topic” opportunities to allow small firms and entrepreneurs to propose any idea or technology that may have an Air Force application. They hypothesized that they might well discover new technologies by letting commercial industry and innovative startups do what they do best – innovate new technology solutions and original applications. While recognizing the need for requirements that meet a specific defense need, these Open Topics provided a new approach to engage a broader cross-section of the innovation ecosystem. Over the last two years, the Air Force has awarded more than 2,200 contracts under the Open Topic program.

The results have been stunning, attracting a new type of company into the program – one that is, on average, almost 10 years younger, twice as small, and less likely to have previously worked with the Department of Defense than other applicants.  Even more astounding, the data showed that small firms selected for an Open Topic award were more likely to receive follow-on private investment, more likely to receive non-SBIR defense contracts after award, and more likely to be granted future patents — indicating their potential for continued invention and commercialization.

In short, this new batch of companies were more effective at achieving the goals of the federally mandated SBIR program. And these companies weren’t just more successful – they were different and more diverse. They were less likely to have previously received an SBIR award, more geographically diverse, and more likely to hail from one of the country’s emerging innovation hubs.

Outside of the immediate defense application and economic benefit, the Open Topic initiative addresses some of the Pentagon’s major innovation deficits. The program was able to overcome the cultural resistance and innovation obstructionists inside the Pentagon that prefer large incumbents, a rigid requirements process and usually suffer a severe case of not-invented-here syndrome.  We’ve heard in numerous congressional hearings and from countless expert panels that the DoD needs to be more innovative – oftentimes without providing concrete ideas on how to make that a reality – here is a clear opportunity for Congress to ensure this experiment thrives amid the Pentagon’s ongoing leadership shuffle.

Eric Snelgrove is a former professional staff member on the House Armed Services Committee and principal staff co-author of the Future of Defense Task Force report.  He is a member of the advisory board of the Common Mission Project, a non-profit dedicated to creating vibrant and diverse ecosystems where government, academia, and industry build partnerships around urgent challenges facing our nation.