Via its commercial solutions opening contracting mechanism, DIU is trying to find solutions that meet the U.S. military’s need for undersea kamikaze drones and UUVs that can be launched from submarines.

To address the first challenge, the organization is looking for hunter-killer systems that can be deployed from a government-provided platform or pier.

“The host vessels can either be surface or housed subsurface and most likely be uncrewed. The vehicle must be able to deliver a payload with the speed and endurance necessary to hone in and interdict a static or moving target,” per the solicitation for low-cost “undersea effectors.”

The Defense Department is aiming to acquire systems that are about 12.75 inches in diameter, 120 inches in length, and less than or equal to 800 pounds while equipped with government-furnished payloads.

To address the second challenge, DIU is also on the hunt for UUVs that can be launched and recovered via a torpedo tube without the need for drivers.

“The Vehicle should operate for at least 2 days and/or 120 nautical miles while operating with a payload,” officials wrote. “The proposed UUV should be able to support multiple communication pathways to the host submarine. Tethered options will be considered. Accurate long-range navigation systems limiting the need for GPS, transponders, or bottom lock is preferred.”

The system must not be more than 21 inches in diameter and 256 inches in length, according to the solicitation.

DIU noted that the DOD has a critical need for “affordable small and medium” UUVs that can perform intelligence, surveillance and reconnaissance, and expeditionary missions.

“Current and legacy systems are designed to be multi-mission, exquisite systems requiring long production timelines, significant training, reconfiguration prior to mission, and technical experts to process data. However, there are situations where a single use, mission specific UUV can be more desirable to the end user in the kinetic, ISR, and expeditionary domains,” officials wrote.

DIU has played a major role in the Pentagon’s Replicator initiative, which aims to add thousands of low-cost uncrewed systems and counter-drone platforms to the U.S. military’s arsenal. The solicitation released Wednesday didn’t explicitly say whether it was tied to Replicator efforts, but it appears to be focused on those types of technologies.

Industry responses to the solicitation are due July 24.

The DOD is looking to award other transaction agreements.

“Companies are advised that any prototype OT agreement awarded in response to this [effort] … may result in the award of a follow-on production contract or transaction without the use of further competitive procedures. The follow-on production contract or transaction will be available for use by one or more organizations in the Department of Defense and, as a result, the magnitude of the follow-on production contract or agreement could be significantly larger than that of the prototype OT,” officials wrote.

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Next year will mark the fourth iteration of the educational ICAP initiative, which DIU runs in partnership with the Defense Acquisition University. This fellowship is designed to provide DOD’s leading procurement professionals with hands-on experience and virtual training to help them more effectively buy in-demand commercial technologies from non-traditional military contractors. 

“We have other acquisition officers from across the department who can apply to the year-long fellowship with DIU — to learn our process, how we work with industry, and then bring that back to wherever they’re going. And [the next ICAP application] just opened today,” DIU’s Deputy Director for Commercial Operations Liz Young McNally told DefenseScoop during a panel at the Special Competitive Studies Project’s AI+ Expo.

If tapped for the fellowship, personnel will get a chance to work on a variety of real-world, military service-aligned projects alongside a DIU contracting officer, project team and commercial solution providers.

The fellows will also gain in-depth instruction on a flexible contracting mechanism designed for rapid prototyping and acquisition of commercial tech, known as other transaction (OT) authority. That mechanism, as well as DIU’s commercial solutions opening (CSO) solicitation process, helps the Pentagon operate at a pace that is closer to commercial speeds, when buying certain technologies.

Pointing to recent internal DIU stats, McNally said that for roughly 40% of the companies that win a new CSO deal each year, “this is the first time they ever worked with the DOD.”

“We’ve built all of these processes [to accelerate acquisition]. So we’re asking for a problem statement as opposed to a requirement. It’s a short response, right — like a few pages or a few slides, as opposed to something more — very rapid. And [the ICAP fellowship] is one of the processes that we have built to help not just do it ourselves, but then scale it across the department,” she noted.

Defense Secretary Pete Hegseth recently issued new guidance to inform how the Pentagon buys software capabilities. In it, he directed Pentagon officials to prioritize OT and CSO procurement options when purchasing digital assets for the military.

“[DIU is] also working very closely with [the Office of the Under Secretary of Defense for Acquisition and Sustainment] and others in the department to implement the president’s new executive order on acquisition. And programs like that fellowship are a real way that we’re going to be able to help upskill, and train, and drive the culture change required so that we bring in more commercial technology,” McNally told DefenseScoop.

Those who wish to apply for ICAP must be permanent government civilians or active component military contracting officers. Each fellow will produce a capstone project that will serve as a training plan for their home organization, based on what they learn throughout the 12-month program.

Applications will be accepted until July 31. DIU aims to notify selected candidates in September and begin the program in October.

“To ensure our warfighters maintain a decisive advantage, we need contracting professionals who are fluent in both the defense and commercial sectors, and who can help their teammates across the department to develop that same fluency. That is what the ICAP fellowship delivers, and we need to keep scaling it — and its impact — for the department’s critical needs,” DIU Director Doug Beck said in a statement.

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The sea service’s maritime operations centers, or MOCs, are part of the Navy’s approach to fleet-level command and control and are expected to be “the center” of how sailors fight in a distributed manner in future battles, according to the CNO Navigation Plan released last year.

“MOCs and the processes they execute, whether in one location or disaggregated, are how fleets convert data into information to deliver decision advantage for the commander. MOCs must be capable of integrating with the Joint Force, Allies, and partners to link our fleet commanders to the range of sensors, shooters, and effectors distributed across the battlespace. To integrate a maneuvering, distributed, information-centric fight requires that we treat MOCs as the weapons systems they are,” then-Chief of Naval Operations Adm. Lisa Franchetti wrote.

She tasked all fleet headquarters, beginning with Pacific Fleet, to have MOCs certified and proficient in command and control, information, intelligence, fires, movement and maneuver, protection, and sustainment functions by 2027.

Franchetti was fired in February by the Trump administration amid a broader removal of senior military leaders at the Pentagon in the early months of President Donald Trump’s second term. Adm. James Kilby has been performing the duties of CNO since then.

Navy leaders have identified AI as a tool that could help commanders and the MOCs.

“One area that can help in that is probably in the area of decision-making, in terms of whether it be AI or some other way of creating an advantage for the commander in terms of that OODA loop that [Pacific Fleet Commander] Adm. [Stephen] Koehler referred to, where we take all this tremendous amounts of data that we have and are able to fuse it quickly into a coherent picture that matches the commander’s timing and tempo and sequencing of events that needs to occur as he or she makes those decisions,” Vice Adm. Michael Vernazza, Naval Information Forces commander, said earlier this year at the WEST conference.

The latest outreach to industry from the Defense Innovation Unit comes via a new solicitation for the Situational Awareness by Intelligent Learning Systems, or SAILS, program.

“U.S. Navy assets generate vast amounts of multi-source tactical data from various platforms, including space-based, shipboard, and airborne assets, as well as unstructured data (intelligence reports, watch logs, etc.) produced by sailors. Currently, Maritime Operations Centers (MOCs) must manage and analyze large volumes of multi-source data generated across the fleet to make critical resource allocation decisions for geographically dispersed fleet and national assets,” DIU officials wrote in a problem statement.

“The Navy seeks commercial AI/ML applications that accelerate the convergence of MOC-destined data inputs (e.g. intelligence reports, satellite-derived data, and existing common operational picture tools, etc.) to improve situational awareness for operators, and optimize existing decision support tools by offering track confidence scoring and real-time recommendations to assist commanders in allocating geographically dispersed resources (e.g. satellites, aircraft, vessels, etc),” they added.

Desired attributes for the technologies include watchfloor workflow automation via connection to third-party software and data platforms through APIs to deliver models developed for MOC use cases; provision of models to generate track confidence scores and threshold-based alerts to end-users; generation of sensor and resource allocation recommendations that take into account communication bandwidth conditions, geographic constraints, sensor reliability, past model performance, watchstander availability and other information to inform MOC commanders of asset availability and readiness; and “natural language-based model tuning that allows MOC end-users to interactively adjust objective functions, factors, and constraints” while ensuring that the model’s decision-making process is “maximally interpretable and/or explainable,” among other characteristics.

Solutions should enable role-based access control and cross-domain data sharing, comply with NIST 800-171 cybersecurity controls, support deployment on government or contractor-provided infrastructure and allow for operations across different classification levels, among other technical attributes, according to the solicitation.

Industry responses to the solicitation are due June 6.

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Kickstarted by DIU in 2021, the HSA program is developing a space-based architecture that can rapidly deliver critical warfighting data by combining commercial-built technologies with military and civilian space assets. Companies contracted under the program will spend the next year prototyping their capabilities at multiple operational demonstrations to lay the foundation for an operational pilot architecture to be ready by 2026, according to DIU.

While HSA is being led by DIU, the Pentagon’s tech innovation arm is working closely with the Space Force, the Air Force Research Lab, combatant commands and other military organizations on the effort.

“Together with DIU we’re accelerating the integration of commercial capabilities through HSA demonstrations and pilot efforts to scale quickly into a resilient, multi-orbit architecture supporting the DoD’s vision for seamless, uninterrupted global communications. These efforts exemplify the power of whole-of-government and industry collaboration in delivering real-world capability at speed,” Lt. Col. Tim Trimailo, director of Space Systems Command’s Commercial Space Office (COMSO), said in a statement. Trimailo recently took the helm at COMSO following the departure of Col. Richard Kniseley in April.

The 12 new firms added to HSA include Capella Space, EdgeCortix, Eutelsat America Corp./OneWeb Technologies, Fairwinds Technologies/AST Space Mobile, Illumina Computing Group, Lockheed Martin, MapLarge, SES Government Solutions, Skycorp, SkyFi, Ursa Space Systems and Viasat.

DIU already had 12 companies working on the project after handing out initial contracts in 2022: Aalyria Technologies, Amazon Web Services, Amazon Kuiper, Anduril, Astranis Space, ATLAS Space Operations, Enveil, Google, Palantir, Planet Labs Federal, Microsoft and SpiderOak.

The upcoming prototype demonstrations will occur across U.S. Indo-Pacific Command, U.S. European Command, U.S. Central Command and U.S. Southern Command, DIU said in a news release. Specifically, the vendors will develop and demonstrate different technologies that enable space-based data collection, transport, processing and dissemination to various military units.

“The HSA network has the potential to increase network resilience by employing multi-path routing of communications to optimize data transport and mitigate adverse effects caused by weather or other obstructions,” the DIU release stated. “HSA seeks to integrate commercial persistent sensing, data fusion, high-performance edge compute and resilient data transport capabilities to significantly enhance real-time access to information.”

The HSA team is also preparing to activate a “live hybrid network for demonstrations, exercise support, and further integration of tactics and warfighting capabilities,” per the release.

Over the last few years, the Space Force has sought to take advantage of the rapidly growing commercial space industry as a way to incorporate the latest technologies and capabilities into its systems. The service’s 2024 Commercial Space Strategy calls for commercial solutions to be integrated into a “hybrid space architecture,” while also identifying seven mission areas where commercial capabilities are most beneficial.

“DIU’s ability to rapidly integrate and deliver a hybrid space network architecture is testament to its process of allowing commercial innovators to solve complex problems at speed and scale by applying their solutions to DOD’s problems,” Steve Butow, director of DIU’s space portfolio, said in a statement.

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In a press release and conversations over email, officials unveiled a new prize challenge for low-cost sensing technologies to enhance counter unmanned aerial systems and — in partnership with the Joint Counter-small UAS Office — a new solicitation for “low-collateral defeat options” that can be quickly integrated into existing C-sUAS programs of record across the joint force via the Replicator initiative.

“DIU’s low-cost sensing prize challenge combined with the LCD [solicitation] are a part of the overall strategic push to get after the toughest challenges and most pressing C-UAS problems identified by the warfighter,” David Payne, the unit’s C-UAS program manager, told DefenseScoop.

The new announcement marks the latest move associated with the Defense Department’s high-stakes — but hush-hush — Replicator effort. 

DOD leadership under the Biden administration established Replicator in August 2023 as a key military technology and procurement modernization initiative. At the time, it was billed as a strategic campaign to confront China’s massive, ongoing military buildup by incentivizing U.S. industrial production capacity and the DOD’s adoption of advanced warfare technologies en masse — through replicable processes — at a much faster pace than has been achieved before.

Tranches within the first capability focus area, Replicator-1, broadly encompass the purchase and making of loitering munitions and other technologies associated with all-domain autonomous systems. In September 2024, Pentagon officials revealed plans to prioritize the high-volume production of C-UAS capabilities through Replicator-2.

In DIU’s press release, officials wrote that Replicator aims to “deliver strategic capability and to build new innovative muscle for” DOD, and that the forthcoming solicitation aligns with the Trump administration’s recent executive order entitled “Modernizing Defense Acquisitions and Spurring Innovation in the Industrial Base.” 

The solicitation will be open for submissions from industry through May 16. 

Officials also noted that the call for LCD capabilities is envisioned to supply the military with the “most effective defeat options” for increasingly complex and custom-built drones — and also “help to minimize risk to friendly forces, civilians, and infrastructure in the homeland and abroad.”

“North America faces a variety of non-traditional threats, and key among these is the use of small uncrewed aircraft systems operating near installations and critical infrastructure — addressing these threats is a top priority and essential task,” NorthCom Commander Gen. Gregory Guillot said in the press release. “Partnering with DIU to employ low-collateral defeat capabilities is one example of how we are developing the forward-looking capabilities and policies necessary to ensure a seamless and well-coordinated defensive enterprise.”

The call for capabilities will also build on other ongoing DOD technology-enabling efforts, including collaborative work with the United Kingdom.

A DIU spokesperson told DefenseScoop that this is the first time the unit launched a bilateral commercial solutions opening where the U.K. government’s Ministry of Defence was involved from the start. They also confirmed that this effort “is very much part of the new U.K. Defence Innovation organization that will officially be stood up in July.” 

“This is both nations leveraging the commercial sector to develop novel technology to solve a defense requirement,” the spokesperson said.

Regarding the separate prize challenge that DIU is also posting Monday, the official said that it seeks “to enhance the DOD’s [C-UAS] capabilities while addressing cost and scalability limitations associated with traditional radars, optical sensors, and radio frequency detection systems.”

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U.S.-based drone companies AeroVironment and Dragoon, as well as U.S.-based software firms Swan and Auterion, were chosen to compete in the project called Artemis, DIU said in a news release. Notably, the two software companies are each partnering with separate unnamed Ukrainian drone manufacturers.

DIU initiated Artemis in response to a congressional mandate, which directed operational testing of low-cost loitering munitions that can fly in electromagnetic contested environments and be deployed in large numbers. The unit wants to have a successful prototype by the end of fiscal 2025.

“We are excited about the non-traditional companies who are providing low-cost, adaptable, long-range, UAS platforms with the potential to maximize operational flexibility for the Joint force,” Trent Emeneker, DIU’s Artemis program manager and contractor, said in a statement. “This was the intent of Congress’ direction to rethink how to get capabilities to the warfighter at speed and scale that can deliver much faster than traditional Programs of Record.”

After releasing a solicitation in October 2024, DIU and the Office of the Under Secretary of Defense for Acquisition and Sustainment evaluated 165 proposals from vendors, held flight demonstrations and then down-selected to four industry teams, according to DIU.

With contracts in place, “the next step is meeting an aggressive testing and integration schedule to complete prototyping and demonstrate success by the end of May 2025,” DIU stated in a release.

The solicitation called for one-way, ground-launched drones from commercial vendors with an operational range of 50 to 300 kilometers or more. DIU wants Artemis prototypes that can carry a 10-plus kilogram payload more than 50 kilometers, and are “capable of supporting high-speed, low-altitude, beyond line of sight flight operations in [disrupted, disconnected, intermittent, and low-bandwidth] environments,” according to the RFP. Ideally, the organization would like the drones to be able to carry a 25-plus kilogram payload upwards of 300 kilometers.

Officials emphasized the Artemis program is directly linked to emerging trends on modern battlefields. Throughout Russia’s full-scale invasion of Ukraine, inexpensive kamikaze drones from commercial vendors have provided warfighters on both sides with key capabilities. In the Middle East, Iranian-backed Houthis launched multiple complex attacks on U.S. Naval forces stationed in the Red Sea last year, as well.

“With Artemis, DIU and A&S are moving rapidly to provide an option for Services and Combatant Commands to choose from, delivered years in advance of current Program of Record timeframes,” DIU stated in a release.

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The two companies announced this week that they have progressed to the second phase of the Enterprise Test Vehicle (ETV) program, beating out Integrated Solutions for Systems and Leidos Dynetics for the follow-on agreement. The effort initially looked to create an inexpensive air vehicle to test new capabilities and subsystems, but now the ETV prototypes are expected to become the baseline architecture for a future palletized munitions platform.

The down-select follows an initial award in April 2024, when DIU announced it was partnering with the Air Force’s Armament Directorate on the ETV program and had awarded contracts to Anduril, Zone 5 Technologies, Leidos Dynetics and Integrated Solutions for Systems. 

The vendors were first tasked with developing and flying an air vehicle that featured an open systems architecture to enable subsystem integration, as well as proving industry could rapidly build and scale production of the platform, Steve Milano, director of Anduril’s strike and air dominance sector, told a group of reporters Monday on the sidelines of the annual AFA Warfare Symposium. Companies were also required to prioritize commercial off-the-shelf parts to reduce supply chain bottlenecks and keep the platforms affordable, according to DIU.

The next phase — expected to last around six months — is “intended to not just iterate on the existing design of that platform, but also demonstrate some of the network collaborative autonomy,” Milano said.

Anduril conducted a successful flight test of its offering for the program — the Barracuda-500 autonomous air vehicle — in September 2024, the company announced Tuesday. The test demonstrated a “successful vertical launch from a cell designed to emulate palletized employment from air-lift aircraft, autonomous navigation and flight for over 30 minutes, successful capture of a GPS coordinate target identified in Lattice and autonomous terminal guidance to the target,” according to a statement from Anduril.

Zone 5 Technologies’ ETV prototype is a system called Rusty Dagger Open Weapon Platform, which “has rapidly demonstrated mature system capability and quickly transitions towards scaled production and mission readiness,” the company said Wednesday in a statement. “Rusty Dagger has successfully performed end-to-end mission demonstrations, including palletized launch, pylon launch, long duration missions, and high accuracy terminal engagement.”

One mission set that DIU and the Air Force are eyeing for the ETV platform is the Franklin Affordable Mass Missile (FAMM) program, which seeks a palletized munition that can be deployed in large quantities via air drop from cargo aircraft.

Milano explained that once the second phase of the ETV program concludes, it will transition into “a formalized requirement to go after a capability set, and that capability set is answered by a program of record called FAMM.”

Anduril’s flight tests in 2025 will demonstrate simultaneous vertical launch of multiple Barracuda-500 vehicles, in-flight communications and how the company’s autonomy stack can enable collaborative autonomous flight, according to an Anduril press release. The company will also produce the air vehicles to prove out the platform’s ability to be rapidly and affordably manufactured, it noted.

The Air Force is also pursuing a separate effort to use the ETV platform for its Extended Range Attack Munition program, intended for foreign military sales to Ukraine, according to a report from Aviation Week. However, the status of the program is unknown due to the pause in military assistance to Kyiv. At the same time, the ETV program was selected for the Defense Department’s Replicator initiative, which aims to rapidly field thousands of small drones in the Indo-Pacific to counter China’s ongoing military buildup. 

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This update comes on the same day that the Government Accountability Office released a report that examines the Defense Innovation Unit’s effectiveness in identifying and fielding industry-built technologies at scale.

When DIU first launched in 2015, it was originally designed to help Defense Department components team with the commercial sector and harness cutting-edge tech at a faster and less costly rate than traditional government buying methods allowed at the time. The unit’s first phase, DIU 1.0, primarily focused on building a foundational bridge between DOD and the commercial tech sector. From there, the second phase was geared toward proving that the government’s innovation problems could be solved with private sector capabilities and prototyped quickly to meet military demands.

In February 2024, the unit’s chief Doug Beck publicly unveiled his team’s vision for “DIU 3.0”, the latest phase that places a sharp focus on scaling the organization’s efforts to help close the U.S. military’s most crucial capability gaps and support contemporary operations.

However, according to the findings in GAO’s 53-page congressionally mandated report, “DIU does not yet have clear insight into whether it is making progress to achieve its 3.0 strategic goal of helping DOD solve its most critical operational gaps.”

“This is because DIU does not have a complete performance management process to assess its results. In addition, DIU has not yet aligned the goals of NSIN and NSIC — DIU’s two new components — with the strategic goal for DIU 3.0,” officials wrote, using acronyms to refer to the National Security Innovation Network and National Security Innovation Capital.

NSIN and NSIC are mechanisms DIU uses to engage and support nontraditional defense partners. The two are being integrated and streamlined in the DIU 3.0 transition.

Watchdog officials conducted this performance audit from May 2023 to February 2025. Among a variety of steps to carry out the review, they reviewed heaps of documentation and guidance in the process, and analyzed DIU-provided data about prototype agreements awarded between fiscal 2016 and 2023.

“We met with a broad range of DIU and military department officials engaged in innovation efforts for the report. We had good dialog and helpful support from all,” GAO Director William Russell told DefenseScoop on Thursday.

This performance audit ultimately suggests that, although it’s been more than a year since DIU 3.0 was announced, the unit hasn’t set official standards or reporting measures to assess the workforce’s progress toward achieving this new strategic goal.

“The bottom line is DIU showed it can quickly prototype and deliver innovative commercial technologies to the warfighter under 2.0. As DIU focuses on 3.0 efforts to deliver technology at scale, setting performance goals and metrics can help its leaders better gauge progress and course correct as needed,” Russell said.

The organization’s timeline for that course correction was not immediately clear after the report was published, but Russell confirmed that “DIU and DOD agreed with all of the report’s recommendations and [GAO plans] to monitor efforts to implement them” moving forward.

A DIU spokesperson said over email that the unit’s leadership team welcomes GAO’s recommendations and “looks forward to meeting the new administration’s goals in providing new capabilities to the warfighter at both speed and scale.”

“Since the release of the DIU 3.0 strategy in late 2023, DIU has been implementing against the plan, formally integrating the NSIC and NSIN teams into a new Commercial Operations structure, embedding personnel into the Combatant Commands, re-evaluating current and future prototype projects in close partnership with the Services and other DoD components, establishing new bodies that help coordinate on DoD-wide innovation efforts like Replicator and the Defense Innovation Community of Entities that are designed to deliver critical capability fast while helping the Department build new muscle to do so again and again, and rethinking how we evaluate and measure successes on accelerating commercial technology into the DoD,” the spokesperson told DefenseScoop.

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DIU Director Doug Beck unveiled his updated strategic vision in early 2024 as a way to address a number of challenges that have kept the organization from accelerating the Defense Department’s adoption of dual-use, commercial technologies. A significant part of the new vision focused on both growing DIU and improving its ability to work with the commercial sector, Liz Young McNally, the organization’s deputy director for commercial operations, told DefenseScoop.

Hired in April 2024 to spearhead the unit’s collaboration with the commercial sector and investment community, McNally has spent the last several months integrating different components within DIU into a more unified commercial ops center while also helping the organization build out its regional infrastructure.

“DIU has folks all across the country helping to galvanize the defense innovation ecosystem,” she said in a recent interview. “We have onramp hubs, we have individuals — both government and contractor — bringing in talent, new companies [and] new technology into the department.”

Although the organization is still working to synchronize all relevant components into a single commercial operations center, McNally said DIU is already seeing improvements to how it brings new companies into the Pentagon ecosystem.

“I think now we’re in an even better position to focus on what the big rocks are, which are really around how do we lower the barriers for entry and … what are all the things that we can do to help make it easier to work with the department,” she told DefenseScoop.

For decades, Pentagon bureaucracy has been an obstacle for non-traditional contractors wanting to do business with the department — a phenomenon DIU and others are trying to remediate as commercial technology advances at a rapid pace.

McNally noted that while funding uncertainties have historically served as a barrier to entry, new entrants are also worried about other bureaucratic hurdles such as cyber resiliency, security clearances and the cumbersome authorization-to-operate (ATO) process. Addressing those specific challenges will be a focal point for the unit in 2025, she added.

“There’s so much chicken and egg for a lot of those in terms of when did the company work on them,” McNally said. “We’re in the process of, in the new year, launching some various efforts to pilot, in terms of what we can do even more to help our DIU portfolio companies in those different areas, using some of the [Defense Innovation Community of Entities] funding in the budget to do so.”

As it launches those pilots, McNally said her organization is taking lessons learned from working with some of the smaller companies on the Replicator initiative — an initiative that seeks to field thousands of advanced autonomous systems by August 2025. A future effort will allow the organization to aid those non-traditional defense companies in assessing their cyber resilience, she said.

“I think DIU just has more of a commercial lens to it than other parts of the department,” McNally told DefenseScoop “So when we do those assessments and help companies to think about what types of remediation they are going to do, quite frankly it feels different than when other parts of the department do it.”

The cultural difference between the commercial sector and the sprawling DOD is another barrier McNally pointed to as an area DIU will be tackling this year. For new entrants, the Pentagon is a large and opaque organization to try and navigate, and her organization wants to increase transparency to help companies know where to focus their investments and technology development, she noted.

It’s a task that requires change from both the top- and bottom-levels of the entire ecosystem, McNally said.

“By actually working together, you’re starting to evolve things as well so that there’s the top-down change,” she said. “But then ultimately, it’s starting work with those different program offices and starting to do the work that we’re doing at [Immersive Commercial Acquisition Program] offices and with the [Defense Acquisition University] and others to evolve that.”

Moving forward, a big focus will be on aligning the Pentagon’s most critical capability gaps with where the venture capitalist community is making investments. While some technologies — like AI and autonomy — are readily being funded, others that are more hardware-intensive currently don’t have as much private capital flowing in, she explained.

“Maybe there will be a window going forward to continue to think about what are the right incentives and other changes we have to make to ensure that we have enough private capital, [and] thinking about those other areas as well,” McNally said.

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“For better or worse, the [Defense Department] has never been very good at batteries. We do bespoke, one-off batteries, historically — and we’re trying to change that,” DIU’s energy portfolio director Andrew Higier told a small group of reporters last week.

While Defense Secretary Lloyd Austin was in closed-door meetings with DIU’s chief Doug Beck at the innovation hub’s Silicon Valley headquarters, Higier and other technology-driving portfolio leads briefed DefenseScoop and other journalists about some of their latest progress and pursuits to grow the military’s arsenal of more easily adoptable, industry-produced capabilities. 

The energy portfolio is around two years old and is considered one of DIU’s largest. According to Higier, its efforts are expanding at a rapid pace.

“From a high-level perspective, it’s kind of what the name suggests — making sure that our bases across the world can operate effectively no matter what, and whether it be [in], manmade or not, disasters” or other scenarios, he explained.

The portfolio broadly covers projects that range from large-scale energy storage to unique forms of power and communications generation, as well as approaches to demand reduction.

“In contested environments, the ability to reduce the amount of fuel needed is very important. You only have to look back at [conflicts in] Iraq and Afghanistan to see that the fuel supply runs were one of the most dangerous things that were happening during that time. So, we have a lot of programs looking at how we can reduce the demand of fuel, [and] therefore reduce the amount of fuel needed to move across the battlefield,” Higier said.

“But what is new is I have created, now, an entire line of effort in the portfolio that is specific to this battery program because it has grown so big,” he added.

The team is introducing a few modifications to how the program operates and is structured. On par with how other DIU projects function, the team is also making new and different moves to harness what Higier said is the U.S. commercial sector’s $100 billion lithium ion battery industry.

“We’re working on leveraging that in a number of ways, both in terms of vehicles and leveraging the best-of-breed from the vehicle market. But there are also a number of form factors that the warfighter uses that are specific to the warfighter — and those are not going to change — so we have a number of vendors on contract to put the best lithium ion batteries in these form factors that you see here, everything from being worn by the warfighter to going in vehicles,” Higier told reporters as he pointed to an image on his presentation slide.

Most recently, he noted, his team has extended “this really big battery program” to partner more closely with the Navy and deploy some of the batteries DIU is accelerating on some of its ships.

“That program is now underway. That’s the DDG 1000,” Higier said, pointing to one of the U.S. Navy’s most advanced surface combatant warships.

“It’s an electric ship. The gun is going to be removed off that ship, and they were going to fill it with ballast — literally dead weight. And they came to us and said, ‘How about instead of ballast, we put a giant battery on here to make the ship more efficient, more effective?’ And we said, ‘Absolutely, we have a vendor on contract to do that.’ [It was] very rapid, actually — one of our fastest projects, from solicitation to award,” the portfolio lead said.

In response to questions from DefenseScoop, he confirmed that part of the unit’s consideration in expanding the battery line of effort into an individual program involved the dire need to grow the United States’ domestic battery manufacturing capacity, as China currently dominates the production of every component of battery cells and the upstream supply chain.

“That’s actually one of the biggest influences on this,” Higier said.

“This is in partnership with industrial base policy [officials]. And the biggest issue we’re facing right now is batteries that are made by the [People’s Republic of China] and the ability to operate our platforms with batteries that come from either onshore or allied partners. So, all the vendors we have on contract are either here in the U.S. or Canada, Australia, I think one in the U.K. So that’s a big part of what we do. And it’s also focused on trying to actually build that industrial base,” he told DefenseScoop. 

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