RDT&E money helps fund next-generation capabilities for the U.S. military in many critical technology areas such as trusted AI and autonomy; space; integrated sensing and cyber; integrated network systems of systems; renewable energy generation and storage; microelectronics; human-machine interfaces; advanced materials; directed energy; advanced computing and software; hypersonics; biotech; quantum; and wireless tech (FutureG), among others.

The Full-Year Continuing Appropriations and Extensions Act of 2025 was signed into law Saturday by President Donald Trump after the House and Senate passed the bill last week. Prior to that, the federal government had been operating under temporary continuing resolutions.

The legislation, which funds the government through the remainder of the fiscal year, sets spending levels for Pentagon RDT&E accounts in 2025 at about $141 billion — approximately $2 billion less than the Biden administration had requested and $7 billion less than the department received for those activities in fiscal 2024.

The Army’s share of the RDT&E funding is approximately $14.3 billion, the Navy’s $26 billion, the Air Force’s $46.8 billion and the Space Force’s $18.6 billion. Defensewide RDT&E accounts will get $35.2 billion, and nearly $350 million will go toward operational test and evaluation, according to the legislation.

The Pentagon’s RDT&E funding is about 15 percent of the $892.5 billion topline for national defense that Congress just approved for fiscal 2025.

In recent years, “DOD has consistently started the fiscal year under a CR, which typically extends funding for programs at the level appropriated in the previous fiscal year and does not fund ‘new start’ programs,” Seamus Daniels, a fellow for defense budget analysis at the Center for Strategic and International Studies, wrote last week before the Senate approved the appropriations bill that had been passed by the House.

“However, DOD has never operated for a complete fiscal year under a CR. The House bill calls for a full-year CR but outlines unique provisions for defense spending not typical under a standard CR. It specifies amounts for defense appropriations accounts for FY 2025, adjusting funding above or below FY 2024 levels, and provides DOD with significantly greater flexibility to spend those funds than it would typically have under a CR,” he added.

Unlike typical CRs that generally prohibit “new starts,” the bill that Congress passed last week provides authorities for the DOD to initiate new programs if they meet certain requirements, according to a summary of the legislation.

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Quantum computing and information science marks a still-emerging and likely disruptive field that applies the laws of physics and complicated phenomena happening at atomic and subatomic levels to store, measure and move information. 

Backed by Congress, U.S. national security agencies have been increasingly prioritizing quantum-enabling activities and funding in recent years to prepare for associated technological transformation that might be on the horizon.

Mace, R-S.C., is introducing an amendment to the Defense Department’s appropriations bill for fiscal 2025 to increase funding by $20 million to the Army research, development, test and evaluation account to enable a new DOD Quantum Computing Center of Excellence.

That investment would be “offset by a decrease to Defense-Wide Operations and Maintenance,” an official from her office confirmed.

In May, DefenseScoop reported that the House Armed Services Subcommittee on Cyber Innovative Technologies, and Information Systems (CITI) submitted a provision in the fiscal 2025 Servicemember Quality of Life Improvement and National Defense Authorization Act for a one-stop, military-focused quantum Center of Excellence.

Such hubs, also referred to as COEs, are typically embedded within federal agencies to foster and coordinate innovation or modernization around a specific, often technology-related, topic of interest. 

CITI’s original proposal — calling for a center to be established at a “research laboratory of a covered Armed Force with requisite experience in quantum computing integrated photonics and photon qubits, superconducting and hybrid systems, and trapped ions” — made it into the House’s recently passed version of the NDAA for fiscal 2025.

The Senate has not yet passed its version of the NDAA, which will need to be reconciled with the House version before becoming law.

While Mace’s new amendment to the separate appropriations bill for the same fiscal year could drive further momentum for the creation of a new quantum COE, it would also explicitly involve the Army in the envisioned effort.

“By increasing funding for the Army RDT&E account to create a Department of Defense Quantum Computing Center of Excellence, we are committing to a future where America leads in quantum innovation. This strategic investment will give our military a decisive technological advantage, fortifying our national security against emerging global threats and keeping us ahead in the race against adversaries like China,” the official on her team told DefenseScoop.

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A fiscal 2025 defense appropriations bill, which is scheduled to be marked up Wednesday by the House Appropriations Defense Subcommittee, would provide $833 billion in total discretionary funding for the department, including more than $1.3 billion for DIU and “select Defense-Wide innovation efforts to deliver capabilities from nontraditional sources, including small and medium-sized businesses,” according to a summary of the legislation.

DIU, which is headquartered in Silicon Valley and has offices in other commercial tech hubs around the United States, works to bring additional vendors into the DOD’s innovation ecosystem. Under Director Doug Beck, the unit has embedded personnel at key combatant commands and launched “DIU 3.0,” with the goal of scaling technologies more broadly across the military.

The organization is also supporting the Pentagon’s Replicator initiative, which aims to field thousands of “attritable autonomous” systems across multiple domains by August 2025 to help the U.S. armed forces counter China’s military buildup.

The appropriations bill released Tuesday includes a $220 million funding increase for DIU’s fielding of capabilities aimed at “addressing the most pressing combatant commander priorities,” and a $240 million boost for DIU’s fielding of technologies with programming commitments from the military services, according to the summary.

It calls for an additional $45 million for a classified facility expansion that would allow for “early digital runs” of new technologies and help obtain clearances for commercial companies and non-traditional defense sources.

Lawmakers want to “increase flexibility for DIU Fielding in exchange for greater transparency with Congress,” according to the summary of the bill.

The approximately $900 million in total funding for DIU would be a major bump over the Pentagon’s fiscal 2025 request, which called for only $110 million for the unit.

This is another example of lawmakers trying to provide much more money to the organization than the Defense Department sought. For fiscal 2024, lawmakers appropriated $946 million for DIU, which was $842 million above its budget request.

The legislation would also provide $400 million for the department’s APFIT program to help bridge the so-called valley of death in the acquisition system and “transition cutting-edge capabilities to the warfighter in an accelerated timeline,” according to the summary. The term “valley of death,” in DOD parlance, refers to the inability to transfer promising tech from research and development into large-scale production and fielding.

Congress allocated $300 million for APFIT in fiscal 2024.

“The benefits of this pilot program will be to deliver war-winning capability earlier than scheduled, while contributing to the viability of small business and nontraditional defense contractor vendors,” the Pentagon said in an April release about the effort.

Meanwhile, House appropriators are proposing $126 million for the Office of Strategic Capital, which aims to connect companies developing tech in support of national security with organizations that can help fund and sustain their growth long enough to reach wider production.

Separately, $732 million would go toward accelerating the department’s “digital transformation of business practices” through the Chief Digital and AI Office (CDAO).

The CDAO intends to proliferate artificial intelligence and other digital tools across the department, from back offices to warfighters at the tactical edge. It’s playing a key role in the Pentagon’s Combined Joint All-Domain Command and Control (CJADC2) initiative, which aims to better connect the platforms, sensors and data streams of the U.S. military and key international partners to improve decision-making, operational effectiveness and efficiency.

“In a resource- and time-constrained environment, my top priority for the Fiscal Year 2025 Defense Appropriations Bill is to strengthen our military’s position against any threat presented by China. To accomplish this, I have once again increased investments in programs that fuel and field innovative technologies, including the Defense Innovation Unit (DIU) and the Accelerate the Procurement and Fielding of Innovative Technologies (APFIT) initiative,” House Appropriations Defense Subcommittee Chairman Ken Calvert, R-Calif., said in a statement.

The defense appropriations bill has to clear many hurdles before becoming law, including passage by the House Appropriations Committee and the full House. The House version must also be reconciled with the Senate version through a conference process, and the reconciled version must be approved by both chambers of Congress and signed by the president.

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Heidi Shyu, undersecretary of defense for research and engineering, has identified 14 “critical technology areas” that she is prioritizing, including trusted AI and autonomy, space, integrated sensing and cyber, integrated network systems of systems, renewable energy generation and storage, and microelectronics. They also include human-machine interface, advanced materials, directed energy, advanced computing and software, hypersonics, biotech, quantum, and 5G/FutureG.

Although S&T funding for budget activities 6.1 basic research, 6.2 applied research and 6.3 advanced technology development only account for about 2% of the Pentagon’s overall budget, it’s considered critical for military modernization because it lays the seed corn for next-generation capabilities.

Of the $17.2 billion that the Pentagon has requested for these budget activities in fiscal 2025, 98% would be divided among those 14 critical tech areas, according to Shyu’s slide presentation during a webinar hosted by NDIA’s Emerging Technologies Institute on Tuesday.

“If you see where the bulk of our funding is going … the biggest bar chart is trusted AI and autonomy. So that’s not going to be surprising. The second area that we found a lot of money in is in the space technology arena. The third piece is the integrators sensing and cyber … Those three categories of areas we’re funding composed about 65% of our S&T budget,” Shyu noted.

The proposal includes about $4.9 billion for trusted AI and autonomy, $4.3 billion for space, and $1.9 billion for integrated sensing and cyber.

Additionally, it includes $1.6 billion for integrated network system of system, $1.5 billion for renewable energy generation and storage, $515 million for microelectronics, $458 million for human-machine interface, $414 for advanced materials, $355 million for directed energy, $333 million for advanced computing and software, $242 million for hypersonics, $224 million for biotech, $76 million for quantum, and $38 million for 5G/FutureG.

The majority of that — approximately $9 billion — is for advanced tech development, with $5.8 billion and $2.5 billion slated for applied research and basic research, respectively.

Among DOD components, about $8.3 billion would go toward “Defense-wide” agencies not aligned with the services — also known as the Fourth Estate — such as the Defense Advanced Research Projects Agency, Defense Innovation Unit, Strategic Capabilities Office, Missile Defense Agency, and other agencies and field activities under the Office of the Secretary of Defense, according to Shyu’s slides.

Among the services, the Army would receive about $2.8 billion, the Air Force $2.7 billion, the Navy $2.5 billion and the Space Force $840 million.

The total S&T funding request for fiscal 2025 is 3.4% lower than the 2024 request, per Shyu’s slides.

Shyu noted the importance of technology transition from the S&T enterprise as the U.S. aims to field new capabilities at scale.

A total of 105 projects in critical technology areas were transitioned in fiscal 2023, with trusted AI and autonomy topping the list at 30, according to the Pentagon CTO.

There are several potential transition pathways, she noted.

“The most typical way that people think about is transitioning into a program of record. Right. So that’s the one pathway. However, it could be a piece of software that we’re delivering capability to upgrade a capability that’s already been fielded. So that’s a different way of fielding a new capability. The other way could very well be, we have developed a technology, the technology is being utilized by a DOD prime or commercial company, [and] we then end up procuring that technology. And the fourth way is we’ve transitioned technology for the DOD [and] it could be used by another government agency,” she explained.

She highlighted the Rapid Defense Experimentation Reserve (RDER) and the Accelerate the Procurement and Fielding of Innovative Technologies (APFIT) programs as examples of initiatives aimed at helping transition promising warfighting capabilities into production.

Several RDER-related technologies are on track to move into production, according to Shyu.

“We have developed some capabilities as part of … the RDER activities. Once we develop it and its mature and the services say, ‘We really would like to have it,’ there are ways that we can just put it right onto the [General Services Administration] schedule and literally a service that wants to procure it just can buy it outright. So it doesn’t have to go through a long procurement process into a program of record,” she explained.

In April, the Pentagon announced the latest tranche of APFIT projects to receive funding, geared toward small and nontraditional contractors. To date, the department has funded 38 companies via the initiative, Shyu said Tuesday.

“We’re helping to fund small companies to get into low-rate initial production. This is helping them to bridge the valley of death that they typically face from [budget activity] 6.3 to get into 6.4 and into-low rate industrial production,” she said, noting that technologies from the first tranche are being fielded by the services and the combatant commands.

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A commission on reforming defense planning, programming, budgeting and execution recently delivered its final report to Congress, a nearly 400-page document that recommends a slew of changes in these areas.

“We are thinking … very seriously about that. The PPBE panel was extremely well done, the report was excellent,” Sen. Jack Reed, D-R.I., told reporters Monday during a Defense Writers Group meeting. “Frankly, we have been trying to reform the acquisition and budget system of the Department of Defense since I got here, and we make incremental progress. But we’re recognizing now that time is really not on our side, that we have to move much more aggressively. We have to be more responsive and flexible. And so … you’ll see a much more keener interest in trying to streamline how DOD develops and acquires equipment, how they deal with these new emerging technologies, which are changing so quickly. So we’re really interested in moving forward with significant reforms.”

On Wednesday, the Senate Armed Services Committee will be holding a hearing with leaders of the PPBE commission to discuss their findings and recommendations.

“The U.S. risks losing more of its already diminishing technological edge without immediate transformational changes in resourcing, especially in the year of execution. The Commission’s recommendations include much-needed changes to the period of availability of funds, account structures, reprogramming processes, and data sharing with Congress. These reforms also leverage modern business systems and data analytics to better manage resourcing and communications,” the report stated.

“One of the most consistent concerns the Commission heard over the past two years is that the current PPBE process lacks agility, limiting the Department’s ability to respond quickly and effectively to evolving threats, unanticipated events, and emerging technological opportunities,” it noted.

The panel’s recommendations for changes to help foster innovation and adaptability include allowing new-start programs and increased program quantities in certain cases when the Pentagon is operating continuing resolutions.

“The CRs generally include a provision prohibiting new start activities, which can slow efforts to insert innovative technology in both new and current programs,” the report noted.

The commission also called for increasing the availability of operating funds and raising dollar amount thresholds for so-called below threshold reprogramming (BTR), among other recommendations.

“Ultimately the Commission proposes eliminating BTRs and allowing a small percentage of an entire appropriation to be realigned with appropriate congressional briefings and oversight,” per the report.

Reed did not identify which of the recommended reforms he wants to implement, but he said including some of them will be a top priority when his committee takes up work on drafting the fiscal 2025 National Defense Authorization Act.  

The SASC wants to move forward in its quest to streamline the acquisition process and enable promising capabilities and technologies to cross the so-called “valley of death” between research and development and large-scale production, he said.

Reed noted that he’s visited Ukraine and seen how Ukrainian forces have been able to quickly adapt commercial, dual-use technologies for military purposes in their fight against Russian invaders.

“We have to have the same type of resiliency. So that’s one thing we want,” he said.

Tech from the commercial sector, such as artificial intelligence and cyber capabilities, can help fuel military modernization in areas such as robotics. However, current budgeting and execution processes don’t give the Pentagon sufficient agility in adopting them, the PPBE commission said.

Meanwhile, the department last week submitted its fiscal 2025 budget request to Congress, which lays out plans for its modernization programs.

On Monday, Reed was asked to comment on the budget submission.

“Every budget is a work in progress. And we’re going to look very carefully at what the services need. We’re particularly waiting for their unfunded priority list so we can take a look at them. And then we’re going to make judgments, some of them independent of the administration’s proposal. But generally, I believe the … proposal sent out was thoughtful. It emphasized the need for innovation and it put pressure on the Congress to retire some systems that are no longer as functional as necessary. And we have to take our [legislative] responsibility too. And so I think we’re in a good position to begin this debate and get it done — hopefully this year, not next year,” he said.

Pentagon officials suggested that the DOD trimmed some of its requests for research, development, test and evaluation efforts — such as the Rapid Defense Experimentation Reserve — due to budget caps stemming from the 2023 Fiscal Responsibility Act.

“The Fiscal Responsibility Act (FRA) caps are mandatory and, if disregarded or exceeded, would be enforced by sequestration. Understanding those fiscal constraints, the Department made responsible choices to prioritize readiness and take care of people but make targeted reductions to programs that will not deliver capability to the force until the 2030s, preserving and enhancing the Joint Force’s ability to fight and win in the near term,” a DOD spokesperson said in an email to DefenseScoop.

Reed was asked how politically feasible it would be to lift the FRA caps, which set limits for defense and non-defense discretionary spending that vary depending on whether Congress passes full-year appropriations bills or CRs.

“We’re stuck with them right now. And it was really a quid pro quo for saving the country from an economic collapse if we hadn’t increased the debt ceiling. And now, it’s somewhat ironic that many of the folks that were insisting on that are now saying that the ceiling is terrible,” Reed said.

He noted that funding for border security has been one of the major sticking points in recent budget negotiations.

However, Reed suggested that he sees a potential opportunity to reach a deal on increasing spending for the Pentagon and other agencies in the future.

“I think what could drive an increase is recognizing that our national security is not simply the DOD budget, that there are other aspects [such as] our research in the sciences, our education activity, or health care activities,” he said.

“To me, one of the recruiting problems we’ve had in the military is because some young people would like to serve, but their education is such they can’t pass this very straightforward test to get in. That’s the reflection of our education system, not the military. We have a problem with obesity in our country that reflects on our public health care system. But if we had more fit young people, we’d have more recruits. So this is all one effort,” he added. “If there is a breakthrough, I think we would have to recognize, too, both sides of the agenda — both the defense and also domestic.”

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The two initiatives fall under the service’s space access, mobility and logistics (SAML) portfolio, which in total is requesting $20 million in research, development, test and evaluation funds in FY ’25.

According to the Space Force’s budget justification documents, the focus of the program through 2026 will be to “establish the foundational capability areas through RDT&E, technology demonstrations, operational integration and fielding of Point to Point Delivery (P2PD) services and on-orbit mobility services, to include refueling.”

The service wants $16 million for work on in-orbit servicing and refueling technology, budget documents show.

Leaders at U.S. Space Command have stated they want to be able to refuel and repair the military’s satellites from space — something that is either incredibly difficult or impossible to accomplish today — in order to conduct “dynamic space operations.”

In response to Spacecom’s demand signal, the Space Force stood up a servicing, mobility and logistics (SML) program office at Space Systems Command in September. Since then, the office has been advocating for sustained funding and planning efforts for space logistics capabilities, particularly those related to satellite refueling.

During a Defense One webinar broadcasted Tuesday, Chief of Space Operations Gen. Chance Saltzman said the investments toward on-orbit refueling represented a key new mission set for the service.

“For the first time, we’re starting to invest small amounts … in demonstrations and capabilities to start to explore what you would need on orbit to be able to service and maintain satellites. This gives us some opportunities to explore dynamic maneuvering and maneuver without regret” of using up too much fuel, Saltzman said. “These are things that will make our satellites harder to target and more defensible, and so we’re starting that investment process to see how that mission set would play out.

Notably, the Space Force wants to exploit commercial capabilities that are already operational, budget documents show. Industry has repeatedly called on the service to provide a clear demand signal — as well as critical funding — for the new-ish commercial space logistics sector that can serve as the foundation for the market’s growth.

The effort “will maintain connectivity to the burgeoning commercial market to capitalize on industry advancement to qualify and onboard additional on-orbit capabilities as they mature,” justification books state. “As an ‘anchor tenant’ this may include providing last-mile development funding for government purpose modifications, demonstrations, landscape assessments and architecture development.”

Meanwhile, the Air Force Research Lab’s experimental Rocket Cargo Vanguard program is now moving to the Space Force under a new name: Point-to-Point Delivery (P2PD). The service is requesting $4 million in fiscal 2025 for the brand new program to leverage research conducted by AFRL and transition the capability to the Space Force.

The goal of the Rocket Cargo concept is to use commercially available rockets to quickly launch military supplies from one point on Earth to another. The program has been an AFRL Vanguard since 2021, and since then research has focused on how to safely land rockets on non-traditional surfaces both near structures and in remote locations; engineer a rocket cargo bay and logistics for rapid loading and unloading; and airdrop supplies from rockets after they’ve launched in order to deliver them to austere environments. 

Funding in fiscal 2025 will “support the detailed engineering design necessary for a P2PD service provider to perform airdrop payload delivery,” according to justification books. In the long term, the Space Force wants P2PD to support U.S. Transportation Command’s resupply missions, the documents state.

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“Beginning in FY 2025, Program Element funding was realigned under four new project codes to correctly align PE funding in support of [CDAO] priorities,” the materials state. 

Although the office’s overarching goals have not changed, this shift essentially means that all prior year CDAO funding project codes will not continue after fiscal 2024. It marks a move to refocus funding mechanisms and “provide traceability to the current priorities of the CDAO,” according to the documents.

The data and AI hub’s new project codes and associated fiscal 2025 requested base amounts are as follows:

• PE 0604122D8Z JADC2 Development and Experimentation Activities — $223 million 
• PE 0604123D8Z CDAO Demonstration and Validation Activities — $372 million 
• PE 0604133D8Z Alpha-1 Development Activities — $54 million
• PE 0606135D8Z CDAO Activities — $9 million

The CDAO was formed in late 2021, when four legacy Pentagon teams — the Joint Artificial Intelligence Center (JAIC), Defense Digital Service (DDS), Office of the Chief Data Officer, and the Advana program — were restructured and combined into one hub to better coordinate and accelerate AI adoption.  

The JAIC was the main mechanism that helped steer the making and implementation of the pioneering Defense Department AI initiative previously dubbed Project Maven. 

With roots tracing back to early 2017, that initiative was designed to enable the military to apply computer vision — or capabilities that autonomously detect, tag and track objects or humans of interest from still images or videos captured by surveillance aircraft, satellites and other means.

In 2022, Project Maven evolved into Maven via the kickoff of a major — and still ongoing — transition that was initially billed as splitting the responsibilities for some of its elements between the National Geospatial-Intelligence Agency (NGA) and the CDAO, while sending its oversight to the Office of the Undersecretary of Defense for Intelligence and Security.

However, officials from each of those entities have been largely hush-hush about pretty much all information regarding Maven and how it’s envisioned to operate since then and moving forward.

Notably, fiscal 2025 budget documents for the CDAO reveal that Maven-associated funding is now realigned under a new AI/ML Scaffolding-related project code under “PE 0606135D8Z CDAO Activities.”

“This funding is assigned to support algorithm development, data preparation, and integration experimentation to create joint DOD and [Intelligence Community] capabilities,” officials wrote.

In response to questions from DefenseScoop on Wednesday, Deputy CDAO Margie Palmieri explained that in the president’s budget request for fiscal 2024, Maven tasks existed under a different code that is “no longer under CDAO in [fiscal 2025] as we are transferring them to other organizations with direct equity to guide further development.”

She also confirmed that the CDAO has passed the entire Maven “AI development pipeline” over to NGA.

“Computer vision is one of the most advanced areas where you can deliver AI, and for them to have that entire computer vision pipeline made a lot of sense. But the concept of that pipeline is also important to the Department of Defense in terms of how we develop our AI capabilities. So the algorithmic warfare division [and CDAO leadership] are thinking through — how do we make sure that the right scaffold is in place?” Palmieri said. 

“Project Maven created one of the first AI/ML development pipelines within the DOD and enables Maven to deliver, test, and deploy models rapidly. This pipeline was designed to support Project Maven’s use cases and their unique requirements. We are incorporating many of the lessons, capabilities, and tools pioneered by Project Maven into the larger enterprise offering CDAO is building under AI/ML Scaffolding,” she added.  

As a key component of the Intelligence Community, the NGA’s budget is classified.

“NGA has lead on the GEOINT lines of effort for Maven, which is roughly 80% of the original program,” a spokesperson told DefenseScoop on Tuesday.

The agency received the GEOINT portions of Maven from the Office of the Undersecretary of Defense for Intelligence and Security — not the CDAO.

“The AI pipeline we inherited is a full-stack, end to end AI development capability at scale, which includes data labeling, data management, infrastructure, test and evaluation, repositories, and a platform to run the model. We’re continuing the work started at OUSD(I&S) with NGA Maven and are integrating our GEOINT capabilities into the platform and delivering custom-tailored, AI-enabled solutions to end users across the globe,” the spokesperson told DefenseScoop.

“But we still can’t really discuss budget details, current or future,” they added.

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The request is 8.5 percent less than the $4.7 billion that the agency asked for in fiscal 2024, marking a shift from the steady increase in funding SDA has received each year since it was founded in 2019. At press time, Congress has not passed a full-year 2024 appropriations bill and the Defense Department is operating under a continuing resolution.

The Space Development Agency is in charge of fielding a constellation of satellites in low-Earth orbit (LEO) known as the Proliferated Warfighter Space Architecture (PWSA). The agency launched the first demonstration satellites in 2023 and wants to begin fielding operational space vehicles in two-year increments — referred to as tranches — beginning in late 2024. 

Recently published budget justification books show that SDA is moving away from development needed for Tranche 1 and is now focusing on production and delivery of the payloads. The agency also wants to ramp up work on Tranche 2, supporting ground infrastructure and battle management software, all while initiating work on Tranche 3.

According to a funding chart provided by SDA, most of the budget request is for research and development — around $3.9 billion, in total. The organization is also looking to buy four space launches for $357 million in fiscal 2025, which is less than the $529 million it asked for in FY ’24 to cover five launches. Rounding out the request is $56 million for operation and maintenance, per the budget documents.

Transport layer

SDA is asking for $1.4 billion in FY ’25 for its transport layer, which will carry data relay and communications capabilities and serve as the foundation for the Pentagon’s Joint All-Domain Command and Control (JADC2) warfighting concept. The agency plans to kick off acquisition for the Tranche 3 transport layer in fiscal 2025, with plans to award the first contracts by the end of the fiscal year, according to budget justification documents. 

The agency is asking for less this year than it did in fiscal 2024, mainly due to the Tranche 1 tracking layer systems moving from development and into production ahead of their launch in late 2024, budget documents state.

The Tranche 2 transport layer will also continue development through FY ’25 to prepare for launch beginning in 2027. The layer will be made up of three different satellite variants — dubbed Alpha, Beta and Gamma — that each have slightly different capabilities. 

SDA has already tapped Lockheed Martin and Northrop Grumman for the Beta variant, while York Space Systems and Northrop Grumman have been contracted for the Alphas. According to the budget request, the agency will award one more contract for Beta satellites and those for the Gamma variants, in fiscal 2024.

According to the justification documents, an additional $153.7 million will go towards building out the needed ground infrastructure and network capabilities for the PWSA’s growth, as well as developing and expanding the Battle Management Command, Control, and Communications (BMC3) Application Factory.

The budget request also includes a separate line that covers risk reduction, analyses, modeling and simulation, and technology maturation efforts for future PWSA tranches. That request — $425.2 million in FY ’25, which is less than the $472.6 million asked for last year — is dedicated to development of an “increasingly broad set of technologies (including alternative navigation solutions, advanced missile tracking, multi-INT fusion algorithms, integrated battle management algorithms, and next generation tactical data links),” the justification book said.

Not only does the money cover some work related to all planned tranches of transport satellites, it also funds some of the ground operations, SDA’s two experimental communications satellite programs, its National Defense Space Architecture Experimental Testbed (NExT) initiative and the PWSA Future Programs effort — which is integral to the agency’s plans to offer fire control capabilities.

However, budget documents state that funding was lowered in FY ’25 “due to realignment for higher U.S. Space Force priorities.” When asked to comment on the priority realignment, the Space Development Agency referred DefenseScoop to the Department of the Air Force, which did not immediately respond to inquiries.

During a meeting with reporters Friday prior to the official budget rollout, Secretary of the Air Force Frank Kendall said that both the Air and Space Forces modernization efforts were constrained by the Fiscal Responsibility Act, which caps defense spending in fiscal 2024 and fiscal 2025. For the Space Force’s budget — a majority of which is RDT&E funding — that meant having to make some “hard choices” about its priorities, he said.

“The net effects of the constraints that we have are that we’re not moving forward as fast as I’d like to in space, but we’re still moving forward,” Kendall said.

Tracking layer

The agency is asking for a little over $1.7 billion in R&D money in FY ’25 to fund the PWSA’s tracking layer of satellites that will be able to detect and track missile threats, as well as work on future fire-control capabilities. 

Creating a multi-orbit, proliferated space architecture of missile warning and tracking satellites is a top priority for the Space Force in its 2025 budget, with the lion’s share of the service’s request for research-and-development funds being allocated to programs that cover all orbital regimes.

The fiscal 2025 request is more than the $1.2 billion the agency asked for in FY ’24 for its missile warning and tracking efforts, which “reflects significant increase in Tranche 2 activities for space vehicle development, delivery, and test,” budget justification documents stated.

The agency is currently planning to launch 54 satellites for its Tranche 2 tracking layer, 48 of which will be for global warning and tracking missions and six that will offer preliminary fire control and missile defense capabilities. SDA awarded L3Harris, Lockheed Martin and Sierra Space contracts in January to build and deliver the payloads.

SDA plans to complete preliminary design review and critical design reviews of the space vehicles, initiate production and conduct other work on Tranche 2, which is scheduled to launch by April 2027. 

As for the Tranche 1 tracking layer, SDA will wrap up development and launch the birds into space beginning in April 2025. Money in fiscal 2025 will also be used to define the requirements and begin soliciting the Tranche 3 tracking layer, according to budget documents.

The request also outlines plans for its next-generation missile tracking and fire control satellites, the Fire-control On Orbit-support-to-the-war Fighter (FOO Fighter) program. SDA wants to award a contract in fiscal 2024 and begin building the space vehicles for initial assembly and test during fiscal 2025. However, SDA Director Derek Tournear recently stated the agency will not be able to award a contract for the program until Congress approves funding for FY ’24, according to a report from Breaking Defense.

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That amount would go toward procuring 3,162 IVAS 1.2 heads-up-display systems, according to newly released budget justification documents. The HUD/puck tactical kits will come with conformal wearable batteries, advanced battery chargers, and a “tactical cloud package.”

The proposal also includes $98 million for research, development, test and evaluation related to the technology, officials told reporters last week during a meeting to preview the Army’s budget proposal, which was officially rolled out Monday.

IVAS is one of the Army’s highest-priority modernization initiatives. The tech includes ruggedized headgear with augmented reality capabilities, inspired by Microsoft’s HoloLens 2 device. The service aims to use the equipment for both training and battlefield operations for dismounted troops.

“Integrated Visual Augmentation System (IVAS) HUD provides a multiple generation single platform for [a] Soldier to fight, rehearse, and train in day and night that provides increased lethality, mobility, and situational awareness necessary to achieve overmatch against our current and future adversaries,” budget justification documents state.

The new variant, known as IVAS 1.2, was developed to address soldier complaints stemming from testing of previous versions.

“The investment [planned for fiscal 2025] … is all tied to 1.2. Right? So the new improved, we believe, we hope — still gotta go through a lot of testing — you know, combat-capable version of it,” Assistant Secretary of the Army for Acquisition, Logistics and Technology Doug Bush told reporters last week during a meeting to preview the Army’s budget proposal. “Those amounts are in there based on our hope for success there.”

The Army’s R&D plans for 2024 included developing software for IVAS “that enables soldiers to intuitively relay reconnaissance intent to a team of autonomous sensors and quickly interpret feedback from the systems and make targeting decisions,” according to budget justification documents.

The Army also wants to explore algorithms that use voice commands, eye movements, and hand gestures to interact with the system for “relaying intent and closing the targeting cycle more effectively,” as well as develop “feedback mechanisms” in the Android Tactical Assault Kit and IVAS to improve the AI algorithms “once soldiers recognize mistakes by the autonomous sensors.”

Plans for 2025 include making improvements related to the heads-up-display design, thermal and low-light sensors, IVAS extensibility, form factor, reliability, reducing weight, and developing AI data integration and applications, per the budget justification documents.

The Army is slated to conduct operational testing in the second quarter of fiscal 2025, which will inform a production and fielding decision in the fourth quarter of that fiscal year. The plan is to transition IVAS to a major capability acquisition pathway no later than October 2025.

Microsoft delivered the first IVAS 1.2 headsets to the Army last year for soldier evaluation, and the service awarded Microsoft $95 million to build more systems for what Bush called “the next step in rapid prototyping.”

The IVAS program could be worth as much as $21.9 billion if it comes to full fruition.

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LASSO is a new-start program for fiscal 2025 that’s part of the service’s vision for a family of low-altitude UAS that are “semi-autonomous (human-in-the-loop) unmanned aerial systems that improves the Infantry Brigade Combat Team (IBCT) lethality in terms of stand-off and destruction against dismounted formations, armored vehicles, and tanks,” according to newly released budget justification documents.

The goal of the project is to make infantry brigades as lethal as armored brigades, according to the Army.

Unlike traditional munitions, loitering munitions — also known as kamikaze drones or one-way attack UAS — can fly around until they identify a target. And unlike armed unmanned aerial systems that launch missiles, kamikaze drones destroy their target by crashing into it. They can be armed with a warhead to enhance their potency.

The Army describes the LASSO capability as a lightweight, man-portable weapon that can operate day or night. It includes all-up rounds with a launch-and-delivery system and payload.

It also comes with a fire control system that consists of the fire control unit, ground data link and terminal, and other ancillary equipment.

“LASSO can range less than or equal to 20km (straight line with auxiliary antenna) with a flight endurance that enables the Soldier to make multiple orbits within the IBCT typically assigned battlespace, to acquire and attack targets within and beyond current crew served and small arms fire. The range/endurance enables the unit to utilize reach back capability and maximize standoff … from enemy fires, significantly reducing risk to the Soldier,” according to budget justification documents.

“Unlike existing direct and indirect fire weapon systems, LASSO’s discreet payload and unique capability delivers Soldiers the ability to abort against targets in a dynamic situation (e.g., use of human shields) or prosecute targets that would have been deemed non-viable in past due to the higher collateral damage associated with alternative munitions,” officials wrote. “The LASSO base capability will be optimized to defeat tanks rapidly and precisely for IBCTs. Follow on increments will support future capabilities for company and below echelons. Future increments will focus on additional range increases, enhanced lethality, and advanced payload options (personnel, hard sites, etc.).”

The $121 million that the Army is requesting would support the procurement of 54 fire control units, 434 all-up rounds and 144 reconnaissance, surveillance and target acquisition components.

The Army has picked AeroVironment’s Switchblade 600 for the first increment of LASSO. However, the service doesn’t intend for it to be a winner-take-all program for industry.

“We’re gonna have multiple variants and we’re gonna have competition. So, to meet the urgent need, we’ve gone sole source to a limited number of SB 600, which is a very good system. But there’s a lot of companies in this space with a lot of good tech. So, we want to have really continuous competition because different companies have things that fit different parts of the mission space better … This is one where I think it’d be unwise to pick one at the start and just say, ‘Nope, this is it. Nobody else gets anything. This one company is it.’ There’s too much competition in this space. We want to leverage that innovation,” Assistant Secretary of the Army for Acquisition, Logistics and Technology Doug Bush said in an interview with DefenseScoop at the Reagan National Defense Forum in December.

For loitering munitions with modular payloads, the Army would like to retain some flexibility on what those payloads are, based on the service’s needs, Bush said last week during a meeting with reporters to preview the fiscal 2025 budget request.

“We might be heavy one year in [intelligence, surveillance and reconnaissance] and heavy the next year on strike,” he said.

The newly released budget justification documents did not include any additional funding for LASSO beyond fiscal 2025.

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