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GovDiscovery AI Podcast with Mike Shanley
Ep. 73 U.S. Army & Innovation with Dr. Matthew Willis, Army FUZE
00:32:47
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Welcome to the Gov Discovery AI podcast with Mike Shanley delivering actionable expert insight and AI enhanced business intelligence for defense and State Department markets. Here's your host, Mike Shanley.
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Welcome to the Gov Discovery AI podcast. I'm your host, Mike Shanley. Our guest today is Dr. Matt Willis. Matt is the director of the Army Fuse program on the show today to talk about army innovation and some of the exciting developments that him and his team have been working on. Matt, thanks a lot for being on the today.
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C
Absolutely Mike, appreciate the opportunity.
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Well, let's get in high level. Where has the army struggled in innovation historically?
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C
Yeah, so historically, you know, I think the army has been challenged by many of the, you know, issues across the Department of War writ large. Right. It's a huge organization. We have a lot of things going on, a lot of different lines of efforts and a lot of the programs have been stovepiped. So not that there wasn't great things happening in different individual programs, but one of the challenges, how can we bring things together, you know, build on, let's say economies of scale, have synergy across programs and leverage the inherent flexibilities that we have from an acquisition perspective, from a speed perspective, from a scale perspective and really bring that all together. So the Army Fuse program is essentially coalescing many of our innovation centric programming so we can identify new tech, identify companies that are ready to scale and pivot funding to help them rapidly accelerate to support our soldiers.
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So is that the main goal of the Army Fuse program? One, maybe goals. Two, One could consolidate the various innovation funding across army into a single program and then to align it with the, I will get into this, the acquisition reform priorities. And also Secretary Driscoll has the venture background, so bringing that private sector expertise and, and processes and, and thought to solving Army's innovation needs and challenges.
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C
Yeah, absolutely. So. So yeah, to provide a little context. Right. So earlier this year Secretary Driscoll approached our office. So I work in the office of the Army Acquisition Executive. So we provide oversight over all of Army's research, development, testing and evaluation enterprise. And he really challenged us to take a more venture capital centric mindset for how we are investing in innovative technology companies. So how can we provide tools and resources to help companies get to a minimum viable product quickly, assess that MVP capability with soldiers in the dirt, you know, in a realistic scenario or a real realistic environment and divest capabilities that aren't working and scale the ones that are. So we've really embodied, you know, that approach within the Army Fuse program to take A, you know, be more tolerant of risk. Right. How can we make a lot of small investments early on, invest in many different capabilities because we're not necessarily certain what will or won't work in a realistic environment. Again, take Capab out, do testing and scale what's working. So it's again about foundationally changing, I'd say, what has plagued the acquisition system historically, where we're applying, let's say a linear model or a linear solution to a nonlinear problem set, right. Traditional acquisition processes taking, let's say on the order of decades or years or decades in time and millions, tens of millions, hundreds of millions of dollars to develop a single capability. Whereas in the tech ecosystem, particularly now, you know, when you look at AI and uass and many other domains, right. Technology is changing. The half life is months, weeks. Right. And if we have an acquisition process that it takes decades to get a capability out the door, then we're already, you know, handicapping ourselves. So again, this is about compressing the capital and technology stacks so we can rapidly develop from concept to scale, you know, operating a high speed, iterating quickly, you know, leveraging, you know, realistic, you know, soldier feedback so that we can develop a capability that's, you know, not the gold plated solution, right. Not, not some overly eloquent system that we send out to the field that doesn't work. But you know, find the right capability with the right feedback that then we can get out to, to our soldiers.
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I want to follow up on a couple of things there, but specifically risk profile, something certainly not unique to army, not unique to dow. Across the federal government. There's just historically a risk aversion or a. Yeah, a risk aversion in the acquisition process with Army Fuse. How are you all looking at that? Acknowledging that or assessing and thinking about the value proposition versus the risk profile of the investments?
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C
Yeah, well, I mean, I would say first and foremost, 100% there's been an aversion to taking risk. And for us in the army, you know, this, it really comes down to leadership tolerance. You know, the Secretary and many of the other army senior leaders have directed us that hey, we need to take more risk. And honestly, you know, many times I think historically within innovation investments and in the ecosystem writ large, we're measuring our success rate based on transition. Did we invest in a capability that then was picked up by, you know, a program office or a program of record? And that certainly is one metric. But you know, in my mind, especially in the innovation space where we are investing in new capabilities that may or may not work because this is still research and development. Right. If we have 100% transition rate, we are definitely not taking enough risk. Right. So, you know, I think that recognizing that we need to change, certainly transition rate is one metric, but we need to change the way in which we assess our success. If we invest in a capability or a company that doesn't necessarily work out for an army mission, that's okay. Right. And I think that that goes back to what I was saying earlier where, you know, we're sort of changing the process whereby we're making lots of, let's say, small investments at the beginning and then having the opportunity to scale those up or scale the ones up that are working, divest the ones that aren't vice the traditional process of putting out a solicitation, assessing a huge proposal and selecting one vendor that we're expecting to deliver a capability in five or 10.
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Years or whatever, and especially if it's a new capability they don't have, it's a bit more academic that reviewing that proposal as opposed to scaling brighten the bigger checks once there's a proven, some proven proof of concept. So, Matt, I think a lot of listeners are going to be familiar with sbir, sttr, a lot of the other innovation funding within Dow. Could you talk a little bit about how this complements those investments?
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C
Absolutely. And so and actually the Army's SBIR and STTR program is a component within Army Fuse. So I'll provide context. So overall, within the army, the Army Fuse program represents about $750 million a year of non dilutive research and development dollars. So it includes our small business innovation research, small Business technology transfer, so SBIR and STTR programs. We also have some prototyping dollars in there which are really critical for us to take promising capabilities coming out of SBI or sttr, coming out of xtec, which is our prize competition portfolio, and helping them to scale. The other piece that is a part of the Army Fuse program is our manufacturing technology program. And so these dollars really help us to get after. Okay, there's a promising capability, but within the Army. Right. We typically aren't going to buy like one or two. Right. We're a very large organization. Quantities, you know, in the thousands, tens of thousands, hundreds of thousands of course, depending on what it is. But if there are challenges from a manufacturability perspective, if we need to onshore, you know, the manufacturing of certain critical components, do we need to leverage, let's say advanced manufacturing techniques so we can get around or help Drive some of those economies of scale. That's what we are leveraging our mantech program for. So holistically from the XTEC program, which again is prize competition market research, helping companies get in the door, our SBIR and STTR program, prototyping dollars and manufacturing dollars. It's really this full life cycle of identifying new tech, developing a minimum viable prototype and then helping companies get to scale.
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Now let's get into the other stakeholders here. Let's talk about the VCs, the venture investors who are going to be engaged. What, what do you see as their role? What do they bring? What do you want them to know before they begin engagement or assess if they're even the right fit for their model with, with, with Army Fuse's priorities?
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C
Yeah, absolutely. So you know, I say $750 million a year in non dilutive research and development dollars is not going to solve, you know, the, the world's problems. Right. I mean it certainly is helps us to get on a path to scale, to develop some initial prototypes. But ultimately, without a doubt, in order for a company to be able to get to that point of manufacturing at scale, they are inevitably and invariably going to need the support of private capital providers, be it from a venture capital backing or other capital sources. And so within the army we're trying to change how we provide that demand signal, if you will, to the market to say, you know, this is where we're investing and this is how that there is a path to let's say, you know, real money. So I think historically, and historically in the past we've in the army have well not been very transparent, right. In terms of where we're going, what our priorities are and how we can, I'd say incentivize co investment opportunities with, with private capital providers. And so I think that we're trying to be a bit more transparent on what those demand signals are, where we're going with our acquisition programs and try to, we can of course completely de risk investments, right? Investments are inherently going to have risk. And the government, our role is certainly not to totally de risk. But if we can sort of change that value proposition for private capital providers to see the promise in a specific tech vertical or a company that has participated in one of our innovation programs, then that's where really where we're trying to go. We're certainly not trying to broker relationships between specific companies and venture capital or other capital providers. We're just trying to set the conditions to say this is where what our priorities are. Here are the areas we're investing and here are the potential outcomes and are there ways?
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So say you're one of those venture funds interested in this, what is the ways? Obviously they're going to want to know which companies is it working with which companies isn't it? Are you envisioning industry days reports from, from your team on the results of, of the funding or what would that process, what do you think that process will look like for how those firms will identify which, which of the, the funding recipients, early stage companies that they do want to invest in to scale up?
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C
Yeah, absolutely. So I'd say yes. And I mean so we are embarking on a series of, I'd say road shows where we're, we are trying to hit some of the major of course areas where there's a focus of, of capital providers. You know, we've been to New York City, we'll be heading out to, to Silicon Valley I guess next month. Other places, of course those are a bit more bespoke. So we also hold a biannual event called the, the Army Demand Signal Forum which is essentially exactly what you described. Right. So we're bringing in army stakeholders, bringing in folks from the startup community, capital providers, which is an opportunity for the army to say hey look, you know, here's where our pain points are, here's where we're investing some performers who you know, either participated in an ex tech competition, a current SBIR STTR awardee, some of our prototyping awardees. So really trying to provide what that Demand Signal looks like. And the other thing that we're working on, you know, I know that right now tech marketplaces is certainly a hot thing. Everyone's putting out a marketplace, but it is certainly important, right. I think internally to the army and to the, into the Dow. We need to have a mechanism to see all of the different companies that we've invested in or help develop capabilities at. But then conversely for the private sector to also see what is the full spectrum of investments that the Dow has made and what are the potential outcomes from a technology development perspective.
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And what about for the companies themselves? Those if you're talking to the founders of those early stage pre seed, maybe they have a family and friends round they've raised and sure, those cities you name may be Colorado Springs or Austin or elsewhere or Huntsville. What's your message to them or what would you say to them on how they can best prepare and how they also should assess when they are ready to engage with Army Fuse?
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C
Yeah, I mean I would say, you know, first and Foremost, the message to them is that the army is open for business. Right. I mean, I think that what we're trying to change and again with Army Fuse brings all these pieces together historically, previously, again, all these programs existed previously. They were somewhat stovepiped and there wasn't a clear pathway for if a company is identified with a promising capability and they're ready to scale, it was challenging for us to move quickly. Right. Because all these different pieces and parts were all over the place. And so with this change, again, we're foundationally changing how rapidly we can move from identifying a company, helping them take that capability to soldiers to get tested and then if there's a promising company to be able to bring that to scale. And so where historically, again this could be measured in multiple years, multiple, you know, even a year to get a contract. Right. I mean that's just, that's just foundationally, I'd say could potentially lead to insolvency, especially for, like you said, many of these companies that have maybe a handful of employees. And so we are foundationally changing how we are managing these investments so we can help companies like that to inject their capabilities into the army so we can help our soldiers.
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I think that'll be message will be well received by the, by the founders, having been one myself, where that cash flow, that Runway, that's an important one. You can't wait for that 24 month procurement decision on an IDIQ, then a task order to come out underneath that. Matt, we talked a bit about the user for using tech terms, user study, user feedback. Here we are, we're talking about the soldiers. Could you talk about that process of how you incorporate the soldiers into the end user, into the development process, into the design process? And does that seem to be comparable to how that does for just a standard B2B software product? Or are there some unique, some unique components of having the end user being the soldier and incorporating them into the development process with, with these early stage companies?
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C
Yeah, I mean that's a great question. And I think that we're really again, foundationally changing the way that this has historically been managed within the army and that we are bringing the soldiers into the loop, you know, earlier and often even to the point of working with our soldiers in our, our combatant commands at the core level, at the division level, to identify what are those capability gaps or those areas where they're having challenges. So leveraging our soldiers to identify the issues they're having, leveraging the Army Fuse program to develop capabilities, our prototypes or you know, Whatever, and then getting that tech into our soldiers hands earlier so then feedback can actually be used to create, to ultimately create the, the, the final solution. So I think that again what's, what's happened a lot historically is we'd start a project and yes, that might be based on a soldier capability gap, but then it would go for 24, 36, 48 months, something would be delivered and oh, hey, it doesn't actually work, you know, in let's say Ukraine in the winter where it's really cold and a battery doesn't have the same capacity as it does in Southern California. Right. And Yep, exactly. So I think that, yeah, what I would say that the difference is and what we're really trying to infuse within the program is that the 90% solution is oftentimes, you know, good enough and we need to stop admiring the problem and we need to actually just deliver a capability and see if it works. And if it doesn't, that's okay. I think that's, that's historically been another challenge that we've had really across the ecosystem which is that this perception that if a company takes capability and we do a test event or an experimentation event and it doesn't work, that that is a black mark on the company. And that's absolutely not what we're trying to do here. Right. We're trying to use that feedback, give it to the company and say look, this is where it worked well, this is where it didn't and this is how you can change and then providing opportunities for follow up. Right. So that, because again we're looking for best of breed capabilities and oftentimes finding out what doesn't work is more valuable than finding out what does.
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We get into a bit of some of those demand signals. What are some of these solutions that army is most interested in funding at this point?
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Yeah, absolutely. So some of the first areas that we're looking at focus on some of the real challenges that our soldiers across the globe are facing. So some of our priorities priority areas right now, one is power generation, honestly. So power generation edge in austere environments, whether that be, you know, in the, in the jungle or be in let's say the Arctic, where of course when it's very cold, batteries don't work very well and generating power is incredibly challenging. And if we, I think we can all see the, the prevalence of obviously electronics, but drones, you know, other things that require batteries and the fact that when we go and take things out into more realistic environment, tech tends to not work. So well, so certainly power generation at the edge is a big one. Another big one we're seeing is the use of certainly unmanned aerial systems, smaller drones, and then counter drone is a, is a, or counter UAS I guess is the official term. But that's certainly a big piece. You know, we've certainly seen in, in Ukraine. It's certainly changed, I'd say the perspective on UASs and counter UASs on the battlefield. And the other one other priority area that we're looking at right now is, is electronic warfare and how we can best adapt capabilities for this evolving, you know, landscape that we're seeing.
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So with that, let's get into who qualifies for this. Yeah, who, who are the firms that qualify for this? Is it, is there a portion for US small businesses? Can members of allied defense industrial bases qualify? I'm thinking of some of the Arctic ones. I'd imagine some of the Nordic countries have some good experience building capabilities. Maybe Finland, Sweden. What? Yeah, are, can they qualify or is this just for US companies?
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No. So you know, again, we're looking for best of breed technology really across the landscape. And so the Fuse program, I'll say it's technology agnostic. I mean, of course there's specific tech areas we're looking at, but you know, holistically, technology agnostic, really maturity agnostic. You know, I think that TRL's technology readiness levels, it's somewhat of a misnomer because there are many capabilities, particularly of course in the software domain where you could accelerate from a concept to a deployable solution in months. Whereas the typical TRL scale implies that it can take years to do so. So I'd say in general maturity agnostic. Although again, we are leaning towards developing or investing in capabilities that we can see at least an MVP solution in a soldier's hands within 18 to 24 months. So if it is an early stage concept, then you need still be able to deliver in that, let's say 18 to 24 month timeframe. And then in terms of the companies or the performers themselves, really it can anywhere. Right. Many of our mission sets or one of our mission sets is focused on U.S. army Europe, Africa. We recently did a demonstration at the Project Flytrap 4.5demo in northern Germany. It was cold, but you know, I think it's, it's critical for us, right, if there's a mission that's going to happen in the NATO domain, that our, our allies and partners participate, certainly from an interoperability perspective. But again, as I'll go back to say, we're we're looking for the best of breed capabilities that will help our, our U.S. army soldiers. And so yes. Break. Break. That being said, there are certain rules for certain dollars. Of course our SBIR and STTR program dollars are limited to US based small businesses, up to 500 employees. But other than that piece of the portfolio, the other program dollars are open to anyone. Of course it's going to depend on the specific solicitation and the competition. And when we put those opportunities out there, it'll be clear as to who can apply. But for the project flag trap 4.5 competition we did again a couple weeks ago, that was open to any US based company and our allied partners and nations and we received a number of, of submissions from, from NATO companies.
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Can you share a story about where this, where this has worked or how army fused when it's what's the give me what's the case study of it working?
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C
Yes, absolutely. And so I'll provide the context here that Secretary Driscoll, you know, Honorable Ingraham, who's the, the Army Acquisition Executive, they have foot stomped over and over and over again about the importance of changing how the army does innovation, the importance of the tantamount importance of speed and the tantamount importance of bringing us to scale. So we need to move quickly. And this kind of goes back to what we talked about earlier, right, with risk tolerance. Admiring the problem typically leads to things going slow. And so they say hey look, we need to move quickly and recognizing that we are going to make mistakes along the way, but that's okay. But so in this sort of vein of moving quickly, getting capability out into the hands of our soldiers, you know, as, as quick as possible. So we ran a competition at the beginning of October. It was held at the association of the United States Army. So AUSA annual meeting, which is in Washington D.C. it's a huge, huge conference. So this was an X Tech competition, XTech Disrupt. We did it in partnership with the Innovation Division, which is out in, in Hawaii and User Pack. And so they identified a few different capability areas that were challenging areas. Of course they were the four that I just described earlier. That's by happenstance. But so we ran this competition in, in early October. Live pitches. Companies could come and sign up on on that day. They could sign up that day if they had some great technology idea in the area of EW, UAS, counter UAS or power generation. We selected companies, eight companies as winners at the AUSA conference. They each received a cash prize and 20 days later, less than three weeks later, they were in theater in Hawaii at User PAC, participating in the joint Pacific Multinational Readiness Center JPMRC exercise that was going on, which is, you know, an exercise that involves like thousands, thousands of soldiers doing a very complex scenario. But the fact that we were able to identify new companies and new technologies and get them out in the hands of our soldiers in 20 days was great. And even more so, I'd say one of the companies, you know, developed this technology solution where we could. Or we. They developed a solution where it was basically a. A controller, platform agnostic controller that could add swarming capabilities to any unmanned aerial system. Live. During this demonstration, we were able to work with the 25th ID. They 3D printed some unmanned aerial systems. We integrated this controller onto I think 10 or 12 of these systems, and we're able to demonstrate an autonomous swarm. So that just shows, you know, in the course of less than 30 days, identifying a company, getting them out, working directly with soldiers, and then demonstrating a capability that we previously were unable to do.
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I mean, Matt, that sounds like what you described as the priorities, not 20 months, 20 days from initial contact with a company to the solution being tested. And they're getting feedback and can iterate on that. Thanks for sharing. I want to ask this Army Fuse, what are you most excited about going into 2026?
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C
Yeah, so what I'm most excited about is, you know, we have a huge amount of momentum and enthusiasm around us. I think we have a lot of upcoming exciting competitions, you know, focusing on anywhere from ground autonomy, some launched effects, um, so broadening a little bit from those four areas that, that I was talking about the other big thing, you know, and I'd be remiss if I, if I didn't say this. So, you know, Army Fuse is the. Again, it. This is all a big component of, of army acquisition reform. So the Dow a couple weeks ago announced acquisition reform. Army followed suit very quickly with a new construct for how we're doing acquisition. We establish or distilled from 12 program executive offices down to six portfolio acquisition executives. So each of these portfolio acquisition executives are focusing on specific capability area. And then there's a plus one. The plus one is the innovation piece, which is the pathway for innovation and technology, the pit. So Army Fuse is essentially the engine behind the pit. So we are all of the resources for how the army is going to get after the identification, development and acceleration of innovation innovative technologies. The other pieces of the pit are the gyop. So that's the Joint Innovation Outpost. They're at the 18th Airborne Corps and so they provide direct demand signal from the the 18th Airborne Corps in terms of what those soldier needs are. We're also working with the gted, so this is a new entity, the Global Tactical Edge Acquisition Directorate. And so this is actually forward deployed Acquisition Officers. So currently have folks in uscraf, they're about to stand up a unit in User pac. What I'm most excited about right is not only are we going to have a lot of new tech opportunities for for new companies to enter our ecosystem, we're going to have direct demand signal from the combatant commands from the ASCCs, from the core levels and I'd say an UN at an unprecedented pace in terms of getting those demand signals and then getting tech out to our soldiers for testing again where historically this has been a long drawn out process. You know we are using the shortcut button here and really expediting opportunities for companies to work directly with soldiers to get feedback so we can scale what works.
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B
Well Matt, I think we got a lot of I'm sure interested listeners in our audience. How do they engage with you if they, if they missed a USA back in October, what are the best ways in person online to follow for updates and to get engaged with Army Fuse?
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C
Yeah, absolutely. So go to Fuse Army Mil, that's our website, Army Fuse. We also have profiles on LinkedIn and X and so certainly follow us there. We're participating in a lot of live events. I'll be at the Consumer Electronics show in Las Vegas here in a couple weeks. We will have a booth out there. You can certainly connect with me on LinkedIn as well. Again, it's all about building this community and how we can work together to help our soldiers.
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Thank you. That's Dr. Matt Willis, director of Army Fuse. Matt, thanks a lot for being on the podcast today.
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C
Absolutely appreciate it. Thanks Mike.
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A
Thank you for tuning in to the govdiscovery AI podcast with Mike Shanley. Govdiscovery AI leverages our team's decade of experience winning federal funding to deliver federal growth intel to sales proposal and capture teams working in defense and civilian markets. Each market intel report is delivered by federal growth experts leveraging our proprietary deep data discovery process. If you enjoyed today's show, be sure to subscribe wherever you get your podcasts and connect with Gov Discovery AI and Mike Shanley on LinkedIn or learn more at govdiscoveryai.com.