AFWERX SBIR 2025: Complete Guide to Air Force Open Topic and Specific Topic Funding
- josh84483
- 36 minutes ago
- 12 min read
AFWERX Executive Summary
The Air Force's AFWERX SBIR program represents one of the most accessible and well-funded paths for innovative companies to partner with the Department of Defense. Since 2017, AFWERX has introduced rapid innovation cycles that compress traditional defense acquisition timelines, moving from multi-year procurement processes to prototype development programs that can begin within months of application.
AFWERX was created to address a critical challenge: the Air Force needed to rapidly access cutting-edge technologies from the commercial sector while maintaining its technological edge. Traditional defense contracting processes, while thorough, often moved too slowly for the pace of modern innovation. The solution was a streamlined approach that could identify, fund, and field innovative solutions in a fraction of the traditional timeline.
Perhaps most revolutionary was AFWERX's introduction of the Open Topic approach in 2018. The open topic made a technology-agnostic solicitation that no longer prescribed the solution sets that the DAF was looking for. The open topic allowed industry to tell the Air Force what they are working on, what their R&D was working to achieve, and showcase a dual-use, commercial product that could be adapted for DoD use cases. This represented a fundamental philosophical shift: rather than limiting innovation by always prescribing what to build, the Air Force recognized they could innovate at the speed of the private sector by letting companies tell them what problems they could solve. Commercial industry submits their technology solutions in the proposal process and defines how they think their solution will benefit the warfighter.
AFWERX's fundamental purpose is creating a direct pathway to Phase III sole-source contracts with the Air Force, opening access to significantly more innovation while providing companies a streamlined route to government contracting without competition. This approach fits into the broader Air Force modernization strategy as a critical component of "accelerated capability development" – enabling the Air Force to rapidly prototype, test, and field innovative capabilities that address immediate operational needs rather than waiting for perfect solutions to emerge from traditional research and development cycles.
AFWERX 2025 Solicitation Schedule
AFWERX operates multiple solicitation cycles throughout 2025, with different opportunities for Open Topic, Specific Topic, and focused challenges:
AFWERX SBIR: The Three-Phase Journey Overview
AFWERX SBIR follows the traditional three-phase structure established by Congress, but with streamlined processes and accelerated timelines:
Phase I: Customer discovery - Open Topic ($75K, 3 months) or proof of concept - Specific Topic ($180K, 6-12 months
Phase II: Prototype development and demonstration (up to 21 months, $1.25M-$1.8M depending on track) - Open Topic requires signed MoU from AF customer
Phase III: Sole-source contracts with AF customer (non-competitive, unlimited funding potential)
Companies can also apply for Direct to Phase II (D2P2) if they have mature technology and strong Air Force relationships, skipping Phase I entirely.
AFWERX Open Topic vs. Specific Topic
AFWERX offers two distinct tracks for companies seeking Air Force SBIR funding, each serving different innovation scenarios and opening when the Air Force identifies specific needs. While AFWERX is best known for its Open Topic approach, understanding both tracks helps companies recognize and capitalize on valuable opportunities when they become available.
AFWERX Open Topic Program
The Open Topic serves as the front door to working with the Department of the Air Force. This track is designed for companies with dual-use technologies that could benefit both commercial markets and Air Force operations, even if the specific military application isn't immediately obvious.
Funding Structure:
Phase I: A maximum award of $75K (SBIR) and $110K (STTR)
Phase II: A maximum award of $1.25M (SBIR) and $1.8M (STTR)
Direct to Phase II (D2P2): A maximum award of $1.25M (SBIR) and $1.8M (STTR)
The Purpose of Phase I
The AFWERX Phase I is unlike other SBIR Phase I awards. The funding is not intended to fund a feasibility study or proof of concept, and there are no Research and Development milestones required in the Open Topic. Rather, the DAF gives you the money so you can fund the costs of business development to identify an AF customer and end-user willing to sign a MoU.
During the 3-month Phase I period of performance, the small business works to identify their Air Force end user (warfighter) and customer (program office) with the goal of getting that Air Force end user and customer to sign a Customer Memorandum verbalizing their intent to work with the small business on transitioning their technology to warfighters.
The Customer Memorandum
For any Open Topic Phase II application—whether following a Phase I award or applying directly through D2P2—companies must submit a signed MoU from an Air Force customer and end-user. An end user is typically the warfighter who will actually use the technology and a customer is the program office with funding authority. This requirement means companies must demonstrate Air Force interest and commitment to their solution. The Customer Memorandum becomes a requirement for submitting for a Phase II proposal.
A best practice is to begin government engagement before the Phase I award and then use the three-month performance period to deepen relationships and secure the Customer Memorandum during months 2-3 of Phase I performance.
Timeline and Performance:
Phase I: Period of Performance: 3 months (focused on customer development, not R&D)
Phase II: Period of Performance: Up to 21-months
Open Topic Success Examples: Here are just a few examples of companies who won AFWERX funding across diverse industries through the Open Topic track:
Advanced Materials: Reflect Orbital received $1.25M Phase II for satellite-based sunlight redirection technology
Healthcare/Biotech: Othram secured $1.25M Phase II for forensic DNA sequencing technology to enhance Air Force investigative capabilities
Electronics/Sensors: MatrixSpace earned $1.25M Direct to Phase II for low SWaP-C multi-function antenna payload systems for uncrewed aerial systems
Cybersecurity: Highlight Technologies earned $1M+ Direct to Phase II for mobile device security systems at the Controlled Unclassified Information level
AFWERX Specific Topic Program
Specific Topics target well-defined problems identified by Air Force end users who need particular solutions. Unlike Open Topic's dual-use focus, Specific Topics often address defense-specific challenges with clearly outlined requirements and a pre-identified Air Force customer. When a Specific Topic solicitation opens that matches your company's capabilities, it represents an excellent opportunity since the customer relationship and problem definition are already established.
Funding Structure
Phase I: $180K
Phase II/D2P2: $1.8M
Specific Topic Phase I awards provide $180K over 6-12 months, allowing for more extensive technical development. Since the Air Force customer is pre-identified, companies can focus entirely on technical feasibility and solution refinement rather than customer development.
No MOU Required: The most significant operational difference is that Specific Topic awards don't require companies to find and secure their own Air Force customer during Phase I. The customer relationship is built into the topic solicitation from the beginning.
What Success Looks Like
Successful Specific Topic Phase I projects demonstrate three critical elements: proven technical feasibility through proof of concept validation, market understanding, and Air Force alignment. Companies that advance to Phase II typically show clear technical progress in validating their concept, strong government engagement, and a realistic path to operational implementation.
Specific Topic solicitations target particular challenges identified by Air Force program offices. Recent examples from current solicitations include:
AI/ML-Generated Decoy Networks
Lidar Tomography for Remote Sensing
Quantum-Resistant Blockchain Architecture and Quantum Scaling Opportunities for Defense Operations
Use of Artificial Intelligence/Machine Learning Applied to the National Environmental Policy Act (NEPA) Process
Visual Position and Navigation Capability Using Computer Vision for SUAS in GPS-Denied Environments
Strategic Decision Framework: Choosing Between Open Topic and Specific Topic
Choose Open Topic If...
Your commercial technology has a clear way to help a USAF need
You can articulate how your solution benefits warfighters but need help finding the right Air Force customer
You're willing to invest time to find an interested USAF customer during Phase I
Your technology is relatively mature but needs adaptation for military use
Choose Specific Topic If...
Your solution fits one of the topics in the Air Force release
You prefer working with a pre-identified government customer
Your technology may be primarily defense-focused
You want higher funding amounts and can handle more specific requirements
Specific Topic opportunities are less frequent and less competitive, as they target precise problem sets rather than broader innovation areas.
Phase II: Prototype Development and Demonstration
Phase II represents the heart of the AFWERX SBIR program for both Open Topic and Specific Topic tracks, where technical concepts become working prototypes that address real Air Force needs.
Open Topic Phase II
The Phase II, or prototyping phase, sees the small business work directly with an Air Force Technical Point of Contact (TPOC) to conduct further R&D to build and adapt their dual-use proposed solution to fit Air Force needs. Open Topic Phase II awards provide a maximum award of $1.25M (SBIR) and $1.8M (STTR) over up to 21-months.
Specific Topic Phase II
Specific Topic Phase II awards offer $1.8M over similar timeframes, with the higher funding reflecting the more focused, often more complex technical requirements of defense-specific solutions.
Direct to Phase II (D2P2)
Both tracks offer Direct to Phase II opportunities for companies with more mature technologies. If a small business already has a solution that is ready for prototype and adaptation to Air Force needs, has identified an Air Force end user and customer, and has a signed Customer Memorandum in hand, they are able to skip the initial Phase I process and apply to a Direct to Phase II (D2P2) solicitation.
D2P2 applications must demonstrate higher technical readiness and stronger Air Force relationships from the beginning, but they allow companies to access Phase II funding immediately.
Phase II Success Examples Across Industries
Defense Technology:
Rebellion Defense: Secured $1.8M Phase II for AI-powered threat detection, leading to $100M+ in follow-on contracts
Shield AI: Developed autonomous flight systems with $1.25M Phase II, now valued at over $2B
Healthcare and Biotechnology:
Biofire Defense: Created rapid pathogen detection systems for deployed forces
HalenHardy: Developed mental health monitoring platforms for aircrew
Energy and Power:
SolAero Technologies: Advanced solar cell technology for space applications
Rebellion Photonics: Gas leak detection systems for both commercial and base infrastructure
Manufacturing and Materials:
Velo3D: 3D printing technology for complex aerospace components
Desktop Metal: Additive manufacturing solutions for rapid prototyping and production
Phase III: Operational Implementation
Phase III represents the transition from prototype to operational capability, where successful technologies become part of regular Air Force operations.
Non-Competitive Contracting Authority: Phase III awards don't follow traditional competitive procurement processes. Instead, they leverage the SBIR program's unique authority under 15 U.S.C. § 638(r)(4), which allows the Air Force to "issue, without further justification, Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that developed the technology."
Transition Requirements: Successful Phase III transition requires three elements: proven technical performance during Phase II, identified funding source within the Air Force, and operational requirement that the technology addresses. The most successful companies begin Phase III planning during Phase II execution.
Phase III Success Stories
Palantir Technologies: Leveraged early Air Force SBIR awards into multi-billion dollar defense contracts
Anduril Industries: Transitioned counter-UAS technology into $1B+ in defense contracts
SpaceX: Used early SBIR funding to develop capabilities that now support major launch contracts
Scaling Beyond Single Contracts
Typically the most successful approach for companies is to use their initial Air Force success to expand across the Department of Defense and into allied nation markets. Technologies proven in Air Force operations often find applications across Army, Navy, and international defense markets.
The three-phase journey represents more than just a funding progression – it's a systematic approach to transforming innovative ideas into operational military capabilities while building sustainable defense technology companies.
Bridge Programs
STRATFI and TACFI - Bridging Phase II to Phase III
AFWERX recognizes that the traditional SBIR structure, while effective, doesn't always provide sufficient capital to bridge the gap between successful prototypes and scaled production. To address this challenge, AFWERX has developed several bridge funding mechanisms that help companies mature from Phase II to Phase III contracts.
STRATFI (Strategic Financing)
STRATFI addresses the "valley of death" between successful prototype development and commercial-scale production. The government provides STRATFI funding between $3M and $15M, with various matching requirements. Companies must secure matching funds from other government sources at a 1:2 ratio (AFWERX: separate government entity) or from both government and private sector sources at a 1:1:2 ratio (AFWERX: separate government: private sector). This structure validates interest beyond AFWERX by recruiting additional government funding and even private sector funding.
Typical Timeline: STRATFI awards typically span 18-24 months, allowing companies sufficient time to scale manufacturing, complete additional testing, and prepare for larger production contracts.
STRATFI Success Examples:
Castelion: Won ~$1.8M Phase II for hypersonic missile development, then was selected for STRATFI and secured $15.75M in Phase III contracts through combined government and private investment
TACFI (Tactical Financing)
TACFI targets operational capabilities with immediate military application, often focusing on technologies that can be rapidly fielded to address current operational gaps. TACFI applications differ from STRATFI in their emphasis on immediate operational utility rather than long-term commercial scaling. Companies must demonstrate that their technology can address current Air Force operational needs within the award timeline. TACFI provides funding between $375K and $1.9M from the SBIR component, with required 1:1 matching funds from eligible sources (investors or other government entities). Maximum total funding including matching can reach $3.8M. This structure allows for focused development of defense-specific capabilities with validated external support.
TACFI Success Examples:
Amsel Medical: Received $1M Phase II, then secured an additional $1.5M TACFI for their needle-delivered hemorrhage control device
APFIT
APFIT (Accelerate the Procurement and Fielding of Innovative Technologies) is not a strictly Air Force program, but rather a DoD-wide program managed by the Office of the Under Secretary of Defense for Research & Engineering that provides procurement funding between $10M-$50M for innovative technologies that have completed development and are ready to transition into operational use. APFIT awards are made in coordination with all services, combatant commands, and defense agencies, making it accessible to companies with Air Force relationships developed through AFWERX SBIR programs. The program targets small businesses and non-traditional defense contractors to accelerate initial production and reduce overall procurement timelines. Unlike R&D funding, APFIT specifically provides procurement dollars for production-ready technologies that can be rapidly fielded to address current operational gaps. Companies selected for APFIT can deliver war-winning capabilities 1-2 years earlier than traditional procurement schedules, making it an excellent bridge from successful Phase II SBIR development to large-scale production and deployment.
AFWERX SBIR Winning Strategies: Best Practices
Success in AFWERX SBIR requires more than good technology – it demands strategic thinking, strong execution, and deep understanding of Air Force needs and processes.
Understanding Air Force Needs and Priorities
Success in AFWERX SBIR requires putting the Air Force customer at the center of your approach. Whether pursuing Open Topic or Specific Topic, you must understand both the specific pain points of your potential end-users and the broader modernization priorities driving the Air Force.
Study Air Force publications, strategic documents, and leadership communications to identify capability gaps, operational challenges, and emerging technology priorities. Key resources include the Air Force Strategic Master Plan, Chief of Staff priorities, and doctrine publications that reveal service direction and problem areas.
Proposals that demonstrate clear understanding of documented Air Force challenges and align with stated priorities consistently score higher than those focused solely on technical capabilities. The most successful AFWERX participants invest significant time researching Air Force needs before writing proposals, solving real documented problems rather than perceived opportunities. This customer-first approach improves proposal quality and increases the likelihood of successful customer development and long-term adoption.
Government Engagement Best Practices
The best practice for Open Topic applicants is to begin government engagement months before application submission. This early engagement helps companies understand Air Force needs, identify potential customers, and refine their value proposition.
Professional networking such as industry conferences, AFWERX events, and professional associations can provide valuable opportunities to meet Air Force personnel and understand emerging needs.
Proposal Writing Excellence
Best practices for winning proposals include clearly articulating the problem being solved, demonstrating deep understanding of Air Force operations, and presenting realistic technical approaches with clear success metrics.
Winning strategies consistently focus on operational impact, set realistic but ambitious technical goals, highlight strong commercialization potential, and address a need that the Air Force needs to have.
Track-Specific Strategies
Open Topic Specific Approaches:
Emphasize dual-use value proposition
Demonstrate clear Air Force relevance even for commercial technologies
Plan for extensive customer development during Phase I
Prepare for MOU development early in the process
Specific Topic Specific Approaches:
Focus directly on problem-solution alignment
Demonstrate understanding of the specific end user's operational environment
Show how your solution integrates with existing Air Force systems
Emphasize technical performance over commercial applications
Common Pitfalls and How to Avoid Them
Technical Proposal Errors:
Over-promising on technical performance
Insufficient technical detail to demonstrate feasibility
Unrealistic development timelines
Failure to address technical risks
Administrative Mistakes:
Incomplete MoU from both an AF End-User and AF Customer
Incomplete company certifications
Missing required documentation
Submission through wrong channels
Late submissions due to technical issues
Strategic Missteps:
Choosing the wrong track for your technology/situation
Inadequate government engagement before submission
Failing to demonstrate operational relevance
Summary: Is AFWERX SBIR Right for Your Company in 2025?
AFWERX represents an exceptional opportunity for innovative companies to partner with the Air Force while building sustainable defense technology businesses. However, success requires genuine commitment to solving Air Force problems rather than simply accessing funding.
Before pursuing AFWERX, companies should honestly assess their technology's Air Force relevance, their team's capability to work with government customers, and their commitment to the defense market beyond initial SBIR funding. Choose Open Topic if you have dual-use technology and strong customer development capabilities, Specific Topic if your solution directly addresses known Air Force problems, or consider Direct to Phase II if you have mature technology and strong Air Force relationships.
Next Steps
Start by checking the next upcoming AFWERX solicitation and deadline. Then contemplate and research how what you are developing could solve an Air Force challenge. Thoroughly research current Air Force priorities, attend industry events to meet Air Force personnel, and develop a clear understanding of how your technology addresses operational needs. The most successful AFWERX participants invest significant time in market education before submitting their first proposal.
Reach out to Akela Consultants to discuss how your technology may fit this program and develop a winning strategy for your AFWERX submission.
About Akela Consultants
Akela Consultants is a trusted partner to startups navigating the federal funding landscape. With deep expertise in SBIR/STTR strategy, proposal writing, and extensive experience with AFWERX programs, we help companies across sectors—from AI to clean energy to biotech—win highly competitive awards from agencies like NSF, DoD, NASA, DOE, NIH, and more. Whether you're submitting your first AFWERX Project Pitch or preparing for a Phase II proposal, our team brings hands-on experience, clear guidance, and honest support to help you turn innovation into impact.
