How the US Dept. of Defense is Making Open Innovation Work

The OnRamp program at the US military’s Defense Innovation Unit (DIU) got started in 2023 as an effort to lower the barriers for non-traditional technology companies that wanted to work with the Department of Defense (DoD) — but weren’t already suppliers. 

OnRamp hubs in cities like Phoenix, Ariz., Seattle, Wash., and Dayton, Ohio  serve as physical and digital connection points for companies and academic institutions, providing mentoring, education on DoD acquisition, technology showcases, and matchmaking opportunities between innovators and Pentagon customers. The goal is to help non-traditional companies and talent navigate the complex DoD acquisition system, accelerate the adoption of commercial technologies, and foster regional innovation ecosystems.

How’s it going, two years in? I recently had an opportunity to sit down with Cassie Muffley, Acting Director of the OnRamp Hub Program. And because we’re talking about the federal government, a warning: there will be acronyms.

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Origins

DIU itself — sometimes known as DIUx — was created in August 2015, intended to be a bridge between the US military’s procurement machinery and technology companies.

If you’re picturing a potential culture mismatch, you’d be absolutely right. There is a book about how this unlikely pairing actually became a successful innovation program, and it was written by two of DIU’s early leaders, Raj Shah and Christopher Kirchhoff. The book is called “Unit X: How the Pentagon and Silicon Valley are Transforming the Future of War.” It offers a look at how the Department of Defense was able to harmonize with Silicon Valley’s “move fast and break things” ethos with classic slow-moving, waterfall-style Pentagon bureaucracy. What made it work was their adoption of some agile/lean principles, like literally getting the customer (warfighters) in the room with engineers from the Valley to get immersed in the problem space before specifying detailed requirements and solutions.

The specific legal instrument or procurement innovation that made this type of contracting viable was a new twist on a procurement type that actually began with NASA in 1958, called the “Other Transaction Agreement,” or OTA. This allowed funding to happen for early-stage technologies, or as NASA put it, those with “low technical readiness,” or low TRL. OTAs bypassed traditional red tape and allowed government contracts to be issued for novel and urgent use cases. OTAs fell out of favor in the 2000s, but after some Congressional reforms, their use has surged — especially under DIU’s Commercial Solutions Office (CSO), under which Muffley operates these regional hubs.

Creating Local Points of Presence

As Muffley explained it, DIU’s Commercial Solutions Office (CSO) and the OnRamp Hubs underneath that office, don’t do the contracting, but they facilitate the matchmaking. “We’re not our own customer, so ultimately everything that DIU does is in support of the Department of the Defense. [As OnRampHubs], we are specifically looking for existing commercial technologies that then we can help these small commercial companies add a defense component to.”

Muffley sits at, or is more often flying out to, one of five regional innovation centers (OnRamp Hubs) under CSO, which is led by Liz Young McNally. (For the full list of hubs, see the table below). These regional centers help bridge commercial technology and startups with emerging defense priorities and procurement. They support real local matchmaking, as well as accelerating commercial tech adoption by providing physical spaces, educational programming. Muffley told me there will be three more onRamp Hubs coming in 2025. 

What’s driving this change in defense procurement? Muffley explained that “the era of big government-funded research programs has somewhat given way to private sector companies pushing fundamental research or new applications of that research forward.” In fields like artificial intelligence, Muffley said, “industry is now spending more money on research and development than the government is. The national security innovation base, the defense industrial base, has shrunk by 50 percent.”

Impact and Results

In terms of impact, Muffley said that over the past two years, the OnRamp Hubs have engaged with more than 1,800 companies. 

What’s their formula for success? Muffley said there are three components: “Each of them comes with a physical space. The next is the programming. But, then the third part is our strategic impact projects.” Two of the strategic impact success stories Muffley cited come from the Hawaii and Arizona hubs, respectively.

In Hawaii, the OnRamp Hub worked with SAGE Pacific, a veteran-owned small business developing biodefense technology. The company faced headwinds related to federal cybersecurity and contracting compliance. The Hub provided mentorship and facilitated engagements with a directorate of the United States Indo-Pacific Command, enabling them to prepare for a high-visibility effort. SAGE Pacific was then awarded a $1.6 million subcontract as part of ABLE RESOLVE, a multinational biosecurity wargame. 

In Arizona, the hub recently responded to an urgent operational requirement from US Army Pacific Command (USARPAC) for a commercially available Counter-Unmanned Aerial Systems (C-UAS) capability. The local Hub team quickly identified and coordinated procurement of a viable solution from within its technology ecosystem. Working closely with Army stakeholders and industry partners, they ensured rapid acquisition and delivery. Within just three weeks, multiple C-UAS units were successfully deployed to forward-positioned Army units, where they now actively support operational readiness and force protection efforts.

Focus and Reporting

Today, DIU organizes its operational portfolio across seven key sectors: Artificial Intelligence, Autonomous Systems, Cyber/Telecom, Energy, Space, Human Systems, and Emerging Technology. It partners with many other DoD organizations to prototype and develop field ready dual-use (military and civilian) capabilities at commercial speed. A Biden administration re-org in 2023 called ‘DIU 3.0’ subsumed the already existing National Security Innovation network (NSIN) and the National Security Innovation Council (NSIC) into DIU’s portfolio.

Muffley’s onRamp program under the Commercial Solutions Office reports up to Doug Beck, a former Apple exec and the current Director of DIU. Beck directly advises the Secretary of Defense. I wondered, given Muffley’s two decades of working within the Department of Defense, what made her feel ready for this high-profile role driving open innovation. “The best advice I ever received was ‘follow the opportunities,’” she said. “In other words, be prepared to ditch your rigid plans.” Several years ago, she ran a Lean Six Sigma program for the US Air Force. Prior to that, she was at the US Navy. “When I came to Orlando in 2020 as a Naval Tech Bridge Deputy Director, I helped stand up an innovation hub called Central Florida Tech Grove,” she said. “I was then introduced to the National Security Innovation Network (NSIN), which is now part of the Defense Innovation Unit (DIU). At that point in 2022, when the opportunity opened, I jumped at the chance.”

How to Connect with DIU

How might the InnoLead readership, and their own commercial enterprises, collaborate with or support the DIU mission?

Muffley said, “We are looking for new technologies and new companies that we haven’t worked with previously. Our OnRamp Hubs serve as an accessible ‘front door’ for companies to easily connect with our DoD partners. Reach out to us at onramphub@diu.mil and connect with us on LinkedIn. Or better, visit us in person at any of our OnRamp Hub locations. If your firm has technology that might have a fit in one of our strategic portfolio areas, or if you have developed innovative technologies or solutions that could solve national security challenges, consider applying for a DIU CSO.”

Of the companies that DIU has awarded contracts to in the past, 88 percent are non-traditional defense contractors, 68 percent are small businesses, and 40 percent were first-time DoD vendors.

”By collaborating with us, you become part of a mission that bridges the gap between commercial ingenuity and defense needs, making a meaningful impact on our national security and readiness,” Muffley said.

OnRamp Hubs

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