Prizes spur military tech breakthroughs

For military-required or desired capabilities with a potential commercial market or application, there are alternative pathways to fund and develop them, which leverage outside investments and introduce new ideas and approaches that reduce time, costs, and risks of failure. One such pathway is using prize competitions that announce a government-related problem, requirement, or desire for new and novel capabilities, products, or scientific advancements with a commitment to a funding award for successful achievements.1 These announcements are made to industry, academia, and others to entice them to raise or invest capital and ideas that may result in solutions and enable them to win the (cash) prize for achievement and other tangible benefits stemming from their success.

Unlike grants and contracts, a prize competition awards funding based on achieving successful outcomes versus the potential for success. Instead of utilizing assigned project funding to issue a grant or contract, a project or program manager, researcher, principal investigator, or similar can instead initiate a prize competition. The language in a prize competition conveys the criteria and specifications required for winning the challenge and being awarded the prize funding. The criteria and specifications should also accurately describe and define the problem and communicate the criteria for a successful solution. Establishing a prize competition motivates competing teams to develop innovative and novel solutions that address the issue or requirement specified in the challenge to win the (cash) prize.

A prize competition is intended to mature the state of the science by requiring a demonstration of development and refinement along with applying the solution to field new capabilities. Establishing a prize competition incentivizes outside investments and reduces costs and risks by developing commercially viable medical products or capabilities that meet military requirements and specifications while creating an affordable commercial product. The benefits of using this developmental pathway are straightforward—the government only funds teams or organizations that achieved a successful outcome (i.e., only pay for acceptable results) while transferring significant risks and costs to the teams that will compete in the challenge.

The prize competition and availability of prize funding entices the formation of teams that raise the capital required to compete and meet the stated objectives of the challenge, reportedly driving cumulative competitor investments totaling 10-40 times the prize purse.2 This leveraging of non-government funding also reduces governmental R&D costs while enabling more capability development. The use of prize competitions also opens the possibility of applying novel ideas and strategies to achieve the stated objectives, as the selection is based on performance outcomes, agnostic to the processes, ideas, and approaches used to achieve solutions.

The U.S. government authorizes prize competitions under 15 U.S. Code § 3719 and Public Laws 110-69 and 111-358 (America COMPETES [Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science] Act) for all federal agencies, and 10 U.S. Code § 4025 for the Department of Defense for advanced technology achievements.3,4 Awards up to $50 M are authorized to stimulate innovative technology breakthroughs in areas that support the government. The Department of Defense has underutilized the prize competition pathway as evidenced by sponsoring ten or fewer competitions and challenges per year between fiscal years 14-20, while the number of prize competitions and challenges conducted by other federal agencies grew from 97 in FY 14 to 140 in FY 20, a 45% increase.1

General Services Administration established the Challenge.Gov program to support all federal agencies using prize competitions and crowdsourcing campaigns to advance their missions.5 They provide a central hub platform for managing prize competitions, including prize competition announcements, information and guidance, inquiries, collection of submissions, selections, and awards. The participating federal agencies provide human resources to manage the effort via a team of subject-matter experts and administrative support, which may include hiring support contractors to manage some or all of the effort.

The government agency sponsoring the prize competition can form teams of subject-matter experts from any government agency to develop acceptance criteria, provide feedback to competitors, and evaluate submitted solutions for acceptance and award. For example, when developing medical products, the government lead or manager of a prize competition may request the U.S. Food and Drug Administration to provide a subject matter expert to be part of the evaluation team.

The concept of prize competitions allows for the pooling of funding from various government, private, corporate, and other sources to increase the value of the purse prize. For establishing prize competitions that require competitors to develop a commercially available product as criteria for success, the government agency sponsoring the prize competition can use Advance Market Commitments to further incentivize investments for product development by agreeing to procure a set number of products that meet their established performance criteria. One example of where the Department of Defense could use prize competitions to develop new medical capabilities or products is a prize competition to develop and field an affordable, viable, universal, and lyophilized blood replacement product for use at the point of injury that the U.S. Food and Drug Administration approves for commercial and military applications. Using a prize competition process and advance market commitments incentivizes and stresses their fielding of a commercially available product that is likely more affordable, available, and universally used.

How to get started? The best place to start is to learn more about prize competitions at https://www.challenge.gov/. This informative website contains examples of current and ongoing prize competitions, outcomes of previous prize competitions, and information on utilizing General Services Administration’s Challenge.Gov program to address government problems, requirements, and desires for new and innovative capabilities or products. We recommend examining the Defense Acquisition University’s (DAU’s) contracting and agreements cone 6 (tool) that lists Federal Acquisition Regulation and non-Federal Acquisition Regulation grants, contracts, and agreements. Similarly, we recommend examining the Federal Acquisition Institute’s periodic table of acquisition alternatives7 that emulates Defense Acquisition University’s cone and includes Joint Venture Partnerships and Prize Competitions as possible pathways.

Armed with this new knowledge, approach project or program managers and Research, Development, and Acquisition leaders to inquire whether a prize competition could be used in lieu of a grant or a contract to develop a new capability or product. Next, share the knowledge you have obtained with others and teach them about seeking out and using alternate pathways that leverage commercial development pathways and non-government funding that improve performance outcomes of R&D efforts. In conclusion, with a focus on proven results, prize competitions empower and leverage untapped talent and funding from outside the government to develop and deliver unexpected solutions to tough government problems and challenges that advance the state of science and provide affordable capabilities and products for military and civilian use.