By Kenneth I. Swartz
Recent Air Race to Certification milestones include the first Air Force-financed flight testing by Joby Aviation for its second-generation S4 eVTOL at Fort Hunter Liggett in Monterey County, California, as well as the opening of a Beta Technologies eVTOL simulation center in downtown Washington, DC, to support Air Force research, and the delivery of a pair of LIFT Aircraft HEXA eVTOL aircraft at Springfield-Beckley Municipal Airport near Dayton, Ohio, to support the Air Force Research Lab (AFRL), headquartered at nearby Wright-Patterson Air Force Base.
Historically, the American military has been the world’s largest investor in vertical flight aircraft R&D, but the innovation-driven eVTOL industry has managed to raise more than $5B in start-up financing to develop aircraft for commercial missions, with almost no military investment and mostly without a military customer even in mind.
About 18 months ago, Air Force leadership saw the risk of sitting on the sidelines of the next technological revolution in vertical flight, especially after development of the last one — the consumer drone industry — was stifled for more than a decade in the US by inflexible regulations and entrenched government indifference to such a degree that China now dominates the global market, posing a defense and economic challenge.
With a total budget of $153.6B for fiscal year 2021, the US Air Force is a procurement powerhouse. The bulk of the Air Force inventory is fighters, bombers, tankers and transport aircraft, but the service also operates more than 250 rotorcraft, including the CV-22 Osprey. It’s also now in the midst of spending $7.9B to acquire 112 Sikorsky HH-60W Jolly Green II combat rescue helicopters and $2.38B to acquire 84 Boeing-Leonardo MH-139A Grey Wolf transport helicopters to replace its oldest assets. It’s also a potential customer for Future Vertical Lift (FVL) platforms.
Setting the Stage
Agility Prime is an initiative of AFWERX, an Air Force technology incubator that founded three years ago.
The Air Force’s sudden engagement with the eVTOL industry caught many by surprise. Its tremendous willingness to fast track contracts with small- and medium-size eVTOL businesses — rather than the huge defense contractors — is accelerating an industry that was already experiencing exponential growth.
In an opinion piece published in Wired magazine on April 27, 2020, entitled, “Flying Cars could takeoff soon, if we let the military help,” then Air Force Assistant Secretary for Acquisition, Technology and Logistics (SAF/AQ) Dr. Will Roper explained that, “previous transformations in aviation generated spectacular leaps in performance, but hand in hand with increased costs that limited quantity.”
“Flying cars are quite the opposite. Given their mechanical simplicity and high degree of automation, costs for purchasing and maintenance could be an order of magnitude lower. This would make the quantities of these systems needed for base security, rescue, disaster relief, and other missions affordable. Moving these missions into the third dimension would provide greater responsiveness for American troops and a faster first use-case for the companies building them,” wrote Roper (who, as a political appointee, stepped down from his position on Jan. 19, 2021).
The first public statement of Air Force interest in eVTOL aircraft can be traced to the Air Force Association’s annual national convention on Sept. 16, 2019, when Roper said the service was following the recent “flying car” developments.
During the summer of 2019, Air Force leaders including Roper attended an eVTOL presentation to Air Force Special Operations Command (AFSOC) that pitched the idea of using small, hybrid-electric eVTOL aircraft — carrying out distributed operations — to perform some of the missions normally assigned by AFSOC to the Bell Boeing CV-22 Osprey’s — but ultra-quietly and at very low cost.
That’s when Roper saw a “low-hanging opportunity” for the Air Force to investigate eVTOL technology within the framework of a competitive “challenge” that could also be a “teaching opportunity” to demonstrate how Air Force acquisitions could be done completely differently, originally modeled after past challenges run by the Defense Advanced Research Projects Agency (DARPA).
The program moved quickly following discussions within the Air Force, DARPA, and the White House Office of Management and Budget (OMB) and Office of Science and Technology Policy (OSTP), where Col. Nathan Diller — who was triple-hatted working for Roper, DARPA’s Strategic Capabilities Office (SCO) and OSTP as its Assistant Director of Aeronautics — had developed in-depth knowledge of the eVTOL industry through his frequent participation in VFS events and engagements with industry since 2017.
“The Vertical Flight Society provided key engagement that led the Office of Management and Budget [OMB] and the Office of Science and Technology Policy to include eVTOL in funding priority documents for two consecutive years. Agility Prime has leveraged this executive level support to accelerate the Air Force eVTOL program and broaden the funding opportunities,” Diller said in an interview with Vertiflite. This was the White House OMB / OSTP “Administration Research and Development Budget Priorities” policy memoranda for fiscal years 2021 and 2022.
Last year, Diller explained at the VFS 8th Annual Electric VTOL Symposium in San Jose, California, that the role of the OSTP is to “look across the innovation ecosystem … and find the ways to connect different pieces in order to accelerate our adoption of new technologies for America.”
He said the roles of US government agencies like the Federal Aviation Administration (FAA), National Aeronautics and Space Administration (NASA) and the Department of Defense are pretty obvious, but OSTP also tries to identify other branches of government that can or should participate in “supercharging this ecosystem.” For example, the OSTP recognizes the eVTOL industry has the ability to “energize a new workforce” and drive a “democratization of air travel” where new electric-powered aircraft dramatically reduce the cost of transportation by air.
As a result of Roper’s interest and Diller’s leadership, the Air Force Research Lab (AFRL) was tasked with developing an eVTOL evaluation and acquisition strategy.
Launched in 2017, AFWERX was founded as a technology incubator that could rapidly contract and fund commercial eVTOL projects at a Silicon Valley start-up pace. AFWERX leverages the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to enable the Air Force to develop and adopt dual-use, commercially viable innovations, while providing a competitive edge to the US entrepreneur and technology ecosystem.
Working with a modest budget, AFWERX has created “innovation hubs” in Washington, DC; Austin, Texas; and Las Vegas, Nevada; to work with the tech industry on its own terms. The organization is loosely modeled on SOFWERX, which was created by the US Special Operations Command to tap the talent of entrepreneurs, small businesses, and other “non-traditional” innovators outside the traditional defense industry market to develop innovative ideas and emerging technologies to serve the needs of special operations forces (SOF).
AFWERX is part of a broad-based commitment by the Air Force to develop a fast, agile procurement process that can leapfrog a historically challenging acquisition bureaucracy.
Agility Prime Launch
On Dec. 17, 2019 — the 116th anniversary of the Wright Flyer making the first heavier-than-air powered flight — AFWERX issued its first request for information (RFI). The document sought information on eVTOL capabilities and technology, including aircraft performance, short-term production plans, test flight schedules and commercialization strategies for a targeted technical maturity by late 2023.
Four months later, the Air Force officially launched Agility Prime on April 27–May 1, 2020, with an online program that included numerous speakers. The original plan was to launch the previous month during the South by Southwest (SXSW) festival in Austin, Texas, but when SXSW was cancelled due to the burgeoning COVID-19 pandemic, the program shifted to a virtual format that actually attracted a much larger and broader audience (see “Agile Change in Air Force ‘Agility Prime’ Launch Pays Off,” Vertiflite, July/Aug 2020).
Diller was, by that time, the Agility Prime team lead, taking on this new role while retaining his positions at OSTP and SCO.
During the launch, the AFWERX team spent a lot of time outlining how eVTOL aircraft developers, suppliers and researchers could obtain funding through the Air Force’s SBIR grants for businesses and STTR grants targeted at partnerships between industry and research organizations.
The Air Force also announced it was going to provide a wide range of “in kind” services to eVTOL developers, including “unique Air Force assets — test ranges, safety certifications, and military missions capable of logging steady flight hours — to build confidence in the technology, attract investors, and hopefully expedite domestic commercialization. It also provides the Air Force revolutionary agility for numerous missions.”
Diller noted that moving to a virtual format because of the COVID-19 pandemic allowed Agility Prime to reach a wider audience than if it had been just holding meetings and conferences. And it also meant people were prepared to accept “slightly less than perfect” in some of the processes that would otherwise have required a lot more time. There was also an openness to “try new things” and “take a slightly different risk posture,” except “when we start flying… and you’ve got hardware in the air.”
Instead of taking years to develop precise mission requirements for eVTOL aircraft and then releasing a specification to industry, the Air Force has established a unique public-private partnership with eVTOL developers to support their flight test and certification programs — without causing them to change their designs or develop militarized designs — while concurrently obtaining in-depth knowledge about each aircraft’s operational and mission capabilities.
Innovative Capabilities Opening (ICO)
In the confusing world of military terminology and acronyms, the AFWERX Innovative Capabilities Opening (ICO) document released on Feb. 25, 2020, described the Air Race to Certification and how the Air Force aims to develop a strategy for the use and procurement of eVTOL aircraft by working closely with companies to study and test fly more mature designs (see “US Air Force Moves to Boost eVTOL Development,” Vertiflite, March/April 2020).
The Air Force is interested in three eVTOL aircraft class, described in three Areas of Interest (AOI) solicitations published after an umbrella Agility Prime ICO.
• Payload: 3–8 personnel
• Range: Greater than 100 miles [161 km]
• Speed: Greater than 100 mph [161 km/h]
• Endurance: Greater than 60 minutes
• First Full-Scale Flight: Prior to Dec. 17, 2020
• Payload: 1–2 persons (equivalent)
• Range: Greater than 10 miles [16 km]
• Speed: Greater than 45 mph [72 km/h]
• Endurance: Greater than 15 minutes
• First Full-Scale Flight: Prior to Dec. 17, 2020
• Cargo aircraft, not necessarily designed to carry occupants
• MTOGW: Greater than 1,320 lb [600 kg]
• Payload: Greater than 500 lb [227 kg]
• Range: Greater than 200 miles [322 km]
• Speed: Greater than 100 mph [161 km/h]
• Endurance: Greater than 100 minutes
• First Full-Scale Flight: Prior to Dec. 17, 2020
The Air Force divided AOI evaluations into three phases. Phase 1 is a written solution brief. Phase 2 is a company engagement that includes a visit with an Air Force team to inspect the aircraft and learn about its systems. Phase 3 is the request for prototype proposal (RPP) stage, where companies are invited to submit a full written proposal to win a multi-year Other Transaction for Authority for Prototype (OTAP) funding agreement.
The first round of solicitations in early 2020 required that an aircraft had to have flown by Dec. 17, 2020. The time limit was set to initially focus on some of the more mature aircraft designs in the first tranche of companies contracted for the Air Race to Certification, which is best described as a race against time — not a competition between companies.
Diller recently told Vertiflite that a secondary reason for requiring an aircraft to have flown by December 2020 was that Agility Prime only had a staff of three people when the AOIs were first released, and they needed to put in place a pacing mechanism to ensure they didn’t receive proposals from all 200+ eVTOL developers all at once.
By late 2020, Agility Prime had tapped the intellectual capital of the Air Force to have a team of more than 75 working on the program on a part-time or full-time basis, with more to be added in 2021. That means that Agility Prime will have more people working to develop the eVTOL ecosystem than Uber had on its Elevate program before its sale to Joby late last year (see “Joby Transitions,” Vertiflite, Jan/Feb 2021).
The deadline for the Air Race to Certification was extended to Dec. 17, 2021, to attract a second tranche of participating eVTOL developers.
The reason for holding the “Air Race” is outlined in the ICO, which explains that the Air Force “intends to test the hypothesis that, compared to other ground and air vehicles, these aircraft could revolutionize mobility given: 1) lower maintenance cost and time, through mechanical simplicity; 2) improved safety and declining personnel demands, using autonomy; 3) affordable quantity, based on potential mass production; 4) improved acoustics, employing distributed propulsion; and 5) greater flexibility and reduced infrastructure needs, with runway independence. To mitigate risk, this hypothesis will initially be tested outside of the urban environment in scenarios that could potentially open a broad public-use market for early Government adoption prior to civil certification in a way that accelerates UAM [urban air mobility].”
Following the launch, Agility Prime kicked off 17 weeks of webinars designed to further increase eVTOL industry engagement, all of which have been posted on the AgilityPrime.com website. The first 10 weeks discussed specific areas of Agility Prime, and the last seven webinars included conversations and presentations by companies and organizations that were part of the new Agility Prime ecosystem, including VFS.
In May 2020, Diller was promoted to be the new director of AFWERX at the same time that the organization transitioned to AFRL.
Then, on May 29, Agility Prime announced that “Beta Technologies and Joby Aviation, some of the earliest participants in the Agility Prime ‘Air Race to Certification,’ have progressed to Phase III of the Initial Capabilities Opening,” that could result in “further prototyping, resource sharing, testing, production, and fielding as a launch customer.”
In June, the Air Force developed a technical airworthiness authority (TAA) plan for eVTOL aircraft, required in order for privately owned eVTOL aircraft to fly within military facilities and ranges under Air Force direction.
In July, Agility Prime hosted an Advanced Air Mobility (AAM) workshop and virtual tradeshow in partnership with NASA and the NASA Aeronautics Research Institute (NARI). The primary goal was to stimulate industry applications for SBIR and STTR funding and to help companies partner with academic institutions and research agencies.
The senior leadership of the Air Force finally witnessed their first flight of an electric-powered VTOL aircraft on Aug. 20, when LIFT Aircraft gave a demonstration of its single-seat HEXA aircraft on the parade ground of Camp Mabry near downtown Austin, Texas. The VIP audience included Chief of Staff Gen. Charles Q. Brown, Jr., Chief Master Sgt. JoAnne S. Bass, then-Secretary of the Air Force Barbara Barrett, and leadership from AFWERX and the Texas National Guard (see "Air Force Leadership Gets eVTOL Demonstration" in the Vertiflite, Nov/Dec 2020).
Behind the scenes, AFWERX was also recruiting more members for the Agility Prime team from different Air Force departments and “building the connective tissue” so they could work together, Diller said.
In laying the foundation for Agility Prime, special emphasis was placed on creating an organization that could rapidly review proposals, sign contracts and send funds to companies to accelerate R&D activities. The Air Force is well-known for its slow-moving, multi-year procurement process, but in 2020, Agility Prime started turning around contracts and issuing wire transfers to companies in a matter of weeks.
In September 2020, AFWERX was relaunched (as “AFWERX 2.0”) with expanded authority, which marked its graduation from a start-up to a Program Executive Office (PEO)-like organization reporting directly to SAF/AQ (then Dr. Roper).
The biggest organizational change was that AFWERX was expanded to three branches — Spark, Prime and AFVentures.
Spark is a grassroots Air Force innovation program designed to form collaborative partnerships between the military’s operational experts and the top problem solvers in industry, academia and the government. The Spark program is currently building a network of Spark Innovation Cells on Air Force bases around the world.
Agility Prime has now become a template for other Prime initiatives focused on other Air Force requirements, including Space Prime, Energy Prime, Digital Prime, Microelectronics Prime, and others.
AFVentures was launched on March 12, 2020, as a “collaboration between the Air Force Small Business Innovation Research/Small Business Technology Transfer Program, AFWERX and Air Force Acquisitions, as the umbrella organization for the Air Force’s efforts to work with small businesses to fund critical technologies for the warfighter.”
One of the important challenges AFWERX 2.0 was designed to overcome is the so-called “valley of death” that often occurs between science and technology developments and the establishment of a military program of record.
In the fast-moving world of eVTOL technology, the operational use cases for these aircraft are making themselves apparent through prototyping and flight demonstration. But then technology companies have usually had to wait years until the military acquisition establishment can budget the development in the Program Objective Memorandum (POM) for development and production contracts.
Waiting years for a production can be a death sentence for a fast-moving advanced technology company. The creation of AF Ventures was designed to create funding mechanisms that could bridge the Valley of Death.
When it was launched almost a year ago, AF Ventures awarded nearly $1B in contracts to more than 550 small businesses, including the Pentagon’s first venture capital contracts, which matched private investment with government funds.
Almost half the $1B went to 21 “big bet” companies (only 20 companies were named), that are “slated to receive four-year, fixed-price contracts worth a combined $550+M through AFVentures’ Strategic Financing (STRATFI) program.” The amount included more than $100M in SBIR funds, $100M in Air Force funding and $35M in private investment, according to the AFVentures press release.
The creation of AFVentures would make it easier for the small business to tap into the $160B-per-year military market, “where successful entries can be higher in risk, lower in quantity, and higher in price as they bridge towards future commercialization,” Roper said when AFWERX 2.0 was launched.
In the civil aviation, the requirements for FAA oversight of US civil aircraft certification and operations are set out in Title 14 of the US Code of Federal Regulations (CFR). When it comes to military aircraft certification, military handbook MIL-HDBK-516C establishes the Airworthiness Certification Criteria.
One of the differences is that when a civilian company is building a prototype aircraft and want to start flying, they apply to the FAA for a special airworthiness certificate in the experimental category, which has very specific limitations regarding where the aircraft can fly and how it can be flown, but it is not evaluated against pre-set criteria. This comes later when the aircraft goes through a certification to receive a type certificate under Part 23 or 25 for airplanes, Part 27 and 29 for rotorcraft, or 21.17b for “special classes,” such as “powered lift” aircraft.
On the other hand, the US military doesn’t have an equivalent to the FAA experimental airworthiness category, and doesn’t require compliance with the 516C Airworthiness Certification Criteria. But the military has an intermediate category between a civil experimental category approval and a military airworthiness certificate that makes a risk-based airworthiness assessment of a prototype design. It allows the military to evaluate and learn about the capabilities of a dual-use civil-military aircraft while it is going through an FAA certification program.
It took the Air Force 47 days from its first look at the Joby 2.0 air taxi to the issuance of an airworthiness approval that it met the criteria of 516C.
The TAA plan mentioned above envisions three letters of authorization (LOAs) covering three different phases in the evaluation of civilian prototype eVTOL aircraft under an ICO Air Race to Certification contract.
LOA-I would see in-kind testing of an aircraft using a Cooperative Research and Development Agreement (CRADA) arrangement. The contractor would comply with test-range safety rules and processes, with the airworthiness requirements dictated by the FAA, and landing and takeoff (LTO) requirements. The Air Force will look to the FAA to provide oversight of maintenance and overhaul activities.
Prototype testing under LOA-II will take place under an OTAP agreement where the Air Force pays for access to prototype air vehicles through a purchase or lease. This will require Air Force airworthiness assessments of contractor-owned, contractor-operated (COCO) aircraft, with risk acceptance established through applicable policy. FAA oversight would apply to most civil aircraft operations.
For LOA-III, which is the Production and Representative Testing phase of the evaluation, the Air Force would also use an OTAP agreement to pay for access to prototype air vehicles through a purchase or lease.
Diller explained to Vertiflite that the Air Force is “not doing a certification process where leaving it to the FAA. We're collaborating closely with the FAA on their certification process. And in the long term, we have an approach for reciprocity to leverage the FAA certification process.”
The last phase is also the stepping stone that places the Air Force in a position to place production orders for eVTOL aircraft for yet-to-be-determined logistics and other missions within the service. “Once we go into larger production,” Diller explained, “what this allows us to do is… an in-depth assessment, engineering discipline by engineering discipline, of each of the vehicles. We also do an assessment of their approach to operations. That assessment then allows us to characterize the risk, and that risk assessment then is what allows us to make a determination of… whether or not we want to actually start using government funding to direct those flights. So, it is the process that is necessary for the government to direct flight test, the process that's necessary for the government to provide funding for flight tests.”
AFWERX Funding Mechanisms
Although full details remain obscured, Agility Prime awarded over $100M in 2020 in Air Race and SBIR/STTR contract awards.
The program received over 335 STTR applications including submissions from 280 businesses and 159 research organizations over its first six months. In October, AFWERX announced that had selected 257 proposals to receive a total of $38.5M in R&D funding. Some of these will see eVTOL developers paid by the Air Force to explore various logistics and disaster response missions.
The SBIR funding — which is managed by the US Small Business Administration — has now rolled in under AF Ventures and provides 1,000 small, entry-level awards (i.e., up to $50,000) across many different (non-eVTOL) technology areas. Three calls for proposals are held in January, May and September each year. A Phase 1 recipient is also free to hunt for contract opportunities across the entire US government without having to recompete.
AFWERX also offers 300 medium-size Phase II awards each year, starting at $750,000 for the initial award, but with the opportunities for additional awards throughout Phase II.
Since AFWERX’s $800M in SBIR funding is legally tied to supporting early-stage innovation, the addition of AFVentures to the portfolio allows for higher awards to companies.
One of the new programs is STRATFI, which can award up to $15M in SBIR (Phase IIB) funding over four years, but is contingent upon obtaining additional funding from a government customer and/or private investors.
Two other new programs are Tactical Funding Increase (TACFI), which provides $375,000 to $1.7M of SBIR funding, and the single Supplemental Funding Pilot Program announced in December 2020, which is designed to help fill the gap between existing small business research contracts and the STRATFI.
Besides the obvious financial and technological benefits of winning an Air Force contract, many US companies are finding that holding a government contract has made it easier to attract more private investment.
In total, the US government has invested more than $130M related to eVTOL to date. In January 2021, the Air Force provided this summary of investments (including support costs):
• FY19: $10M
• FY20: $25M
• FY21: $25M
In addition, the Air Force has made $38M in STTR awards and $30M in SBIR awards in FY19-21.
Meanwhile, the US Marine Corps has invested $3M and the Pentagon’s Strategic Capabilities Office another $1.6M.
In early 2021, Agility Prime is expected to launch a training program for eVTOL operators and maintainers — managed from San Antonio, Texas — to support the first deployment of eVTOL aircraft in military exercises later this year.
Agility Prime has also joined with the US Marine Corps, the US Coast Guard, the US Naval Test Pilot School and other government agencies. To this end, each of the companies in the Air Race to Certification is required to establish a simulation facility where representatives from the Air Force and other agencies can gain an understanding of the unique performance capabilities of each aircraft.
The program is focused on leveraging civil certification to serve the military, rather than developing military-specific aircraft. The military and other public-use agencies are able to increase the utility of an FAA-certified aircraft by, for example, lifting the arbitrary maximum takeoff weight and air-speed restrictions placed on FAR Part 103 ultralight aircraft, in the case of the LIFT HEXA.