About this programme
AFWERX is the innovation arm of the U.S. Air Force and Space Force, and it runs the Department of the Air Force's SBIR/STTR program: non-dilutive federal awards that fund small businesses to develop technology the Air Force and Space Force actually need. The program's job is to de-risk early technology and move it from a research idea toward something a program office can field, using the government-wide SBIR/STTR mechanism rather than a defense-specific one.
SBIR (Small Business Innovation Research) funds a for-profit small business directly. STTR (Small Business Technology Transfer) requires that small business to formally partner with a U.S. research institution — a university or federal lab — and split the work between them. Both run through the same DoW Submission portal and the same phase structure.
The Army runs a sibling innovation platform, xTech, led by the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA(ALT)) as part of the Army FUZE innovation portfolio. It is not SBIR/STTR — it's a prize-competition program that funds small businesses (and in some competitions, larger and allied-country businesses) to pitch and demonstrate technology against Army problem sets, with white-paper and pitch-event rounds instead of a formal SBIR proposal. CapEasy groups the two together here because both are non-dilutive U.S. Department of Defense-adjacent routes into government innovation funding, run by sibling armed-service innovation offices.
Both AFWERX SBIR/STTR and Army xTech are open programs a startup applies to directly through the official channel — AFWERX proposals go through dodsbirsttr.mil, xTech competitions are entered through xtech.army.mil. Neither involves CapEasy acting as a grant-making body; CapEasy's role is prep and advisory only.
How it works
AFWERX SBIR/STTR runs the standard multi-phase federal SBIR structure: Phase I is a feasibility-stage award, Phase II funds further R&D on a concept that showed promise, and some solicitations allow a Direct to Phase II (D2P2) path that skips Phase I for a company that can show equivalent work was already done. Phase III is commercialization funded from non-SBIR/STTR sources (a program office's own budget, for example) — the government can award Phase III work sole-source to the company that did the earlier phases, without a new competition, because the SBIR/STTR process already satisfied the competition requirement.
A company that has an active or recently-completed Phase II can apply for sequential funding through STRATFI (Strategic Financing) or TACFI (Tactical Financing) — matching-fund programs that add government dollars on top of private/program-office matching investment to bridge a proven technology toward a program of record. AFWERX's eligibility rule: the Phase II must be active, or completed within the last two years, at least 90 days must have passed since that Phase II started, and it must not already be under a sequential award.
Army xTech runs as a prize competition, not a grant proposal: Phase 1 is a written submission (a white paper describing the concept), Phase 2 is a pitch event for companies that clear Phase 1, and Phase 3 is a proof-of-concept demonstration for competition winners, sometimes leading to a follow-on Army contract. xTech runs multiple parallel competitions at once (for example xTech|Search, and topic-specific competitions), each with its own submission window, eligibility rules and prize structure — a business applies to the specific competition, not to "xTech" generically.
Who can apply
AFWERX SBIR eligibility: a for-profit, U.S.-based company with 500 or fewer employees, majority U.S.-owned, where the principal investigator's primary employment is with the small business (more than 50% of their time).
AFWERX STTR eligibility: the same small-business requirements as SBIR, plus a formal cooperative research agreement with a U.S. research institution (university or federally-funded R&D center); at least 40% of the work must be performed by the small business and at least 30% by the research institution.
STRATFI/TACFI eligibility (on top of standing SBIR/STTR eligibility): the company must be a Small Business Concern eligible for a SBIR/STTR award, hold an active Phase II or one completed within the prior two years, be at least 90 days into that Phase II's period of performance, not already be executing another sequential award (STRATFI/TACFI) tied to the same Phase II, and the work must be performed in the United States. Submission into STRATFI/TACFI must be made by a government point of contact, not the company directly.
Army xTech eligibility varies by competition. The program states it is open to "small and large businesses across the U.S. and allied foreign countries," but each competition (xTech|Search, or a topic-specific round like the autonomous-sustainment competition) sets its own specific eligibility and submission requirements — check the individual competition page before applying.
How to apply
- Register the business in the federal System for Award Management (SAM.gov) — required before any SBIR/STTR award can be made.
- Read the current AFWERX solicitation and its reading guide, and confirm your technology matches an open topic (or, for STRATFI/TACFI, confirm your Phase II status meets the sequential-funding eligibility window).
- Submit the Phase I, Direct to Phase II, or Phase II proposal through the official DoW SBIR/STTR submission portal at dodsbirsttr.mil/submissions.
- Keep your SAM.gov and portal contact details current — AFWERX notifies applicants of selection decisions by email.
- For STRATFI/TACFI, work with your government program point of contact: review the FAQs and checklist, prepare the guidance-document package and submission templates, and have the government POC (not the company) complete the online submission.
- For Army xTech, choose the specific open competition on xtech.army.mil, submit a Phase 1 white paper by that competition's deadline, and — if selected — advance to the Phase 2 pitch event and potential Phase 3 proof-of-concept.
Documents you’ll typically need
- AFWERX SBIR/STTR Eligibility Guide (PDF, published on the official SBIR/STTR overview page)
- Active SAM.gov registration
- Phase I / Direct to Phase II / Phase II proposal submitted via dodsbirsttr.mil
- For STTR: a formal cooperative R&D agreement with the partnering U.S. research institution
- For STRATFI/TACFI: the sequential-funding guidance documents and submission templates referenced on the sequential-opportunities page (submitted by a government POC)
- For Army xTech: a Phase 1 white paper for the specific open competition
Frequently asked
Is AFWERX SBIR/STTR money a grant or a contract?
It's the federal SBIR/STTR mechanism — non-dilutive funding awarded competitively against published solicitation topics, structured as either a contract or (less commonly) a grant depending on the award vehicle. It doesn't take equity and doesn't need to be repaid.
What is the difference between SBIR and STTR?
SBIR funds the small business alone. STTR requires the small business to formally partner with a U.S. research institution such as a university, with a minimum work split (at least 40% by the small business, at least 30% by the research partner). Both otherwise share the same phase structure and submission portal.
What is STRATFI/TACFI and who can apply?
STRATFI (Strategic Financing) and TACFI (Tactical Financing) are sequential, matching-fund awards for companies that already have an active Phase II or one completed within the last two years. Eligibility requires at least 90 days into the Phase II period of performance, no existing sequential award on the same Phase II, and work performed in the U.S. Submission is made by a government point of contact, not the company itself.
Can AFWERX award a contract without competing it again?
Yes — Phase III. Once a company has received a Phase I or II award, the government can award follow-on Phase III work sole-source to that company, because the earlier SBIR/STTR competition already satisfied the legal competition requirement. Phase III must be funded from non-SBIR/STTR sources.
Is Army xTech the same as an SBIR award?
No. xTech is a prize competition led by the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA(ALT)) as part of the Army FUZE innovation portfolio, not the SBIR/STTR program. It runs a white-paper round (Phase 1), a pitch event (Phase 2), and a proof-of-concept demonstration (Phase 3), and some winners go on to a follow-on Army contract. Eligibility and prize structure are set per competition.
Can a non-U.S. company apply to Army xTech?
Some xTech competitions are explicitly open to allied foreign countries alongside U.S. small and large businesses — the official site states this generally, but the exact eligibility is set competition-by-competition, so check the specific xTech competition page before applying.
Where do I actually submit an AFWERX SBIR/STTR proposal?
Through the official Department of War (formerly Department of Defense) SBIR/STTR submission portal at dodsbirsttr.mil/submissions — not through AFWERX.com directly. AFWERX.com hosts the solicitation guidance, eligibility guide and reading guide that precede submission.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.