Defense and DARPA Funding Guide for Small Businesses and Universities

Defense funding is the largest single source of federal research dollars in the United States. The Department of Defense spends over $100 billion annually on research, development, test, and evaluation (RDT&E), and a significant portion of that funding is accessible to small businesses, universities, and independent research organizations. Yet many potential applicants never pursue it because the defense funding landscape feels opaque, jargon-heavy, and culturally unfamiliar.

This guide demystifies defense research funding for first-time applicants. Whether you are a university PI considering a DARPA BAA response, a startup looking at DOD SBIR, or a research lab exploring basic science funding through ONR or AFOSR, this guide covers the major mechanisms, the unique cultural norms of defense proposal writing, and the practical steps to get started.

The Defense Funding Landscape: Major Players

Understanding who funds what is the first step. The Department of Defense distributes research funding through several distinct organizations, each with its own mission, culture, and proposal expectations.

DARPA (Defense Advanced Research Projects Agency)

DARPA is the DOD's high-risk, high-reward research agency. It funds breakthrough technologies that could provide decisive military advantage -- or that create entirely new technological capabilities. DARPA programs have produced the internet, GPS, stealth aircraft, and mRNA vaccine technology.

Funding size: Individual performer awards range from $500,000 to $10 million or more, depending on the program. DARPA's total annual budget is approximately $4.5 billion.

Who applies: Universities, small businesses, large defense contractors, and research institutions. DARPA actively seeks non-traditional performers -- organizations that have never done defense work before but have relevant technical expertise.

How it works: DARPA publishes Broad Agency Announcements (BAAs) describing technical challenges. Performers respond with proposals. Unlike most federal grants, DARPA program managers (PMs) are deeply involved in shaping proposals and often encourage white paper submissions before full proposals.

DOD SBIR/STTR Programs

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are mandated by Congress across all major federal agencies, but the DOD components are by far the largest. The DOD SBIR/STTR program receives over $2 billion annually.

Each military branch and defense agency runs its own SBIR/STTR program:

• Army SBIR/STTR: Managed through the Army Research Office (ARO) and various Program Executive Offices
• Navy SBIR/STTR: Managed through NAVWAR, NAVSEA, NAVAIR, and ONR
• Air Force SBIR/STTR: Managed through AFWERX, which has adopted a rapid contracting model
• DARPA SBIR/STTR: Smaller program focused on technologies aligned with DARPA missions
• MDA, DTRA, DHA, CBD, and other agencies: Each with their own SBIR topics

Phase I awards are typically $50,000 to $275,000 for 6-12 months of feasibility research. Phase II awards are typically $750,000 to $1.75 million for 24 months of prototype development. Phase III involves transition to production or operational use and has no dollar cap.

ONR (Office of Naval Research)

ONR funds basic and applied research relevant to naval and Marine Corps needs. It operates through several directorates covering ocean sciences, materials, electronics, human performance, and more.

Key programs:

• ONR BAAs: Open solicitations for research proposals in specific topic areas
• Young Investigator Program (YIP): Awards of approximately $510,000 over three years for early-career faculty (tenure-track, within 7 years of PhD)
• MURI (Multidisciplinary University Research Initiative): Large team grants, typically $1.5 million per year for 3-5 years, for university research teams
• DURIP (Defense University Research Instrumentation Program): Equipment grants of $50,000 to $1.5 million for university labs

AFOSR (Air Force Office of Scientific Research)

AFOSR is the basic research arm of the Air Force. It funds fundamental science in areas including aerospace, information, and physical and biological sciences.

Key programs:

• BAAs covering specific research portfolios managed by individual program officers
• Young Investigator Research Program (YIP): $150,000 per year for three years for early-career researchers
• DURIP: Equipment grants for university labs
• DEPSCoR (Defense Established Program to Stimulate Competitive Research): Funding for researchers at institutions in states that receive relatively little DOD funding

ARO (Army Research Office)

ARO manages the Army's extramural basic research portfolio. It funds fundamental research across chemistry, electronics, earth sciences, life sciences, mathematical sciences, mechanical sciences, and network science.

Key programs:

• Core research BAAs in specific scientific disciplines
• Young Investigator Program: Similar to ONR and AFOSR programs
• MURI: Army-specific MURI topics
• Short-Term Innovative Research (STIR): Small awards ($75,000) for rapid-turnaround exploratory research

DTRA (Defense Threat Reduction Agency)

DTRA funds research in chemical, biological, radiological, and nuclear (CBRN) defense, counter-WMD technologies, and related areas. DTRA publishes BAAs and also manages SBIR topics.

Strategic Capabilities Office (SCO)

SCO is a newer organization focused on repurposing existing military systems for new applications. It operates more quietly than DARPA and typically works through partnerships with defense primes, but occasionally engages with non-traditional performers on specific capability needs.

DARPA BAAs: How They Work

DARPA's Broad Agency Announcements are not like traditional grant solicitations. Understanding the differences is critical for a successful response.

Structure of a DARPA BAA

A DARPA BAA describes a technical problem the agency wants to solve. It typically includes:

• Program name and technical description of the challenge
• Technical areas (TAs) -- sub-problems within the broader program
• Phases and milestones with specific technical metrics
• Proposal instructions including format, page limits, and required content
• Period of performance and anticipated funding range

Some BAAs are highly specific, describing a detailed technical architecture and asking for performers to execute specific components. Others are deliberately broad, inviting creative approaches to an open-ended challenge.

Office-Wide BAAs

DARPA also maintains office-wide BAAs that are open continuously. Each of DARPA's six technical offices (Biological Technologies, Defense Sciences, Information Innovation, Microsystems Technology, Strategic Technology, and Tactical Technology) publishes a standing BAA that accepts white papers and proposals at any time. These are vehicles for researchers with ideas that do not fit into a current named program but align with the office's interests.

The White Paper Stage

Most DARPA BAAs encourage or require a white paper or abstract submission before a full proposal. This is not a formality -- it is a critical stage.

The white paper (typically 3-5 pages) describes your technical approach, key innovations, team qualifications, and rough cost estimate. DARPA program managers review white papers and provide feedback -- often a phone call -- indicating whether a full proposal is encouraged.

If a PM tells you not to submit a full proposal, listen. Submitting over a PM's recommendation wastes everyone's time and can damage your reputation with that office.

Program Manager Culture

DARPA PMs are the most important variable in the DARPA ecosystem. They conceive programs, write BAAs, select performers, and manage the resulting research portfolios. They typically serve 3-5 year terms, are deeply technical, and have significant autonomy.

Building a relationship with the relevant PM before the BAA is published is a legitimate and expected part of the process. Attend DARPA Proposers' Days (industry days held before or after BAA release), request introductions through your institution's research office, and reach out directly through the contact information in the BAA. PMs expect to hear from potential performers and often provide guidance that shapes stronger proposals.

This is one of the biggest cultural differences between defense and civilian research funding. At NIH, contacting a program officer before submission is useful but optional. At DARPA, it is practically essential.

Other Transaction Authority (OTAs)

Other Transaction Authorities are a contracting mechanism used extensively by DOD to engage with non-traditional defense contractors. OTAs are not grants, contracts, or cooperative agreements -- they are a separate legal category that offers more flexibility than the Federal Acquisition Regulation (FAR) typically allows.

Why OTAs matter for small businesses and universities:

• OTAs do not require compliance with many FAR clauses that are burdensome for non-traditional performers
• Intellectual property terms are more flexible than standard government contracts
• Cost accounting requirements are less onerous
• The contracting process can be faster than traditional procurement

DOD uses OTAs through consortium models. Organizations like the National Security Innovation Network (NSIN), various Defense Innovation Unit (DIU) programs, and specific OTA consortia solicit proposals and award prototype agreements to member organizations. Joining a relevant consortium gives you access to rapid-turnaround solicitations that are not available through traditional channels.

Getting Registered: SAM.gov and DSIP

Before you can receive any DOD funding, you need to be registered in the right systems.

SAM.gov

The System for Award Management is required for all federal awards. Registration is free but takes 2-4 weeks. You need:

• A Unique Entity ID (UEI)
• Your organization's legal name, address, and EIN
• Banking information for electronic fund transfers
• NAICS codes relevant to your work
• A designated Entity Administrator

Keep your SAM registration active. It expires annually, and a lapsed registration will prevent you from receiving new awards or modifications to existing ones.

DSIP (Defense SBIR/STTR Innovation Portal)

If you are applying for DOD SBIR/STTR awards, you must register on DSIP (formerly the DOD SBIR/STTR Submission Portal). This is separate from Grants.gov and is the platform through which all DOD SBIR/STTR proposals are submitted.

DSIP registration requires your SAM.gov UEI and organizational information. The portal also requires you to certify your small business status and export control compliance.

DUNS/UEI and Cage Codes

You will need a Cage Code (Commercial and Government Entity code) for many DOD awards. If you do not have one, you can request it through SAM.gov during your registration process.

Writing Defense Proposals: Cultural Differences

Defense proposal writing has its own conventions that differ from NIH, NSF, or foundation proposals. Failing to adapt your writing style to defense expectations is a common mistake among first-time applicants.

Quad Charts

Many DOD programs -- particularly SBIR/STTR and DARPA -- request a quad chart as part of the proposal or as a standalone summary. A quad chart is a single-page, four-quadrant summary:

• Top left: Problem statement and technical approach
• Top right: Key milestones and schedule
• Bottom left: Team qualifications and management plan
• Bottom right: Cost summary and transition plan

The quad chart is often the first thing a program manager reads. It should be immediately understandable to a technically literate reader without additional context. Graphics, diagrams, and concise bullet points work better than paragraphs of text.

Technical Volume Structure

DOD technical volumes typically follow this structure:

1. Technical Approach: What are you going to do, and how?
2. Innovation: What is new about your approach compared to the state of the art?
3. Schedule and Milestones: Specific deliverables at defined intervals
4. Key Personnel: Bios of the team members who will do the work
5. Facilities and Equipment: What you have and what you need
6. Related Work: Other projects that inform or complement this effort

Unlike NIH, where "significance" is a scored section, DOD proposals emphasize "so what" -- what is the military utility? How does this technology transition to an operational capability? Proposals that describe interesting science without connecting it to a defense need will not score well.

Transition Plans

Every DOD research proposal must address how the technology will transition from the lab to the field. For SBIR/STTR, this means a commercialization plan that identifies potential military and commercial customers. For DARPA, this means a transition path from research prototype to acquisition program.

A credible transition plan includes:

• Identification of the military end-user (specific commands, programs, or offices)
• Engagement with potential transition partners (defense primes, program offices)
• A realistic timeline from research completion to operational deployment
• Technical readiness level (TRL) assessment at start and end of the project

Reviewers know that basic research is far from deployment. They do not expect a firm commitment from an acquisition program. But they do expect that you have thought about who would use this technology and how it would get from your lab to their hands.

Classification and Export Control

If your research touches on classified information, controlled unclassified information (CUI), or export-controlled technologies, address this in your proposal. Even unclassified fundamental research proposals should note any potential classification issues and how you will manage them.

International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) apply to many defense-related technologies. If your team includes foreign nationals (including graduate students on visas), you need to address export control compliance explicitly. Some DOD programs restrict foreign national participation; others do not but require specific management plans.

DOD SBIR/STTR: A Closer Look

The DOD SBIR/STTR programs are the most accessible entry point for small businesses new to defense funding. Here is what you need to know to submit a competitive proposal.

Finding Topics

DOD SBIR/STTR topics are published on the DSIP portal. Each topic describes a specific technical need, written by a topic author who is typically a military scientist or engineer. Topics are organized by component (Army, Navy, Air Force, DARPA, etc.).

Read the topic description carefully. Each topic includes:

• A description of the military need
• The current state of the art and its limitations
• The specific technical objectives the topic author wants to achieve
• Phase I deliverables
• References and keywords

Successful proposals respond directly to the topic description. Generic technology pitches that do not address the specific military need will not score well, no matter how impressive the technology.

Pre-Release and Open Topics

Some DOD components, particularly the Air Force through AFWERX, use an open topic model. Instead of publishing specific topics, they publish broad challenge areas and accept proposals that address any relevant technology need. This gives proposers more flexibility but also requires a stronger articulation of the military use case.

Phase I Proposal Structure

A typical DOD SBIR Phase I proposal includes:

• Technical Volume (usually 20-25 pages): Technical approach, innovation, key personnel, related work
• Cost Volume: Detailed budget with justification for each line item
• Company Commercialization Report (CCR): Your track record of transitioning SBIR research to products or services
• Supporting documents: Letters of support, facility certifications, data rights assertions

The Company Commercialization Report

The CCR is unique to DOD SBIR/STTR. It documents your company's history of turning SBIR Phase I and Phase II awards into Phase III contracts, commercial sales, or additional investment. Companies with strong CCRs -- demonstrating a track record of transition -- receive higher scores.

If you are a first-time SBIR applicant with no CCR history, focus on demonstrating other indicators of commercialization potential: letters of interest from military end-users, commercial market analysis, advisory board members with defense acquisition experience, and relevant non-SBIR revenue that shows your ability to deliver products.

Entry Points for University Researchers

If you are a university PI considering defense funding for the first time, here are the most accessible starting points:

Young Investigator Programs (YIP): ONR, AFOSR, and ARO each run YIP programs for early-career faculty. These are prestigious, well-funded awards that provide 3 years of support and establish a relationship with the funding agency.

Core research BAAs: Each service research office publishes BAAs covering their basic research portfolio. Find the program officer whose portfolio aligns with your research, reach out to introduce your work, and discuss whether a proposal would be welcome.

MURI: If you are part of a team of investigators spanning multiple disciplines, MURI is a high-value mechanism. Topics are published annually, and awards typically run $1.5 million per year for 3-5 years.

DURIP: If you need a major piece of equipment for your lab, DURIP grants from ONR, AFOSR, or ARO can cover it. Awards range from $50,000 to $1.5 million.

NDSEG Fellowship: If you have graduate students who are U.S. citizens, the National Defense Science and Engineering Graduate Fellowship provides full tuition and stipend for 3 years. Funded students can work on defense-relevant research in your lab.

Building a Defense Research Portfolio

Defense funding is relationship-driven to a degree that many civilian researchers find surprising. Success in the defense funding world comes from building sustained relationships with program managers, delivering results on current awards, and positioning yourself for the next program.

Here is a practical sequence for building a defense research portfolio from zero:

1. Identify the relevant program office (ONR, AFOSR, ARO, or DARPA) and the specific program officer whose portfolio aligns with your research
2. Make contact through your institution's research office, at a conference, or directly via email
3. Submit a white paper or proposal to a core research BAA or YIP
4. Deliver excellent results on your first award -- meet milestones, publish, and communicate proactively with your PM
5. Expand through follow-on proposals, MURI teams, or DARPA programs that build on your initial work

The first award is the hardest to get. After that, your track record becomes your most powerful asset.

Keep Reading

• Pentagon's $13 Billion AI and Autonomy Budget: How to Win Defense Contracts
• How to Respond to a DARPA BAA
• DOD SBIR Proposal Guide: Agency Breakdown
• Explore Granted AI for SBIR proposals

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