Defense Innovation Unit (DIU): How Commercial Solutions Openings and Prototype OTs Work

Who this is for: founders, university technology-transfer staff and research administrators asking how the Defense Innovation Unit (DIU) buys prototypes and whether a research-based team can respond. After reading, you should be able to say how a Commercial Solutions Opening differs from a grant, what the statute requires of a prototype agreement, and what the steps from first brief to follow-on production look like. Everything below is as described on the official pages and statute text on 2026-11-07; programs change, so confirm current solicitations on the DIU site.

What the Defense Innovation Unit is and who runs it

DIU stands for Defense Innovation Unit. The organization launched in August 2015 as DIUx under Secretary of Defense Ash Carter. On the date checked, its own website styles it the “Department of War Innovation Unit” and describes it as a Department of War field activity; this page uses the long-standing name DIU. Its stated number one goal is “rapid prototyping, transition and delivering results” (diu.mil/about).

The Department of Defense is not “the military” itself. It is the executive department that administers the armed forces, and the official DIU pages now use the Department of War styling. DIU is one of several defense research and innovation organizations; for a sibling with a different model see our guides to DARPA artificial intelligence programs and the DARPA Technology Transfer Office. DARPA is still named as an active prototype-agreement authority in the statute (see below).

Eligibility: who can respond

According to diu.mil/work-with-us, any individual or commercial entity may respond to a DIU solicitation, whether or not it has sold to the government before. That is the practical eligibility rule for submitting a solution brief.

The statute adds a second test for the agreement itself. Under 10 U.S.C. 4022(d), a prototype transaction must meet at least one of four conditions:

• at least one nontraditional defense contractor or nonprofit research institution participates to a significant extent;
• all significant non-government participants are small businesses or nontraditional defense contractors;
• at least one third of the total prototype cost is paid from non-federal sources; or
• the senior procurement executive makes a written determination of exceptional circumstances.

For research-based teams the first condition matters most: a nonprofit research institution counts, so a university lab teaming with a startup can satisfy it. Whether your organization qualifies as a “nontraditional defense contractor” turns on statutory definitions outside this page, so check the definition in the solicitation.

What DIU funds and how it contracts

DIU uses a Commercial Solutions Opening (CSO) to competitively solicit proposals for innovative commercial solutions, and posts solicitations on its website. It mainly uses Other Transaction authority (10 U.S.C. 4022) for prototype agreements, which DIU says can be awarded in as few as 60 to 90 days. Payment is milestone-based through DFAS, with invoices submitted through iRAPT in WAWF. For how Other Transactions differ from grants and procurement contracts generally, read Other Transaction authority vs grants and contracts.

Intellectual property: DIU states that companies generally keep their IP, while the department usually licenses certain rights. Read the specific agreement; the general statement does not replace its terms.

Approval thresholds in the statute: the DARPA Director, the DIU Director, a service secretary or a designee may carry out prototype projects. Projects above $100 million up to $500 million need a written determination by the head of the contracting activity (the agency director for DARPA, DIU and MDA). Above $500 million, the senior procurement executive must determine and Congress must be notified 30 days ahead; that authority is not delegable.

Application steps

For a company or research team

1. Find an open solicitation on the DIU website.
2. Send a short solution brief.
3. If DIU is interested, it contacts you for a pitch; if not, it aims to tell you quickly.

For a government partner organization

1. Contact DIU with a mission-critical challenge; DIU describes this as bringing a liaison and funding.
2. DIU turns the challenge into a solicitation.
3. DIU awards one or more prototype agreements.

Typical phases

Phase	What happens	Source
Solicitation	DIU posts a CSO solicitation for a defined challenge	diu.mil/work-with-us
Solution brief and pitch	Short brief first; pitch only if DIU is interested	diu.mil/work-with-us
Prototype agreement	Mainly an Other Transaction under 10 U.S.C. 4022; as few as 60 to 90 days to award, milestone payments	diu.mil/work-with-us
Follow-on	After a successful prototype, any interested department entity can enter a non-competitive follow-on production contract or agreement; a “Success Memo” lets any federal agency use the solution without re-competing, with no time limit	diu.mil/work-with-us; 4022(f)

The statute (4022(f)) permits follow-on production without competitive procedures when participants were selected competitively and successfully completed the prototype project, including on completion of an individual prototype or subproject within a consortium. Teams often describe their maturity using technology readiness level (TRL).

Common mistakes

• Treating a CSO like a grant call. The response is a short solution brief to a specific challenge, not a research proposal with an aims section.
• Assuming prior government sales are needed. DIU states that they are not.
• Skipping the statutory test. The agreement must meet one of the four 4022(d) conditions; a nonprofit research institution partner is one way to do so.
• Reading the general IP statement as the contract. Rights are set in the agreement.
• Overlooking export controls. Defense work can raise ITAR requirements for technical data and foreign collaborators.

Related programs

Page	Why it is relevant
DARPA AI programs	DARPA is also named as a prototype-agreement authority in 10 U.S.C. 4022(a)
DARPA Technology Transfer Office	Another defense route for moving research toward use
SBIR	A small-business research program often considered alongside prototype agreements
NIH vs DoD grant requirements	Contrasts requirements for the two sponsors

Frequently asked questions

What does DIU stand for?

Defense Innovation Unit. It began in 2015 as DIUx; its current website styles it the Department of War Innovation Unit.

Is the Department of Defense the military?

No. It is the executive department that administers the armed forces. Official DIU pages now use the name Department of War.

What is the latest military technology in the US?

No single list exists. DIU publishes the work it is currently running on its website’s active projects page, which is the most direct primary source for its portfolio.

Is DARPA still active?

Yes. DARPA remains named alongside DIU as an authority that may carry out prototype projects under 10 U.S.C. 4022(a), and CASRAI covers its programs in the guides linked above.

Sources

• DIU, About, read 2026-11-07
• DIU, Work with us, read 2026-11-07
• 10 U.S.C. 4022, Legal Information Institute, read 2026-11-07