Alternative Fuel Technologies Awarded $715,000 Phase 2 SBIR U.S. Army Contract

Oct 27, 2010, 09:00 ET from Alternative Fuel Technologies, Inc.

REDFORD, Mich., Oct. 27 /PRNewswire/ -- Alternative Fuel Technology, LLC, a wholly owned subsidiary of Alternative Fuel Technologies, Inc. (Pink Sheets: AFTC) announced today that the Company has been awarded and has commenced working on a U.S. Army Phase 2 SBIR project valued at US$715,000.

"This is the largest Army contract the Company has ever been awarded," said James McCandless, Chief Executive Officer of Alternative Fuel Technologies, Inc. "The Phase 2 project is an extension of a successful Phase 1 project in which AFT identified a significant wear problem on a commercial diesel common rail fuel injection system running on JP-8 jet fuel."

The Army uses JP-8 jet fuel in all of its diesel applications for logistics reasons. The Company will redesign the commercial diesel common rail pump to lower wear to acceptable levels in this Phase 2 project. To accomplish this goal, AFT will apply materials technology and other lessons learned during the development of the Company's well known DME common rail fuel system.

"Following successful completion of Phase 2, the project may qualify for Phase 3 whereby the Company can commercialize the product and sell it to the military and commercial customers," said McCandless.

About Alternative Fuel Technologies, Inc.

Alternative Fuel Technologies, Inc. is a research & development organization engaged in the design, development and prototype manufacturing of advanced fuel systems for use with a new alternative fuel -- dimethyl ether (DME). The Company has developed practical, low-cost fuel injection equipment for DME fueled vehicles and currently provides complete DME fuel systems for testing and research purposes in addition to retrofit systems that can be used with most diesel engines. The Company's ultimate goal is series production of DME fuel systems for the global automotive market by 2011. For more information, visit:

About SBIR's:

DoD's SBIR program funds early-stage R&D projects at small technology companies -- projects which serve a DoD need and have the potential for commercialization in private sector and/or military markets. The program, funded at approximately $1.23 billion in FY 2009, is part of a larger (>$2 billion) federal SBIR program administered by twelve federal agencies.

As part of its SBIR program, the DoD issues an SBIR solicitation three times a year, describing its R&D needs and inviting R&D proposals from small companies -- firms organized for profit with 500 or fewer employees, including all affiliated firms. Companies apply first for a six-month to nine-month phase 1 award of $70,000 to $100,000 to test the scientific, technical, and commercial merit and feasibility of a particular concept. If phase 1 proves successful, the company may be invited to apply for a two-year, phase 2 of approximately $725,000 to further develop the concept, usually to the prototype stage. Proposals are judged competitively on the basis of scientific, technical, and commercial merit. Following completion of phase 2, small companies are expected to obtain funding from the private sector and/or non-SBIR government sources (in "Phase 3") to develop the concept into a product for sale in private sector and/or military markets.

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SOURCE Alternative Fuel Technologies, Inc.