The Welch Engineering and Hughes Space and Communications (WE/HSC) team is pleased to propose a universal Inertial Navigation System (INS) enabled by Microelectromechanical Systems (MEMS) technology. We will leverage Welch Engineering's expertise in inertial navigation system software design for space and ground applications and HSC's extensive internal MEMS R&D and several of its MEMS research partnerships for the more stringent space INS applications. With our relevant expertise, we will define requirements and identify MEMS sensors from proven single-crystal-silicon designs that have the hallmarks of navigation grade inertial sensors. Custom low-power digital CMOS for sensor compensation, control and I/O will complement this high performance MEMS and is also key to our compact universal design. The basic MEMS-based IMU performance will be enhanced and further optimized using a two-layered software compensation approach via unaided and aided fashion to provide a robust navigation solution. The overall compensation scheme will be architected for maximum reuse and plug-and-play utility for future component interchangeability. The Phase I success will set the stage for building a breadboard of the universal INS using a Commercial-off-the-shelf PC product development system in Phase II and the laboratory or field demonstration of the complete INS and an integrated GPS/INS.