WASHINGTON — The U.S. Department of Defense announced Friday it is issuing $84.4 million in funding through the Defense Production Act to small unmanned technology, space and shipbuilding companies.

The money, divided among seven different companies, will be used to “sustain and strengthen essential domestic industrial base capabilities,” per a Pentagon announcement. “These actions will help to retain critical workforce capabilities throughout the disruption caused by COVID-19 and to restore some jobs lost because of the pandemic.”

The Defense Production Act has been in the spotlight in recent months, as it’s served as a central tool in attempts by the Trump administration to increase production of personal protective equipment to combat the spread of the coronavirus, something critics say the administration was too slow to implement.

Title III of the DPA gives the department the opportunity to fund what it sees as critical suppliers of the defense industry who might otherwise be at risk of closing. Although those authorities have been on the books for years, the department became more serious about using them following a 2018 landmark study of the defense industrial base that identified a number of sectors where small companies that provide key parts for America’s arsenal could go out of business.

The undersecretary of defense for acquisition and sustainment, Ellen Lord, previously identified shipbuilding, aviation and the small space sector as three areas that are suffering under the economic impacts from COVID-19. She has said her office will keep an eye on those sectors. That seems to have played out in the Pentagon’s announcement about the $84.4 million in funding.

Of the funding, $13.4 million went to five small unmanned systems companies. Funding was authorized and appropriated under the Coronavirus Aid, Relief and Economic Security Act, and awarded through the Defense Innovation Unit — the Silicon Valley technology hub for the Pentagon. The department claims the funding “saved 14 jobs, created 20 new positions, and will support continued advancement of capabilities providing the companies additional paths for recurring revenue.”

Even before the economic damage from COVID-19, the department had identified small UAS manufacturers as a sector that needs to grow. Included in this latest funding are:

  • AirMap, in Santa Monica, California, which received $3.3 million. The money will “aid product development and engineering support for integration of sUAS mission planning, post-mission analysis, and unmanned traffic management software.”
  • ModalAI, of San Diego, California, which received $3 million to “develop their next generation U.S.-made flight controller that will enable advanced autonomy including GPS-denied navigation, and all-environment obstacle avoidance.”
  • Skydio, in Redwood City, California, which received $4 million to “improve the flight controller hardware/software and data link for their sUAS so that highly capable components can be purchased and used across U.S. Government unmanned systems.”
  • Graffiti Enterprises, located in Somerset, New Jersey, which was given $1.5 million to “modify their commercial data link for DoD’s sUAS use including operation in restricted frequency bands, reduction in the size, weight, and power of the hardware, and software developments to improve security and resiliency of their data link.”
  • Obsidian Sensors, from San Diego, California, which received $1.6 million to build a “low-cost, dual thermal sUAS camera that can be mounted onto a stabilization gimbal and then integrated and flown on small, packable, ISR systems.”

In addition, the Pentagon awarded $15 million to LeoLabs, based in Menlo Park, California, to “ensure the continued viability of space surveillance capability through the operation and maintenance of a world-wide highly capable phased-array radar network.” The department said LeoLabs is the only domestic commercial supplier with the capability to meet requirements in this area.

Last month, the Space Force invoked the DPA to get funding for six small space companies that were considered at risk, before it reversed those awards two weeks later.

While those are all fairly small technology firms, the biggest dollar amount awarded was $56 million for ArcelorMittal Inc., a steel and mining company based in Chicago, Illinois. The funding, also from the coronavirus relief package, will be used to “protect” jobs impacted by the pandemic that are critical to military shipbuilding.

Specifically, the investment will “expand ArcelorMittal’s plate processing footprint and heat-treating capability, subsequently increasing its alloy steel plate production and ensure the U.S. Government gets dedicated long-term industrial capacity to meet the needs of the nation,” per the department.

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

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