DoD hands out $84 million in recovery funds for small unmanned companies, space firm

WASHINGTON — The Department of Defense on Friday announced it was issuing $84.4 million in funding through the Defense Production Act to small unmanned, 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.”

In recent months, the Defense Production Act has gotten a major spotlight as a central tool in attempts by the Trump administration to increase production of personal protective equipment to combat the spread of COVID-19, something critics say the administration has moved too slowly on.

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 up shop. 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.

Undersecretary of Defense for Acquisition and Sustainment Ellen Lord has previously identified shipbuilding, aviation and the small space sector as three areas that are suffering under the economic impacts from COVID-19, and said her office would be watching them going forward. That seems to have played out in the Pentagon’s announcement about its $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 CARES Act and were awarded through the Defense Innovation Unit. The Pentagon 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.

  • AirMap, in Santa Monica, Calif., 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, Calif., 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, Calif., 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, NJ., 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, Calif., 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, of Menlo Park, Calif., 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 states that LeoLabs is the only domestic commercial supplier with the capability to meet requirements in this area.

The money, also from the CARES Act, will help “offset” economic damage from COVID, per the department. Last month, the Space Force invoked the DPA in order to get funding to six small space companies that were viewed as at-risk, before reversing those awards just 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 headquartered in Chicago. The funding, once again from the CARES Act, will be used to “protect” jobs impacted by the COVID-19 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.

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