The Pentagon wants to boost American manufacturers of small unmanned aerial systems by connecting them with "trusted" venture capitalists as part of a new program being launched later this fall.
Small UAS firms will be the initial focus of the new "Trusted Capital Marketplace" program, Ellen Lord, under secretary of defense for acquisition and sustainment, said today during a conference hosted by the Association for Unmanned Vehicle Systems International in Washington.
"What we are going to focus on are small UAS, where we have a deficit of capability, but a lot of technology," Lord said.
While DOD had previously said the Trusted Capital Marketplace would be launched in June, the goal now is for the program to be up and running in the "late October, early November time frame," Lord said. She did not provide a reason for the delay.
The new program is aimed at connecting small technology firms deemed critical to national defense with trusted sources of private capital, rather than risk those companies taking money from Chinese investors.
"It's illegal for me to take one investor and have them sit down with one company," Lord said. "But I can create an environment where DOD states what our requirements are, what our needs are, and bring a number of companies together that we think meets that criteria, along with a lot of vetted sources of capital, and allow them to develop their own ecosystem and begin to invest in one another."
Small UAS is one area U.S. officials have increasingly focused on as crucial to national defense yet reliant on foreign supply. A DOD industrial base report released last fall pointed to how a single Chinese manufacturer represents 70 percent of the commercial unmanned aerial system market, including "a dominance in the small unmanned aerial system subsector."
Ever since former Defense Secretary Jim Mattis banned DOD organizations from purchasing commercial off-the-shelf UAS in 2018, Lord said she and DOD CIO Dana Deasy have spent "a lot of quality time together" reviewing waiver applications from DOD organizations seeking to circumvent that ban to purchase quadcopters made by DJI, a leading drone manufacturer headquartered in Shenzhen, China.
"The demand signal is a very, very strong, especially for expeditionary units, special operations and so forth," Lord said.
In June, President Trump issued a Presidential Determination authorizing DOD to use Defense Production Act Title III funding to bolster the domestic industrial base for small UAS. The determination allows DOD to spend up to $50 million per year on economic incentives for small UAS suppliers, such as "purchases to create or expand production capacity or assistance with the purchase and installation of production equipment," according to a DOD spokesman.
Lord said DOD's goal is to help small UAS firms get to the point where they are viable not just as defense suppliers, but as commercial businesses.
"What we would like to do in terms of the industrial base is to get the defense market to really begin to see that and get it going, but then have actual applicability to the commercial market, because if we get to the scale, then the economies of scale are there, the prices come down and so forth," she said.