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The Pentagon’s Office of Strategic Capital (OSC) has announced the release of its first Notice of Funding Availability (NOFA), setting out the eligibility criteria and initiating the application process for OSC loans to help expand and reindustrialise the US industrial base.
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This announcement marks the first Office of Strategic Capital application call to accelerate commercialisation and scale production for critical technologies.
US Deputy Secretary of Defense Kathleen Hicks explained the importance of the NOFA, saying: “With this Notice of Funding Availability, OSC establishes itself as a credible lending partner for US-based companies that manufacture and produce critical technology components.”
The NOFA will finance companies’ equipment needs to help them scale production in the 31 covered technology categories identified as promising critical technologies and assets in the US National Defense Authorisation Act for fiscal year 2024 (FY24 NDAA).
“This demonstrates that DOD is dedicated to using every tool in our toolbox to secure America’s and our military’s enduring technological advantage,” the deputy secretary said.
An initiative of US Defense Secretary Lloyd Austin, the Office of Strategic Capital was established in December 2022 with the mission to attract and scale private capital for national security priorities.
Congress formally enacted OSC into law through the FY24 NDAA in December 2023, granting the office new authorities to issue loans and loan guarantees. Congress also appropriated funds for OSC in March 2024 to loan up to US$984 million (AU$1.43 billion) to eligible companies in this NOFA.
OSC director Jason Rathje said: “Through these congressional authorities and appropriations, the DOD now has proven financial tools to enable millions of dollars of investment in national security priorities at limited cost to the department and the taxpayer.”
OSC aims to use the US’ comparative advantages in capital markets and economic competition to crowd in capital for the critical technology supply chains needed by the US Department of Defense.
DOD’s National Defense Science and Technology Strategy specifies 14 critical technology areas vital to national security. By attracting private capital investments into these critical technology areas, OSC seeks to accelerate the development and deployment of technology critical to current and future warfighting capabilities.
More information about the Office of Strategic Capital is available here.
