New DOD Program Helps Dual-Use Hardware Startups Accelerate Product Development

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The US Department of Defense has launched a new program called National Security Innovation Capital.

The program aims to stimulate and access technological innovation in hardware in the private sector.

Located in Mountain View, Calif., NSIC fills the trust funding gap from private venture capital sources for the development of new hardware technologies with commercial and national security applications, said Tex Schenkkan, director of NSIC.

“This is an effort to protect against antagonistic capital and ensure that our national security innovation base continues to be strong,” he said, referring to China and other antagonistic countries financing and developing equipment for military use.

Congress funded additional F-35 Lightning II aircraft in the Fiscal Year 2020 budget. Pictured is an F-35 at Nellis Air Force Base, Nev. (Air Force photograph by Airman 1st Class Bailee A. Darbasia)

Less than 30% of US private venture capital is invested in computer hardware companies, and less than 10% of that capital is invested early on, where it is needed most. In many cases, hardware startups had to look to foreign sources of capital, making them vulnerable to the loss of their intellectual property to potential adversaries, he said.

The NSIC team identifies tech startups across the country that would benefit from government funding to develop dual-use products and bring them to market. NSIC funding allows these companies to speed up their product development plans and reduce inherent technical risks, Schenkkan said.

NSIC’s funding and engagement attracts additional private capital, further accelerating the company’s progress towards product launch and blocking future investment from unreliable sources, he added.

Since the NSIC began in February, it has received $ 15 million in funding from Congress. He is on track to commit all of these funds by the end of September. It has awarded prototype development contracts to companies in multiple technological fields.

An Atlas V rocket carrying a satellite into a geosynchronous orbit of the infrared system based in space for an Air Force mission takes off from Cape Canaveral Air Force Base, Fla., Jan. 19, 2018. (Photo by United Launch Alliance)

Schenkkan said a few examples include:

* Xplore is developing a high-powered, carpooling-capable spacecraft providing the infrastructure necessary to perform missions from low Earth orbit to the moon and through cislunar space for commercial, scientific and national security end users .
* New Frontier Aerospace is developing a new rocket motor design for hypersonic vehicles.
* FuelX is developing a manufacturing process that produces a material for the safe storage and transportation of hydrogen.
* Advanced Magnet Lab is a company that creates a manufacturing process that will result in a national source of new high performance magnets.
* A soon-to-be announced company is building a nationwide manufacturing facility to produce qualification cells based on next-generation battery chemistry.
* NSIC is part of the innovation ecosystem of the department led by the Defense Innovation Unit. Its streamlined procurement process takes advantage of the Other Transaction Power already granted and used by DIU.
* “NSIC is an important part of accelerating emerging commercial technologies in DOD,” said Michael Brown, director of DIU. “Funding innovative dual-use technology to improve national security is essential in our country’s strategic competition with China and provides the best technology to our military. “


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