The U.S. Department of Defense announced today that it will dedicate $100 million authorized by the CARES Act to boost medtech and pharmaceutical manufacturing in the U.S.
Working with DOD, the newly formed U.S. International Development Finance Corporation (DFC) launched a request for proposals from companies seeking financing under the Defense Production Act, which prioritizes government orders amid a war or national crisis.
The Trump administration has invoked the Korean-War-era law to require certain manufacturers to produce critically needed ventilators and personal protective equipment during the COVID-19 pandemic. For example, the president ordered General Motors in March to start producing ventilators for COVID-19 patients. In April, the defense department awarded $133 million in N95 respirator contracts to 3M (NYSE:MMM), Owens & Minor (NYSE:OMI) and Honeywell (NYSE:HON) under the act.
In the latest initiative, eligible projects should help return production to the U.S. or strengthen related domestic supply chains of personal protective equipment, medical testing supplies, vaccines, pharmaceuticals, ventilation equipment or “relevant ancillary materials and technologies,” according to defense department.
“Today marks an important milestone in DFC’s collaboration with DOD under the Defense Production Act,” said DFC CEO Adam Boehler in a news release. “We look forward to working together with DOD and the private sector to protect the health and safety of Americans by strengthening critical supply chains at home. Increased U.S. production of strategic resources will also allow the United States to assist allies around the world.”
“The COVID-19 pandemic response has highlighted what DOD has always known, a strong domestic supply chain is critical for economic and national security. DOD is committed, in partnership with other federal agencies, to bring all tools available to support the response to COVID-19,” added Ellen Lord, DOD undersecretary for acquisition and sustainment. “I look forward to this partnership between DOD and DFC. We both wholeheartedly believe it will provide new avenues to expand and support our domestic industrial base for medical resources in support of the nation’s COVID-19 response.”
Interested parties can review the full eligibility criteria and learn how to submit a proposal on the DFC website. Submissions will be reviewed on a rolling basis and selected through a competitive process subject to a thorough due diligence and approval process, according to the DOD.