The US Department of Defense (DOD) has announced a $100m initiative to fund private medtech and pharma projects, and strengthen supply chains impacted by the Covid-19 pandemic.

Through a memorandum of agreement (MOA) with the US Development Finance Corporation (DFC), the DOD will bear all direct and indirect costs for eligible projects seeking financial support under the Defense Production Act (DPA).

This agreement between the two organisations will attempt to create, expand, and restore domestic production of personal protective equipment (PPE), medical testing supplies, vaccines, pharmaceuticals, ventilation equipment, and relevant ancillary materials and technologies in the US.

Funding will come from the DOD’s spend plan outlined in the CARES (Coronavirus Aid, Relief, and Economic Security) Act — which became the largest economic stimulus package in US history when it was passed into law by President Donald Trump on 27 March.

DOD undersecretary for acquisition and sustainment Ellen M Lord, who signed the agreement on behalf of the government department, said: “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.

“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.”


The US Department of Defense’s funding for Covid-19-related production

The MOA signed by the DOD and the DFC on 22 June will formalise the relationship between the two organisations, and is designed to bolster the country’s industrial base capabilities following the Covid-19 crisis.

The DFC will originate, screen, and conduct due diligence on private projects seeking funding under the DPA.

It will also underwrite and grant funding to projects that clear its comprehensive review process.

These responsibilities will be carried out in consultation with the DOD, and the two agencies will establish a working group to ensure close coordination and implementation of the MOA.

Following the announcement, DFC CEO Adam Boehler said: “Today marks an important milestone in DFC’s collaboration with DOD under the Defense Production Act.

“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 US production of strategic resources will also allow the United States to assist allies around the world.”

In a statement, the DOD said any interested parties can review the full eligibility criteria for projects – and learn how to submit a proposal – via the DFC website, adding that submissions will be reviewed on a rolling basis, and selected competitively following a thorough due diligence and approval process.