Notice2024-22229
Notice of Funding Availability-Covered Technology Categories-Equipment Financing
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 27, 2024
Issuing agencies
Defense Department
Abstract
The OSC is announcing the availability of up to $984,000,000 aggregate funding for direct loans for equipment financing for technologies in the designated covered technology categories.
Full Text
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<title>Federal Register, Volume 89 Issue 188 (Friday, September 27, 2024)</title>
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[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79271-79278]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-22229]
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DEPARTMENT OF DEFENSE
Office of the Secretary
Notice of Funding Availability--Covered Technology Categories-
Equipment Financing
AGENCY: Office of Strategic Capital (OSC), Office of the Under
Secretary of Defense for Research and Engineering, Department of
Defense (DoD).
ACTION: Notice of Funding Availability (NOFA).
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SUMMARY: The OSC is announcing the availability of up to $984,000,000
aggregate funding for direct loans for equipment financing for
technologies in the designated covered technology categories.
DATES: Applications will be accepted per the terms set forth below.
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact David Vidal, Office of Strategic Capital Director of
Credit Programs, at <a href="/cdn-cgi/l/email-protection#0b4d6e6f6e796a6725596e6c62787f6e792545647f62686e4b64786825666267"><span class="__cf_email__" data-cfemail="c680a3a2a3b4a7aae894a3a1afb5b2a3b4e888a9b2afa5a386a9b5a5e8abafaa">[email protected]</span></a>, tel. no. 703-545-
1903. Please direct media inquiries to the OSC Press Team at
<a href="/cdn-cgi/l/email-protection#fc99929b9d9b99919992888fbc938f9fd2919590"><span class="__cf_email__" data-cfemail="dcb9b2bbbdbbb9b1b9b2a8af9cb3afbff2b1b5b0">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
1. Notice of Funding Availability Overview
<bullet> Federal Agency Name: Office of Strategic Capital, U.S.
Department of Defense.
<bullet> Federal Funding Opportunity Title: Office of Strategic
Capital Notice of Funding Availability (Equipment Finance).
<bullet> Announcement Type and Date: Initial announcement for the
Office of Strategic Capital Notice of Funding Availability (Equipment
Finance), as authorized by section 903 of the National Defense
Authorization Act for Fiscal Year 2024. Effective date: September 27,
2024.
<bullet> Purpose: This Notice of Funding Availability seeks
applications for financing the construction, expansion, or
modernization of commercial equipment in the United States. These
commercial facilities and their products will support, either directly
or indirectly, Covered Technology Categories as set out in 10 U.S.C.
149(e). The Office of Strategic Capital will provide direct loans in
the amount of $10-$150 million under this Notice of Funding
Availability. The eligibility and selection criteria for investments
include compliance with statute, the extent to which an investment
supports U.S. national security or economic interests, the impact that
direct loans would have on the project or transaction, and the
creditworthiness of the investment, among other factors OSC will
evaluate in the application process. See section 5 for additional
information on evaluation criteria.
<bullet> Application Format and Timeline: This Notice of Funding
Availability will employ a two-stage application process. The
application process under this
[[Page 79272]]
Notice of Funding Availability consists of an Application Part 1 to
validate eligibility and project or transaction suitability. As further
detailed below, Applicants with a successful Part 1 submission will be
invited to complete the full application.
[cir] Application Part 1. Part 1 of the application may be
submitted starting on January 2, 2025 and must be received by 4:59 p.m.
Eastern Time on February 3, 2025. See section 7(B) for additional
information on Application Part 1 submission instructions.
[cir] Application Part 2. Following Application Part 1 review, the
Office of Strategic Capital will invite certain applicants to complete
Application Part 2. See section 7(E) for additional information on
Application Part 2 submission instructions.
Application Part 2 submissions will be considered on a rolling
basis. The Office of Strategic Capital may amend, cancel, or withdraw
the Notice of Funding Availability at any time. All changes will be
communicated via Federal Register Notice and the OSC website at <a href="https://www.osc.mil">https://www.osc.mil</a>.
<bullet> Eligible Applicants: Pursuant to section 903 of the
National Defense Authorization Act for Fiscal Year 2024: (1) an
eligible applicant must be an Eligible Entity, (2) investments must be
in a Covered Technology Category, and (3) investments must not be in a
technology that solely has defense applications (each of Eligible
Entity and Covered Technology Category, as defined in the National
Defense Authorization Act for Fiscal Year 2024). Furthermore, eligible
applicants will be assessed for creditworthiness, alignment with the
mission of the Office of Strategic Capital, and compliance with certain
provisions of the Federal Credit Reform Act of 1990. See section 3 of
this Notice of Funding Availability for a full assessment of
Eligibility.
<bullet> Funding Opportunity Description: Direct loans made under
this Notice of Funding Availability will seek to strengthen U.S.
economic and national security by providing equipment finance loans for
companies investing in Covered Technology Categories. Through this
Notice of Funding Availability, the Office of Strategic Capital will
issue approximately $10-$150 million in loans to approximately ten
successful applicants, subject to the availability of funds as set out
in section 4(B)(I) below. Subsequent Notices of Funding Availability
will offer additional forms of financial assistance for companies
investing in Covered Technology Categories.
2. Covered Technology Categories
Per 10 U.S.C. 149(e), the Covered Technology Categories are:
(A) Advanced bulk materials;
(B) Advanced manufacturing;
(C) Autonomous mobile robots;
(D) Battery storage;
(E) Biochemicals;
(F) Bioenergetics;
(G) Biomass;
(H) Cybersecurity;
(I) Data fabric;
(J) Decision science;
(K) Edge computing;
(L) External communication;
(M) Hydrogen generation and storage;
(N) Mesh networks;
(O) Microelectronics assembly, testing, or packaging;
(P) Microelectronics design and development;
(Q) Microelectronics fabrication;
(R) Microelectronics manufacturing equipment;
(S) Microelectronics materials;
(T) Nanomaterials and metamaterials;
(U) Open RAN;
(V) Optical communications;
(W) Sensor hardware;
(X) Solar;
(Y) Space launch;
(Z) Spacecraft;
(AA) Space-enabled services and equipment;
(BB) Synthetic biology;
(CC) Quantum computing;
(DD) Quantum security; and
(EE) Quantum sensing.
3. Notice of Funding Availability
Table of Contents
1. Notice of Funding Availability Overview
2. Covered Technology Categories
3. Notice of Funding Availability Table of Contents
4. Program Description
A. Purpose of Program
B. Program Objectives and Priorities
C. Statutory Authority
5. Federal Funding Information
A. Funding Instrument--Type of Funding
B. Funding Availability
I. Fiscal Year Funds
II. Funding Categories, Interest Rates, Terms and Conditions
III. Direct Loan Amounts
6. Eligibility Information
A. Eligible Applicants
B. Eligible Projects
C. Section 8140 Eligibility Criteria
D. Eligible Costs
7. Application and Submission Information
A. How To Access an Application
B. How To Submit Application Part 1
C. Pre-Application Consultation
D. Application Part 1, Review and Selection
I. Foreign Ownership, Control, or Influence and Adversarial
Capital
II. Evaluation Criteria
E. How To Submit Application Part 2
F. Part 2 Application Review
G. System for Award Management and Unique Entity Identifier
H. Submission Dates and Times
I. Confidential Business Information
J. Funding Restrictions
K. Intergovernmental and Regulatory Review
8. Federal Funding Administration Information
A. Third-Party Expenses and Fees
B. Funding Availability and Limitation of Liability
C. Reporting
D. Additional Information
E. Privacy Advisory
F. Office of Strategic Capital Contact Information
4. Program Description
This Notice of Funding Availability (``NOFA'') from the United
States Department of Defense (``DoD'' or the ``Department'') Office of
Strategic Capital (``OSC'') seeks submission of Part 1 of the
Application for Loan Financing (``Application Part 1'') from eligible
applicants based on criteria set forth in subsequent portions of this
document. Successful Application Part 1 submissions may receive an
invitation from OSC to submit an Application Part 2.
OSC has the authority to provide multiple forms of assistance,
including direct loans, loan guarantees, and technical assistance that
support commercial supply chains for technologies that are critical to
U.S. national security. This inaugural NOFA specifically seeks
applications for direct loans that will support modernization of
manufacturing equipment in Covered Technology Categories. Applicants
are not required to have any past, current, or future DoD or Federal
Government contracts or provide sales or services to the Federal
Government to be eligible. Subject to additional appropriations, OSC
expects to publish opportunities in the future for additional CTCs and
types of assistance, including loan guarantees.
This NOFA provides detailed information about the program
objectives and requirements applicants will need to meet to receive
funding. It also describes the procedures the program will use to
evaluate and select applications for funding. Application Part 1, OMB
Control Number 0704-0694, is due no later than 4:59 p.m. Eastern Time
on February 3, 2025. OSC will invite certain applicants to submit Part
2 of the application (OMB Control Number 0704-0694, ``Application Part
2'') based on its evaluation of Application Part 1. OSC may provide
further guidance on these requirements and procedures in subsequent
publications and through a series of public outreach sessions,
information about which will be available at OSC's website: <a href="https://www.osc.mil">https://www.osc.mil</a>. Interested
[[Page 79273]]
parties should routinely check the website for updates.
OSC reserves the right to amend or modify any of the terms,
procedures, or conditions set forth in this Notice of Funding
Availability.
A. Purpose of Program
OSC's mission is to attract and scale private capital to
technologies critical to the national and economic security of the
United States. The NDAA (as defined below) states OSC shall:
<bullet> develop, integrate, and implement capital investment
strategies proven in the commercial sector to shape and scale
investment in critical technologies and assets;
<bullet> identify and prioritize promising critical technologies
and assets that require funding and have the potential to benefit DoD;
and
<bullet> make eligible investments in such technologies and assets,
such as supply chain technologies not always supported through direct
investment.
The United States is in a global competition to be the world's
leader in emerging and critical technologies. These technologies are
vital to creating enduring national security advantages for the U.S.,
its allies, and partners. Today, the private sector funds the majority
of technological research and development, and, consequently, private
capital is the driving resource that determines the United States'
research and development agenda.
DoD will utilize financial tools available to OSC to attract and
scale the private capital needed to commercialize and scale critical
technologies that enhance the United States' broader national security
and economic interests. OSC is authorized to provide loans and loan
guarantees to eligible projects in select covered technology
categories. OSC aims to build on successful examples of administering
efficient, cost-effective financial tools to advance national security
priorities. By aligning government and private sector incentives around
technologies vital to national security and economic interests, DoD
aims to use the power of the market and economic competition to attract
the capital required for critical technology investment.
B. Program Objectives and Priorities
OSC aims to support entities in expanding and modernizing their
production capabilities while simultaneously encouraging private
capital investment. A key goal in OSC's efforts is to attract and scale
private capital alongside public funds, rather than relying on public
funding alone for investment in national and economic security
priorities. For this inaugural NOFA, OSC's objective is to provide
direct loans to entities for equipment modernization, refurbishment,
and expansion efforts in existing manufacturing facilities that support
the CTCs.
C. Statutory Authority
This NOFA is issued pursuant to the National Defense Authorization
Act for Fiscal Year 2024, Public Law 118-31, section 903 (the
``NDAA''), which authorized the Office of Strategic Capital. Under the
NDAA, OSC is authorized to carry out a pilot program to provide direct
loans to eligible entities for investments in technologies that fall
within specified CTCs and have existing or forecasted commercial
applications beyond solely defense purposes. The eligibility and
selection criteria for investments include compliance with statute, the
extent to which an investment supports U.S. national security or
economic interests, the impact that direct loans would have on the
project or transaction, and the creditworthiness of the investment,
among other factors OSC will evaluate in the application process.
5. Federal Funding Information
A. Funding Instrument--Type of Funding
To accomplish program objectives described in section 3(a) and
section 3(b) above, OSC will provide direct loans to eligible
applicants. Additional financial products will be available in future
NOFAs.
B. Funding Availability
I. Fiscal Year Funds
The Further Consolidated Appropriations Act, 2024 (Pub. L. 118-47)
(the ``Appropriations Act'') included appropriations to support up to
$984,000,000 in direct loans, available for obligation through
September 26, 2026. Total amount of funding for direct loans under this
NOFA may include future appropriations. Amounts funded under this NOFA
will depend on the creditworthiness of applications received and
program priorities. Remaining funding, if any, will be used for future
funding opportunities.
OSC reserves the right to issue funds up to the amounts
appropriated under fiscal year 2024 under this NOFA. Additionally, OSC
retains the discretion to apply funds from future appropriations to
loans issued under this NOFA. OSC will determine the total level of
funding to be issued based on current and future appropriations.
II. Funding Categories, Interest Rates, Terms and Conditions
Based on statutory authority provided in section 903(b)(3)(A) of
the NDAA, OSC has established requirements for terms and conditions for
direct loans under this NOFA. Specific terms will be developed for each
transaction, but this section describes guiding principles for certain
terms.
Interest Rate
The interest rate on direct loans provided under this program shall
be set depending upon factors specific to the transaction and market
factors at the time of approval, including prevailing market interest
rates and the credit risk of the transaction, but in no event at a rate
less than the yield on marketable United States Department of the
Treasury securities of a similar maturity.
Maturity Date
The maturity date for direct loans under this program shall be
determined depending upon factors specific to the transaction at the
time of approval, including the credit risk of the transaction, use of
loan proceeds, useful life of the underlying assets, and collateral.
Prepayment
Direct loans provided under this program may be prepaid without
penalty.
Non-Subordination
OSC loans are senior loans and shall not be subordinated to any
other indebtedness, subject to certain exceptions. The form of
acceptable security will be determined based on factors specific to
transactions and can include a lien on pledged collateral, or other
form of security acceptable to OSC in its sole discretion. In some
cases, pursuant to the NDAA, OSC may make an unsecured corporate loan.
Other Terms and Conditions
OSC reserves the right to determine terms on a transaction-by-
transaction basis under this program. Transactions may be subject to
such other terms, conditions, covenants, representations, warranties,
and requirements as OSC deems appropriate.
III.Direct Loan Amounts
The total amount of direct loan financing provided under this NOFA
will vary by project or transaction and applicants will be required to
specify their financing needs in their Application Part 1. For this
NOFA, a project or transaction is defined as the comprehensive effort
encompassing the
[[Page 79274]]
purchase, refurbishment, installation, maintenance, and/or related
activities associated with the use of equipment for manufacturing
purposes. Direct loan financing will be individually negotiated and
obligated based on considerations specific to each project, as well as
the availability of program funds.
Under this NOFA, OSC will accept loan applications for loan amounts
of no less than $10 million and not exceeding $150 million. The NDAA
section 903(d) requires not less than 80% of the total capital invested
in a CTC-focused industry come from non-Federal sources at the time of
OSC investment. While OSC will monitor compliance with this
requirement, OSC generally does not expect this requirement to restrict
investment into individual projects.
6. Eligibility Information
The eligibility information below applies to this inaugural NOFA.
OSC may revise the scope of eligible projects for future funding
opportunities.
A. Eligible Applicants
The following entities (including relationships by and among
entities, e.g., joint ventures or strategic alliances) are eligible to
apply for direct loans from OSC:
<bullet> an individual;
<bullet> a corporation;
<bullet> a partnership, which may include a public-private
partnership, limited partnership, or general partnership;
<bullet> a trust;
<bullet> a State, including a political subdivision or any other
instrumentality of a State;
<bullet> a Tribal government or consortium of Tribal governments;
<bullet> any other governmental entity or public agency in the
United States, including a special purpose district or public
authority, including a port authority, or
<bullet> a multi-State or multi-jurisdictional group of public
entities.
To ensure the effective allocation of direct loans, OSC will
require that borrowing entities (or sponsors) demonstrate a minimum of
three years of operating history. OSC reserves the right to waive or
increase this requirement in its sole discretion if the application
demonstrates exceptional alignment with NOFA objectives and
requirements.
B. Eligible Projects
Eligible projects or transactions under this NOFA must align with
authorizing language provided in the NDAA, which requires that all
eligible investments made:
<bullet> are in a CTC, and
<bullet> are not a technology that solely has defense applications.
For this inaugural NOFA, OSC aims to fund the procurement or
rehabilitation of equipment for manufacturing processes in the CTCs.
C. Section 8140 Eligibility Criteria
OSC will evaluate project applications for existing Federal
involvement. The Section 8140 Eligibility Criteria were developed
pursuant to section 8140 of the Appropriations Act. The third proviso
of section 8140 requires the Secretary of Defense and the Director of
the Office of Management and Budget (``OMB'') to jointly develop
criteria for ``eligibility for direct loans and loan guarantees that
limit Federal participation in a project consistent with the
requirements for the budgetary treatment provided for in section 504 of
the Federal Credit Reform Act of 1990 (``FCRA''; 2 U.S.C. 661c) and
based on the recommendations contained in the 1967 Report of the
President's Commission on Budget Concepts. All applicants submitting
applications for funding under this NOFA must complete responses for
the Section 8140 Eligibility Criteria. OSC and OMB will perform a
holistic review of the responses to the Section 8140 Eligibility
Criteria responses and determine whether the application meets the
criteria.
Federal Eligibility Threshold Questions
1. Is the prospective borrower seeking financing for a project or
transaction to produce a technology, product, asset, and/or service for
which the Federal Government is the sole user?
2. Is the prospective borrower seeking financing for a project or
transaction to produce a technology, product, asset, and/or service
where repayment is majority dependent on current or anticipated Federal
sources (e.g., grants or contracts)?
Federal Transaction Screening Criteria
1. Is the borrower a public-private partnership, or does the
Federal Government otherwise have a role in the governance of the
activity financed by the proposed transaction (e.g., a corporate
officer position, membership on the Board of Directors, the ability to
unilaterally elect or veto members of the Board of Directors, or other
forms of control or influence reserved for a stockholder), excepting
any terms and conditions contained in the Credit Agreement or ancillary
documents?
2. Is the proposed transaction financing an activity for which a
Federal agency has received previous authorization in legislation, and
without which authorization a private sector entity would not engage in
the activity?
3. In the absence of an OSC loan, is the project economically
viable (e.g., is the OSC loan critical to securing favorable ratings
opinions or catalyzing private investments)? If yes, please explain how
the proposed transaction fits within the assessed current private
market.
4. Does the transaction depend on the Federal Government making
other in-kind contributions (land, real estate, right-of-way, etc.)? If
yes, please explain.
5. What, if any, current Federal capital assets (e.g., Federal
land, structures, equipment, or intellectual property) will be affected
by the transaction? For example, will the transaction finance
construction of an asset on Federal land, or does the transaction rely
on the Federal Government's continued ownership and maintenance of a
structure for viability?
6. To your knowledge, excepting an event of default, would the
Federal Government be required to cover financial losses associated
with the project?
In the Application Part 1, if the applicant answers ``yes'' to any
of the Federal Transaction Screening Criteria, the applicant will be
invited to supplement the answer to provide further detail.
D. Eligible Costs
Direct loans made for eligible projects through OSC may be used to
finance the purchase or rehabilitation of equipment, as well as the
following costs directly associated with the financed equipment:
<bullet> Pre-installation costs, such as planning, development,
engineering analysis, financing, legal expenses, and associated fees
(excepting application costs, which shall not be covered);
<bullet> Ancillary costs, such as preparation of facility,
permitting, utility upgrades, delivery, calibration, first-article
testing and/or qualification, integration with existing systems, as
well as associated modifications or software necessary for operational
use;
<bullet> Installation costs, including cost of labor and materials
required for installation;
<bullet> Appraisal and inspection costs, appraisals required to
determine value of asset, or appraisal or inspections required by law
and industry regulations; and
<bullet> Refinancing costs, on a case-by-case basis.
For any equipment that is purchased prior to submission of the
Application Part 1, any of the above costs that have
[[Page 79275]]
been incurred during the useful life of an underlying asset may be
included, at the sole discretion of OSC.
7. Application and Submission Information
This section 7 describes the application completion and submission
process. First, potential applicants will submit Application Part 1
complete with descriptive information about the equipment purchase or
rehabilitation and the potential borrower. Next, Application Part 1
will be reviewed using the criteria described in sub-section D below.
Finally, applicants who meet these criteria will then be invited to
apply and submit Application Part 2.
A. How To Access an Application
Application Part 1, Application Part 2, FAQs, and other materials
are available at <a href="https://www.osc.mil">https://www.osc.mil</a>.
B. How To Submit Application Part 1
a. All instructions required for submitting Part 1 are located on
the OSC web page, <a href="https://www.osc.mil">https://www.osc.mil</a>.
b. Applicants can submit only one application.
c. A parent company that has subsidiaries applying for funding
based on the parent's audited financials can only be the proposed
guarantor for one application for funding under this notice. If
multiple subsidiaries apply based on the same parent audited financial
statement, only one application for one subsidiary can be funded,
chosen at OSC's discretion.
d. Applications and supporting documents will not be accepted
through mail or courier delivery, in-person delivery, or fax.
C. Pre-Application Consultation
Subject to OSC availability, Applicants can request pre-application
consultation sessions with OSC prior to completion of Application Part
1. This optional pre-application consultation can be useful for
feedback in anticipation of review of materials. Topics of discussion
may include but are not limited to: OSC's economic and national
security goals; the scope of the OSC mission; the application process;
CTCs; long-term investment plans for capital expenditures, as well as
standard, market-oriented terms and conditions for loans. No findings
from a pre-application consultation shall be used to evaluate an
Application Part 1 or Application Part 2 and OSC shall make no binding
agreements whatsoever with applicants during a pre-application
consultation.
D. Application Part 1, Review and Selection
Application Part 1 submissions must be received by 4:59 p.m.
Eastern Time on February 3, 2025. Application Part 1 submissions
received after this date shall not be considered or reviewed. For all
Application Part 1 submissions, OSC and OMB will assess whether the
proposed project meets minimum eligibility requirements described in
this NOFA as well as the loan proposal and supporting project
information. OSC reserves the right to reopen this NOFA for the purpose
of additional submissions of new or amended applications or to offer
additional notices of funding availability.
I. Foreign Ownership, Control, or Influence and Adversarial Capital
During both the Application Part 1 and Application Part 2
evaluation, OSC will assess the degree to which the applicant
(including the borrower, sponsor, or guarantor, as applicable) or the
project or transaction is subject to Foreign Influence and Adversarial
Capital (each as defined below). The scope of the assessment will
include the entity's customers, suppliers, management team, board of
directors or equivalent governing body, the entity's ownership, as well
as other contractual relationships.
For the purposes of this NOFA these terms can be clarified as
described below:
Foreign Influence is a condition that exists when a Foreign Country
of Concern (as defined below) or a Foreign Entity of Concern (as
defined below) has the power, direct or indirect, whether or not
exercised, (A) to direct or decide matters affecting the management or
operations of the company or (B) to access material non-public
information, or (C) to access material intellectual property of the
company. Adversarial Capital is an investment in an entity, in the form
of ownership or credit, from persons, whether legal or individual, in
Foreign Countries of Concern or from Foreign Entities of Concern
hostile to the interests of the United States, its allies, or partners.
For the purposes of this NOFA, a Foreign Country of Concern is as set
out in 15 U.S.C. 4651(7) and a Foreign Entity of Concern is as set out
in 15 U.S.C. 4651(8) and 15 CFR 231.104(c).
In connection with any concerns about Foreign Influence or
Adversarial Capital, OSC reserves the right to employ mitigation
agreements or other measures during the application process, including
not approving a loan application.
II. Evaluation Criteria
OSC will review eligible Application Part 1 submissions and
prioritize them by selection criteria, which include readiness to
proceed and alignment with OSC's mission. Following review, OSC will
invite applicants to submit Application Part 2. At that time, OSC will
furnish an application number for employment throughout the remainder
of the application process.
Application Part 1 will be assessed and prioritized on factors that
include, but are not limited to, the following:
a. Economic and National Security Objectives
OSC is guided by the OSC mission statement: to attract private
capital to national security priorities and scale private investment
into critical technologies. Successful applicants will have a
demonstrated investment in one or more CTCs, either through previous
actions or a comprehensive business plan.
b. Adherence to OSC Statutory Requirements
Applicants that align with covered technologies eligible for
investment and are not solely for defense applications, as outlined in
the NDAA will be eligible for consideration.
c. Alignment With OSC Funding Objectives
Applicants that align with CTCs for equipment modernization efforts
in existing manufacturing facilities will be prioritized under this
NOFA.
d. Speed to Commercialization
Applicants for projects or transactions for which a technology or
product can be quickly brought to market and made commercially
available will be prioritized in the evaluation process.
e. Readiness To Proceed
Applicants in a position to execute on the purchase of equipment
will be prioritized in the evaluation process.
f. Availability of Government Financial Support
The extent to which the project or transaction uses available
funding (i.e., appropriated funds from Congress), allowing OSC to fund
a diverse portfolio of investments for the initial funding round.
g. Creditworthiness
OSC will review applicants for a demonstrated history of reliable
credit repayment. OSC will not issue a loan unless it determines that
the applicant has a reasonable prospect of repaying
[[Page 79276]]
the principal and interest on the loan in a timely manner and that the
principal, when combined with amounts available to the applicant from
other sources, will be sufficient to carry out the purchase or
refurbishment, installation, and use of the equipment.
h. Technical Assessment
Projects or transactions may be prioritized based on a technical
assessment associated with the subject application.
i. Anticipated Results or Benefits of Resulting Capability
Projects or transactions may be prioritized, at the discretion of
OSC, based on the prospective benefits or results of the subject
application.
j. Current Associated Financing for Past Purchases (as Applicable)
In the case of equipment purchased prior to submission of the
application, OSC may prioritize projects or transactions associated
with current financing or obligations to maximize the benefit of the
subject offering.
k. Other Factors (as Applicable)
Projects or transactions may be prioritized on other factors
relevant to OSC, the applicant, or the subject application as
appropriate.
l. Timeline
Following review, at any time following the submission of
Application Part 1, the OSC project development team may notify
applicants of their status and invite them to submit Application Part
2.
E. How To Submit Application Part 2
a. OSC will invite applicants to complete Application Part 2.
Unsolicited Application Part 2 submissions will not be reviewed. OSC
will employ the contact and notice information listed in Application
Part 1 to send its invitation.
b. All materials and instructions for completing an application are
located on the OSC web page, <a href="https://www.osc.mil">https://www.osc.mil</a>. Please note there are
several supporting studies and documents that will need to be submitted
along with Application Part 2.
c. Applicants can submit only one application.
d. A parent company that has subsidiaries applying for funding
based on the parent's audited financials can only be the proposed
guarantor for one application for funding under this notice. If
multiple subsidiaries apply based on the same parent audited financial
statement, only one application can be funded, chosen at OSC's
discretion based on the factors in section 6(D)(ii) above.
e. Applications and supporting documents will not be accepted
through mail or courier delivery, in-person delivery, or fax.
F. Part 2 Application Review
Following receipt of a complete Application Part 2, the proposed
project will undergo environmental, credit, legal, and technical due
diligence on the proposed project or transaction, including compliance
with relevant Bank Secrecy Act requirements. This review will inform a
final determination on whether to make commit to a project and on what
terms. OSC may request the applicant to retain outside consulting
services to assess relevant aspects of the project. Those costs may be
included in the project costs listed in the financial plan and may be
the responsibility of the applicant, as determined by OSC. In some
cases, OSC may request additional information to ensure the best
financing options for an applicant's needs.
OSC will conduct the business, technical, and legal review during
the due diligence phase to evaluate the financial and legal soundness
of the proposed project or transaction. The areas that the origination
team evaluates include the following:
<bullet> Proposed Capitalization Structure;
<bullet> Financial History of Key Participants--Borrower(s),
Guarantor(s), Contractors(s);
<bullet> Financial Condition of Key Participants;
<bullet> Terms and Conditions of Project Contracts;
<bullet> Target Market and Marketing Strategy;
<bullet> Proposed Project Management Team and Operating Plan;
<bullet> Financial Projections of the Project;
<bullet> Historical Financial Performance;
<bullet> Legal, Regulatory, and Tax Issues;
<bullet> Bank and Trade References; and
<bullet> Character Risk Due Diligence.
Following due diligence, the application materials and findings
will undergo an approval process within OSC. OMB will evaluate the
final subsidy cost of the direct loan.
Following OSC and OMB approval processes, OSC may share a final
term sheet and conditional letter of commitment with the applicant. At
this stage, OSC may seek the applicant's approval for employment of
consultants or advisors to perform any confirmatory due diligence items
which may include, but are not limited to, independent engineering
assessment, appraisals, and insurance evaluations.
G. System for Award Management and Unique Entity Identifier
Applicants should make efforts to complete the process of
registering for the System for Award Management (<a href="http://SAM.gov">SAM.gov</a>), including
obtaining a Unique Entity Identifier, prior to submitting a full
application. Applicants are strongly encouraged to begin the process of
registering for <a href="http://SAM.gov">SAM.gov</a> as early as possible. While this process
ordinarily takes between three days and two weeks, in some
circumstances it can take six or more months to complete due to
information verification requirements. The Department is unable to
issue the OSC loan to an entity that lacks an active <a href="http://SAM.gov">SAM.gov</a>
registration. Throughout the term of the OSC loan, applicant will be
required to maintain its <a href="http://SAM.gov">SAM.gov</a> registration in good standing.
In considering applications, OSC will assess the record of the
applicant, as well as of its corporate parent, in executing programs or
activities under Federal grants, cooperative agreements, procurement
awards, and other transactions, as well as its integrity and business
ethics. As part of this consideration, OSC will review and consider the
non-publicly available information about that applicant in the
designated integrity and performance system accessible through
Responsibility/Qualification Records on <a href="http://SAM.gov">SAM.gov</a>. This review may also
include the applicant's corporate parent or affiliates that are under
common ownership and control. Each applicant, at its option, may review
information in the designated integrity and performance system
accessible through SAM and comment on any information about itself that
a Federal awarding agency previously entered and is currently in the
designated integrity and performance system accessible through SAM. OSC
will consider any comments by the applicant, in addition to the other
information in the designated integrity and performance system, in
making a judgment about the applicant's integrity, business ethics, and
record of performance under Federal awards.
H. Submission Dates and Times
<bullet> Beginning on January 2, 2025, Application Part 1 will be
accepted until 4:59 p.m. Eastern Time on February 3, 2025.
<bullet> Application Part 2 will be accepted on a rolling basis
following OSC's invitation to complete an Application Part 2. The
invitation to complete an Application Part 2 will include a submission
deadline.
[[Page 79277]]
<bullet> OSC will not solicit or consider new scoring or
eligibility information that is submitted after the application
deadline. However, OSC reserves the right to ask applicants for
clarifying information and additional verification of assertions in the
Application Part 1 and Application Part 2.
I. Confidential Business Information
OSC recognizes the importance of protecting proprietary or
otherwise confidential business information. OSC and the Department
will follow applicable laws, including, for example, the Trade Secrets
Act, and the Freedom of Information Act (``FOIA''), as well as the DoD
Controlled Unclassified Information (``CUI'') policy to protect such
information.
All Federal employees are bound by the Trade Secrets Act, which
makes Federal employees criminally liable for the unauthorized
disclosure of ``information [that] concerns or relates to the trade
secrets, processes, operations, style of work, or apparatus, or to the
identity, confidential statistical data, amount or source of any
income, profits, losses, or expenditures of any person, firm,
partnership, corporation, or association''. Violations of the Trade
Secrets Act may result in the loss of employment, fines, or
imprisonment. OSC will also ensure any contractors or consultants
working in support of OSC uphold relevant standards for protecting the
Confidential Business Information of any applicant.
Exemption 4 of FOIA protects trade secrets and commercial or
financial information obtained from a person that is privileged or
confidential. This exemption is designed to protect the interests of
both the government and private parties doing business with the
government by exempting the disclosure of information that is
customarily kept confidential by the company providing the information.
The Department will apply this exemption to FOIA requests in accordance
with the law and the Department's FOIA regulations.
CUI policy outlines the handling, dissemination, and protection of
information that requires safeguarding or dissemination controls
pursuant to and consistent with law, regulations, and government-wide
policies. CUI policy encompasses a wide range of information categories
including proprietary business information, defined as material and
information relating to, or associated with, a company's products,
business, or activities, including but not limited to financial
information; data or statements; trade secrets; product research and
development; existing and future product designs and performance
specifications. The policy mandates proper marking, handling, and
dissemination practices to prevent unauthorized access and ensure the
protection of sensitive information, thereby enhancing operational
security and reducing the potential damage associated with data
breaches. Instructions for the identification and marking of
information or documents that the applicant treats as confidential are
in included in Application Part 1 and on the OSC website at <a href="https://www.osc.mil">https://www.osc.mil</a>. Any requests for information covered by a confidentiality
claim will be disclosed by OSC in accordance with the procedures set
forth under 32 CFR Subchapter N, or as otherwise required by law or
order of court with appropriate jurisdiction.
J. Funding Restrictions
In the case of an eligible investment made through a direct loan,
OSC requires not less than 80% of the total capital invested in a CTC-
focused industry come from non-Federal sources at the time of OSC
investment. OSC will evaluate applications against this requirement by
sector and covered technologies. OSC will monitor this requirement but
based on OSC's market research to date, OSC generally does not expect
this requirement to restrict investment into individual projects under
this NOFA.
Funds made available under this NOFA may only be put to eligible
uses. In addition, funds made available through this NOFA may not be
used for any purpose that would violate the following laws and
regulations:
<bullet> Foreign Corrupt Practices Act and Domestic Anti-Bribery
Laws: Prohibited uses include making payments to foreign or domestic
government officials to assist in obtaining or retaining business, and
willfully using mails or any means of interstate commerce corruptly to
offer, pay, promise to pay, or authorize the payment of money or
anything of value, directly or indirectly, to a foreign or domestic
government official to influence the official in their official
capacity, induce the official to do or omit to do an act in violation
of their lawful duty, or to secure any improper advantage to assist in
obtaining or retaining business for or with, or directing business to,
any person.
<bullet> Anti-Lobbying Laws: Prohibited uses include using money
appropriated by any enactment of Congress, in the absences of express
authorization by Congress, to directly or indirectly influence or
attempt to influence any official or employee of a government agency,
or any official, employee or member of Congress, in connection with a
government loan or contract.
<bullet> Anti-Boycott: Prohibited uses include participation in
foreign boycotts not sanctioned by the United States.
<bullet> Foreign Entities of Concern: Prohibited uses include
purchases or other commercial or advisory relationships with Foreign
Entities of Concern.
Additionally, OSC funds may not be used for any illegal or other
prohibited purpose.
K. Intergovernmental and Regulatory Review
Under this NOFA, financing for equipment modernization and
expansion may constitute a major Federal action and cross-cutting
regulations may apply. Accordingly, receiving financial credit support
may--in certain circumstances--require borrowers to comply with a
variety of Federal environmental, labor, transportation, and equipment
sourcing requirements.
In certain circumstances, and based on potential borrowers'
responses to Application Part 1, applicants may be required to provide
a description of whether and how they intend to utilize domestically
produced iron, steel, and construction materials as part of their
projects, including for non-Federal entities how they plan to meet any
applicable legal requirements pursuant to the Build America, Buy
America Act. Applicants may also be required to comply with Davis-Bacon
and its related acts (40 U.S.C. 3141 et seq.).
In addition, applicants may be required to provide environmental
studies necessary to verify compliance with the National Environmental
Policy Act (42 U.S.C. 4321 et seq.), and other applicable Federal
environmental laws and authorities such the National Historic
Preservation Act, Endangered Species Act, Clean Water Act, and related
Executive Orders. OSC expects applicants to design their projects so
that they avoid, minimize, and mitigate the potential for significant
environmental effects.
The applicant will also be responsible for obtaining and complying
with applicable Federal, State, and local permits such as those
required under the Clean Water Act, Clean Air Act, and Resource
Conservation and Recovery Act. OSC expects that each applicant invited
to submit an Application Part 2 will be prepared to submit required
environmental studies as outlined in the application requirements. OSC
encourages applicants to begin preparing for the environmental review
[[Page 79278]]
process as early as possible so that the applicant can demonstrate its
readiness to commence the project(s). Applicants should therefore
prepare for the environmental review, including gathering data and
analysis, engaging experts or outside contractors, etc., as early as
possible. Such actions will facilitate an expeditious environmental
review process if invited to submit Application Part 2.
In connection with any loans issued by OSC and depending on the
nature of the project or transaction, borrowers may be required to
adhere to additional regulations. OSC and potential borrowers (or
sponsors) will determine which regulations shall apply during the
development of legal documentation.
8. Federal Funding Administration Information
A. Third-Party Expenses and Fees
OSC may utilize independent technical, financial, environmental,
insurance, or other consultants and contractors and outside legal
counsel during the due diligence process. Subject to the express
agreement of the applicant, the applicant shall be responsible for the
payment of all expenses charged by the independent consultants or
contractors and OSC outside legal counsel in connection with an
application. In such case, OSC shall not be responsible for expenses
incurred if an application is denied.
B. Funding Availability and Limitation of Liability
Funding for the program is contingent upon the availability of
appropriations. In no event will OSC be responsible for application
preparation costs. Neither publication of this NOFA nor invitation to
complete an Application Part 2 will oblige OSC to fund any specific
project or transaction or to obligate available funds. This NOFA also
is not intended to and does not create any rights enforceable by any
alleged third-party beneficiaries.
OSC is not under any obligation to provide additional future
funding in connection with funding made under this NOFA.
C. Reporting
OSC understands the importance of undertaking systemic data
collection and rigorous evaluative activities to assess the outcomes
related to funds given under this NOFA. OSC is committed to this goal,
and all applicants should expect this will be a requirement of funding.
All funding recipients will be expected to comply with all
reporting requirements, as well as program evaluation activities
undertaken by OSC, in a format acceptable to OSC.
OSC may publish generalized information through the review,
selection, and loan issuance process. OSC may inform and, to the extent
required by law, seek consent from applicants of any such disclosures.
In addition, as will be set forth in the terms and conditions of each
loan, successful applicants will be expected to support program and
project reviews, audits, and program evaluation activities, including
by submitting required financial and performance information and other
relevant data in an accurate and timely manner, making available
documents and other records related to the project upon request, and by
cooperating with OSC and external program evaluators, including the
Office of the Inspector General. Certain post-loan issuance progress
reporting may also be made public.
OSC may also publish aggregated information from Application Part 1
and Application Part 2.
D. Additional Information
Any decision by OSC to reject an Application Part 1 as ineligible,
or to deny an Application Part 2, shall be final and non-appealable.
Unsuccessful applicants will be notified of a denial by email and will
have the opportunity to receive a debriefing. Unsuccessful applications
will be retained in accordance with Department of Defense recordkeeping
requirements.
E. Privacy Advisory
a. Authority: The information requested by Application Part 1 and
Part 2 is authorized by the NDAA.
b. Purpose: The information requested by Application Part 1 and
Part 2 will be used to determine whether the loan transaction presents
a reasonable assurance of repayment, meets the eligibility requirements
set forth in NDAA section 903 and section 8140 of the Further
Consolidated Appropriations Act, 2024, and supports the mission of OSC
to attract and scale private investment for national and economic
security. The information collected will also be used for ``know your
customer'' purposes to assure that transaction parties do not have
ownership, control, or influence from or by foreign parties adverse to
the United States.
c. Uses: While the information requested by the Application Part 1
and Part 2 is primarily intended to be used internally at OSC, in
certain circumstances it may be necessary to disclose this information
externally, including to contractors, experts, consultants, and others
performing or working on a contract, service, or other assignment for
the Federal Government, when necessary to accomplish an agency
function.
d. Disclosure: Provision of the information requested by the
Application Part 1 and Part 2 is voluntary. However, failure to provide
the requested information may result in OSC being unable to determine
eligibility under this Notice of Funding Availability and rejection of
an Application Part 1 or Part 2. At all times, OSC reserves the right
to decline to process or to discontinue processing any application.
e. OMB Control Number: Unless a currently valid OMB control number
is displayed on Application Part 1 and Application Part 2, OSC may not
ask applicants to submit, and applicants are not required to provide,
the requested information.
F. Office of Strategic Capital Contact Information
For general inquiries regarding the NOFA, please contact: Office of
Strategic Capital, Department of Defense, Phone: (703) 545-1903, Email:
<a href="/cdn-cgi/l/email-protection#2d627e6e0361424c43036c5d5d41444e4c594442436d425e4e03404441"><span class="__cf_email__" data-cfemail="09465a4a27456668672748797965606a687d60666749667a6a27646065">[email protected]</span></a>.
DoD is an equal opportunity provider, employer, and lender.
Dated: September 24, 2024.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2024-22229 Filed 9-26-24; 8:45 am]
BILLING CODE 6001-FR-P
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</html>Indexed from Federal Register on September 27, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.