Notice of Funding Availability-Covered Technology Categories-Equipment Financing, 79271-79278 [2024-22229]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79271-79278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 [email protected], tel. no. 703-545-
1903. Please direct media inquiries to the OSC Press Team at 
[email protected].

SUPPLEMENTARY INFORMATION:

1. Notice of Funding Availability Overview

     Federal Agency Name: Office of Strategic Capital, U.S. 
Department of Defense.
     Federal Funding Opportunity Title: Office of Strategic 
Capital Notice of Funding Availability (Equipment Finance).
     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.
     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.
     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 https://www.osc.mil.
     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.
     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: https://www.osc.mil. 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:
     develop, integrate, and implement capital investment 
strategies proven in the commercial sector to shape and scale 
investment in critical technologies and assets;
     identify and prioritize promising critical technologies 
and assets that require funding and have the potential to benefit DoD; 
and
     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

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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:
     an individual;
     a corporation;
     a partnership, which may include a public-private 
partnership, limited partnership, or general partnership;
     a trust;
     a State, including a political subdivision or any other 
instrumentality of a State;
     a Tribal government or consortium of Tribal governments;
     any other governmental entity or public agency in the 
United States, including a special purpose district or public 
authority, including a port authority, or
     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:
     are in a CTC, and
     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:
     Pre-installation costs, such as planning, development, 
engineering analysis, financing, legal expenses, and associated fees 
(excepting application costs, which shall not be covered);
     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;
     Installation costs, including cost of labor and materials 
required for installation;
     Appraisal and inspection costs, appraisals required to 
determine value of asset, or appraisal or inspections required by law 
and industry regulations; and
     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

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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 https://www.osc.mil.

B. How To Submit Application Part 1

    a. All instructions required for submitting Part 1 are located on 
the OSC web page, https://www.osc.mil.
    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, https://www.osc.mil. 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:
     Proposed Capitalization Structure;
     Financial History of Key Participants--Borrower(s), 
Guarantor(s), Contractors(s);
     Financial Condition of Key Participants;
     Terms and Conditions of Project Contracts;
     Target Market and Marketing Strategy;
     Proposed Project Management Team and Operating Plan;
     Financial Projections of the Project;
     Historical Financial Performance;
     Legal, Regulatory, and Tax Issues;
     Bank and Trade References; and
     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 (SAM.gov), including 
obtaining a Unique Entity Identifier, prior to submitting a full 
application. Applicants are strongly encouraged to begin the process of 
registering for SAM.gov 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 SAM.gov 
registration. Throughout the term of the OSC loan, applicant will be 
required to maintain its SAM.gov 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 SAM.gov. 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

     Beginning on January 2, 2025, Application Part 1 will be 
accepted until 4:59 p.m. Eastern Time on February 3, 2025.
     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]]

     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 https://www.osc.mil. 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:
     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.
     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.
     Anti-Boycott: Prohibited uses include participation in 
foreign boycotts not sanctioned by the United States.
     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: 
[email protected].
    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