DOD looks to expand drone industrial base amid supply chain concerns

The Department of Defense is looking to help establish a domestic manufacturing base for lightweight drones – a market dominated by Chinese firm DJI.

Ellen Lord, DOD's undersecretary for acquisition and sustainment, said at an Aug. 26 press briefing that the Pentagon can't use DJI's commercially available and popular drones because of security concerns. DOD is hoping a new program called Trusted Capital Marketplace would help broaden the pool of available drone manufacturers.

The Trusted Capital Marketplace was initially scoped out as a web-based platform to support connections between venture capital and emerging tech firms. But Lord said at the briefing that the "complicated expensive website" idea was discarded in favor of meetings on "very, very focused topics."

In October, DOD will convene acquisition match-making meet up with an eye to diversifying the small drone industrial base. Lord said focusing on drones for the first marketplace meetup made sense because of the reliance on China-made tech.

These aren't the large weaponized drones that deliver military strikes by remote control or conduct long-range surveillance and intelligence gathering, but more along the lines of drones used by hobbyists and are flown within sight of the operator.

"Essentially we don't have very much of a small [unmanned aerial systems] industrial base because DJI dumped so many low-priced quadcopters on the market and we then became dependent on them both from the defense point of view and the commercial point of view," Lord said during the briefing.

DJI has been criticized before for potential security risks due to concerns that China-made or linked products are dominating the drone supply chain.

At a June Senate hearing, Harry Wingo of National Defense University said DJI had a "near monopoly" on drone technology marketed in the U.S. and that its use of proprietary software networks make it difficult for DOD to ascertain whether the data is safe. Wingo also indicated that security concerns didn't just lay in the drones' components, but in data storage practices.

Lord echoed that testimony, saying "we know that a lot of the information is sent back to China from those; so this is not something that we can use."

DJI spokesman Michael Oldenburg said the accusations are "false and misleading" in a statement to FCW.

"DJI drones do not automatically send data to the Chinese government or to any unauthorized party. An independent U.S. cybersecurity firm has debunked these claims and verified that DJI's hardware and software systems give our customers full control over how their data is collected, stored, and transmitted," Oldenburg said.

Oldenburg also disputed Lord's assertion that DJI was dumping product to establish market dominance.

"DJI has earned its market-leading position in the drone industry because we have continued to research, develop and deliver the most capable products to the market," he said.

Still, the Pentagon is hoping its "strong demand signal" will help boost domestic capaicty in small drones. Lord said.

"What we would like to have are U.S designers and manufacturers of small UAS. Because not only do we have a need for that in the Department of Defense -- we know it's a very, very large commercial industry -- so we think that we can catalyze that activity and have a safe and secure supply," Lord said.