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Defense Funding, Defense Innovation Josiah Wegner Defense Funding, Defense Innovation Josiah Wegner

The Pentagon Is Buying 60,000 Drones. Here Are Three Ways Deep-Tech Founders Get In.

The Pentagon’s roughly $1.1 billion Drone Dominance Program is creating a few scaled drone champions and pushing them onto a domestic supply chain. That opens doors for far more than drone makers.

The Department of War's Drone Dominance Program has finished its second competitive round. The program named its top performers in September and plans to order about 60,000 drones from them, with final quantities set at contract award.

The program is worth understanding even if you have never built a drone. It is a roughly $1.1 billion, four-phase buy designed to create a few scaled U.S. drone companies. It is also deliberately pushing those companies toward a domestic and allied supply chain. That combination creates openings for component, materials, payload and autonomy companies.

How the program works

Drone Dominance is sponsored by the Office of the Secretary of War and executed by the Test Resource Management Center, with the Defense Innovation Unit overseeing industry engagement. Awards are prototype Other Transaction agreements under 10 U.S.C. 4022. NSWC Crane awards them, and they are managed through the NSTXL consortium portal. The most recent call says NSTXL membership is not required to respond but is required before award.

Each phase centers on a Gauntlet. Vendors deliver drones, military operators fly them against realistic missions, and the government orders from the top performers. Gauntlet 2 ran at Fort Carson from August 16 to September 5, 2026. DefenseScoop reported 1,858 sorties across 23 platform types from 19 companies. The top performers were:

  • Deep Strike: Perennial Autonomy, Hyperscale, Neros, Skycutter and Swarm Defense Technologies

  • Close Quarters Battle: Neros, ORQA US, XTEND Reality, Vector and ModalAI

The program's March 2026 industry day slides laid out the plan. They put Phase III around February 2027, with about $350 million. The stated goal is three to five "champion" companies that are "profitable, scaled, and selling to DoD at low cost."

Door 1: Build the drone

Gauntlet 3 is expected about six months after Gauntlet 2. If you build small UAS, treat February 2027 as your planning date and watch dronedominance.mil and the NSTXL portal for the next request for solutions.

Flight performance is only part of the score. The latest call evaluates four things:

  • performance in degraded RF and GNSS environments

  • structured feedback from military operators

  • compliance with the program's supply chain framework

  • production capability, assessed through surveys, interviews and site visits

Gauntlet 2 vendors had to deliver 120 drones, with a mix of live, safe-armed, trainer and dummy payloads, before the event even started. A company that cannot show volume production and a compliant bill of materials will struggle, however good its aircraft is.

Door 2: Supply the winners

This is the widest door, and most founders overlook it.

The program publishes a supply chain framework that tightens each phase. The Phase 2 floor requires motors, battery packs, flight controllers and ground control stations assembled outside covered countries. The Phase 3 minimum, around February 2027, adds battery cells from non-covered countries that comply with Section 842 of the FY2026 NDAA, and requires motor makers to have a DFARS-compliant magnet sourcing plan. The Phase 3 preferred level adds non-covered-country magnet production and winding, with disclosed rare earth feedstock origin. By the Phase 4 minimum, magnet production and rare earth feedstock must both be non-covered. The call also states that vendors exceeding the minimums score higher, so the demand for compliant parts shows up before each floor takes effect.

The top performers now have to deliver at volume while their sourcing rules tighten. That is a direct demand signal for companies that make:

  • magnets and motor components

  • battery cells and packs

  • flight controllers, radios and GNSS modules

  • cameras and sensors

  • the manufacturing equipment and processes that make any of these cheaper at scale

This is a supplier route, not a direct government opportunity. Your customer is the drone company. The pitch is a qualified, compliant part that lets them meet the next phase floor at their price target.

For materials and component companies, the same demand also strengthens the case for industrial-base funding. A letter of intent from a Drone Dominance vendor is exactly the kind of demand evidence those programs look for.

Door 3: Make the drone more capable

Gauntlet 2 vendors had to partner with at least one lethality provider, and five payload vendors took part. The Phase 2.5 bomber-drone call lists areas of particular interest:

  • advanced target engagement, such as pixel locking and automated target recognition

  • autonomous behaviors, such as GPS-denied navigation and mission continuation after link loss

  • open data feeds and interfaces

Payload, autonomy, EW-resilience and software companies usually enter by teaming with a platform vendor before the next Gauntlet. The team is scored together, so the time to form it is well before the call opens.

What to do this month

  1. Decide which door fits your company. Most deep-tech companies belong in Door 2 or 3.

  2. Read the supply chain framework and the most recent request for solutions on dronedominance.mil. The Phase 2.5 call closed August 5, so use it as a preview of what Gauntlet 3 will ask for.

  3. If you are a supplier, map your part against the Phase 3 and Phase 4 requirements and identify which top performers need it.

  4. If you are a platform company, build the production and supply chain evidence now. Four months is not long to prove volume.

  5. Register on the NSTXL portal so you can see program correspondence.

Figures come from Department of War materials and the reporting cited below. Order quantities are planned, not obligated, and are finalized at contract award.

Photo: A small unmanned aircraft system is prepared for launch during the Air Force's Game of Drones 26-2 at Edwards Air Force Base, California. This is not a Drone Dominance Gauntlet event. U.S. Air Force photo by Brandon Hernandez, 412th Test Wing, via DVIDS. The appearance of U.S. Department of War visual information does not imply or constitute DoW endorsement.

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