The business of defense, October 14

The Army is "ready to move in on the ‘27 [plan to] award a production contract" for its High Accuracy Detection and Exploitation System (HADES) spy jet, Andrew Evans told Breaking Defense. "We cannot do that … until we clear a CR," he said. Evans, who directs the Strategy & Transformation Office under the Army's deputy chief of staff for intelligence (G-2), said the program is "completely on cost" and "completely on schedule."¹

platform and system integration$131.7 millionrequested

The Army requested

micro-high altitude balloons and payloads$15.3 millionrequested

The Army requested

A CR means the Pentagon cannot begin funding new programs

The CR is in place through Dec. 11, but there’s no guarantee programs can commence once it ends

Reported by Breaking Defense, Oct. 1, 2026

Sources

• breakingdefense.com ↗

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Lawmakers have not approved a fiscal 2027 defense spending bill, and the CR funding the government runs through Dec. 11, Breaking Defense reported.^1–2 Under a CR, the Department of War cannot begin funding new programs, known as new starts. Breaking Defense's search of fiscal 2027 budget documents found two HADES new starts, including $131.7 million the Army requested for platform and system integration.²

Sierra Nevada Corporation (SNC) won HADES in August 2024 with a $991.3 million multi-year contract to deliver aerial intelligence, surveillance and reconnaissance jets to the Army.³ A team of L3Harris, Leidos and MAG Aerospace also bid to replace the Army's RC-12 Guardrail turboprops, and the Government Accountability Office denied L3Harris's protest in December 2024, Breaking Defense reported.⁴ So far the Army is developing three prototypes, government-furnished Bombardier Global 6500 jets that SNC is outfitting with different tech packages.^{1, 3} Production aircraft were to come after those prototypes, under the deal Evans says the CR blocks, the outlet reported.¹

AIR, the company formerly known as Govini, said Monday that the Department of War has awarded it a $200 million, five-year contract supporting the Army's Next Generation Command and Control (NGC2) ecosystem.^1–2 On Oct. 7 the Army named AIR among nine vendors receiving initial NGC2 application awards.³

AIR, formerly Govini$200 million, five-yearplanned

AIR says it will work with Army and industry partners to deliver NGC2 software, starting with I Corps

The Army named nine vendors, including AIRapproximately $93.6 millionactual

initial collective one-year value

AIR release, Oct. 12, 2026; U.S. Army, Oct. 7, 2026

Sources

• www.air.ai ↗
• www.army.mil ↗
• www.prnewswire.com ↗

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Six of the other names, all but Onebrief and Rune Technologies, match contracts the department announced Sept. 29, though those announcements don't mention NGC2.^3–4 General Dynamics Mission Systems, Air Space Intelligence, Immersive Wisdom, LMI, Mente Systems and Stilman Advanced Strategies each received a $99 million firm-fixed-price, indefinite-delivery/indefinite-quantity contract for "commercial technology offerings."⁴ The Army's collective first-year value for the application awards, about $93.6 million, is less than the face value of any one of them.^3–4 All six were awarded by Army Contracting Command at Aberdeen Proving Ground, Md., and are estimated to run through Sept. 30, 2031.⁴

AIR's stated $200 million is about twice any one of those contracts.^{1, 4} Its release doesn't name a contracting office, contract type or obligated amount, or say whether this is the award the Army announced.¹ AIR, Onebrief and Rune Technologies don't appear in the department's daily contract announcements from Sept. 29 through Oct. 13.¹⁴

AIR says its Enterprise Readiness platform has provided software to NGC2 since the program's inception and gives commanders forward-looking visibility into supply stocks, unit capacity and overall force readiness. Building on field trials with the 4th Infantry Division, AIR says it will deliver NGC2 software with Army and industry partners, starting with I Corps.¹

Albania, Canada, Croatia, Egypt, Japan, Kuwait, Morocco and Panama signed statements of intent Tuesday, Oct. 13, to join the Army's two online marketplaces, one for drones and one for counter-drone systems. The signing, at the Association of the U.S. Army's annual meeting, extends a framework nine European partners joined at Eurosatory in Paris in June. The Army says 29 partners have joined the framework.¹ Defense News reported that AUSA's president, retired Gen. Robert Brown, put the total at 33 nations.²

Eightpartner nations signed statements of intent at AUSA on Oct. 13

29partners the Army says have joined the marketplace framework

$800 millionin transactions the drone marketplace has processed since it was stood up, Defense News reported

$7 billionworth of counter-UAS contract vehicles the Army awarded through the marketplace, Ingraham said, according to Defense News

The $800 million in transactions and the $7 billion in contract vehicles are separate measures, not a combined total. Neither source says how much came from partner nations or names a vendor on the marketplaces.

Sources: U.S. Army, Oct. 13, 2026. Dollar figures reported by Defense News, Oct. 14, 2026. Data as of Oct. 14, 2026.

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What the signatories get is a way to order off Army contracts that suppliers already hold. Using a foreign military sales (FMS) pathway the Army calls the "FMS Fast Lane," partners can order pre-cleared, standard-configuration systems directly through those pre-established contracts. By completing technology transfer approvals, marketing licenses and foreign disclosure clearances in advance, the Army says it compressed FMS case development from months to days.¹

The drone marketplace has processed $800 million in transactions since it was stood up, Defense News reported, without saying how much came from partner nations.² Brent Ingraham, the Army's assistant secretary for acquisition, logistics and technology, said the Army recently awarded counter-drone contract vehicles worth $7 billion through the marketplace, according to the outlet.^1–2

The Army will open Project Gatekeeper on Oct. 23, Breaking Defense reported. The sandbox will run on the Army's cloud, isolated from operational networks, where companies will put software through the service's standardized cybersecurity tools, including an AI assessment.¹ They can do so before they have an Army contract or sponsoring program manager, officials said Tuesday at the Association of the U.S. Army's annual conference.^1–2 Acting Army Chief Information Officer Gabe Chiulli heads the effort, DefenseScoop reported.^2–3

Project Gatekeeper will startOct. 23planned

the automated system will either tell the company its software passed the test or give detailed, actionable feedback explaining why it failed

Login.gov platformmid-Novemberplanned

Companies will still need CAC cards to access the platform initially

officials said, if a program manager takes on the software through acquisition pathways, it is already vetted

the Army is finalizing an agreement with the General Services Administration (GSA) to use its Login.gov platform

Breaking Defense reported Oct. 13, 2026; DefenseScoop reported Oct. 14, 2026. Data as of Oct. 14, 2026.

Sources

• breakingdefense.com ↗
• defensescoop.com ↗

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Bringing commercial software onto Army networks was "up to every program manager," said David Markowitz, the Army's chief data and analytics officer. Many offices waited for another organization to grant an Authority to Operate (ATO), Breaking Defense reported. "A lot of times, organizations in the Army won't talk to [companies] until they have this 'golden ATO,'" Chiulli said. In Breaking Defense's assessment, the companies best positioned to win Army software contracts were often those that already had them.¹ For vendors, software scanned in Gatekeeper is already vetted if a program manager takes it on through an acquisition pathway, officials said, according to DefenseScoop.²

Chiulli describes success as a company logging in, submitting code and getting "the green check mark from our pipeline that says you are good to go" within minutes. Clearance now can take days or weeks, stalling some projects for as long as nine months, officials said, according to Breaking Defense.¹ Neither Breaking Defense nor DefenseScoop reported funding or a contract vehicle for Gatekeeper.^1–2

Fathom Digital Manufacturing has acquired TCS Industries, TCS Electronics and Precision Grinding & Manufacturing (PGM), all based in Rochester, New York, its owner CORE Industrial Partners announced Tuesday, Oct. 13.¹ CORE affiliates took the Hartland, Wisconsin, contract manufacturer private in May 2024.^{1, 4} The deals bring Fathom to 10 facilities and about 700 employees.¹

Fathom Digital ManufacturingAdvanced manufacturing and low- to mid-volume production services

TCS Industries and TCS ElectronicsPrinted circuit board (PCB) assemblies, cable and wire harnesses and electro-mechanical box builds; nearly 35 years with aerospace and defense customers

Precision Grinding & Manufacturing (PGM)Supports aerospace and defense customers from low- and mid-volume manufacturing through full-rate production

→

Early-stage development and prototyping through qualified, sustained productionWhat Fathom says the combination leaves it better positioned to support

Fathom's website capabilities menu lists no PCB assembly or wire harness work. CORE gave no price.

Source: CORE Industrial Partners release, Oct. 13, 2026, published on Fathom's website; Fathom website capabilities menu. Data as of Oct. 14, 2026.

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TCS adds printed circuit board assemblies and cable and wire harnesses, work that does not appear in the capabilities menu on Fathom's website.^1–2 PGM reaches further along the volume curve than the announcement's description of Fathom. It supports aerospace and defense customers from low- and mid-volume manufacturing through full-rate production, while Fathom describes its own production services as low- to mid-volume.¹

PGM's website says it is involved with "many critical programs for our armed forces" and makes components and assemblies for areas including electronic protection (countermeasures) and RF housings and covers.³ Both TCS and PGM hold AS9100 certifications and International Traffic in Arms Regulations (ITAR) registrations. The announcement says TCS serves customers primarily in aerospace and defense but gives no split between defense and commercial aerospace work at either company.¹

L3Harris and the Army Special Operations Aviation Command's Systems Integration Management Office have completed the first flight demonstration of a Red Wolf air-launched effect from an MH-60 helicopter, the company announced Tuesday, Oct. 13. L3Harris says the flight establishes a pathway for integrating its launched effects air vehicles with Black Hawks and other H-60 variants.¹

Jan. 30, 2026Naval Air Systems Command selection announced: develop, test and manufacture Red Wolf for the Marine Corps' Precision Attack Strike Munition program

Oct. 13, 2026First Red Wolf flight demonstration from an MH-60 helicopter announced, with the Army Special Operations Aviation Command's Systems Integration Management Office

The Oct. 13 release names no Army program, requirement, contract, order or funding behind the MH-60 flight, and gives no date for the flight itself.

Source: L3Harris press releases, Jan. 30 and Oct. 13, 2026. Data as of Oct. 14, 2026.

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Red Wolf already has a Navy customer. In a Jan. 30 release, L3Harris said Naval Air Systems Command had selected it to develop, test and manufacture Red Wolf vehicles for the Marine Corps' Precision Attack Strike Munition program. The company said the selection built on launched effects flights including a low-altitude test firing from a Marine AH-1Z helicopter. The same release said Red Wolf extends the range of weapons launched from vertical take-off and landing platforms to proven distances of 200 nautical miles.²

The MH-60 flight puts Red Wolf on a different helicopter, with an Army special operations aviation office as the test partner.^1–2 The test payload validated launch system compatibility and demonstrated flight characteristics in an operational setting, L3Harris says. Quinlan Lyte, president of Advanced Effects at L3Harris, described the effort as "expanding the platforms from which they operate."¹

Performance Drone Works (PDW) announced a memorandum of understanding Monday, Oct. 12, with The Fourth Law and Odd Systems, both founded in Kyiv. Subject to evaluation, regulatory approvals and definitive agreements, the companies intend PDW to become the primary US manufacturing partner for Odd Systems' Kurbas thermal cameras that require domestic production. They describe Kurbas as the most widely used Ukrainian-made thermal camera on the frontline, supplied to more than 200 drone manufacturers. Initial work would focus on a US-compliant, export-ready configuration of the Kurbas 640 family.¹

U.S.-manufactured camerasother U.S. customersplanned

The proposed pathway would support integration into PDW platforms

U.S. thermal-sensor manufacturing capabilityintend to exploreplanned

would build on Project Foundation, the semiconductor initiative The Fourth Law and Odd Systems launched on October 9

previously announced conditional loan commitmentup to $820 millioncontingent

from the Department of War's Office of Strategic Capital (OSC)

PDW says the collaboration advances the vision-systems element of the strategy behind its conditional OSC loan commitment

The MOU establishes a non-binding framework and sets forth the companies' business intent

Source: Performance Drone Works release, Oct. 12, 2026. Data as of Oct. 12, 2026.

Sources

• www.prnewswire.com ↗

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PDW comes to the camera work as a drone maker: the company says the Army expanded its use of PDW's C100 drone through follow-on procurement in the first half of 2026.⁴ The proposed camera pathway reaches past PDW's own platforms, to distribution of the US-built cameras to other US customers. PDW says the memorandum advances the vision-systems element of the strategy behind its previously announced conditional loan commitment of up to $820 million from the Department of War's Office of Strategic Capital.¹ That financing, with additional private capital, is meant to establish domestic production of drone and robotics components now dependent on foreign-controlled supply chains, vision systems among them.³

The companies also intend to explore separate US manufacturing of the thermal sensor itself. That would build on Project Foundation, the microbolometer initiative The Fourth Law and Odd Systems launched Friday, Oct. 9, to mass-produce the sensors in Europe and the US. The initiative plans initial production in 2027.¹

Also announced: PDW entered a nonbinding memorandum with veteran-owned Revenant Technologies to identify and evaluate selected Ukrainian technologies, which the companies call "battle-proven", for US integration and production. They expect to start with unmanned systems, counter-UAS, electronic warfare, sensors and mission-critical components.²

Enovix announced the purchase order on Tuesday, Oct. 13, for an initial 100,000 battery units. The batteries will use Enovix cells made at the company's military-qualified South Korean facility, which it calls compliant with the Trade Agreements Act (TAA). Enovix expects the customer to place follow-on orders in the second half of 2027 and beyond, after a successful initial deployment.¹

initial order100,000 battery unitsplanned

a multinational provider of dual-use drone systems

Enovix expects the customer to place follow-on orderssecond half of 2027 and beyondcontingent

following successful initial deployment

double the capacity of its Korean plant$19 millionplanned

Interim CEO Ryan Benton said the added Korean capacity will enable timely delivery of orders

The order moves one opportunity from the roughly $216 million drone, defense and industrial pipeline reported Oct. 12 into backlog

Enovix's pipeline is its estimate of peak annual production value of identified design opportunities

Source: Enovix releases, Sept. 1, Oct. 12 and Oct. 13, 2026

Sources

• ir.enovix.com ↗
• ir.enovix.com ↗
• ir.enovix.com ↗

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Enovix also develops silicon-anode batteries for smartphones and smart eyewear, but drone and defense customers accounted for about 70% of its preliminary third-quarter revenue of $11.0 million.^1–2 This order moves one opportunity out of its drone, defense and industrial pipeline, which Enovix estimates at about $216 million of peak annual production value, and into backlog.¹ It is among the fourth-quarter purchase orders Enovix referenced on Oct. 12, when it announced a leadership team realigned for drone and defense growth.^1–2 Interim CEO Ryan Benton said those orders, in the first part of the quarter, "have already exceeded our Q3’26 total revenue."²

"Drone makers need high-performance batteries from a qualified, non-Chinese source now," said Steve Bakos, Enovix's chief revenue officer.¹ The company makes its defense cells in-house at a Korean plant it acquired, citing the site's 20-year defense production history, and is investing $19 million to double the plant's capacity.²

Draganfly, a Canadian-headquartered drone maker, announced Monday, Oct. 12, that it has formed Draganfly Defense USA, Inc. as a focused operating structure for its U.S. defense activities.^1–2 The company says the structure is designed to support demand for its products and services in defense programs with "stringent domestic, security and compliance requirements."¹ Thomas B. Modly, the Navy's 33rd under secretary and a former acting secretary, will chair the subsidiary's board, with Draganfly CEO and Chairman Cameron Chell as a director.¹

Thomas B. ModlyChairman of the Board of Draganfly Defense USAplanned

the 33rd Under Secretary and former Acting Secretary of the U.S. Navy

Cameron Chella director of the new subsidiaryplanned

CEO and Chairman of Draganfly Inc.

Source: Draganfly Inc., Form 6-K Exhibit 99.1 (release dated Oct. 12, 2026)

Sources

• www.sec.gov ↗

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The unit is meant to provide a framework for defense-specific governance, cybersecurity and export-control procedures, including "the segregation and protection of controlled technologies and sensitive information where required." Modly, a Draganfly director since 2024, will give up his seat on the parent board "in accordance with regulatory requirements" to take the chair. Draganfly didn't say which requirements apply, or what ownership, capital or contracts the unit will hold.¹

Retired Marine Brig. Gen. AJ Pasagian, named the unit's president in August, will lead U.S. defense operations.^{1, 4} Draganfly says he was acquisition decision authority for more than 450 Marine Corps ground and information technology programs as head of Marine Corps Systems Command from 2018 to 2022.⁴

The remit runs from counter-UAS technologies and domestic supply chains to "execution of current and future U.S. defense programs." Draganfly also cites its selection, with F4 Defense International, by DEVCOM Army Research Laboratory for a counter-UAS development contract.¹ On Oct. 13 it announced a strategic investment in DoD Solution, an Estonian-Ukrainian autonomy developer that plans to use the financing partly to meet U.S. National Defense Authorization Act compliance requirements.³

Under a memorandum of agreement announced Monday, Oct. 12, the Small Business Administration will support the Department of War's Economic Defense Unit in executing department-funded redeemable preferred-equity investments in small and medium-sized businesses. The unit may originate those investments in companies that create, expand or restore industrial capacity critical to national security, from munitions and platforms to critical-minerals mining.¹

redeemable preferred-equity investmentsDepartment of War-fundedplanned

SBA will provide due diligence, underwriting, transaction support, and portfolio-management assistance, while EDU retains responsibility and ultimate decision-making authority for its investments

SBA-backed capital7(a) and 504 lender networksplanned

EDU will identify firms with financing needs through its Business Operators for National Defense (BOND) efforts and refer potential loan candidates to SBA

Source: U.S. Small Business Administration release, Oct. 12, 2026

Sources

• legacy.sba.gov ↗

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Each investment would add a government investor to a small or midsize supplier's capital structure. The SBA will provide due diligence, underwriting, investment structuring, transaction documentation and portfolio-management assistance, while the unit keeps "ultimate decision-making authority."¹

On the debt side, the unit will find loan candidates through the department's Business Operators for National Defense efforts and refer them to the SBA, whose lenders will help connect eligible firms with SBA-backed capital.¹

The agreement builds on the Smaller War Plants Commission the agencies announced on Aug. 25.^1–2 Secretary of War Pete Hegseth said the commission "will now be able to surge strategic capital" to small businesses that build ships, munitions and microelectronics.¹

Estonia's new defense minister, Martin Herem, said the country should consider buying light jet aircraft to shoot down Russia's faster, jet-powered attack drones, Defense News reported Wednesday.¹ Herem told The Baltic Sentinel and the daily Postimees that Estonia should study the option, calling air-to-air weapons the most effective counter to the drones, according to Defense News. He spoke after meeting Ukrainian President Volodymyr Zelensky in Kyiv.^1–2 Herem took office Sept. 16 after leading the Estonian Defence Forces from 2018 to 2024 and then advising defense industry companies.³

More than 400 km/hspeed of jet-powered drones, according to Ukraine's defense ministry

Several thousand a monthjet-powered drones fired at Ukraine, up from a few hundred a month, between July and August

Twoleased L-39 Albatros trainers Estonia uses; a former head of its air force said in April their civilian status and lease terms would complicate arming them

Herem gave no aircraft type, budget or timeline and has not committed to buying anything, Defense News reported.

Reported by Defense News, Oct. 14, 2026. Estonian Defence Forces. Data as of Oct. 14, 2026.

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Estonia, like Latvia and Lithuania, has no fighter fleet of its own and relies on NATO allies policing its skies on rotation, Defense News reported. Herem pointed to the pilots, air-control expertise and L-39 trainers Estonia already has.¹ Estonia uses two of them, at Ämari air base.^{1, 4} They are leased, and a former head of Estonia's air force said in April that their civilian status and lease terms would complicate arming them, according to the outlet.¹

Jets are one option on a longer list. Herem told The Baltic Sentinel he is also looking at computer-controlled cannons, heavy machine guns and fast, jet-powered interceptor drones, Defense News reported.¹ Jet-powered drones fired at Ukraine rose from a few hundred to several thousand a month between July and August, the outlet reported. Ukraine's defense ministry puts their speed at more than 400 kilometers per hour.¹

Badland Batteries, a subsidiary of drone battery maker Packet Digital, opened its battery cell plant in Fargo, N.D., on Oct. 8.^{1, 4–5} The facility will manufacture lithium-ion cells, from electrode manufacturing through formation and aging, and Badland will be able to assemble packs at its facility a mile away.^{1, 6} The company says it has the capacity to increase production based on industry growth.¹

End of 2025April 2024 goal: make battery cells for customers

2026April 2026: plant will begin production of U.S.-made battery cells

OctoberSept. 23, 2026: set to begin production

Oct. 8Badland celebrated the plant's opening

The Oct. 8 releases from Badland and Sen. John Hoeven say the plant will manufacture cells; neither says production has begun or names a customer.

Badland Batteries releases, April 18, 2024, and April 8, Sept. 23 and Oct. 8, 2026; Sen. John Hoeven release, Oct. 8, 2026.

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Badland called the opening the completion of the building.¹ When Packet Digital announced the factory in April 2024, it aimed to make cells for customers by the end of 2025.⁵ In April 2026, Packet Digital said cell production would begin that year; on Sept. 23, Badland put the start in October.^{2, 4} The company's Oct. 8 release says the plant will manufacture cells, without saying production has begun or naming a customer.¹

North Dakota's Clean Sustainable Energy Authority made a $17.4 million award toward the plant.⁵ Chief Executive Terri Zimmerman said the company invested nearly $100 million.^1–2

Navy money runs through the project. After a Navy contract phase covering plant design and construction, the company announced in May that it was awarded $9.8 million for Phase 3.³ In April it announced a $27 million Small Business Innovation Research Phase III contract from the Naval Air Warfare Center Aircraft Division to scale cell manufacturing.⁴

Ottawa-based Dominion Dynamics signed a memorandum of understanding with Ukrainian ground-robot maker TENCORE on Tuesday, Oct. 13, to manufacture TENCORE's TerMIT uncrewed ground vehicle (UGV) in Canada. Their announcement bills the Canadian-built vehicles as "for Ukraine," with Dominion's AuraNet autonomy stack serving as the onboard intelligence layer. A TENCORE team will lead the initial technology transfer and train technicians in Canada, with initial production targeted for 2027. The companies say TENCORE has delivered more than 5,000 UGVs to Ukrainian military units since 2024.¹ TENCORE's technical specifications for the TerMIT 2.0 list an electric powertrain and a payload capacity of 398 kilograms (±10 kg) without armor, or 327 kilograms (±10 kg) with armor.³

TENCOREinitial technology transferplanned

train technicians in Canada to build its UGV

Dominion DynamicsAuraNetplanned

will serve as the onboard intelligence layer for TENCORE's TerMIT

The companies will continue to work toward definitive agreements

Source: Dominion Dynamics and TENCORE release, Oct. 13, 2026

Sources

• www.prnewswire.com ↗

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For Dominion, TerMIT would add a ground vehicle to a business it describes as autonomy, sensing and command and control systems.¹ In June it said its C$139 million (US$100 million) Series A would accelerate AuraNet and Scout, an autonomous collaborative platform meant to extend the reach of crewed fighter planes.² The same month, it moved into a 25,000-square-foot manufacturing facility in Kanata, Ontario, though the announcement says only that TerMIT would be built in "Canadian facilities."^1–2

The companies tie the memorandum to a September defense cooperation declaration by Prime Minister Mark Carney and Ukrainian President Volodymyr Zelenskyy. Under it, they say, both countries committed to manufacturing thousands of drones and uncrewed systems over the next two years, with one-third earmarked for Ukraine's defense. Dominion also aims to develop an Arctic-hardened TerMIT for Canadian operations and for export to NATO allies.¹