The Pentagon is working with the U.S.’s international finance agency on issuing loans from a $100 million pool to increase domestic production of medical supplies that are now made largely overseas, from syringes to protective gear, in response to the coronavirus pandemic.

The Defense Department announced Monday a memorandum of agreement for the U.S. International Development Finance Corp. to award and administer loans using authority under the Defense Production Act and funds provided by the CARES Act. President Donald Trump signed an executive order authorizing the effort in May.

The finance agency said in a statement to Bloomberg News that it will “dedicate a team of experts to focus on protecting and restoring domestic industrial base capabilities directly supporting the national response to the COVID-19 outbreak and resiliency in relevant supply chains.”

The Pentagon already has been helping to increase production of critical items. Ellen Lord, the undersecretary of defense for acquisition, told reporters Monday that the Defense Department has placed more than $3 billion in contract obligations, including awards for 14.3 million standard face masks, 5.9 million medical-grade N-95 masks and 8,000 ventilators.

Congress created the finance corporation in 2018, merging the Overseas Private Investment Corp. and the U.S. Agency for International Development’s Development Credit Authority. It calls itself “America’s development bank.” Its chief executive officer, Adam Boehler, is a friend of Jared Kushner, Trump’s son-in-law and senior adviser.

The agency said the effort to “reshore” domestic manufacturing of medical supplies will remain separate from its mandate to finance development in emerging markets.

The finance corporation, which is issuing a request for proposals Monday, said eligible projects might include personal protective equipment, medical testing supplies, vaccines, pharmaceuticals, ventilation equipment and “relevant ancillary materials and technologies.”

It cited as an example financing a U.S. company if needed to ensure there’s an adequate domestic supply of syringes for annual flu shots as well as for a potential coronavirus vaccine.

The situation “could be similar for cotton swabs, medical gloves and lots of other everyday consumables in the medical supply chain,” it said.

Lord said the finance corporation “has the unique ability to address this crisis with a global perspective, coordinating their international efforts” with new domestic authority provided to the Pentagon.

(Updates with Pentagon acquisition chief starting in fourth paragraph)

To contact the reporter on this story:
Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story:
Bill Faries at wfaries@bloomberg.net

Larry Liebert, Gregory Mott

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