How to Qualify for Federal Supply Chain and Domestic Manufacturing Conversion Grants

Domestic Manufacturing Conversion Grants image

By: Micki Vandeloo, President, Lakeview Consulting

The bills authorizing funding to support domestic manufacturing that resulted from the pandemic have really garnered the attention of the U.S. manufacturing base.  However, as noted previously in my article, “Setting the Record Straight on Grants for Reshoring Manufacturing”, these grants are targeted at supply chains in very specific industry sectors, such as electric vehicle, battery, heat pump and semiconductor and chip manufacturing.

What if, however, you are participating in these supply chains and want to know if your project qualifies for funding through one or more of these programs?  Here are some steps you can take to ensure you qualify for funding:

  1. Make sure your company is registered in the System for Award Management (SAM) and that your registration is up to date. If you are unsure about your registration, you can use the Search feature on the home page to search for your company name and see if your company is registered.  In order to apply for any federal (and most state) funding, you need to have an active registration.  If you are not currently registered, please note that, to get an active registration typically takes 1-3 weeks.  This could impact your ability to apply for one of these programs.  Here is a link to a registration checklist that you might find helpful:  SAM Registration Checklist.
  2. Check to ensure you are an eligible applicant. Many federal funding opportunities require very specific partnerships to access funding.  For example, here is the Eligible Entities verbiage from the CHIPS Small Scale Supplier Projects funding opportunity:  “An applicant must be a “Covered Entity” to receive CHIPS incentives.  For purposes of this NOFO, a Covered Entity means a non-profit entity; a private sector entity; a consortium of private sector entities; or a consortium of non-profit, public and private sector entities with a demonstrated ability to substantially finance, construct, expand or modernize a facility relating to the fabrication, assembly, testing, advanced packaging, production or research and development of semi-conductors, materials used to manufacture semi-conductors or semi-conductor manufacturing equipment.”  Note that the overall requirement is for entities with a demonstrated ability to finance, construct, expand or modernize a facility.  You can only apply if, and only if, you are an eligible entity for the grant and can meet that grant’s requirements, and eligibility requirements may vary from grant program to grant program.
  3.  Verify your project activities match the required activities for funding through the grant. A grant’s required activities are what the funder will pay for with their grant funds, and most often, they are the activities that address the results of the work that the funder is most closely aligned with.  For example, many federal grants, including the supply chain and domestic conversion grants, list outreach to underserved populations as a required activity due to the federal government’s requirements around diversity, equity and inclusion as a part of their funding distribution.  If your project does not include these activities, you will not be funded through the grant, no matter how sound your project is. 
  4. Compare your project activities to the eligible activities in the funding announcement. Eligible activities are activities you are permitted to request funding for.  These can include personnel costs for people working on the project; workforce development activities to train your workers on new technologies; capital expenditures for new equipment; and operating expenses related to construction and/or expansion.  If some of your activities fall outside the eligible activities, you can’t request funding for those, but the costs can often be used as cost share.
  5. Ensure you can meet cost share requirements. And, speaking of cost share…very few grant funders will pay for 100% of a project’s costs.  They usually require a percentage of the project be paid for by the applicant, many times to show “skin in the game”.  For larger grants (those in the $20-200M range as many of these opportunities are), a 20% cost share, which is not uncommon, would mean that you, as an applicant, would need to come up with $4 to 40 million to utilize the funding.  Funders will typically ask for proof in the application that you either have the cash on hand or can get it from a bank or banks.
  6. Ensure you can do the project whether or not you receive the funds. Finally, to verify you are eligible to receive funds through any grant program, have a contingency plan in place to accomplish the project (full scale or a scaled down version) if you don’t receive grant funding.  While that seems counterintuitive, the fact is that these programs are VERY competitive and you can’t be certain you will get a grant.  So have a plan in place to do the project without funding.

If you take the steps above, and are confident that you are an eligible candidate for funding under one of these programs, by all means, give it a shot.  If you don’t have the time or the ability to determine this, utilize our team’s expertise to provide a mock scoring of your project, using your project plan and the scoring criteria from the Notice of Funding Opportunity (NOFO) to provide an objective evaluation of your likelihood of getting a targeted grant.  The higher the score, the more likely you are to get funding through the desired program.  If you are interested in this service, email me, and we can talk through this service.

There are more opportunities than ever to expand your production and markets, and I truly want the manufacturing community to grow using these incentives to do so.  With that in mind, though, make sure you don’t waste precious time and resources pursuing grants you are not eligible for without doing a little pre-work (or letting us help you).

Free Download: The Complete Manufacturer's Gudie to Grant Funding

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