When Army Secretary Dan Driscoll went on CBS’ Face the Nation this past Sunday and called drones and “flying IEDs” the “threat of humanity’s lifetime,” he also painted a picture of where he thinks the U.S. needs to go: to a point where “we will know what is in the sky at every moment across our country, all at once.” 

Just days earlier, the Department of Homeland Security quietly released the first Notice of Funding Opportunity (NOFO) for a new $500 million Counter-Unmanned Aircraft Systems (C-UAS) Grant Program, an early attempt to translate that kind of rhetoric into funded requirements for state, local, tribal and territorial (SLTT) agencies. 

For unmanned and counter-UAS manufacturers, integrators and service providers, the document reads like a first blueprint for how Washington wants to buy and govern large-scale domestic C-UAS capabilities over the next several years.

A World Cup–Driven Program with National Ambitions

The C-UAS Grant Program was created by the One Big Beautiful Bill Act of 2025 and is administered by FEMA under DHS. It provides $500 million across FY26 and FY27 to “enhance state and local capabilities to detect, identify, track, or monitor unmanned aircraft systems” consistent with federal criminal and aviation law.

The program is explicitly framed as a response to “growing national security concerns” around unlawful or nefarious drone use, and its priorities are aligned with Executive Order 14305, Restoring American Airspace Sovereignty, as well as recommendations from the White House FIFA World Cup Task Force. 

The money rolls out in two phases:

• FY 2026 – up to $250 million. Eligibility is limited to State Administrative Agencies (SAAs) in the 11 states hosting FIFA World Cup 2026 events plus the National Capital Region (NCR), which is hosting national America 250 celebrations. All of these events are rated SEAR 1 or 2, and some may be elevated to National Special Security Event (NSSE) status.
• FY 2027 – up to $250 million. Eligibility expands to all 56 states and territories, with a focus on building “nationwide detection and response capabilities.” Statutory minimums ensure each jurisdiction receives at least 0.35% (states, D.C., Puerto Rico) or 0.08% (territories) of total funds, with additional competitive allocations based on risk.

The period of performance is back-dated to July 4, 2025, and runs through September 30, 2028, effectively allowing costs incurred on or after that date to be covered once awards are made.

Who Applies—and Who Actually Buys the Gear

Only State Administrative Agencies—the governor-designated homeland security grant offices—can apply directly for the funds. They serve as primary recipients and grant administrators.

However, local, tribal and territorial entities are expected to be the primary operators of the systems. SAAs can issue subawards to city and county agencies, law enforcement, fire services, EMS, emergency management organizations and other public safety entities that meet program requirements.

The NOFO also sets an aggressive pass-through requirement:

• States may retain up to 3% for management and administration.
• SAAs must pass through at least 97% of funds to eligible subrecipients, with a narrow exception allowing states to retain up to 20% for statewide purchases that directly benefit law enforcement or other statewide needs.

There is no cost-share requirement, making this effectively 100% federal funding for eligible C-UAS projects. 

What the Money Can—and Cannot—Buy

FEMA structures allowable costs around the POETE categories:

• Planning
• Organization
• Equipment
• Training
• Exercises 

All funded activities must have a clear nexus to preventing, preparing for, protecting against or responding to acts of terrorism, though FEMA notes they may concurrently improve preparedness for non-terrorism disasters. 

On the equipment side, the money is explicitly aimed at UAS detection, identifying, monitoring, tracking and mitigation (DIMT-M) technologies—fixed or portable systems that detect, track, identify and, where authorized, mitigate UAS threats consistent with law.

At the same time, the NOFO draws bright lines on what is not allowed:

• No weapons or weapons accessories, including ammunition.
• No “weaponized aircraft, vessels or vehicles of any kind with weapons installed.” Non-weaponized drones for monitoring or data collection are not prohibited.
• No technology development studies or proof-of-concept initiatives.
• No initiatives that duplicate capabilities already provided by the federal government.

Indirect costs are not allowed; management and administration must be captured as direct, project-support costs. 

For industry, this means the program is not a research sandbox or a weapons procurement vehicle. It is a procurement and deployment program for already-fieldable C-UAS sensing and mitigation solutions that fit within existing legal authorities.

Mitigation Is Restricted and Training-Heavy

Unsurprisingly, the most sensitive piece of the program is mitigation—any kinetic or non-kinetic action that disables, destroys or seizes control of a drone in flight.

The NOFO sharply limits who can use grant funds for these capabilities:

• Only law enforcement or correctional agencies are eligible to receive funding for mitigation tools.
• Those agencies must have personnel trained at, or scheduled to be trained at, the FBI’s National Counter-UAS Training Center (NCUTC). FEMA will verify NCUTC registration.

Applicants seeking mitigation capabilities must also, after award, submit an implementation plan that documents:

• NCUTC training completion or enrollment;
• Participation agreements with FBI Joint Counterterrorism Task Forces for select personnel;
• Policies for privacy protections, FCC/FAA compliance, operational coordination with DHS/DOJ and willingness to provide mutual aid for special events. 

The message to SLTT agencies is clear: detection and monitoring are broadly encouraged; mitigation funding comes with tight guardrails, training obligations and federal oversight.

A Data-Driven View of C-UAS Performance

The NOFO goes beyond simple “spend and report” language and spells out performance metrics that hint at how DHS and FEMA plan to evaluate C-UAS architectures nationwide:

Recipients must track and report:

• Total hours each system is in active use since acquisition.
• Cumulative number of UAS detections, including repeats.
• Number of distinct UAS identified (unique events vs. repeat hits).
• Total number of criminal investigations launched based on intelligence from C-UAS systems. 

Short-term targets include:

• 80% of funds used for C-UAS equipment and services.
• 20% used for training personnel. 

Longer-term targets include:

• 100% of mitigation systems used to protect FIFA World Cup and America 250 events in conjunction with federal authorities.
• Successful identification and classification of 90% of detected UAS (distinguishing commercial, recreational and potentially malicious systems).
• Criminal investigations launched on 100% of identified violations of civil or criminal law where UAS operators endanger the public or violate airspace or other criminal statutes. 

For vendors, those metrics point toward data-rich, integrated solutions—systems that not only generate detections but also feed usable intelligence into law enforcement workflows and case-building.

Deadlines and Near-Term Opportunities

The timeline for FY26 funding is compressed:

• Application window: Closes December 5, 2025 (5 p.m. ET). 
• Anticipated selection date: January 30, 2026.
• Awards issued by: No later than February 27, 2026.

For industry, that translates into a near-term window to align offerings with state homeland security offices, help shape investment justifications and map product portfolios against FEMA’s allowable cost categories and performance metrics.

From Rhetoric to Requirements

Driscoll’s Face the Nation comments, and the broader Washington debate about mass drones, “flying IEDs” and swarm tactics, have put unmanned threats in the same rhetorical category as nuclear and cyber risk. 

The C-UAS Grant Program is one of the first large, concrete funding vehicles that translates that rhetoric into requirements, eligibility rules and measurable outputs for SLTT agencies. It does not solve all of the legal and regulatory issues around domestic drone defense, nor does it create new shoot-down authority for local law enforcement. But it does three things that matter for the UAS/C-UAS market:

1. Signals scale. A half-billion dollars for DIMT-M systems, with 97% pass-through, effectively seeds a multi-year procurement cycle at the state and local level.
2. Raises the bar on governance. NCUTC training, privacy protections, federal coordination and detailed performance reporting mean C-UAS deployments will be scrutinized as much for policy compliance and civil liberties as for technical performance.
3. Favors mature, integrable solutions. With technology development and proof-of-concept projects ruled out, and with an emphasis on quantifiable detections and investigative outcomes, the NOFO implicitly favors systems that can plug into existing command centers, fusion cells and case management tools today.

Taken together, Driscoll’s “threat of humanity’s lifetime” warning and FEMA’s C-UAS NOFO suggest a market entering a new phase: less about pilots and demonstrations, more about operational deployment at scale under tight legal, training and data-reporting regimes.