WASHINGTON, Sept 17 (Reuters) - U.S. rocket propulsion

startup Ursa Major said on Tuesday it was awarded a $12.5

million contract to build out production and testing for new

solid fuel rocket engines.

The award, though small, is part of a bigger effort by the

Pentagon to increase the number of rocket makers as stockpiles

dwindle from supplying Ukraine and Israel in their ongoing wars.

CONTEXT

The agreement contains some of the first funds distributed

from the Pentagon's Office of Strategic Capital which are meant

to seed investment in the defense industrial base's supply

chain. The Navy is also contributing to the $12.5 million award

that is being matched by Ursa Major, culminating in a $25

million expansion of the company's solid rocket motor

capabilities.

The investment will support Ursa Major's efforts to enhance

its solid rocket motor manufacturing process under the Office of

Strategic Capital's Transition Acceleration Program, which aims

to fund development of future defense products.

Separately, the Navy awarded a contract earlier this year

to address surging demand for the M104 engine which is used in

RTX Corp's ( RTX ) Standard Missile family of missiles.

WHAT'S NEXT

Ursa Major's contribution to the investment will be directed

toward completing an Advanced Manufacturing Pathfinder program,

which includes the design, manufacture, and testing of a solid

rocket motor prototype.

Tuesday's award is significant because it is one of the first

from the Office of Strategic Capital, a fund which was

established to boost public-private investments in critical

technology areas for national security.