The phrasing in the press release uses the words: “appropriated funding,” which suggests to me that NASA wants these companies to find outside investors, similar to the early milestone of the COTS phase of the CRS (ISS commercial resupply) contracts. If this is the case, I suspect that NASA wants this type of funding in order to have business experts figure out whether a company is likely to remain solvent enough for the NASA contract to produce results. NASA understands the technical issues, but they are scientists and engineers, not business experts. Finding outside investors would help demonstrate the “partner’s ability to successfully bring the technology to market” part of NASA’s desired result for supporting these developments.

I noticed that Orbital Sciences (now Orbital ATK) was one of the contract recipients. I am a bit confused about this, as Orbital is a large enough company that I would have thought that they could have developed their proposed advanced materials on their own. A downside to accepting NASA money is that NASA may require that the technology become public domain far before a patent would expire, and that is against Orbital’s best interests. The only thing that I can think of for Orbital to accept the funding — and the conditions that come with it — is that the idea is not original to Orbital but is NASA’s idea, and Orbital has agreed to develop it.

This isn’t Orbital’s first contract with NASA’s Space Technology Mission Directorate (STMD) for developing a technology. Three months ago, they announced another:
https://www.orbitalatk.com/news-room/release.asp?prid=204

The other seven companies listed in the announcement are fairly small or are fairly young, and they may benefit greatly by having the technologies that these contracts help them develop, and as the press release noted these technologies should benefit NASA. The rest of the world will also benefit, and so will other component manufacturers once these technologies become public domain.

This announcement and these contracts tell me that at least part of NASA is serious about advancing the commercialization of space. The CRS and CCDev (commercial manned flights) were just the beginning. NASA has been helpful with providing information and knowledge to a large number of upstart startup NewSpace companies, and now it seems that NASA is also helpful in their technology development, especially where NASA sees that it can benefit from the technology.
https://www.nasa.gov/feature/opportunities-to-foster-commercial-space-technologies

This announcement may also tell investors that commercial space is not in competition with NASA but is in partnership with it.* This would be a signal to investors that it is safe to invest in commercial space, a signal that was not clear during the COTS phase of CRS, and this lack of clarity may have contributed to the demise of Kistler.

The nature of these technologies shows that NASA believes that the future of many satellites and spacecraft is to be smaller, not larger. “Large” may stop being the signature of unmanned satellites and become the domain of manned spacecraft.

* Robert has noted that another announcement, moving the first manned Orion flight to the first SLS test launch, may be NASA’s way of trying to “stay ahead” of the commercial competition in the manned space realm, even though the missions and abilities of NASA’s Orion spacecraft and the two commercial manned spacecraft are different. NASA’s “left hand” (government control of space access) may be working at odds with its “right hand” (developing commercial space).