The Defense Production Act of 1950: History,
Authorities, and Reauthorization
Jared T. Brown
Analyst in Emergency Management and Homeland Security Policy
Daniel H. Else
Specialist in National Defense
June 14, 2013
Congressional Research Service
7-5700
www.crs.gov
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CRS Report for Congress
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The Defense Production Act of 1950: History, Authorities, and Reauthorization
Summary
The Defense Production Act (DPA) of 1950 (P.L. 81-774, 50 U.S.C. Appx § 2061 et seq.), as
amended, confers upon the President a broad set of authorities to influence domestic industry in
the interest of national defense. The authorities can be used across the federal government to
shape the domestic industrial base so that, when called upon, it is capable of providing essential
materials and goods needed for the national defense.
Though initially passed in response to the Korean War, the DPA is historically based on the War
Powers Acts of World War II. Gradually, Congress has expanded the term national defense, as
defined in the DPA, so that it now includes activities related to homeland security and domestic
emergency management. The scope of DPA authorities extends beyond shaping U.S. military
preparedness and capabilities, as the authorities may also be used to enhance and support
domestic preparedness, response, and recovery from natural hazards, terrorist attacks, and other
national emergencies.
The current authorities of the DPA include, but are not limited to:
• Title I: Priorities and Allocations, which allows the President to require persons
(including businesses and corporations) to prioritize and accept contracts for
materials and services as necessary to promote the national defense.
• Title III: Expansion of Productive Capacity and Supply, which allows the
President to incentivize the domestic industrial base to expand the production and
supply of critical materials and goods. Authorized incentives include loans, loan
guarantees, direct purchases and purchase commitments, and the authority to
procure and install equipment in private industrial facilities.
• Title VII: General Provisions, which includes key definitions for the DPA and
several distinct authorities, including the authority to establish voluntary
agreements with private industry; the authority to block proposed or pending
foreign corporate mergers, acquisitions, or takeovers that threaten national
security; and the authority to employ persons of outstanding experience and
ability and to establish a volunteer pool of industry executives who could be
called to government service in the interest of the national defense.
The authorities of the DPA are generally afforded to the President in statute. The President, in
turn, has delegated these authorities to department and agency heads in Executive Order 13603,
National Defense Resource Preparedness, issued in 2012. While the authorities are most
frequently used by, and commonly associated with, the Department of Defense, they can be, and
have been, used by numerous other executive departments and agencies. The DPA lies within the
jurisdiction of the House Committee on Financial Services and the Senate Committee on
Banking, Housing, and Urban Affairs.
Nearly all DPA authorities will terminate on September 30, 2014, though a few, such as the Exon-
Florio Amendment (which established government review of the acquisition of U.S. companies
by foreigners) and anti-trust protections for certain voluntary industry agreements, have been
made permanent. Since 1950, the DPA has been reauthorized over 50 times, though significant
authorities were terminated from the original law in 1953. Typically, Congress has reauthorized
the DPA through stand-alone measures granting an extension of the act for a definite period of
time (ranging from a few months to many years). Congress last reauthorized the DPA in 2009
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The Defense Production Act of 1950: History, Authorities, and Reauthorization
(P.L. 111-67, the Defense Production Act Reauthorization of 2009). This reauthorization amended
some of the current DPA authorities and extended the termination of the act by five years.
Congress may consider reauthorizing the DPA prior to its termination on September 30, 2014. In
conjunction with, or separate from, authorizing legislation, Congress may evaluate the need to
expand, restrict, or otherwise clarify the powers granted to the President in the DPA. Congress
might also expand the notification, reporting, and rulemaking requirements of the law in order to
aid future oversight of the DPA.
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The Defense Production Act of 1950: History, Authorities, and Reauthorization
Contents
Introduction ...................................................................................................................................... 1
History of the DPA........................................................................................................................... 1
Origin ......................................................................................................................................... 1
Committee Jurisdiction .............................................................................................................. 3
Reauthorization of the DPA ....................................................................................................... 3
Major Authorities of the DPA .......................................................................................................... 4
General Parameters of the DPA ................................................................................................. 5
Authorities under Title I of the DPA .......................................................................................... 6
Priorities and Allocations Authority .................................................................................... 6
Title I and Energy ................................................................................................................ 9
Authorities Under Title III of the DPA .................................................................................... 10
Loan Guarantees and Direct Loans ................................................................................... 11
Purchase, Purchase Commitments, and Installation of Equipment ................................... 12
Delegation of Section 301, 302, and 303 Authorities in E.O. 13603 ................................ 14
Use of Title III Authorities ................................................................................................ 15
Defense Production Act Fund ........................................................................................... 15
Authorities Under Title VII of the DPA ................................................................................... 16
Special Preference for Small Businesses ........................................................................... 16
Definitions of Key Terms in the DPA ............................................................................... 17
Voluntary Agreements ....................................................................................................... 17
Nucleus Executive Reserve ............................................................................................... 19
Authorization of Appropriations ....................................................................................... 19
Committee on Foreign Investment in the United States .................................................... 20
Defense Production Act Committee .................................................................................. 20
Impact of Offsets Report ................................................................................................... 21
Issues for Congress ........................................................................................................................ 21
Reauthorization of the DPA ..................................................................................................... 21
Considerations for Amending the Defense Production Act of 1950 ........................................ 22
Declaration of Policy ......................................................................................................... 22
Definitions ......................................................................................................................... 23
Appropriations to the DPA Fund ....................................................................................... 23
Considerations for Oversight of Ongoing DPA Activities ....................................................... 24
Expand Reporting or Notification Requirements .............................................................. 24
Rulemaking Requirements ................................................................................................ 24
Amend Authority Delegations ........................................................................................... 24
Tables
Table 1. Appropriations to the DPA Fund Since FY2010, in Millions........................................... 16
Table A-1. Additional Resources by Defense Production Act Subject .......................................... 26
Table A-2. Substantive Provisions of the Defense Production Act, Related Portions of
Executive Order 13603, and Associated Regulations ................................................................. 27
Table A-3. Delegation of Priorities and Allocations Authorities to Cabinet Secretaries................ 30
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Table A-4. Chronology of Laws Reauthorizing the Defense Production Act of 1950 ................... 32
Appendixes
Appendix. Additional Resources and Summary Tables ................................................................. 26
Contacts
Author Contact Information........................................................................................................... 33
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The Defense Production Act of 1950: History, Authorities, and Reauthorization
Introduction
The Defense Production Act of 1950, as amended (DPA),1 provides the President a broad set of
authorities to ensure that domestic industry can meet national defense requirements. In the DPA,
Congress has found that “the security of the United States is dependent on the ability of the
domestic industrial base to supply materials and services for the national defense and to prepare
for and respond to military conflicts, natural or man-caused disasters, or acts of terrorism within
the United States.”2 Through the DPA, the President can, among other activities, prioritize
contracts for goods and services, and offer incentives within the domestic market to enhance the
production and supply of critical materials and technologies when necessary for national defense.
Since 1950, the DPA has been reauthorized over 50 times by Congress, most recently in 2009.3
The majority of DPA authorities will expire on September 30, 2014, unless reauthorized.
This report examines some of the extensive history of the DPA, focusing primarily on its creation
and most recent legislative reauthorization. This report also discusses the foremost active
authorities of the DPA. Nevertheless, this report is not intended to evaluate all authorities of the
DPA comprehensively. In discussing the major authorities of the DPA, this report explains how
those authorities may have changed as a result of the most recent reauthorization of the law (P.L.
111-67, the Defense Production Act Reauthorization of 2009, henceforth referred to as
“Reauthorization of 2009”).4 This report also identifies relevant delegations of the President’s
DPA authorities made in Executive Order (E.O.) 13603, National Defense Resources
Preparedness.5 Finally, this report provides a brief overview of issues relevant to Congress as it
contemplates reauthorizing the DPA. It also discusses considerations for expanding, restricting, or
otherwise modifying the authorities provided therein.
History of the DPA
Origin
The DPA was inspired by the First and Second War Powers Acts of 1941 and 1942, which gave
the executive branch broad authority to regulate industry during World War II.6 Much of this
1 50 U.S.C. Appx. §§ 2061 et seq.
2 50 U.S.C. Appx. § 2062(a)(1); Section 2(a)(1) of the DPA.
3 Congress reauthorized the DPA when it enacted the Defense Production Act Reauthorization of 2009, P.L. 111-67,
123 Stat. 2006-2022.
4 These changes are discussed at length in this report, but are summarized in Table A-2 of the Appendix.
5 Executive Order 13603, “National Defense Resource Preparedness,” 77 Federal Register 16651, March 22, 2012.
6 First War Powers Act, 1941 (H.R. 6233, P.L. 77-354, 55 Stat. 838), and Second War Powers Act, 1942 (S. 2208, P.L.
77-507, 56 Stat. 176). The first of these statutes conferred considerable emergency power on the President to reorganize
the executive branch, to enter into contracts and make payments on them, and to regulate “trade with the enemy.” The
second act expanded the powers of the Interstate Commerce Commission to improve the efficiency of transportation of
war materials; expanded an existing authority for military departments to acquire private property by condemnation,
purchase, donation, or other transfer; permitted the Secretaries of War and the Navy to place orders and contracts and
the President to give such contracts priority over all deliveries for private accounts or for export; and gave the President
the authority to require acceptance of and performance under these contracts and to allocate materials and facilities for
their fulfillment. The act also empowered the President to obtain information, records, and reports sufficient to enforce
the provisions of the act and clarified existing law on the amount of compensation required if property was
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authority lapsed at the end of that war, but the beginning of the Cold War with the Soviet Union
in the late 1940s and the North Korean invasion of South Korea in June of 1950 caused the
Truman Administration to reconsider the need for stronger executive authority in the interest of
national defense.7
A number of factors encouraged President Truman to propose such legislation. Both the armed
services and the defense industry supporting the nation’s effort during World War II had
demobilized during the late 1940s after the cessation of hostilities. With the return of peace, the
Administration cut back military expenditures significantly. President Truman accentuated these
cuts by placing heavy reliance on atomic weapons to provide for the nation’s defense.8 The
perceived power of the atomic arsenal justified, in the eyes of the Administration, substantial cuts
in expensive, manpower-intensive conventional military capabilities. This enabled the President
to propose and Congress to pass much-reduced defense appropriations.
In addition, the nation had recently experienced substantial economic and industrial turmoil.
Demand for housing and consumer products, unleashed by the expiration of wartime economic
controls, precipitated a series of postwar labor strikes. These reached their height in 1946 in a
nationwide shutdown of passenger and freight rail service, leading President Truman to threaten
to seize control of the railways and draft striking rail workers into the Armed Forces, placing
them under military discipline. Though the presidential threats were never carried out, the strike
served to illustrate the economic context in which the nation approached the Korean War.9
The original DPA, enacted on September 8, 1950, granted broad authority to the President to
control national economic policy.10 Containing seven separate titles, the DPA allowed the
President, among other powers, to demand that manufacturers give priority to defense production,
to requisition materials and property, to expand government and private defense production
capacity, to ration consumer goods, to fix wage and price ceilings, to force settlement of some
(...continued)
requisitioned for defense purposes. The act also included provisions relating to free postage for members of the military
services, naturalization of persons serving in the armed forces, acceptance of conditional gifts to further the war
program, metal content of coinage, inspection and audit of war contractors, and the gathering and assessment of war
information by the Department of Commerce.
7 In a message sent to Congress at the outbreak of war in Korea in mid-1950, President Truman stated that the United
States and the United Nations were responding to a military invasion of the Republic of Korea by forces from north of
the 38th parallel, that the nation urgently needed additional military manpower, supplies, and equipment, and that the
nation’s military and economic preparedness were inseparable. He urged Congress to pass legislation that would
guarantee the prompt supply of adequate quantities of needed military and civilian goods, including measures to help
compensate for manufacturing demand growth caused by military expansion. For more history of the DPA, see U.S.
Congress, House Banking and the Currency, Defense Production Act of 1950, report to accompany H.R. 9176, 81st
Cong., 2nd sess., July 28, 1950, H.Rept. 81-2759 (Washington: GPO, 1950), p. 1.
8 Examples of the many studies of the impact of atomic weaponry on U.S. strategic thought during the initial years of
the Cold War may be found in Edmund Beard, Developing the ICBM: A Study in Bureaucratic Politics (New York:
Columbia University Press, 1976), pp. 34-35; Bernard Brodie, Strategy in the Missile Age (Princeton: Princeton
University Press, 1959), pp. 107-144; Harland B. Moulton, “American Strategic Power: Two Decades of Nuclear
Strategy and Weapon Systems, 1945-1965” (Ph. D. dissertation, University of Minnesota, 1969), pp. 1-14. A more
recent general examination of the development of military strategy during the Truman Administration forms the basis
of Patrick W. Steele, “Strategic Air Warfare and Nuclear Strategy: The Formulation of Military Policy in the Truman
Administration, 1945-1950” (Ph. D. dissertation, Marquette University, 2010).
9 See, for example, Robert W. Ruth, “Truman Denies He Gave Ike Order to Take Over in 1946 Railroad Strike,” The
Baltimore Sun, September 19, 1952, p. 1.
10 P.L. 81-774, 64 Stat. 798.
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labor disputes, to control consumer credit and regulate real estate construction credit and loans, to
provide certain antitrust protections to industry, and to establish a voluntary reserve of private
sector executives who would be available for emergency federal employment.
Four of the seven titles (Titles II, IV, V, and VI), which were those related to requisitioning,
rationing, wage and price fixing, labor disputes, and credit controls and regulation, terminated in
1953 when Congress allowed them to lapse.11
Committee Jurisdiction
Though commonly associated with industrial production for the Department of Defense (DOD),
the DPA currently lies within the jurisdiction of the House Committee on Financial Services and
the Senate Committee on Banking, Housing, and Urban Affairs. Prior to 1975, House rules did
not permit simultaneous referral of bills to two or more committees. Precedents in both chambers
did not allow divided or joint referrals, regardless of bill content. Instead, bills were assigned to
committees based on the preponderance of their subject matter. Because much of the President’s
proposal dealt with economic policy, what became the Defense Production Act was assigned in
1950 to the House and Senate Committees on Banking and Currency (their successors are the
House Committee on Financial Services and the Senate Committee on Banking, Housing, and
Urban Affairs). Although the parts of the act dealing with the requisitioning of materials, wages
and prices, labor, and credit are no longer in force, these committees have retained jurisdiction.
In addition to the standing committees of jurisdiction, the original statute created a Joint
Committee on Defense Production. This committee was composed of selected members from the
standing Committees on Banking and Currency of the Senate and House. This committee was
intended to review the programs established by the DPA and advise the standing committees
whenever they drafted legislation on the subject. The Joint Committee has not existed, in effect,
since 1977 when salaries and expenses for the committee were last funded,12 although the
provision in the DPA establishing the Joint Committee on Defense Production was only officially
repealed in 1992.13
Reauthorization of the DPA
The DPA has been amended and reauthorized numerous times since its original enactment. Most
notably, with the passage and enactment of P.L. 85-95, Congress reauthorized Titles I, III, and VII
while allowing Titles II, IV, V, and VI of the DPA to expire in 1953.14 The Defense Production
Act, like the War Power Acts that preceded it, included a sunset provision that has required
periodic reauthorization and offered the opportunity for amendment. Congress passed the DPA in
1950 and has thus far reauthorized it 51 times, including many short-term “stop-gap”
11 P.L. 83-95, 67 Stat. 129. P.L. 83-95 permitted the termination of Titles II and VI as of June 30, 1953, and Titles IV
and V to terminate as of April 30, 1953.
12 Although in 1977 Congress extended the 1950 Act through September 30, 1979 (P.L. 95-37), no appropriation for
salaries and expenses of the Joint Committee was made for FY1978. The last appropriation for salaries and expenses
for the Joint Committee was made in P.L. 94-440.
13 Section 153 of the Defense Production Act Amendments of 1992 (P.L. 102-558, 106 Stat. 4219).
14 Act of June 30, 1953, Defense Production Act Amendments of 1953 (S. 1080, P.L. 83-95).
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extensions.15 From time to time, the DPA has expired without Congress passing a law
reauthorizing and extending the termination date of the DPA. However, in such circumstances,
Congress has often ultimately passed a law retroactively setting the effective date for the law to
the previous expiration date. Most notably, for example, the DPA expired on October 20, 1990,
and was not reauthorized until August 17, 1991. However, upon passage of P.L. 102-99, the
effective date of the law was set to October 20, 1990.
The DPA was most recently reauthorized by the 111th Congress. Senators Christopher Dodd and
Richard Shelby, who were the chairman and ranking Member of the U.S. Senate Committee on
Banking, Housing, and Urban Affairs in the 111th Congress, introduced S. 1677, the Defense
Production Act Reauthorization of 2009, on September 16, 2009. The bill passed both chambers
of Congress by September 23, 2009, and was signed into law by the President as P.L. 111-67 on
September 30, 2009.16
Most of the authorities of the DPA would have terminated on the day that the reauthorization was
signed into law. The Reauthorization of 2009 extended the majority of DPA authorities until
September 30, 2014, at which time they will be terminated unless reauthorized once again. For
more on the potential termination of DPA authorities after September 30, 2014, see the
“Reauthorization of the DPA” section in this report.
Major Authorities of the DPA
This section provides summaries of the major authorities granted to the President in the three
remaining active Titles of DPA.17 Each summary describes how the DPA authorities are delegated
to Cabinet officials or other offices of the U.S. government in the recently issued Executive Order
(E.O.) 13603, National Defense Resource Preparedness.18 The section highlights substantive
changes made to these authorities in the Defense Production Act Reauthorization of 2009
(Reauthorization of 2009).19 This portion of the report identifies substantive changes contained in
the Reauthorization of 2009 and E.O. 13603. It is not intended to comprehensively evaluate all
authorities in the DPA. The information provided below is reviewed in Table A-2 in the Appendix
for select provisions of the DPA. Table A-1 also provides a list of additional materials,
information, and resources on various topics of the DPA that may be of use to Congress.
15 See Table A-4 in the Appendix for a full chronology of reauthorizations.
16 The bill was introduced and passed by unanimous consent in the Senate on September 16, 2009. The House passed
the bill under the suspension of the rules procedure by voice vote on September 23, 2009.
17 Titles I, III, and VII. The remaining Titles of the DPA (II, IV, V, and VI) terminated in 1953, but were officially
repealed in the Reauthorization of 2009.
18 Executive Order 13603, “National Defense Resource Preparedness,” 77 Federal Register 16651, March 22, 2012.
E.O. 13603 replaced the previous E.O. 12919 on National Defense Industrial Resource Preparedness, which had been
issued by President William J. Clinton on June 3, 1994. See Executive Order 12919, “National Defense Industrial
Resources Preparedness,” 59 Federal Register 29525, June 7, 1994.
19 P.L. 111-67, Defense Production Act Reauthorization of 2009.
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General Parameters of the DPA
The DPA provides the President an “array of authorities to shape national defense preparedness
programs and to take appropriate steps to maintain and enhance the domestic industrial base.”20
[Italics added.] DPA authorities are tied to the definition of national defense, as the use of any
major DPA authority must be interpreted to promote, support, or otherwise be deemed needed or
essential for the national defense.21 National defense is defined in the statute as:
programs for military and energy production or construction, military or critical
infrastructure assistance to any foreign nation, homeland security, stockpiling, space, and
any directly related activity. Such term includes emergency preparedness activities
conducted pursuant to title VI of The Robert T. Stafford Disaster Relief and Emergency
Assistance Act [42 U.S.C. § 5195 et seq.] and critical infrastructure protection and
restoration.22
Further reference can be made to Title VI of the Stafford Act for a definition of “emergency
preparedness” activities. It states that emergency preparedness:
means all those activities and measures designed or undertaken to prepare for or minimize
the effects of a hazard upon the civilian population, to deal with the immediate emergency
conditions which would be created by the hazard, and to effectuate emergency repairs to, or
the emergency restoration of, vital utilities and facilities destroyed or damaged by the
hazard.23
Therefore, the use of DPA authorities extends beyond shaping U.S. military preparedness and
capabilities, as the authorities may also be used to enhance and support domestic preparedness,
response, and recovery from hazards, terrorist attacks, and other national emergencies, among
other purposes.
In its original 1950 form, the DPA defined national defense as “the operations and activities of the
armed forces, the Atomic Energy Commission, or any other department or agency directly or
indirectly and substantially concerned with the national defense.... ”24 Over the many
reauthorizations and amendments to the DPA, Congress has gradually expanded the scope of the
definition of national defense, and did so again in 2009.25 At that time, Congress included critical
infrastructure assistance to any foreign nation and added homeland security to the definition.26
20 50 U.S.C. Appx. § 2062(a)(4); Section 2(a)(4) of the DPA (emphasis added).
21 There are various ties to national defense throughout the DPA. Some examples: Title I, Section 101 priorities and
allocations authority requires the President to deem action as “necessary or appropriate to promote the national
defense” (50 U.S.C. Appx. § 2071(a)); Title III authorities can be used when “essential for the national defense” (50
U.S.C. Appx. §§ 2091(a), 2092(a), 2093(a)); and Title VII voluntary agreement authority requires that the use helps
“provide for the national defense” (50 U.S.C. Appx. § 2158(c)(1)).
22 50 U.S.C. Appx. § 2152(14); Section 702(14) of the DPA.
23 42 U.S.C. § 5195(a)(3)
24 See Section 702(d) of P.L. 81-774.
25 For further discussion of the evolution of the definition of national defense, see The National Infrastructure Advisory
Council, Framework for Dealing with Disasters and Related Interdependencies: Final Report and Recommendations,
Appendix G: The Defense Production Act, Washington, D.C., July 14, 2009, pp. 41-42, at http://www.dhs.gov/xlibrary/
assets/niac/niac_framework_dealing_with_disasters.pdf.
26 123 Stat. 2017, Section 8 of P.L. 111-67. Both “critical infrastructure” and “homeland security” are defined in
Section 702 of the DPA, 50 U.S.C. Appx. § 2152.
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For more on the other definition changes to the DPA in the Reauthorization of 2009, see the
section “Definitions of Key Terms in the DPA” of this report.
The DPA also includes a full statement of policy and congressional findings, as set forth in the
“Declaration of Policy.”27 In 2009, Congress amended the declaration of policy by expanding the
text to explicitly list natural disasters and terrorist attacks as being part of the national defense.28
The declaration was also amended to include “biomass” and “more efficient energy storage and
distribution technologies” as forms of renewable energy to augment domestic energy supplies to
further assure the adequate maintenance of the domestic industrial base.29 The Reauthorization of
2009 also often reordered or slightly reworded various clauses.
Authorities under Title I of the DPA
Priorities and Allocations Authority
Section 101(a) of Title I of the DPA states:
The President is authorized (1) to require that performance under contracts or orders (other
than contracts of employment) which he deems necessary or appropriate to promote the
national defense shall take priority over performance under any other contract or order, and,
for the purpose of assuring such priority, to require acceptance and performance of such
contracts or orders in preference to other contracts or orders by any person he finds to be
capable of their performance, and (2) to allocate materials, services, and facilities in such
manner, upon such conditions, and to such extent as he shall deem necessary or appropriate
to promote the national defense.30
The priority performance authority allows the federal government to ensure the timely
availability of critical materials, equipment, and services produced in the private market in the
interest of national defense, and to receive those materials, equipment, and services through
contracts before any other competing interest.31 Under the language of the DPA, a person
27 50 U.S.C. Appx. § 2062; Section 2 of the DPA. This section comprises congressional findings, Section 2(a), and a
statement of policy of the United States, Section 2(b).
28 For instance, in Section 2(a)(1), Congress now finds that “the security of the United States is dependent on the ability
of the domestic industrial base to supply materials and services for the national defense and to prepare for and respond
to military conflicts, natural or man-caused disasters, or acts of terrorism within the United States”. [Italics added.]
Additionally, the Reauthorization of 2009 added Section 2(b)(5), which states “authorities under this Act [50 U.S.C.
App. §§ 2061-2171] should be used to reduce the vulnerability of the United States to terrorist attacks, and to minimize
the damage and assist in the recovery from terrorist attacks that occur in the United States.” 123 Stat. 2007, Section 3 of
P.L. 111-67.
29 In the 2009 reauthorization of the DPA, an existing provision in the declaration of policy was amended to state that
“to further assure the adequate maintenance of the domestic industrial base, to the maximum extent possible, domestic
energy supplies should be augmented through reliance on renewable energy sources (including solar, geothermal, wind,
and biomass sources), more efficient energy storage and distribution technologies, and energy conservation measures”
[italics added for new text]. See 123 Stat. 2007, Section 3 of P.L. 111-67 and the current 50 U.S.C. Appx. .§
2062(a)(6); Section 2(a)(6) of the DPA.
In other words, under this declaration of policy, Congress has found that it is in the interest of national defense
preparedness that the government assure some level capacity exists in the domestic industrial base to produce and
provide renewable energy sources, including from biomass sources.
30 50 U.S.C. Appx. § 2071(a); Section 101(a) of the DPA.
31 As noted in regulations for Title I authorities, especially 15 C.F.R. § 700.1(b), this priority authority is broader than
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(including corporations, as defined in statute)32 is required to accept prioritized contracts/orders,33
though regulations implementing Title I authorities provide practical exemptions to this mandate.
The limited allowances for when a person is required to or may optionally reject a prioritized
order can be superseded by the direction of the implementing federal department.34 In executing a
contract under the DPA, a contractor is not liable for actions taken to comply with governing
rules, regulations, and orders (e.g., prioritization requirements), including any rules, regulations,
or orders later declared legally invalid.35 The government can also prioritize the performance of
contracts between two private parties, such as a contract between a prime contractor and a
subcontractor, if needed to fulfill a priority contract and promote the national defense.36
Title I also allows the President to allocate or control the general distribution of materials,
services, and facilities. Allocation authority relates historically to the controlled materials
programs of World War II, when the distribution of critical materials and resources had to be
managed to maximize the production of goods needed in the war effort.37 This authority is rarely
used today, and is currently only implemented for the Civil Reserve Air Fleet (CRAF) program,
under which the DOD may augment its airlift capability with civilian aircraft during a national
defense related crisis.38
There are several notable restrictions to the priorities and allocation authority. For example, it
cannot be used for contracts of employment.39 Additionally, unless authorized by a joint
resolution of Congress, the authority cannot be used for wage or price controls. Private persons
are not required to assist in the production or development of chemical or biological weapons
unless directly authorized by the President or a Cabinet Secretary.40
(...continued)
similar priority authorities provided in other statutes including Section 18 of the Selective Service Act of 1948 (50
U.S.C. Appx. § 468).
32 50 U.S.C. Appx. § 2152(15), Section 702(15) of the DPA, defines person as “individual, corporation, partnership,
association, or any other organized group of persons, or legal successor or representative thereof, or any State or local
government or agency thereof.”
33 Contracts and “rated orders” have the same meaning in the regulations on Title I authorities, see, for example, the
definition for “rated order” provided by 15 C.F.R. § 700.8.
34 See, for example, the regulations establishing standards and procedures for the use of the Secretaries’ of Commerce,
Energy, and Transportation delegated authorities under Title I of the DPA (15 C.F.R. § 700.13, 10 C.F.R. § 217.33, and
49 C.F.R. § 33.33, respectively). These regulations explain the circumstances a person may reject a prioritized contract,
though these conditions are limited by the clause “Unless otherwise directed by the [implementing department].”
35 50 U.S.C. Appx. § 2157; Section 707 of the DPA. Immunity under this provision is limited, and does not confer
blanket tort immunity to a contractor for liability to injured third parties. Also, carrying out a contract according to its
terms does not necessarily entitle a contractor to be indemnified by the government when the resulting product injures
third parties, absent an indemnification clause in the contract. Hercules v. United States, 516 U.S. 417 (1996).
36 See, for example, 15 C.F.R. § 700.3(d).
37 See further explanation of allocation authority in 15 C.F.R. § 700.30(a)(2). In a proposed rulemaking that would
revise current regulations issued by the Department of Commerce with regards to priorities and allocations authority,
the proposed definition of allocation is: “The control of the distribution of materials, services or facilities for a purpose
deemed necessary or appropriate to promote the national defense.” See Department of Commerce, “Revisions to
Defense Priorities and Allocations System Regulations,” 75 Federal Register 32122, June 7, 2010.
38 Department of Homeland Security, The Defense Production Act Committee: Report to Congress, August 2011, p. 9.
For more on the CRAF program, see http://www.dot.gov/ost/oiser/craf.htm.
39 This restriction is written as a parenthetical in Section 101(a)(1), but is an important constraint on Title I priorities
authority.
40 50 U.S.C. Appx. § 2074; Section 104 of the DPA. It should be noted that development and production of chemical
(continued...)
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Determinations and Delegations
In statute, Title I priorities and allocation authority can only be used to “promote national
defense.” In E.O. 13603, the President further constrains that authority so that it “may be used
only to support programs that have been determined in writing as necessary or appropriate to
promote the national defense” by the either the Secretary of Defense, the Secretary of Homeland
Security, or the Secretary of Energy, depending on the issue involved.41 Once a program is
determined to promote the national defense, other Secretaries who have been delegated the
priorities and allocation authority can use their authority for those pre-designated program
purposes.
E.O. 13603 provides for the delegation of the President’s priorities and allocation authority to six
different Cabinet Secretaries based upon their areas of expertise in different resource and material
sectors. These resource areas are further defined in Section 801 of E.O. 13603. The delegation to
the Cabinet Secretaries in E.O. 13603 did not differ from the earlier executive order, though the
definitions of their assigned resource areas did change somewhat. Table A-3 in the Appendix
summarizes this delegation of priorities and allocation authority.
How Priorities and Allocations Changed in the Reauthorization of 2009 and
E.O. 13603
The statutory language providing Section 101(a) priorities and allocation authority has existed,
unaltered, since the original enactment of the DPA.42 However, in the Reauthorization of 2009,
Congress added a rulemaking requirement to the statute. Congress mandated that all Cabinet
Secretaries delegated priorities and allocation authority establish standards and procedures for its
use. The statute further encourages these rules to be consistent and unified in nature, a
recommendation made by the Government Accountability Office and endorsed by the
reauthorization bill’s principal sponsor.43
(...continued)
weapons and biological weapons are prohibited by the Chemical Weapons Convention (CWC) and the Biological
Weapons Convention (BWC), respectively. The United States is a state party to both of these international treaties and
is legally bound by their obligations and prohibitions.
41 See Section 202 of E.O. 13603. Determinations are made
(a) by the Secretary of Defense with respect to military production and construction, military
assistance to foreign nations, military use of civil transportation, stockpiles managed by the
Department of Defense, space, and directly related activities; (b) by the Secretary of Energy with
respect to energy production and construction, distribution and use, and directly related activities;
and (c) by the Secretary of Homeland Security with respect to all other national defense programs,
including civil defense and continuity of Government.
In practice, some determination authority has been further re-delegated within the executive branch. An example of a
written determination, issued by the Department of Homeland Security through FEMA, can be found at
http://www.fema.gov/pdf/about/programs/dpa/signed-program-determinations-100506.pdf.
42 See Section 101 of P.L. 81-774.
43 See 50 U.S.C. Appx. § 2071(d); Section 101(d) of the DPA and U.S. Government Accountability Office, Defense
Production Act: Agencies Lack Policies and Guidance for Use of Key Authorities, GAO-08-854, June 2008, at
http://www.gao.gov/products/GAO-08-854. Sen. Christopher Dodd, “Defense Production Act Reauthorization of
2009,” Senate consideration of S. 1677, Congressional Record, September 16, 2009, p. S9480.
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The necessary rules were required to be issued within 270 days from bill enactment, or the end of
June 2010. Of the six departments delegated authority, three (Commerce, Energy, and
Transportation) had issued final rules as of April 1, 2013. The Department of Agriculture has
issued a proposed rule. The Departments of Defense and Health and Human Services have not yet
released rules in proposed or final form.44
Examples of Use
The allocation authority has rarely been used by the government, but the authority to prioritize
contracts is routinely employed by the DOD. In a typical year, DOD will assign a DPA priority to
more than 300,000 contracts, representing more than 20% of the nearly 1.5 million contracts
reported by the department and its subordinate military departments, agencies, and offices for
FY2012.45 These prioritized contracts are typically issued under the Department of Commerce’s
(Commerce’s) delegated authority with respect to materials, services, and facilities, including
construction materials, and under its regulations guiding the use of this authority.46 Some notable
examples of DOD’s use of Title I priorities authority include supporting the development of the
Integrated Ballistic Missile Defense System and Mine Resistant Ambush Protected (MRAP)
Vehicles.47 While the priorities authority is used far less frequently by other departments and
agencies, it has been used for both the prevention of terrorism and natural disaster preparedness.
For example, the Federal Bureau of Investigation has prioritized contracts in support of the
Terrorist Screening Center program and the U.S. Army Corps of Engineers prioritized contracts in
support of the Greater New Orleans Hurricane and Storm Damage Risk Reduction System
program.48
Title I and Energy
Title I also contains several provisions related to domestic energy. Section 101(c) authorizes the
President to allocate and prioritize contracts for materials, equipment, and services to maximize
domestic energy supplies in certain circumstances.49 This authority was used by the Department
44 The Department of Commerce has had a regulation for priorities and allocation authority for many years, called the
Defense Priorities and Allocation System (DPAS). See 15 C.F.R. Part 700. There is a proposed rulemaking that would
revise this existing regulation, see Department of Commerce, “Revisions to Defense Priorities and Allocations System
Regulations,” 75 Federal Register 32122, June 7, 2010, but this proposal has not been finalized. The Department of
Agriculture also has a proposed rulemaking that has not been finalized, see Department of Agriculture, “Agriculture
Priorities and Allocations System,” 76 Federal Register 29084, May 19, 2011. The Department of Energy issued a final
rule codified in 10 C.F.R. Part 217, see Department of Energy, “Energy Priorities and Allocations System
Regulations,” 75 Federal Register 41405, July 16, 2010. The Department of Transportation issued a final rule codified
in 49 C.F.R. Part 33, see Department of Transportation, “Prioritization and Allocation Authority Exercised by the
Secretary of Transportation Under the Defense Production Act,” 77 Federal Register 59793, October 1, 2012.
45 Department of Homeland Security, The Defense Production Act Committee: Report to Congress, August 2011, p. 7.
Total contract data for FY2012 compiled from USASpending.gov on May 17, 2013.
46 Ibid. DOD has been re-delegated authority by DOC to use their regulations and authorities for Title I priorities
authority.
47 There are two levels of priority rating provided in DPAS regulations. The “DO” rating is lower than a “DX” rating.
For a discussion of the different priority ratings, see 15 C.F.R. § 700.11. DOD, as a matter of practice, includes a DO
rating on most commercial contracts. Only select programs may receive a “DX” rating. For a current list of “DX” rated
programs, see http://www.bis.doc.gov/dpas/pdfdocs/list_of_dx_approved_programs.pdf.
48 Department of Homeland Security, The Defense Production Act Committee: Report to Congress, August 2011, p. 8.
49 50 U.S.C. Appx. § 2071(c); Section 101(c) of the DPA.
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of Energy to ensure that emergency supplies of natural gas continued to flow to California
utilities, helping to avoid threatened electrical blackouts in early 2001.50 However, Section 105 of
the DPA restricts its authorities from being used to ration the end-use of gasoline without the
approval of Congress.
Section 106 of Title I, as amended, also designates energy as a strategic and critical material.51
This designation enables other authorities in the DPA, especially Title III authorities discussed
below, to be used for policy decisions related to energy. However, prior to the Reauthorization of
2009, the DPA did not grant any new direct or indirect authority to the President to “engage in the
production of energy in any manner whatsoever (such as oil and gas exploration and
development, or any energy facility construction), except as expressly provided in sections 305
and 306 [50 U.S.C. App. § 2095 and 2096] for synthetic fuel production.”52 This restriction
designating “energy” as “strategic and critical material” was deleted in Section 5 of the
Reauthorization of 2009.53 With that restriction eliminated, the specific exemption for synthetic
fuel production became unnecessary, so the Reauthorization of 2009 also repealed several
sections on the production of synthetic fuel.54 The issue of synthetic fuel production and the use
of the DPA for energy production has an extensive history that is beyond the scope of this
report.55
Authorities Under Title III of the DPA
Title III authorities are intended to help ensure that the nation has an adequate supply of, or the
ability to produce, essential materials and goods necessary for the national defense. Using Title III
authorities, the President may provide appropriate financial incentives to develop, maintain,
modernize, restore, and expand the production capacity of domestic sources for critical
components, critical technology items, materials, and industrial resources essential for the
execution of the national security strategy of the United States.56 The President is also directed to
use Title III authorities to ensure that critical components, critical technology items, essential
materials, and industrial resources are available from reliable sources when needed to meet
defense requirements during peacetime, graduated mobilization, and national emergency.57 In the
Reauthorization of 2009, Congress amended and replaced the full text of Title III, though the core
purpose and content of the authorities remain principally the same.58 From an administrative
standpoint, language was updated throughout Title III to comply with more modern legislative
style and structure.
50 For discussion on how DPA was used in this situation, see U.S. Congress, Senate Committee on Banking, Housing,
and Urban Affairs, California Energy Crisis and Use of the Defense Production Act, 107th Cong., 1st sess., February 9,
2001, S. Hrg. 107-215 (Washington: GPO, 2001).
51 50 U.S.C. Appx. § 2076; Section 106 of the DPA.
52 See the former 50 U.S.C. Appx. § 2076(2) [2006 edition]
53 123 Stat. 2009.
54 See 50 U.S.C. Appx. § 2095 to § 2098 [2006 edition]; the former sections 306, 307, and 308 of the DPA.
55 In brief, these DPA authorities supported the Synthetic Fuels Corporation, established in P.L. 96-294. Language
rescinding most of the Synthetic Fuels Corporation funding was included in the FY1986 continuing appropriations
resolution (H.J.Res. 465, P.L. 99-190).
56 50 U.S.C. Appx. § 2077; Section 107(a) of the DPA. Many of these terms are defined further in 50 U.S.C. Appx. §
2152.
57 50 U.S.C. Appx. § 2077; Section 107(b)(1) of the DPA.
58 123 Stat. 2010-2017.
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Loan Guarantees and Direct Loans
Sections 301 and 302 of Title III of the DPA authorize the President to issue loan guarantees and
direct loans to reduce current or projected shortfalls of industrial resources, critical technology
items, or essential materials needed for national defense purposes.59 Loan guarantees and direct
loans can be issued to private businesses to help them create, maintain, expedite, expand, protect,
or restore production and deliveries or services essential to the national defense.60 A direct loan is
a loan from the federal government to another government or private sector borrower that
requires repayment, with or without interest. A loan guarantee allows the federal government to
guarantee a loan made by a non-federal lender to a non-federal borrower, either by pledging to
pay back all or part of the loan in the instance that the borrower is unable to do so.61 These
authorities, for instance, could be used to provide a loan, or to guarantee a loan, to a defense
contractor that is responsible for the provision of critical services essential to the national defense
when credit is otherwise unavailable in the private market.
How Loan Authority Changed in the Reauthorization of 2009
According to Senator Christopher J. Dodd, of Connecticut, the reauthorization bill’s principal
sponsor, the loan authorities provided in Sections 301 and 302 were updated in order to comply
with the Federal Credit Reform Act of 1990.62 In general, these changes increased restrictions on
the use of the authority by the President. For example, prior to the Reauthorization of 2009,
Section 301 and 302 authorized the President to make loans and loan guarantees if an “industrial
resource shortfall,” which the direct loan or loan guarantee was intended to correct, had been
identified in the President’s annual budget submission to Congress (or amendment to the
submission).63 Since reauthorization, the budget authority for guarantees and direct loans must be
specifically included in appropriations passed by Congress and enacted by the President before
they can be issued.64 Both before and after 2009, the President is allowed to waive the majority of
restrictions on use of this authority during periods of national emergency declared by the
President or Congress.65
Except in declared national emergencies, this statute also requires the President to determine that
loan guarantees or direct loans meet a number of conditions before issuance. Perhaps most
importantly, one of the conditions in using the loan authority is that the loan or loan guarantee is
the most cost-effective, expedient, and practical alternative method for meeting the need.66 Prior
to the reauthorization, the President had been required to determine that the ability of domestic
industrial sources to produce a good or service was insufficient to meet the combined projected
59 50 U.S.C. Appx. § 2091(a)(1). The beginning of 50 U.S.C. Appx. § 2092(a) includes the same basic text as §
2091(a)(1).
60 Ibid.
61 For more on direct loans and loan guarantees, see CRS Report R42632, Budgetary Treatment of Federal Credit
(Direct Loans and Loan Guarantees): Concepts, History, and Issues for the 112th Congress.
62 Sen. Christopher Dodd, “Defense Production Act Reauthorization of 2009,” Senate consideration of S. 1677,
Congressional Record, September 16, 2009, p. S9481.
63 See former 50 U.S.C. Appx. § 2091(e)(1)(A) and 50 U.S.C. Appx. § 2092(c)(1) [2006 edition].
64 50 U.S.C. Appx. § 2091(a)(3) and 50 U.S.C. Appx. § 2092(c).
65 See former 50 U.S.C. Appx. § 2091(a)(3) and 50 U.S.C. Appx. § 2092(b)(2) [2006 edition]; and current 50 U.S.C.
Appx. § 2091(a)(2) and 50 U.S.C. Appx. § 2092(b)(2).
66 50 U.S.C. Appx. § 2091(a)(2)(C) and 50 U.S.C. Appx. § 2092(b)(2)(C).
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defense and non-defense demand.67 In other words, the President had been required to determine
that there was an insufficient supply of a good before issuing a loan guarantee or direct loan. The
Reauthorization of 2009 removed this requirement, but expanded the determination requirements
for guarantee and direct loans to include provisions that may help ensure that the loan is repaid by
the recipient.68 For example, the President is now required to determine that there is “reasonable
assurance” that a recipient of a loan or loan guarantee will be able to repay the loan.69
Purchase, Purchase Commitments, and Installation of Equipment
Section 303 of Title III grants the President an array of authorities to create, maintain, protect,
expand, or restore domestic industrial base capabilities essential to the national defense.70 These
authorities include, but are not limited to:
• purchasing or making purchase commitments of industrial resources or critical
technology items;71
• making subsidized payments for domestically produced materials; and72
• installing and purchasing equipment for industrial facilities to expand their
productive capacity.73
In general, Section 303 authorities can be used by the President to provide incentives for domestic
private industry to produce and supply critical goods that are necessary for the national defense.
The scope of Section 303 authorities allows for these incentives to be structured in a number of
ways, including direct purchases or subsidies of such goods.
Determination and Notification of an Industrial Base Shortfall
Prior to using Section 303 authorities, the law requires the President to determine that there is a
“domestic industrial base shortfall” for a particular industrial resource, material, or critical
technology item that threatens the national defense.74 This determination includes finding that the
industry of the United States cannot reasonably be expected to provide the capability for the good
in a timely manner.75 The President is required to notify the committees of jurisdiction when such
a determination is made and give the committees 30 days to comment if the cost of actions to
67 See former 50 U.S.C. Appx. § 2091(a)(3)(D) and 50 U.S.C. Appx. § 2092(b)(2)(D) [2006 edition].
68 The Reauthorization of 2009 added 50 U.S.C. Appx. §§ 2091(a)(2)(D), (E), and (F) and 50 U.S.C. Appx. §§
2092(b)(2)(D) and (E); which are Sections 301(a)(2)(D), (E), and (F) and Sections 302(b)(2)(D) and (E) of the DPA,
respectively.
69 See 50 U.S.C. Appx. §§ 2091(a)(2)(D), Section 301(a)(2)(D) of the DPA.
70 50 U.S.C. Appx. § 2093, Section 303 of the DPA.
71 50 U.S.C. Appx. § 2093(a), Section 303(a)(1)(A) of the DPA. The terms “critical technology item” and “industry
resource” are further defined in 50 U.S.C. Appx. § 2152, Section 702 of the DPA.
72 50 U.S.C. Appx. § 2093(c), Section 303(c) of the DPA.
73 50 U.S.C. Appx. § 2093(e), Section 303(e) of the DPA.
74 The President delegated authority to make these determinations to the “head of each agency engage[d] in
procurement for national defense” in Section 305(b) of E.O. 13603. Section 303(a)(5) of the DPA states that an
“industrial base shortfall” exists when domestic industry “cannot be reasonably expected to provide the capability for
the need.”
75 50 U.S.C. Appx. § 2093(a)(5)(B), Section 303(a)(5)(B) of the DPA.
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remedy the shortfall is expected to exceed $50 million.76 The President is authorized to waive the
determination and notification provisions in periods of national emergency or in situations that
the President, on a non-delegable basis, determines the industrial base shortfall would severely
impair national defense.77
How Section 303 Authority Changed in the Reauthorization of 2009
Expansion of Authorities
Section 303(a)(1) of DPA provides an “In general” list of actions the President may take in order
to meet the needs of the national defense. In the Reauthorization of 2009, Congress clarified the
President’s authority in Section 303(a)(1) to specifically state that the authorities may be used to
“create, maintain, protect, expand, or restart domestic industrial base capabilities.”78 Previously,
this section only stated that the authorities could “assist in carrying out the objectives” of the
DPA.79 More significantly, the Reauthorization of 2009 also expanded the list of authorized
actions in the Section 303(a)(1) subsection to include providing for the “development of
production capabilities” and “for the increased use of emerging technologies in security program
applications and the rapid transition of emerging technologies.”80
Likewise, Section 303(e) has long authorized the President to enhance productive capacity by
directly procuring and installing manufacturing equipment in both government and privately
owned industrial facilities. In the reauthorization, this authority was expanded to allow the
President to provide for the modification or expansion of privately owned facilities, as well as the
ability to sell and transfer equipment to privately owned industrial facilities.81 In addition, the
statute now requires that the owner of an industrial facility receiving equipment from this
subsection of authorities indemnify the federal government from certain liability claims under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980.82
Determination and Notification Requirements
While the Reauthorization of 2009 tightened restrictions on the use of Sections 301 and 302, it
appears to have eased the use of Section 303 authorities. In order to use Section 303 authorities
the President is required to make a determination that there is a “domestic industrial base
shortfall” of a particular good before initiating action under the section. Prior to being struck from
the statute by the 2009 reauthorization, the President’s determination requirement under this
section also included the conditions that:
76 50 U.S.C. Appx. § 2093(a)(6), Section 303(a)(6) of the DPA
77 50 U.S.C. Appx. § 2093(a)(7), Section 303(a)(7) of the DPA.
78 50 U.S.C. Appx. § 2093(a)(1), Section 303(a)(1) of the DPA
79 See the former 50 U.S.C. Appx § 2093(a)(1) [2006 Edition], what was 303(a)(1) of the DPA.
80 50 U.S.C. Appx. §§ 2093(a)(1)(C) and (D), Section 303(a)(1)(C) and (D) of the DPA; 123 Stat 2014.
81 50 U.S.C. Appx. §§ 2093(e)(1)(C) and (D), Section 303(e)(1)(C) and (D) of the DPA.
82 Specifically, 50 U.S.C. Appx. § 2093(e)(2), Section 303(e)(2) of the DPA requires owners to waive claims against
the United States under Section 107 or 113 of CERCLA. For more on these liabilities, see CRS Report R41039,
Comprehensive Environmental Response, Compensation, and Liability Act: A Summary of Superfund Cleanup
Authorities and Related Provisions of the Act, by David M. Bearden.
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purchases, purchase commitments, or other action pursuant to this section are the most cost
effective, expedient, and practical alternative method for meeting the need; and
the combination of the United States national defense demand and foreseeable nondefense
demand for the industrial resource or critical technology item is not less than the output of
domestic industrial capability, as determined by the President, including the output to be
established through the purchase, purchase commitment, or other action.83
However, these two conditions were struck from the statute in the Reauthorization of 2009. In
addition, the law previously contained a limitation on the amount of money that could be spent on
actions to rectify a domestic industrial base shortfall. Prior to 2009, the actions that would cause
aggregate spending in excess of $50 million needed to be specifically authorized by law.84 This
was changed in the reauthorization, and the President is now allowed to initiate actions in
aggregate of over $50 million after a waiting period of 30 days following notification to the
committees of jurisdiction.85
Delegation of Section 301, 302, and 303 Authorities in E.O. 13603
In E.O. 13603, the “head of each agency engaged in procurement for national defense” is
delegated the majority of the authorities of Sections 301, 302, and 303 of Title III of the DPA.86
These agencies are specifically identified in E.O. 13603.87 This delegation includes the ability to
make all determinations not explicitly cited in the statute as being nondelegable.88 However, this
delegation does not include the authority to encourage the exploration, development, and mining
of strategic and critical materials and other materials. This authority is provided to the President
in the statute, and is delegated only to the Secretaries of Defense and the Interior.89
E.O. 13603 offers a level of uniformity and clarity to the delegation of Title III authorities that
was absent from previous executive orders. Under an earlier executive order that implemented the
pre-2009 DPA, authorities had been delegated through a similar definition process, but were
additionally tied to another executive order. The additional step of referring to another executive
order for delegations was eliminated in E.O. 13603.90
83 See former 50 U.S.C. Appx §§ 2093(a)(5)(C) and (D) [2006 Edition]. They were deleted from law in Section 7 of
P.L. 111-67, 123 Stat. 2014.
84 See former 50 U.S.C. Appx §§ 2093(a)(6)(C) [2006 Edition].
85 50 U.S.C. Appx §§ 2093(a)(6)(B), Section 303(a)(6)(B) of the DPA.
86 See Sections 301, 302, 303, 304, and 305 of E.O. 13603.
87 Section 801(h) of E.O. 13603 states “the heads of the Departments of State, Justice, the Interior, and Homeland
Security, the Office of the Director of National Intelligence, the Central Intelligence Agency, the National Aeronautics
and Space Administration, the General Services Administration, and all other agencies with authority delegated under
section 201 of this order.” Under Section 201 of the executive order, the additional agencies are the Departments of
Agriculture, Commerce, Defense, Energy, Health and Human Services, and Transportation.
88 Section 305 of E.O. 13603. The only determination not delegable is 50 U.S.C. Appx. § 2093(a)(7)(B), Section
303(a)(7)(B) of the DPA. This determination allows the President, on a non-delegable basis, to waive requirements in
Section 303(a)(1)-(6) on the use of those authorities.
89 In statute, see 50 U.S.C. Appx. § 2093(a)(1)(B); Section 303(a)(1)(B) of the DPA. The authority is delegated in
Section 306 of E.O. 13603. The Secretary of Interior is delegated this authority in consultation with the Secretary of
Defense, as the National Defense Stockpile Manager.
90 See the definition for “head of each agency engaged in procurement for national defense” in Section 802(h) of E.O.
12919, which had been issued on June 3, 1994.
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Use of Title III Authorities
According to the Defense Production Act Committee, the federal government has not used the
loan authorities provided in Section 301 or Section 302 of Title III in more than 30 years. Rather,
current projects are initiated under Section 303 of Title III of the DPA.91 There are approximately
31 current Title III research or procurement projects that are “focused on ensuring future U.S.
production capabilities and maintaining U.S. technological leadership in critical markets.”92
Examples include a “Lithium Ion Space Battery Production Initiative” and a “Lightweight Small
Caliber Ammunition Production Initiative.”93 These examples, like many other Title III projects,
are meant to establish a domestic capacity to produce these advanced technologies deemed
essential for national defense.
Advance Drop-In Biofuels
The Departments of the Navy, Energy, and Agriculture signed a Memorandum of Understanding
(MOU) that, in part, proposed using Section 303 authorities to support the development of
advanced drop-in biofuels.94 This proposal provoked controversy about the DOD’s role in
alternative energy development. In considering the project proposal, Congress passed a restriction
on the use of DOD funds in FY2013 to support this particular project until funding was also
matched by the Departments of Energy and Agriculture.95 This provision did not amend or restrict
DPA authorities, but it did limit a particular use of funding related to the use of the DPA. For
more on this particular issue and on DOD and alternative energy in general, see CRS Report
R42859, DOD Alternative Fuels: Policy, Initiatives and Legislative Activity.
Defense Production Act Fund
The DPA contains a blanket authorization of appropriations needed to carry out all of its
provisions and purposes.96 Title III of the DPA also establishes a Treasury account, the Defense
Production Act Fund, that is available to carry out all of the provisions and purposes of Title III.
The monies in the DPA Fund are available until expended. The DPA fund is also used to collect
all proceeds from DPA activities under Title III, such as the resale of DPA-procured commodities
or products.97 However, the balance in the DPA Fund at the end of any fiscal year cannot exceed
$750 million, excluding monies appropriated for that fiscal year or obligated amounts.98 The only
91 Department of Homeland Security, The Defense Production Act Committee: Report to Congress, August 2011, p. 10.
For a current list of all DPA Title III projects, see http://www.dpatitle3.com/dpa_db/.
92 Ibid.
93 See http://www.dpatitle3.com/dpa_db/project.php?id=67 and http://www.dpatitle3.com/dpa_db/project.php?id=66,
respectively.
94 Memorandum of Understanding Between the Department of the Navy and the Department of Energy and the
Department of Agriculture, June 2011. Available at http://www.rurdev.usda.gov/SupportDocuments/
DPASignedMOUEnergyNavyUSDA.pdf.
95 Section 315, P.L. 112-239, National Defense Authorization Act for Fiscal Year 2013.
96 50 U.S.C. Appx. § 2161; Section 711 of the DPA. This section will terminate on September 14, 2014, unless
reauthorized.
97 50 U.S.C. Appx. § 2094; Section 304 of the DPA.
98 50 U.S.C. Appx. § 2094(e); Section 304(e) of the DPA. The obligation of funds is defined in the DOD Financial
Management Regulation as an “amount representing orders placed, contracts awarded, services received, and similar
transactions during an accounting period that will require payment during the same, or a future, period.” Office of the
(continued...)
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substantive change made to the DPA Fund in the Reauthorization of 2009 was to increase this
allowable annual balance for the Fund from $400 million to $750 million.99 Table 1 provides the
appropriations to the DPA Fund between FY2010 and FY2013.
Table 1. Appropriations to the DPA Fund Since FY2010, in Millions
Fiscal Year
Law
Appropriation Amount
2010
P.L. 111-118, 123 Stat. 3422
$150.7
2011
P.L. 112-10, 125 Stat. 51
$34.3
2012
P.L. 112-74, 125 Stat. 800
$170.0
2013
P.L. 113-6, 127 Stat. 291
$223.5
Source: CRS analysis of appropriation acts. Dol ars rounded to the nearest hundred thousand. These figures do
not account for transfers or other obligations to the DPA Fund and may not reflect adjustments to
appropriations required by recently enacted legislation.
The President is also required to designate a “Fund manager” to carry out general accounting
functions for the fund.100 The Secretary of Defense has been delegated this responsibility in E.O.
13603.101 As the Fund Manager, the Secretary of Defense (or official to whom the authority is
delegated) is responsible for the financial accounting of the fund, but does not necessarily have
decision-making authority over the use of the fund. The designation of a Fund Manager did not
change from E.O. 12919, as amended.
Authorities Under Title VII of the DPA
Title VII of the DPA contains an assorted mix of provisions that clarify how DPA authorities
should and can be used, as well as additional presidential authorities. Significant provisions of
Title VII, and how they have changed under the Reauthorization of 2009 or how delegations of
the authority changed with the issuance of E.O. 13603, are summarized here.
Special Preference for Small Businesses
There are two provisions in the DPA directing the President to accord special preference to small
businesses when issuing contracts under DPA authorities. Section 701 of Title VII reiterates102
and expands upon a requirement in Section 108 of Title I directing the President to “accord a
strong preference for small business concerns which are subcontractors or suppliers, and, to the
maximum extent practicable, to such small business concerns located in areas of high
unemployment or areas that have demonstrated a continuing pattern of economic decline, as
(...continued)
Comptroller, Department of Defense, Financial Management Regulation, DOD 7000.14-R, Washington, DC,
December 2008, p. Glossary-21.
99 123 Stat. 2017.
100 50 U.S.C. Appx. § 2094(f); Section 304(f) of the DPA.
101 Section 309 of E.O. 13603.
102 50 U.S.C. Appx. § 2151; Section 701 of the DPA.
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identified by the Secretary of Labor.”103 These provisions were not amended in the
Reauthorization of 2009, nor did the delegation of the authority change in E.O. 13603.
Definitions of Key Terms in the DPA
The DPA statute historically has included a section of definitions.104 Though national defense is
perhaps the most important term, there are additional definitions provided both in current law and
in E.O. 13603.105 Over time, the list of definitions provided in both the law and implementing
executive orders has been added to and edited, and the Reauthorization of 2009 was no
exception.106 Most notably, Congress added a definition for homeland security to place it within
the context of national defense.107 Likewise, in issuing E.O. 13603, supplementary definitions
were amended, added, and removed definitions that had been listed in E.O. 12919, as amended.108
Voluntary Agreements
Normally, voluntary agreements or plans of action between competing private industry interests
could be subject to legal sanction under anti-trust statutes or contract law. Title VII of the DPA
authorizes the President to “consult with representatives of industry, business, financing,
agriculture, labor, and other interests in order to provide for the making by such persons, with the
approval of the President, of voluntary agreements and plans of action to help provide for the
national defense.”109 The President must determine that a “condition exists which may pose a
direct threat to the national defense or its preparedness programs”110 prior to engaging in the
extensive consultation process. Following the consultation process, the President or appropriate
delegate may approve and commence the agreement or plan of action.111 Parties entering into
103 50 U.S.C. Appx. § 2078; Section 108(a) of the DPA.
104 The original law provided five definitions, including a definition of “national defense.” See Section 702 of P.L. 81-
774.
105 In total, there are 17 terms defined in law in 50 U.S.C. Appx. § 2152, and 13 additional definitions in Section 801 of
E.O. 13603.
106 123 Stat 2017-2018. Congress amended, in addition to the definition of national defense, the existing definitions of
critical component, critical technology, domestic industrial base, industrial resources, and services. Congress struck
the definitions for critical industry for national security, essential weapon system, and small business concern owned
and controlled by socially and economically disadvantaged individuals. Congress added the definitions guaranteeing
agency and homeland security.
107 50 U.S.C. Appx. § 2152(11). Homeland security means efforts “(A) to prevent terrorist attacks within the United
States; (B) to reduce the vulnerability of the United States to terrorism; (C) to minimize damage from a terrorist attack
in the United States; and (D) to recover from a terrorist attack in the United States.”
108 By comparison to Section 901 of E.O. 12919, as amended, Section 801 of E.O. 13603 altered the definitions civil
transportation, energy, food resources, food resource facilities, head of each agency engaged in procurement for the
national defense, health resources, and water resources. Section 801 of E.O. 13603 added the definitions national
defense (same meaning as in statute), offsets, and special priorities assistance. It removed the definitions of heads of
other appropriate Federal departments and agencies, and metals and minerals.
109 50 U.S.C. Appx. § 2158(c)(1); Section 708(c)(1) of the DPA.
110 Ibid. The consultation process is described in 50 U.S.C. Appx. §§ 2158(d) and (e); Section 708(d) and (e) of the
DPA.
111 50 U.S.C. Appx. § 2158(f); Section 708(f) of the DPA.
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such voluntary agreements are afforded a special legal defense if their actions within that
agreement would otherwise violate antitrust or contract laws.112
• Historically, the National Infrastructure Advisory Council noted that the
voluntary agreement authority has been used to “enable companies to cooperate
in weapons manufacture, solving production problems and standardizing designs,
specifications and processes,” among other examples.113 The Maritime
Administration of the Department of Transportation manages the only currently
established voluntary agreements in the federal government, the Voluntary
Intermodal Sealift Agreement (commonly referred to as “VISA”) and the
Voluntary Tanker Agreement.114 These agreements are established to ensure that
the maritime industry can respond to the mobilization and transportation
requirements of the Department of Defense.
• There were two substantive changes to this voluntary agreement authority in the
Reauthorization of 2009.115 First, in most circumstances, an individual with
delegated authority must consult with the Attorney General or the Federal Trade
Commission prior to finalizing the voluntary agreement. The revised statute now
permits the finalization of a voluntary agreement without consultation with the
Attorney General or Federal Trade Commission if the President determines, on a
nondelegable basis, that it is needed to meet national defense requirements in the
wake of a disaster that destroys or degrades critical infrastructure.116 Second, the
reauthorization extended the maximum term length for each voluntary
agreement, once it is established, from two years to five years.117
The delegation of voluntary agreement authority did not change substantively with the issuance
of E.O. 13603.118 However, E.O. 13603 includes an explicit requirement that the Department of
Homeland Security issue regulations on voluntary agreements in accordance with DPA statute.119
112 50 U.S.C. Appx. § 2158, Section 708 of the DPA provides a legal defense to parties of voluntary agreements or
plans of action that can be used in civil suits or criminal actions brought against them under anti-trust laws (§ 2158(j))
or for breach of contract (§ 2158(o)). These exemptions do not grant them blanket immunity from these laws.
113 The National Infrastructure Advisory Council, Framework for Dealing with Disasters and Related
Interdependencies: Final Report and Recommendations, Appendix G: The Defense Production Act, Washington, DC,
July 14, 2009, p. 45, at http://www.dhs.gov/xlibrary/assets/niac/niac_framework_dealing_with_disasters.pdf.
114 Department of Homeland Security, The Defense Production Act Committee: Report to Congress, August 2011, p.
10.
115 123 Stat. 2018-2019.
116 See 123 Stat. 2018 and 50 U.S.C. Appx. § 2158(c)(3); Section 708(c)(3) of the DPA. In a report released before the
DPA reauthorization in 2009, the National Infrastructure Advisory Council (NIAC) suggested that the voluntary
agreement authority could be especially useful for recovering privately owned critical infrastructure following a
terrorist attack or natural disaster. However, NIAC was concerned that some of the restrictions for creating a voluntary
agreement would unnecessarily delay using the authority following a major disaster. See The National Infrastructure
Advisory Council, Framework for Dealing with Disasters and Related Interdependencies: Final Report and
Recommendations, Appendix G: The Defense Production Act, Washington, D.C., July 14, 2009, p. 48, at
http://www.dhs.gov/xlibrary/assets/niac/niac_framework_dealing_with_disasters.pdf.
117 123 Stat. 2018. See 50 U.S.C. Appx. § 2158(e)(2); Section 708(e)(2) of the DPA.
118 Section 401 of E.O. 13603.
119 The legal requirement for the regulations can be found at 50 U.S.C. Appx. § 2158(e). FEMA’s regulations can be
found at 44 C.F.R. Part 332.
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Nucleus Executive Reserve
In Title VII of the DPA, the President is authorized to establish a volunteer body of industry
executives, the “Nucleus Executive Reserve,” or more frequently called the National Defense
Executive Reserve (NDER).120 The NDER would be a pool of individuals with recognized
expertise from various segments of the private sector and from government (except full-time
federal employees). These individuals would be brought together for training in executive
positions within the federal government in the event of an emergency that requires their
employment. The historic concept of the NDER has been used as a means of improving the war
mobilization and productivity of industries.121 The Reauthorization of 2009 amended the statute
by removing a clause that allowed the President to grant some exemptions to criminal statutes to
NDER participants.122
The head of any governmental department or agency may establish a unit of the NDER and train
its members.123 No NDER unit is currently active, though the statute and E.O. 13603 still provide
for this possibility. Units may be activated only when the Secretary of Homeland Security
declares in writing that “an emergency affecting the national defense exists and that the activation
of the unit is necessary to carry out the emergency program functions of the agency.”124
Authorization of Appropriations
Appropriations for the purpose of the DPA are authorized by Section 711 of Title VII.125 The only
regular annual appropriation for the purposes of the DPA is made in the Department of Defense
appropriations bill to the DPA Fund, though appropriations could be made in other bills.126 Prior
to the Reauthorization of 2009, Section 711 contained a separate provision authorizing
appropriations within a defined time period for Title III specifically.127 However, this separate
provision was removed in 2009. Arguably, this separate authorization was redundant with the
overall authorization of appropriation.
120 50 U.S.C. Appx. § 2160(e); Section 710(e) of the DPA.
121 President Dwight D. Eisenhower created the NDER in 1956 by issuing E.O.10660 under the authorities granted in
Title VII. It has served as a vehicle for training highly qualified private industry executives in war production
mobilization should the nation be faced with the need to place the nation’s industrial base on a war footing. This
program was inspired by the experiences of the War Industries Board of World War I and the War Production Board of
World War II, when corporate executives were brought into government service, often with little or no compensation,
to organize the nation’s industries for war production. For background on the origins and operation of the War
Industries Board, see Paul A. C. Koistinen, “The ‘Industrial-Military Complex’ in Historical Perspective: World War
I,” The Business History Review, Vol. 41, No. 4 (Winter, 1967), pp. 378-403; and Robert D. Cuff, “A ‘Dollar-a-Year
Man’ in Government: George N. Peek and the War Industries Board,” The Business History Review, vol. 41, no. 4
(Winter, 1967), pp. 404-420.
122 123 Stat 2019.
123 Section 501(c) in E.O. 13603.
124 Section 501(e) in E.O. 13603.
125 50 U.S.C. Appx § 2161
126 See Table 1 above for a list of recent appropriations.
127 See the former 50 U.S.C. Appx § 2161(b) [2006 Edition], what was Section 711(b) of the DPA.
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Committee on Foreign Investment in the United States
Another section of Title VII grants the President authority to review certain corporate mergers,
acquisitions, and takeovers, and to investigate the potential impact on national security of such
actions.128 The statute empowers the President to suspend these actions for any period he
considers appropriate, or to prohibit transactions found to threaten impairment of national
security. This is the so-called Exon-Florio Amendment, which designated a pre-existing
interagency body, the Committee on Foreign Investment in the United States (CFIUS) chaired by
the Secretary of the Treasury, as the entity through which the President acts.129 For example,
CFIUS reviews resulted in President George H. W. Bush ordering the China National Aero-
Technology Import & Export Corporation to divest itself of Seattle-based MAMCO
Manufacturing in 1990 and in the approval by President George W. Bush of the acquisition of
IBM’s personal computer and laptop division by Chinese-owned Lenovo in 2005. Various CFIUS
authorities are delegated by the President in E.O. 11858, Foreign Investment in the United States,
originally issued in 1975, not in E.O. 13603.130 The Reauthorization of 2009 did not amend this
authority.
Defense Production Act Committee
The Defense Production Act Committee (DPAC) is a new interagency body established by the
2009 reauthorization of the DPA.131 The DPAC was created to advise the President regarding the
effective use of DPA authorities. Comments made by Representative Melvin Watt during floor
consideration of the 2009 bill suggest that part of the legislative intent in creating the DPAC may
have been to elevate the policy discussions on the DPA to a Cabinet-level body.132 Congress
exempted the DPAC from the requirements of the Federal Advisory Committee Act.133
The statute assigns membership in the DPAC to the head of each federal agency delegated DPA
authorities, as well as the Chairperson of the Council of Economic Advisors. A full list of the
members of the DPAC is included in E.O. 13603.134 The DPA also requires the President to
designate one of the members as Chairperson of the DPAC. President Obama has appointed the
Secretaries of Homeland Security and Defense to serve as the Chairperson on an annually rotating
basis.135 The President is also required to appoint an Executive Director to the DPAC to support
the Chairperson as needed. The current Chairperson is the Deputy Assistant Secretary of Defense
128 50 U.S.C. Appx § 2170; Section 721 of the DPA.
129 For more on CFIUS, see CRS Report RL33388, The Committee on Foreign Investment in the United States
(CFIUS), by James K. Jackson.
130 See Executive Order 11858, “Foreign Investment in the United States,” 40 Federal Register 20263, May 7, 1975.
131 See 123 Stat. 2019-2020 for the creation of the DPAC in statute. The DPAC is now authorized in Section 722 of the
DPA, 50 U.S.C. Appx. § 2171. The DPAC website is at http://www.acq.osd.mil/mibp/dpac.html.
132 Rep. Melvin Watt, “Defense Production Act Reauthorization of 2009,” House consideration of S. 1677,
Congressional Record, September 23, 2009, pp. H9817-H9818; and Sen. Christopher Dodd, “Defense Production Act
Reauthorization of 2009,” Senate consideration of S. 1677, Congressional Record, September 16, 2009, p. S9480.
133 50 U.S.C. Appx. § 2171(e); Section 722(e) of the DPA. For more on the Federal Advisory Committee Act, see CRS
Report R40520, Federal Advisory Committees: An Overview, by Wendy Ginsberg.
134 Section 701 of E.O. 13603.
135 Presidential Documents, “Designating the Chairperson of the Defense Production Act,” 75 Federal Register 32087,
June 7, 2010. This relationship between the Secretaries of Homeland Security and Defense is supported by a
memorandum of agreement, available at http://www.acq.osd.mil/mibp/resources.html.
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for Manufacturing and Industrial Base Policy. The only statutory responsibility of the DPAC is to
provide an annual report that reviews the current use of DPA authorities, and provides
recommendations for improving DPA implementation in the government or for amending DPA
statute.136 This report is provided to the Senate Committee on Banking, Housing, and Urban
Affairs and the House Committee on Financial Services. As of May 1, 2013, annual reports for
calendar years 2011 and 2012 had not been submitted.
Impact of Offsets Report
Offsets are industrial compensation practices that foreign governments or companies require of
U.S. firms as a condition of purchase in either government-to-government or commercial sales of
defense articles and/or defense services as defined by the Arms Export Control Act (22 U.S.C. §
2751, et seq.) and the International Traffic in Arms Regulations (22 C.F.R. §§ 120-130). In
defense trade, such industrial compensation can include mandatory co-production, licensed
production, subcontractor production, technology transfer, and foreign investment.
The Secretary of Commerce is required to prepare and to transmit to the appropriate
congressional committees an annual report on the impact of offsets on defense preparedness,
industrial competitiveness, employment, and trade. Specifically, the report discusses “offsets” in
the government or commercial sales of defense materials.137 The Reauthorization of 2009 moved
this reporting provision to Title VII from Title III.138 The reporting provision did not change
substantively in the move to Title VII.
Issues for Congress
Reauthorization of the DPA
All DPA authorities in Titles I, III, and VII are scheduled to terminate on September 30, 2014,
with the exception of four sections.139 As explained in Section 717 of the DPA, the sections that
are exempt from termination are:
• 50 U.S.C. Appx. § 2074, Section 104 of the DPA that prohibits both the
imposition of wage or price controls without prior congressional authorization
and the mandatory compliance of any private person to assist in the production of
chemical or biological warfare capabilities;
• 50 U.S.C. Appx. § 2157, Section 707 of the DPA that grants persons limited
immunity from liability for complying with DPA-authorized regulations;
136 50 U.S.C. Appx. § 2171(d); Section 722(d) of the DPA. The first version of this report is Department of Homeland
Security, The Defense Production Act Committee: Report to Congress, August 2011.
137 Offsets are defined in Section 801(k) of E.O. 13603. Offsets can be direct, where offsetting sales of goods and
services are related to the military export sale being contracted, or indirect, where they are not. This report is prepared
by the Department of Commerce Bureau of Industry and Security (BIS) and is posted online at http://www.bis.doc.gov/
defenseindustrialbaseprograms/osies/offsets/default.htm.
138 123 Stat. 2020. The reporting requirement moved to Section 723 from Section 309 of the DPA; to the current 50
U.S.C. Appx. § 2171 from the former 50 U.S.C. Appx. § 2099 [2006 Edition].
139 123 Stat. 2006; 50 U.S.C. Appx. § 2166.
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• 50 U.S.C. Appx. § 2158, Section 708 of the DPA that provides for the
establishment of voluntary agreements; and
• 50 U.S.C. Appx. § 2170, Section 721 of the DPA, the so-called Exon-Florio
Amendment, that gives the President and CFIUS review authority over certain
corporate acquisition activities.
In addition, Section 717(c) provides that any termination of sections of the DPA “shall not affect
the disbursement of funds under, or the carrying out of, any contract, guarantee, commitment or
other obligation entered into pursuant to this Act” prior to its termination. This means, for
instance, that prioritized contracts or Section 303 projects created with DPA authorities prior to
September 30, 2014, would still be executed until completion even if the DPA is not reauthorized.
Frequently, Congress has elected to reauthorize the DPA by extending the termination date
provided in Section 717 for a limited period, such as a year, without making significant
amendments to the overall statute.140 In other circumstances, Congress has reauthorized the law
by extending the Section 717 date for several years while also amending the other provisions of
the law.141 In either circumstance, reauthorizations have typically been presented as discrete bills,
though on occasion the DPA has been reauthorized through a provision in a larger legislative
vehicle such as the National Defense Authorization Act.142 For a chronology of all laws
reauthorizing the DPA since inception, see Table A-4.
Considerations for Amending the Defense Production Act of 1950
In conjunction with or separate from a reauthorization bill, Congress could amend the DPA in
order to extend, expand, restrict, or otherwise clarify the powers granted to the President in the
DPA. For example, Congress could eliminate certain authorities altogether, such as the Section
710(e) authority underpinning the National Defense Executive Reserve. Likewise, Congress
could expand the DPA to include new authorities to address novel threats to the national
defense.143 In addition to addressing the specific authorities granted in Title I, Title III, and Title
VII of the DPA, Congress may also consider amending the DPA as discussed below.
Declaration of Policy
The “Declaration of Policy” in the DPA describes the general intentions of the authorities it
confers to the President. One option for Congress is to amend this section of the statute in order to
expand, restrict, or clarify the overall purpose of the authorities. For instance, Congress could
140 For examples, see P.L. 110-367, P.L. 106-363, or P.L. 102-193.
141 For examples, see P.L. 111-67, P.L. 108-195, or P.L. 102-558.
142 For example, the DPA was reauthorized for a year by a provision in Section 1072 of P.L. 105-261, the Strom
Thurmond National Defense Authorization Act for Fiscal Year 1999.
143 For example, Congress may consider creating new authorities to address specific concerns relating to production
and security of cyber-related infrastructure and assets necessary for the national defense. The Homeland Security
Studies and Analysis Institute has suggested that DPA authorities, especially Section 303 authorities, might be helpful
in addressing cybersecurity threats, though the legality of such action remains unknown. See Homeland Security
Studies and Analysis Institute, An Analysis of the Primary Authorities Supporting and Governing the Efforts of the
Department of Homeland Security to Secure the Cyberspace of the United States, Arlington, VA, May 24, 2011, p. 28,
at http://www.homelandsecurity.org/docs/reports/MHF-and-EG-Analysis-of-authorities-supporting-efforts-of-DHS-to-
secure-cyberspace-2011.pdf.
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include further discussion on the specific circumstances under which it finds DPA authorities are
appropriate for use by the President. Though this section serves as a guide for the overall use of
DPA authorities, changes to the Declaration of Policy may not fully endow or deny the
President’s authorities covered in the titles of the DPA without also amending the DPA’s other
provisions.
Rather than passing legislation to amend the text of the DPA, Congress could adopt a resolution
clarifying the purpose of the DPA authorities. For example, one such resolution introduced in the
112th Congress, H.Con.Res. 110, states that is it the “Sense of Congress” that the DPA should not
be used to “confiscate personal or private property, to force conscription into the Armed Forces
on the American people, to force civilians to engage in labor against their will or without
compensation, or to force private businesses to relinquish goods or services without
compensation.” However, “Sense of Congress” resolutions of this nature do not carry the force of
law.144
Definitions
Congress may wish to amend the definitions of key terms found in the DPA to shape the scope
and use of the authorities, especially the definition of national defense. As an example, Congress
could amend the definition of national defense to remove space from the definition, and as a
result the President may be less able to use DPA authorities to support space-related projects.145
On the other hand, for example, Congress could amend the definition of national defense to
specifically include counter-narcotics, cybersecurity, or organized crime. Doing so would more
explicitly enable the use of DPA authorities to address these homeland security and national
defense concerns.
Appropriations to the DPA Fund
Congress could increase or reduce future appropriations to the DPA Fund to manage the scope of
Title III projects initiated by the President (see Table 1 for appropriations to the DPA Fund since
FY2010). Use of the DPA Fund, however, is specific to Title III. Therefore, adjusting
appropriations to the DPA Fund is unlikely to have an effect on the President’s ability to exercise
his authorities under the other titles of the DPA, unless Congress writes specific language in the
appropriations statute changing the nature of the Fund itself or authorizing its used beyond a
specific title. Within the scope of a reauthorization bill, Congress may wish to reintroduce of a
separate provision in Section 711 of the DPA authorizing only certain appropriation amounts over
a given time period for Title III or other DPA authorities.146 Likewise, Congress may wish to
direct the usage of such funds more specifically, such as has been done recently in relation to
advanced drop-in biofuels.147
144 For more on this issue, see CRS Report 98-825, “Sense of” Resolutions and Provisions, by Christopher M. Davis.
145 For the definition of national defense, see 50 U.S.C. Appx. § 2152(14); Section 702(14) of the DPA.
146 For example, appropriations for Title I could be authorized for only one year, but for Title III for five, and vice
versa. See the “Authorization of Appropriations” section of this report for more.
147 Section 315, P.L. 112-239, National Defense Authorization Act for Fiscal Year 2013. For more on this topic, see the
“Advance Drop-In Biofuels” section of this report and CRS Report R42859, DOD Alternative Fuels: Policy, Initiatives
and Legislative Activity.
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Considerations for Oversight of Ongoing DPA Activities
Expand Reporting or Notification Requirements
Congress might be satisfied with the existing scope and use of DPA authorities by the President,
but may wish to add more extensive notification and reporting requirements on the use of all or
specific authorities in the DPA. Additional reporting or notification requirements could involve
formal notification of Congress prior to or after the use of certain authorities in certain
circumstances. For example, Congress may wish for the President to notify Congress (or the
committees of jurisdiction) when the priorities and allocations authority is used on a contract over
a certain dollar amount. Congress might also consider expanding the existing reporting
requirements of Defense Production Act Committee (DPAC), to include semi-annual updates on
the recent use of authorities or explanations about controversial determinations. Thus far, the
DPAC has failed to regularly submit an annual report on time to the committees of jurisdiction,
which may be limiting the ability of Congress to oversee the use of the DPA.
Existing requirements could also be expanded from notifying/reporting to the committees of
jurisdiction to the Congress as a whole, or to include other interested committees, such as the
House and Senate Armed Services Committees. Additionally, Congress may consider
reestablishing a select committee with a similar purpose as the Joint Committee on Defense
Production that was repealed in 1992 by Congress.148
Rulemaking Requirements
In the Reauthorization of 2009, Congress required agencies with delegated priorities and
allocations authority under Title I of the DPA to issue final rules creating standards and
procedures for the use of the authority. Similarly, a rulemaking requirement exists for the
voluntary agreement authority in Title VII.149 Congress may wish to review the compliance with
these existing rulemaking requirements, and potentially expand them for other authorities
included in the DPA. For example, Congress may consider whether the President should
promulgate rules establishing standards and procedures for the use of all or certain Title III
authorities.
Amend Authority Delegations
Congress may consider limiting the use of certain DPA authorities to specific departments and
agencies. To do so, Congress could amend the President’s delegation of DPA authorities,
superseding those made in E.O. 13603, by amending the statute to assign specific authorities to
individual Cabinet Secretaries as opposed to the President. Further, Congress could expand the
use of the legislative clause “on a nondelegable basis” to ensure that the authority is not delegated
beyond the person identified in the statute.150 In considering these options, Congress may
148 P.L. 102-558, 106 Stat. 4219. This committee was intended to review the programs established by the DPA, and
advise the standing committees in their legislation on the subject.
149 50 U.S.C. Appx. § 2158(e); Section 708(e) of the DPA. This rule is established in 44 C.F.R. Part 332.
150 For an example of this clause, see 50 U.S.C. Appx. § 2158(c)(3); Section 708(c)(3) of the DPA.
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determine that the use of some authorities by certain agencies is appropriate and necessary for the
national defense, but not for others.
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Appendix. Additional Resources and Summary
Tables
There are many government-sponsored websites, reports, and guides that discuss various aspects
of the Defense Production Act in depth that may be of interest to Congress. Table A-1 provides a
list of some of these resources.
Table A-1. Additional Resources by Defense Production Act Subject
DPA Subject
Additional Resources
General Information on
DPAC website at http://www.acq.osd.mil/mibp/dpac.html.
DPA Authorities
FEMA website on the DPA at http://www.fema.gov/defense-production-act-
program-division.
U.S. Government Accountability Office, Defense Production Act: Agencies Lack Policies
and Guidance for Use of Key Authorities, GAO-08-854, June 2008, at
http://www.gao.gov/products/GAO-08-854.
The National Infrastructure Advisory Council, Framework for Dealing with Disasters
and Related Interdependencies: Final Report and Recommendations, Appendix G: The
Defense Production Act, Washington, D.C., July 14, 2009, pp. 40-49, at
http://www.dhs.gov/xlibrary/assets/niac/niac_framework_dealing_with_disasters.pdf.
Title I: Priorities and
Department of Commerce “Defense Priorities and Allocations System” website at
Allocations
http://www.bis.doc.gov/dpas/default.htm.
Department of Defense, Priorities and Allocations Manual, 4400.1-M, Washington,
D.C., February 21, 2002, at http://www.acq.osd.mil/mibp/docs/44001m.pdf.
Title III: Authorities and
Website with listing and description of Title III projects at
Projects
http://www.dpatitle3.com/dpa_db/.
A 2012 brochure produced by the Department of Defense on Title III projects at
http://dpatitle3.com/Title_III%202012%20Brochure.pdf.
Committee on Foreign
Department of Treasury CFIUS website at http://www.treasury.gov/resource-
Investment in the United
center/international/Pages/Committee-on-Foreign-Investment-in-US.aspx.
States (CFIUS)
CRS Report RL33388, The Committee on Foreign Investment in the United States
(CFIUS), by James K. Jackson.
Impact of Offsets in
Department of Commerce website on offsets at http://www.bis.doc.gov/
Defense Trade
defenseindustrialbaseprograms/osies/offsets/default.htm.
Source: CRS.
Congressional Research Service
26
Table A-2. Substantive Provisions of the Defense Production Act,
Related Portions of Executive Order 13603, and Associated Regulations
Related
Portions of
Regulations or
Authority and DPA
Executive
Guiding
Summary of How the Authority
Statute
Order13603a
Documents
Changed in the Reauthorization of 2009 Example of Use of Authority
Declaration of Policy;
Sections 101, 102,
Not applicable
Expanded the “Statement of Policy” to
Not applicable
Section 2 of the DPA, 50
and 103
specifically advocate the use of the DPA in
U.S.C. Appx. § 2062
domestic preparedness and responses to
terrorist attacks and natural hazards.
Priorities and
Part II
10 C.F.R. Part 217, 15
Required a rulemaking by al federal
Priority contracts have been issued to
Allocations; Title I of the
C.F.R. Part 700 and 49 departments and agencies delegated Title I
support the Integrated Ballistic Missile
DPA, 50 U.S.C. Appx. §
C.F.R. Part 33. More
authorities within 270 days of enactment.
Defense System.c
2071
regulations are being
proposed under the
Reauthorization of
2009.b
Loan Guarantees; Section
Part III
Not applicable
Updated authorities to comply with the
According to the DPAC, none in recent
301 and 302 of Title III of
Federal Credit Reform Act by mandating that
history.
the DPA, 50 U.S.C. Appx. §
loans and loan guarantees are appropriated
§ 2091 and 2092
by Congress before issuance.
Amended the factors for determining if a
guarantee or loan is needed for national
defense.
Limited the authority of the President to
waive requirements on how the guarantees
and loans can be used and issued.
Purchases, Purchase
Part III
Not applicable
Expanded some Section 303 authorities and
“Lithium Ion Space Battery Production
Commitments, and
amended the notification and determination
Initiative,” which involved remodeling a
Installation of
requirements prior to use of authorities.
facility and the purchase and installation of
Equipment; Section 303 of
equipment to create “a viable domestic
Title III of the DPA, 50
source of spacecraft-quality rechargeable
U.S.C. Appx. § 2093
Lithium Ion (Li Ion) cells and the critical
materials required to produce these cells.”d
CRS-27
Related
Portions of
Regulations or
Authority and DPA
Executive
Guiding
Summary of How the Authority
Statute
Order13603a
Documents
Changed in the Reauthorization of 2009 Example of Use of Authority
Definitions; Section 702 of
Section 802
Not applicable
Amended the definitions: “national defense,”
Not applicable
the DPA, 50 U.S.C. Appx. §
“critical component,” “critical technology,”
2152
“domestic industrial base,” “industrial
resources,” and “services.”
Revoked the definitions “critical industry for
national security,” “essential weapon system,”
and “smal business concern owned and
controlled by socially and economically
disadvantaged individuals.”
Added the definitions “guaranteeing agency”
and “homeland security.”
Voluntary Agreements;
Part IV
44 C.F.R. Part 332
Created an exemption from some
Voluntary Intermodal Sealift Agreement
Section 708 of the DPA, 50
prerequisites to establish a voluntary
(VISA) managed by the Maritime
U.S.C. Appx. § 2158
agreement when the President determines a
Administration in the U.S. Department of
voluntary agreement is needed to meet
Transportation.f
national defense requirements fol owing a
disaster that destroys or degrades critical
infrastructure.e
Extended the term of voluntary agreements
from 2 to 5 years before they need to be
renewed.
National Defense
Part V
Interim Guidance for
Removed a provision that allowed the
Not applicable
Executive Reserve
the NDER Programg
President to grant some exemptions to
(NDER); Section 710 of the
criminal statutes to participants in the NDER.
DPA, 50 U.S.C. Appx. §
2160
Committee on Foreign
Executive Order
31 C.F.R. Part 800, as
No changes were made.
See CRS Report RL33388, The Committee on
Investment in the United 11858: Foreign
amended
Foreign Investment in the United States (CFIUS),
States (CFIUS); Section
Investment in the
by James K. Jackson.
721 of the DPA, 50 U.S.C.
United States, as
Appx. § 2170
amended.
CRS-28
Related
Portions of
Regulations or
Authority and DPA
Executive
Guiding
Summary of How the Authority
Statute
Order13603a
Documents
Changed in the Reauthorization of 2009 Example of Use of Authority
Defense Production Act
Part VII
Presidential
The DPAC is a new federal government
The DPAC has established four different
Committee (DPAC);
Memorandum
interagency body established by the
“study groups” to assess industrial capabilities
Section 722 of the DPA, 50
Designating the
Reauthorization of 2009.
necessary for the national defense, and
U.S.C. Appx. § 2171
Chairperson of the
another study group to develop
Committee; Charter
recommendations for improving the DPA via
of the DPAC; MOU
legislation or regulation.i
between DHS and
DoD on their shared
responsibilities to
support the DPAC.h
Source: CRS analysis of E.O. 13603 and 50 U.S.C. Appx. § 2061 et seq. and information from available resources.
Notes:
a. Unless otherwise noted, provisions cited are found in E.O. 13603.
b. See footnote 44 for additional information.
c. For more examples, see Department of Homeland Security, The Defense Production Act Committee: Report to Congress, Washington, DC, August 2011, p. 8, and
http://www.bis.doc.gov/dpas/pdfdocs/list_of_dx_approved_programs.pdf.
d. See specifically http://www.dpatitle3.com/dpa_db/project.php?id=67. For a current list of all DPA Title III projects, see http://www.dpatitle3.com/dpa_db/.
e. 50 U.S.C. Appx. § 2158(c)(3); Section 708(c)(3) of the DPA.
f.
For more, see approval of the VISA program in the Federal Register at Maritime Administration, “Voluntary Intermodal Sealift Agreement,” 75 Federal Register 14245,
March 24, 2010. See also http://www.marad.dot.gov/ships_shipping_landing_page/national_security/vol_intermodal_sealift_agreement/
vol_intermodal_sealift_agreement.htm.
g. Federal Emergency Management Agency, The National Defense Executive Reserve: Policies and Procedures Manual, Washington, DC, June 20, 2007, at
http://www.fema.gov/library/viewRecord.do?id=3606.
h. These documents are available for download at http://www.acq.osd.mil/mibp/resources.html.
i.
See http://www.acq.osd.mil/mibp/dpac.html. Part of the policy of the United States, as provided in Section 2(b)(1) of the DPA, is to “continuously assess the
capability of the domestic industrial base to satisfy production requirements under both peacetime and emergency conditions, specifically evaluating the availability of
adequate production sources, including subcontractors and suppliers, materials, skilled labor, and professional and technical personnel.”
CRS-29
Table A-3. Delegation of Priorities and Allocations Authorities to Cabinet Secretaries
Delegated Area of Authority
Cabinet Secretary
in E.O. 13603a
Definitions in E.O. 13603b
Secretary of
Food resources, food resource
‘ Farm equipment’ means equipment, machinery, and repair parts manufactured for use on farms in connection
Agriculture
facilities, livestock resources,
with the production or preparation for market use of food resources.
veterinary resources, plant health
resources, and the domestic
‘ Fertilizer’’ means any product or combination of products that contain one or more of the elements nitrogen,
distribution of farm equipment
phosphorus, and potassium for use as a plant nutrient.
and commercial fertilizer
‘‘Food resources’’ means all commodities and products (simple, mixed, or compound), or complements to such
commodities or products, that are capable of being ingested by either human beings or animals, irrespective of
other uses to which such commodities or products may be put, at al stages of processing from the raw
commodity to the products thereof in vendible form for human or animal consumption. ‘‘Food resources’’ also
means potable water packaged in commercial y marketable containers, all starches, sugars, vegetable and animal
or marine fats and oils, seed, cotton, hemp, and flax fiber, but does not mean any such material after it loses its
identity as an agricultural commodity or agricultural product.
‘‘Food resource facilities’’ means plants, machinery, vehicles (including on farm), and other facilities required for
the production, processing, distribution, and storage (including cold storage) of food resources, and for the
domestic distribution of farm equipment and fertilizer (excluding transportation thereof).
Secretary of Energy
All forms of energy
‘‘Energy’’ means all forms of energy including petroleum, gas (both natural and manufactured), electricity, solid
fuels (including all forms of coal, coke, coal chemicals, coal liquification, and coal gasification), solar, wind, other
types of renewable energy, atomic energy, and the production, conservation, use, control, and distribution
(including pipelines) of all of these forms of energy.
Secretary of Health
Health resources
‘‘Health resources’’ means drugs, biological products, medical devices, materials, facilities, health supplies,
and Human Services
services and equipment required to diagnose, mitigate or prevent the impairment of, improve, treat, cure, or
restore the physical or mental health conditions of the population.
Secretary of
All forms of civil transportation
“Civil transportation” includes movement of persons and property by all modes of transportation in interstate,
Transportation
intrastate, or foreign commerce within the United States, its territories and possessions, and the District of
Columbia, and related public storage and warehousing, ports, services, equipment and facilities, such as
transportation carrier shop and repair facilities. “Civil transportation” also shall include direction, control, and
coordination of civil transportation capacity regardless of ownership. “Civil transportation” shall not include
transportation owned or control ed by the Department of Defense, use of petroleum and gas pipelines, and
coal slurry pipelines used only to supply energy production facilities directly.
Secretary of Defense
Water resources
‘‘Water resources’’ means all usable water, from all sources, within the jurisdiction of the United States, that
can be managed, controlled, and allocated to meet emergency requirements, except ‘‘water resources’’ does
not include usable water that qualifies as ‘‘food resources.’’
CRS-30
Delegated Area of Authority
Cabinet Secretary
in E.O. 13603a
Definitions in E.O. 13603b
Secretary of
All other materials, services, and
Materials, services, and facilities are all defined in statute; see 50 U.S.C. Appx. §§ 2152(13), (16), and (8),
Commerce
facilities, including construction
respectively.
materials
Source: CRS analysis of E.O. 13603 and 50 U.S.C. Appx. §§ 2061 et seq.
Notes:
a. See Section 201(a)(1) to (6) of E.O. 13603.
b. These definitions are found in Section 802 of E.O. 13603.
CRS-31
The Defense Production Act of 1950: History, Authorities, and Reauthorization
Table A-4. Chronology of Laws Reauthorizing the Defense Production Act of 1950
Public Law and Statutes at Large Citation, and Date of Approval
General Expiration Datea
P.L. 81-774, 64 Stat. 798, September 8, 1950
June 30, 1951
P.L. 82-69, 65 Stat. 110, June 30, 1951
July 31, 1951
P.L. 82-96, 65 Stat. 131, July 31 1951
June 30, 1952
P.L. 82-429, 66 Stat. 296, June 30, 1952
June 30, 1953
P.L. 83-95, 67 Stat. 129, June 30, 1953b
June 30, 1955b
P.L. 84-119, 69 Stat. 225, June 30, 1955
July 31, 1955
P.L. 84-295, 69 Stat. 580, August 9, 1955
June 30, 1956
P.L. 84-632, 70 Stat. 408, June 29, 1956
June 30, 1958
P.L. 85-471, 72 Stat. 241, June 28, 1958
June 30, 1960
P.L. 86-560, 74 Stat. 282, June 30, 1960
June 30, 1962
P.L. 87-505, 76 Stat. 112, June 28, 1962
June 30, 1964
P.L. 88-343, 78 Stat. 235, June 30, 1964
June 30, 1966
P.L. 89-482, 80 Stat. 235, June 30, 1966
June 30, 1968
P.L. 90-370, 82 Stat. 279, July1, 1968
June 30, 1970
P.L. 91-300, 84 Stat. 367, June 30, 1970
July 30, 1970
P.L. 91-371, 84 Stat. 694, August 1, 1970
August 15, 1970
P.L. 91-379, 84 Stat. 796, August 15, 1970
June 30, 1972
P.L. 92-325, 86 Stat. 390, June 30, 1972
June 30, 1974
P.L. 93-323, 88 Stat. 280, June 30, 1974
July 30, 1974
P.L. 93-367, 88 Stat. 419 , August 7, 1974
September 30, 1974
P.L. 93-426, 88 Stat. 1166, September 30, 1974
June 30, 1975
P.L. 94-42, 89 Stat. 232, June 28, 1975
September 30, 1975
P.L. 94-100, 89 Stat. 483, October 1, 1975
November 30, 1975
P.L. 94-152, 89 Stat. 810, December 16, 1975
September 30, 1977
P.L. 95-37, 91 Stat. 178, June 1, 1977
September 30, 1979
P.L. 96-77, 93 Stat. 588, September 29, 1979
January 28, 1980
P.L. 96-188, 94 Stat. 3, January 28, 1980
March 28, 1980
P.L. 96-225, 94 Stat. 310, April 3, 1980
May 27, 1980
P.L. 96-250, 94 Stat. 371, May 26, 1980
August 27, 1980
P.L. 96-294, 94 Stat. 611, June 30, 1980
September 30, 1981
P.L. 97-47, 95 Stat. 954, September 30, 1981
September 30, 1982
P.L. 97-336, 96 Stat. 1630, October 15, 1982
March 31, 1983
P.L. 98-12, 97 Stat. 53, March 29, 1983
September 30, 1983
P.L. 98-181, 97 Stat. 1267, November 30, 1983
March 30, 1984
P.L. 98-265, 98 Stat. 149, April 17, 1984
September 30, 1986
Congressional Research Service
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The Defense Production Act of 1950: History, Authorities, and Reauthorization
Public Law and Statutes at Large Citation, and Date of Approval
General Expiration Datea
P.L. 99-441, 100 Stat. 1117, October 3, 1986
September 30, 1989
P.L. 101-137, 103 Stat. 824, November 3, 1989
August 10, 1990
P.L. 101-351, 104 Stat. 404, August 9, 1990
September 30, 1990
P.L. 101-407, 104 Stat. 882, October 4, 1990
October 5, 1990
P.L. 101-411, 104 Stat. 893, October 6, 1990
October 20, 1990
P.L. 102-99, 105 Stat. 487, August 17, 1991
September 30, 1991c
P.L. 102-193, 105 Stat. 1593, December 6, 1991
March 1, 1992
P.L. 102-558, 106 Stat. 4198, October 28, 1992
September 30, 1995
P.L. 104-64, 109 Stat. 689, December 18, 1995
September 30, 1998
P.L. 105-261, 112 Stat. 2137, October 17, 1998
September 30, 1999
P.L. 106-65, 113 Stat. 769, October 5, 1999
September 30, 2000
P.L. 106-363, 114 Stat. 1407, October 27, 2000
September 30, 2001
P.L. 107-47, 115 Stat. 260, October 5, 2001
September 30, 2003
P.L. 108-195, 117 Stat. 2892, December 17, 2003
September 30, 2008
P.L. 110-367, 122 Stat. 4026, October 8, 2008
September 30, 2009
P.L. 111-67, 123 Stat. 2006, September 30, 2009
September 30, 2014
Source: CRS.
Notes: This table does not include all laws that amended the DPA, only those that altered the termination date
of the act, currently codified at 50 U.S.C Appx. § 2166, Section 717 of the DPA.
a. Not al provisions of the DPA may have expired on each given date, as the law has frequently offered an
evolving set of exceptions to the termination of DPA authorities. For example, as discussed in the
“Reauthorization of the DPA” section of this report, currently the majority of DPA authorities wil
terminate on September 30, 2014, with the exception of four sections.
b. P.L. 83-95 permitted the termination of Titles 2 and 6 as of June 30, 1953, and Titles IV and V to terminate
as of April 30, 1953.
c. The termination of authorization from October 20, 1990, to August 17, 1991, is the longest period on
record since inception. However, in Section 7 of P.L. 102-99, Congress set the effective date of the passage
to October 20, 1990, thus technically authorizing the DPA through this time period.
Author Contact Information
Jared T. Brown
Daniel H. Else
Analyst in Emergency Management and Homeland
Specialist in National Defense
Security Policy
delse@crs.loc.gov, 7-4996
jbrown@crs.loc.gov, 7-4918
Congressional Research Service
33