Defense Production Act (DPA): Recent Developments in Response to COVID-19

Defense Production Act (DPA): Recent Developments in Response to COVID-19

INSIGHTi

Defense Production Act (DPA): Recent
Developments in Response to COVID-19
Updated July 28, 2020
The Administration has employed the Defense Production Act of 1950 (DPA) as part of federal
countermeasures to the Coronavirus Disease 2019 (COVID-19) pandemic. The DPA confers presidential
authorities to mobilize domestic industry in service of the national defense, broadly defined, including
emergency preparedness. The DPA includes provisions under Title I to prioritize the acceptance of
contracts, and to allocate scarce goods, materials, and services; and under Title III, to provide for the
expansion of productive capacity. Title VII provides definitions and other supporting provisions.
This Insight considers recent DPA actions in response to COVID-19 and is intended as a companion to
CRS Insight IN11387. See CRS Report R43767 for an in-depth discussion of DPA history and authorities.
Recent DPA Implementation Actions
Since May 12, a number of DPA actions have occurred or been made public:
 May 12: The Federal Emergency Management Agency (FEMA) and the Department of
Justice (DOJ) announced a “voluntary agreement” pursuant to Title VII of the DPA to
coordinate industry cooperation.
 May 13: FEMA issued its “Emergency Management Priorities and Allocations System”
to govern Title I implementation processes.
 May 18: The Food and Drug Administration (FDA) and the Department of Agriculture
(USDA) issued a memorandum of understanding (MOU) regarding DPA food security
implementation.
 May 30: The Department of Defense (DOD) reversed plans to allocate approximately
75% of the $1 billion in DPA Title III funds appropriated for health resources under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act in response to the
pandemic, and instead allocated $688 million for defense industrial base investments.
 June 22: DOD and the International Development Finance Corporation (DFC) signed an
MOU in which the DFC would support lending activities under DOD’s Title III program.
Congressional Research Service
https://crsreports.congress.gov
IN11470
CRS INSIGHT
Prepared for Members and
Committees of Congress

Congressional Research Service
2
 July 7: According to Federal Procurement Data System records, FEMA initiated a fourth
DPA Title I priority-rated order of N95 respirators from the 3M Company.
In addition, DPA Title III projects facilitated by DOD’s Industrial Policy office were announced:
 May 12: Coordinating with the Department of Health and Human Services (HHS), DOD
awarded $138 million to support COVID-19 vaccine supply chain development.
 May 28: DOD and HHS awarded $2.2 million to Hollingsworth & Vose Company to
increase N95 ventilator and filter production.
 May 29: DOD awarded $18.45 million for the space-based defense industrial base.
 June 10: DOD awarded $135 million for the textile, aviation, and shipbuilding defense
industrial base.
 June 16: A funding opportunity announcement (FOA) was posted in the System for
Award Management (SAM) for space launch services, but withdrawn on July 1.
 June 19: DOD awarded $187 million for shipbuilding, aviation, and textile defense
industrial base.
 July 10: DOD awarded $84.4 million for the unmanned aerial systems, space, and
shipbuilding defense industrial base.
 July 15: A Title III FOA was posted in SAM for upgrading military clothing
manufacturing facilities to mitigate workplace COVID-19 transmissibility.
 July 17: DOD awarded $36.9 million for the aviation and shipbuilding defense industrial
base.
 July 24: DOD awarded $77.3 million for the microelectronics, aviation, and rare earths
defense industrial base.
 July 28: DFC and DOD announced a $765 million loan to the Eastman Kodak Company
to support domestic pharmaceutical production.
 In May and July, the DOJ’s COVID-19 Hoarding and Price Gouging Task Force arrested
persons in Staten Island and Suffolk County, New York and New Jersey for violating
DPA anti-hoarding/price gouging provisions.
These may not be exhaustive of all recent DPA activity, as there is no standing requirement for publishing
DPA actions, and no centralized repository where they are collected.
Additional DPA Developments
In addition, other recent developments occurred with DPA relevance:
 On May 14, Deputy Assistant Secretary of Defense for Industrial Policy Jennifer Santos
was reassigned from head of DOD’s Industrial Policy office. DOD did not publicly
comment on the reason for her departure, but updated reporting suggested her handling of
DPA was a potential factor.
 On July 14, the House Committees on Financial Services, Homeland Security, Armed
Services, Foreign Affairs, and Energy and Commerce released a letter addressed to the
HHS and DOD secretaries. The letter outlined concerns over the Administration’s
COVID-19 response, including DPA implementation. It objects to DOD’s use of DPA
Title III CARES Act appropriations, noting that Congress intended those funds to be
reserved for health and medical countermeasures, and not defense industrial base support.
The letter also listed concerns regarding the DFC’s role supporting Title III projects.

Congressional Research Service
3
 On July 1, a new nasal swab factory funded under DPA Title III was scheduled to open in
Pittsfield, ME, but no opening announcement has been made by DOD, which awarded
the contract, or by the company performing the contract, Puritan Medical. According to a
June 5 press release, the company hosted the President and reported its new facility
would open July 1. No progress updates have been issued since then, though the company
advertises vacant positions for the new factory.
Policy Considerations
The Administration’s DPA implementation pattern appears sporadic and relatively narrow. Although the
volume of DPA actions has increased, no new DPA Title I prioritization orders for health articles have
been observed since April 14. Most direct Title III funding has been awarded to the defense industrial
base.
Despite continued congressional concerns over personal protective equipment (PPE) availability, the
Administration has not consistently employed DPA authorities to expedite PPE contracts. For example, on
July 19, DOD and HHS announced a $3.5 million award for surgical mask production (with production
not expected until May 2021). However, this action did not appear to be accomplished under DPA
authorities. In a media interview, White House trade advisor Peter Navarro reiterated past assertions that
the Administration wielded DPA authorities to compel voluntary action without the need to actually
implement them.
It is unclear which executive agency leads overall efforts under DPA authority, in response to the
pandemic. Reporting on DPA activities remains dispersed among multiple agency sources and appears
incomplete. In addition, it is not clear under which authorities agencies are undertaking certain DPA-
attributed activities, such as DOD’s redirection of Title III funds, or DOJ’s enforcement of anti-
hoarding/price gouging.

Author Information

Michael H. Cecire
Heidi M. Peters
Analyst in Intergovernmental Relations and Economic
Analyst in U.S. Defense Acquisition Policy
Development Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,

Congressional Research Service
4
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN11470 · VERSION 3 · UPDATED