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Defense Production Act

The Defense Production Act (DPA) is the primary source of Presidential authorities to expedite and expand the supply of critical resources from the U.S. industrial base to support the national defense and homeland security.  In addition to military, energy, and space activities, the DPA definition of "national defense" includes emergency preparedness activities conducted pursuant to title VI of the Stafford Act and protection and restoration of critical infrastructure. The President's DPA authorities are delegated to the heads of Federal departments and agencies in Executive Order (E.O.) 12919.

Summary of DPA provisions:

• Authority to require acceptance and priority performance of contracts and orders in support of national defense [priorities and allocations];
• Various types of financial incentives and assistance for industry to expedite production and deliveries or services under Government contracts and to provide for maintenance, improvement, and expansion of production capabilities needed for national defense purposes [Title III];
• Antitrust protection for voluntary agreements among business competitors to enable cooperation to plan and coordinate measures to increase the supply of materials and services needed for national defense purposes;
• Authority to establish the National Defense Executive Reserve, a cadre of persons with recognized expertise for employment in executive positions in the Federal Government in the event of an emergency;
• Other DPA provisions.

• Priorities and Allocations
  

  Section 101 of the Defense Production Act authorizes the President: (1) to require acceptance and preferential performance of contracts and orders and (2) to allocate materials, services, and facilities, as he deems necessary or appropriate to promote the national defense.  The President's section 101 authorities are delegated in Part II of Executive Order 12919 to the following agency heads:

  • The Secretary of Agriculture with respect to food resources, food resource facilities, and the domestic distribution of farm equipment and commercial fertilizer;
  • The Secretary of Energy with respect to all forms of energy;
  • The Secretary of Health and Human Services with respect to health resources;
  • The Secretary of Transportation with respect to all forms of civil transportation;
  • The Secretary of Defense with respect to water resources; and
  • The Secretary of Commerce for all other materials, services, and facilities, including construction materials.  The Defense Priorities and Allocation Systems (DPAS) implements the priorities authority delegated to the Secretary of Commerce.  DPAS priority ratings are used to ensure timely delivery of materials and services for national defense and homeland security programs.

  The Defense Production Act Program Division is responsible for: (1) providing guidance for use of priority ratings by DHS and other Federal departments and agencies; (2) determining which civilian programs (except energy programs) are eligible to be supported using priority ratings; and (3) authorizing use of priority ratings in support of FEMA and other DHS programs.  In addition to developing and updating policy and procedures on the use of priority ratings for DHS and other civilian programs, The Defense Production Act Program Division provides support for use of the priority-rating authority by FEMA, other DHS components, other Federal departments and agencies, State and local governments, and private sector owners and operators of critical infrastructure.  Guidance for FEMA implementation of DPAS is provided in the FEMA DPAS Directive and the FEMA DPAS Manual.

• Expansion of Productive Capacity and Supply
  

  Title III of the DPA provides various financial measures, such as loans, loan guarantees, purchases, and purchase commitments, to improve, expand, and maintain domestic production capabilities needed to support national defense and homeland security procurement requirements.  A typical Title III project is focused on increasing production capacity and reducing production costs for a new, state-of-the-art technology.  The Department of Defense (DOD) is the only Federal agency with an active Title III Program.  For more information about the DOD program, go to the Title III Program website.

  The Defense Production Act Program Division is responsible for providing guidance and coordination for use of the Title III authorities in support of DHS program requirements.

• Voluntary Agreements
  

  A "voluntary agreement " is an association approved by the Government and entered into freely by two or more representatives of industry, business, financing, agriculture, labor, or other private interests to plan and coordinate actions in support of the national defense, including emergency preparedness and response activities.  Participants in a voluntary agreement are granted relief from antitrust laws under the provisions of Section 708 of the Defense Production Act of 1950 (DPA).  The Federal regulations regarding implementation of voluntary agreement authorities is provided in 44 CFR 332.

  Voluntary agreements enable cooperation among business competitors to plan and coordinate measures to increase the supply of materials and services needed for national defense and homeland security purposes.  Such agreements could be effective tools for engaging suppliers of critical materials and services in emergency preparedness, response, recovery, and mitigation activities.

  The Defense Production Act Program Division is responsible for: (1) providing guidance and procedures for establishing voluntary agreements and conducting activities under the agreements; and (2) supporting actions by DHS and other Federal agencies to implement the voluntary agreement authority.
     

• National Defense Executive Reserve (NDER)
  

  Section 710 of the DPA provides for employment of private sector personnel in support of Government emergency preparedness and response activities.  For example, the DPA provides for establishment of the National Defense Executive Reserve, a cadre of personnel trained for employment in executive positions in the Federal Government in the event of an emergency.  The Defense Production Act Program Division is responsible for providing guidance for use of the Section 710 authorities.

  FEMA is responsible for: (1) coordinating the NDER program activities of departments and agencies in establishing units of the Reserve; (2) providing for appropriate guidance for recruitment, training, and activation; and (3) issuing necessary rules and guidance in connection with the program.  Administration of each NDER unit is the responsibility of the agency sponsoring the unit.  These responsibilities include recruitment, security clearance, training, travel, pay, personnel records, and other administrative matters.  Funding for the training, travel, and administrative support of NDER personnel is also the responsibility of the sponsoring agencies.

Last Modified: Wednesday, 11-Aug-2010 13:16:44 EDT