The Defense Production Act (DPA) is the primary source of Presidential authorities to expedite and expand the supply of resources from the U.S. industrial base to support military, energy, space, and homeland security programs. Homeland security programs eligible for DPA support include:
- Efforts to counter terrorism within the United States;
- Emergency preparedness activities conducted pursuant to title VI of the Stafford Act;
- Protection and restoration of critical infrastructure; and
- Continuity of Government.
The President's DPA authorities are delegated to the heads of various federal departments and agencies in Executive Order (E.O.) 13603.
DPA Title I - Priorities and Allocations
Section 101 of the DPA authorizes the President to require acceptance and priority performance of contracts or orders and to allocate materials, services, and facilities to promote the national defense or to maximize domestic energy supplies. The President’s priorities and allocations authority is delegated, in E.O. 13603, to the Departments of Agriculture (USDA), Energy (DOE), Health and Human Services, Transportation, Defense (DOD), and Commerce (DOC) (referred to as "Resource Departments") with respect to resources within each department’s jurisdiction. The Department of Homeland Security (DHS) has been delegated authority by DOC and USDA to use the priorities authority to ensure on-time procurement of materials and services needed for DHS Approved Programs.
Use of the priorities and allocations authorities is limited to support for programs determined to be “necessary or appropriate to promote the national defense” by DOD (for military and space programs), by DOE (for energy resources), or by DHS (for all other national defense programs, including civil defense and continuity of government).
Section 101(d) of the DPA directs the head of each Resource Department to issue final rules that establish standards and procedures by which this authority is used to promote national defense, under both emergency and non-emergency conditions. Together, these rules constitute the Federal Priorities and Allocations System.
The priorities authority is used extensively to ensure timely performance of military and space contracts and orders. Use in support of homeland security programs is more limited, but growing, to: ensure timely procurement of resources to save lives and property under emergency conditions; protect or restore critical infrastructure operations; and to counter threats of terrorism within the United States. While the allocations authority has not been used since the end of the Cold War, standards and procedures for use of this authority have been established to support effective use of this authority, when needed.
DPA Title III - 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. Title III also authorizes Federal Government procurement and installation of equipment in plants, factories, and other industrial facilities owned by the Government or private persons. A typical Title III project is focused on increasing production capacity and reducing production costs for new, state-of-the-art technologies needed for military and homeland security purposes.
DOD is the only federal agency with an active Title III Program, but, from time to time, other departments and agencies have partnered with DOD in sponsoring individual Title III projects. The authority to undertake Title III projects is delegated, in E.O. 13603, to federal agencies, including DHS, engaged in procurement for the national defense.
DPA Title VII - General Provisions (including voluntary agreements)
Section 708 of the DPA authorizes the President to consult with representatives of industry, business, financing, agriculture, labor, and other interests to provide for development of voluntary agreements and plans of action to help provide for the national defense. A voluntary agreement is an association of private interests, approved by the Government to plan and coordinate actions in support of the national defense. Under Section 708, Participants in a voluntary agreement are granted relief from antitrust laws . Voluntary agreements enable cooperation among business competitors to plan and coordinate measures to increase the supply of materials and services needed for military and homeland security purposes. For example, a voluntary agreement could be used to enable cooperation among suppliers of critical materials and services to plan and carry out emergency preparedness, response, and recovery activities.
Other Title VII Provisions
- Section 705 – Investigations; Records; Reports; Subpoenas; Right to Counsel – provides authority to obtain information from businesses, as necessary or appropriate, for the administration of the DPA, including information needed for industry studies.
- Section 710(e) – authorizes establishment of the National Defense Executive Reserve (NDER), a cadre of pers ons with recognized expertise for employment in executive positions in the Federal Government in the event of an emergency.
- Section 721 – Committee on Foreign Investment in the United States (CFIUS) – establishes CFIUS to determine the effects on national security of certain mergers, acquisitions, and takeovers related to foreign investment in the United States. (The DPA Program Division has no CFIUS responsibilities.)
- Section 722 – Defense Production Act Committee (DPAC) – establishes DPAC to advise the President on effective use of DPA authorities by Federal agencies and to report to Congress on such use. (DPAC is chaired by the Administrator of FEMA.)
- Section 723 – Annual Report on Impact of Offsets – requires an annual report to Congress on the impact of offsets on the defense preparedness, industrial competitiveness, employment, and trade of the United States. (The DPA Program Division has no involvement with this report.)