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November 6, 2013
The Defense Production Act of 1950 (DPA)
Overview
Key Provisions of the DPA
Title 1: Priority Contracts
The Defense Production Act of 1950 (DPA, 50 U.S.C.
Appx § 2061 et seq.) confers upon the President a broad set
of authorities to influence domestic industry in the interest
of national defense. These authorities are primarily used by
the Department of Defense (DOD) to enhance and support
U.S. military preparedness and capabilities. They are also
used across the federal government to improve domestic
preparedness, response, and recovery from natural hazards,
terrorist attacks, and other national emergencies.
...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. DPA, 50 U.S.C. Appx. § 2062(a)(1)
History of the DPA
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.
The original DPA contained seven separate titles, but four
of the seven titles (Titles II, IV, V, and VI) terminated in
1953 when Congress allowed them to lapse. These
terminated titles related to requisitioning materials and
property, rationing consumer goods, fixing wage and price
ceilings, settling labor disputes, and controlling consumer
credit.
Existing DPA authorities are largely tied to the definition of
national defense (§702(14)), 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. Since original enactment, Congress has gradually
expanded the scope of the definition of national defense to
include homeland security related activities.
Congress has granted most DPA authorities directly to the
President. The President, in turn, has historically delegated
these authorities to department and agency heads through
memoranda or Executive Order. Most recently, President
Obama updated and issued Executive Order 13603,
National Defense Resource Preparedness, in 2012.
Priority contract authority (§ 101 (a)) allows delegated
federal agencies to prioritize (or rate) contracts for critical
materials, equipment, and services produced in the private
market. Prioritized contracts must be fulfilled before other
competing interests to ensure timely availability of goods
for the national defense. In executing a prioritized contract,
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.
Title Ill Expansion of Productive Capacity
Title III authorities can be used to provide 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 national defense.
These authorities (§303) include, but are not limited to:
* purchasing or making purchase commitments of
industrial resources or critical technology items;
* making subsidized payments for domestically produced
materials; and
* installing and purchasing equipment for industrial
facilities to expand their productive capacity.
Available incentives also include government direct loans
and loan guarantees, though these authorities have not been
used in recent decades.
Title VII: General Provisions
Title VII contains an assortment of provisions that clarify
how DPA authorities can be used and set out key
definitions. Title VII also establishes the Defense
Production Act Committee (DPAC), an interagency body
created to advise the President regarding the effective use
of DPA authorities. The DPAC is co-chaired by the
Secretaries of Defense and Homeland Security. Title VII
also provides two important authorities that are
permanently authorized in statute. They are: §721, the so-
called Exon-Florio Amendment, which gives the President
and the Committee on Foreign Investment in the United
States (CFIUS) review authority over certain corporate
acquisition activities; and §708, which provides for the
establishment of voluntary agreements in the private sector
in the interest of the national defense.
www.crs gov 1 7-5700
What is the DPA?](ViewImageLocal?handle=hein.crs/crsuntaajtn0001&div=1&collection=&method=preview&ext=.png&size=3)