Defense Production Act—What is it?

Over the last few days, we have heard a lot about the possible uses of the Defense Production Act (DPA), but not a lot of substance about what it actually does. I was the senior Senate aide responsible for the DPA for six years (1975-1981) and for 22 years was a defense consultant who advised FEMA, the Air Force, and DoD on uses of the DPA. I have probably spent as much time as anyone since the Korean War reading, interpreting, and thinking about how to use the DPA.

The DPA does indeed date back to the Korean War. It was in effect the War Powers Act for this war, including wage and price controls, credit controls, and other tools for economic stabilization. Most of those authorities were quickly repealed in 1953, but the production expansion and control authorities were kept to help meet Cold War needs for defense production.

The DPA contains some important authorities. If someone is producing the same thing for defense and for non-defense purposes, the DPA can put the defense orders at the head of the line, or take all of it. If someone is producing something for non-defense needs that the government decides it needs, it can say “that stuff is mine.” If they produce defense and civilian products with the same equipment, they can say “our order comes first.”

The president can also use the authority of the DPA to order a company to go into production of surgical masks or medical suits or respirators. And it can expedite delivery of parts to the prime contractor through the use of the same “ours comes first” process.

Those authorities are all contained in Title I of the DPA. A separate authority (Title III) lets the government guarantee a market. So, if people were reluctant to start producing, for example, ventilators, because they weren't sure there would be buyers, the government could give them a purchase guarantee that "if you can't sell it, we'll buy it, so go ahead and start production." Finally, Title VII allows industry to work together to pool resources, share ideas, and coordinate orders.

But the DPA can’t speed up the process of turning a company into a qualified producer of these essential devices. The new producer needs to be qualified as a source, which means it needs production equipment, training, and a supply chain and it needs to show that it can produce the product. And the DPA itself only gives authority to do things. Invoking the DPA doesn’t replace the planning that didn’t happen before the crisis. Without preparation, it will be necessary to identify the expansion potential, the potential new sources, the bottlenecks, and the things we need to do to open those bottlenecks in the heat of battle.

In short, the DPA is a good tool but hardly a magic bullet. The president has claimed he doesn’t want to “take over industry,” which the DPA wouldn’t allow him to do. that issue was settled almost 70 years ago. In 1952, President Truman used the DPA to seize control of the steel mills to settle a steel strike, but the Supreme Court ruled in the “Youngstown Sheet and Tube” case that the president did not have this authority.

But the discussions about using the DPA to force companies to produce essential gear have overlooked what could be the most useful application of the DPA. The controls in the DPA can be used to coordinate orders. Using the DPA to purchase shortage items nationally would avoid the competition and price bidding between different states or different hospitals. This can make sure supplies go to the highest priority producers and products go to fill the most urgent needs.

And, yes, under the DPA, the government indeed is "a shipping clerk.” Coordinating orders and production is a profoundly important job and the federal government has let us down.

The fact that this authority is being dredged up more than a month into the crisis says much about the state of our response. Either the White House wasn't aware of it (which would be scary) or they were and didn't think it was important enough to use. Either way, the result is that we haven’t used an authority that could help speed and coordination production of necessary equipment.