Defense Production Act

The Defense Production Act (Pub.L. 81–774) is a United States federal law enacted on September 8, 1950, in response to the start of the Korean War. It was part of a broad civil defense and war mobilization effort in the context of the Cold War. Its implementing regulations, the Defense Priorities and Allocation System (DPAS), are located at 15 CFR §§700 to 700.93. The Act has been periodically reauthorized and amended, and remains in force as of 2014.

Provisions

The Act contains three major sections. The first authorizes the President to require businesses to sign contracts or fulfill orders deemed necessary for national defense. The second authorizes the President to establish mechanisms (such as regulations, orders or agencies) to allocate materials, services and facilities to promote national defense. The third section authorizes the President to control the civilian economy so that scarce and/or critical materials necessary to the national defense effort are available for defense needs.[1]

The Act also authorizes the President to requisition property, force industry to expand production and the supply of basic resources, impose wage and price controls, settle labor disputes, control consumer and real estate credit, establish contractual priorities, and allocate raw materials towards national defense.[1]

The President's authority to place contracts under the DPA is the part of the Act most often used by the Department of Defense (DOD) since the 1970s. Most of the other functions of the Act are administered by the Office of Strategic Industries and Economic Security (SIES) in the Bureau of Industry and Security in the Department of Commerce.[2]

The Defense Priorities and Allocations System institutes a rating system for contracts and purchase orders.[3] The highest priority is DX, which must be approved by the Secretary of Defense. The next level down is DO, and below that are unrated contracts.

Usage over time

Korean War-era usage

The DPA was used during the Korean War to establish a large defense mobilization infrastructure and bureaucracy. Under the authority of the Act, President Harry S. Truman established the Office of Defense Mobilization, instituted wage and price controls, strictly regulated production in heavy industries such as steel and mining, and ordered the dispersal of wartime manufacturing plants across the nation.[4]

The Act also played a vital role in the establishment of the domestic aluminum and titanium industries in the 1950s. Using the Act, DOD provided capital and interest-free loans, and directed mining and manufacturing resources as well as skilled laborers to these two processing industries.[5]

Cold War–era usage

The DPA was used sporadically during the Cold War.[6]

21st-century usage

In 2011 it was reported that the law was invoked to force telecommunications companies, under criminal penalties, to provide detailed equipment outlines to the Commerce Department’s Bureau of Industry and Security.[6]

Tool for innovation

Beginning in the 1980s, DOD began using the contracting and spending provisions of the DPA to provide seed money to develop new technologies.[7] Using the Act, DOD has helped to develop a number of new technologies and materials, including silicon carbide ceramics, indium phosphide and gallium arsenide semiconductors, microwave power tubes, radiation-hardened microelectronics, superconducting wire, and metal composites.[5]

Notes

  1. 1 2 "The Defense Production Act: Choice as to Allocations," Columbia Law Review, March 1951; Lockwood, Defense Production Act: Purpose and Scope, June 22, 2001.
  2. ↑ Nibley, "Defense Production Act: The Government's Old but Powerful Procurement Tool," Legal Times, April 1, 2002.
  3. ↑ DCMA Defense Priorities and Allocations System (DPAS)
  4. ↑ Pierpaoli, Truman and Korea: The Political Culture of the Early Cold War, 1999.
  5. 1 2 Mirsky, "Trekking Through That Valley of Death—The Defense Production Act," Innovation, June/July 2005.
  6. 1 2 Riley, Michael (30 November 2011). "Obama Invokes Cold-War Security Powers to Unmask Chinese Telecom Spyware". Bloomberg News.
  7. ↑ National Research Council, Defense Manufacturing in 2010 and Beyond, 1999.

References

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