Defense Production Act of 1950

Defense Production Act

Long title	An Act to establish a system of priorities and allocations for materials and facilities, authorize the requisitioning thereof, provide financial assistance for expansion of productive capacity and supply, provide for price and wage stabilization, provide for the settlement of labor disputes, strengthen controls over credit, and by these measures facilitate the production of goods and services necessary for the national security, and for other purposes
Enacted by	the 81st United States Congress
Effective	September 8, 1950
Citations
Public law	81-774
Statutes at Large	64 Stat. 798
Codification
Titles amended	50 U.S.C.: War and National Defense
U.S.C. sections created	50 U.S.C. Chapter 55
Legislative history
Introduced in the House as H.R. 9176

The Defense Production Act of 1950 (Pub.L. 81–774) is a United States federal law enacted on September 8, 1950 in response to the start of the Korean War.^[1] 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. Since 1950, the Act has been reauthorized over 50 times.^[1] It has been periodically amended and remains in force.

Provisions

The Act contains three major sections. The first authorizes the president to require businesses to accept and prioritize contracts for materials deemed necessary for national defense, regardless of a loss incurred on business. The law also allows the president to designate materials to be prohibited from hoarding or price gouging.^[2] The law does not state what would occur if a business refuses or is unable to complete a request on time. However, any person who performs any act prohibited or willfully fails to perform any act required by the Defense Production Act may be charged with a felony that results in a fine up to $10,000 or imprisonment for up to one year or both.^[3][4] The second section 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 critical materials necessary to the national defense effort are available for defense needs.^[5][6][7]

The Act also authorizes the President to requisition property, force industry to expand production and the supply of basic resources, settle labor disputes, control consumer and real estate credit, establish contractual priorities, and allocate raw materials towards national defense.^[5]

The president's designation of products under the jurisdiction of the DPA is the authority 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.^[8]

The Defense Priorities and Allocations System institutes a rating system for contracts and purchase orders.^[9] 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.

Use

Korean War

The DPA, passed by the U.S. Congress in September 1950, was first used during the Korean War to establish a large defense mobilization infrastructure and bureaucracy. Under the authority of the Act, President Harry S. Truman eventually established the Office of Defense Mobilization, instituted wage and price controls, strictly regulated production in heavy industries such as steel and mining, prioritized and allocated industrial materials in short supply, and ordered the dispersal of wartime manufacturing plants across the nation.^[10]

Cold War

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.^[11][12] The DPA was also used in the 1950s to ensure that government-funded industries were geographically dispersed across the United States to prevent the industrial base from being destroyed by a single nuclear attack. During the late 1960s and early 1970s, the DPA increasingly was used to diversify the US energy mix by funding the trans-Alaskan pipeline, the US synthetic fuels corporation, and research into liquefied natural gas.^[13]

Technological innovation

Beginning in the 1980s, the DOD began using the contracting and spending provisions of the DPA to provide seed money to develop new technologies.^[14] The DOD has used the act to help 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, metal composites and the mining and processing of rare earth minerals.^[11][15]

21st century

In 2011, President Barack Obama invoked the law to force telecommunications companies, under criminal penalties, to provide detailed information to the Commerce Department's Bureau of Industry and Security on the use of foreign-manufactured hardware and software in the companies' networks, as part of efforts to combat Chinese cyberespionage.^[12]

On June 13, 2017, President Donald Trump invoked the law to classify two sets of products as "critical to national defense". The first referenced "items affecting aerospace structures and fibers, radiation-hardened microelectronics, radiation test and qualification facilities, and satellite components and assemblies".^[16][17] The second referenced "items affecting adenovirus vaccine production capability; high strength, inherently fire and ballistic resistant, co-polymer aramid fibers industrial capability; secure hybrid composite shipping container industrial capability; and three-dimensional ultra-high density microelectronics for information protection industrial capability".^[18][19]

COVID-19 pandemic

On March 18, 2020, in response to the COVID-19 outbreak, President Trump issued an executive order that defined ventilators and protective equipment as "essential to the national defense", the standard required by the DPA.^[20][21] Later that day, he indicated that he would not make immediate use of DPA authority, writing, "Hopefully there will be no need"; he indicated that he would do so in a "worst-case scenario".^[22][23] Speaker of the House Nancy Pelosi called upon Trump to "immediately use the powers of the DPA" to produce and distribute critically needed hospital equipment.^[22][23] On March 20, Trump said that he will use the DPA.^[24] The next day General Motors (GM) CEO Mary Barra spoke to Trump administration officials about how GM could support production of ventilators without the use of DPA.^[25]

On March 23, Trump issued an executive order classifying "health and medical resources necessary to respond to the spread of COVID-19" as subject to the authority granted by DPA to prohibit hoarding and price gouging.^[26][27]

Trump's initial reluctance to use the act's authorities prompted criticism.^[28] On March 27, 2020, after negotiations with GM had broken down over costs, estimated at over $1 billion, but primarily due to GM's inability to commit delivering the number of ventilators required speedily, Trump ordered HHS Secretary Alex Azar to use the DPA to require GM to accept and prioritize contracts for as many ventilators as Azar determines to be appropriate.^[29] Trump also named Peter Navarro national policy coordinator for the DPA.^[30]

On April 2, Trump said he was invoking the DPA to require 3M, General Electric, and Medtronic to increase its production of N95 respirators.^[31][32]

On April 28, Trump announced that he intended to issue an executive order under the Defense Production Act mandating that plants producing beef, pork, poultry and eggs stay open, a move which also prompted criticism. White House General Counsel Pat Cipollone consulted with various companies "to design a federal mandate to keep the plants open and to provide them additional virus testing capacity as well as protective gear," according to Bloomberg News.^[33] Trump mentioned to the press that the order is intended to "solve any liability problems" by workers and local authorities to close meat-processing plants for cleaning.^[34][35] The order gave USDA extraordinary powers to have firms maintain production. The order does not allow companies to ignore safety rules (except for keeping the plants opened), however, and OSHA / CDC guidance remains in force. In September 2020, OSHA fined Smithfield and JBS for failing to take the necessary actions to prevent the spread of coronavirus.^[36][37]

On December 8, 2020, more than a month after losing the 2020 presidential election, then-president Trump said that he would invoke the Defense Production Act to produce vaccine doses, but he did not do so before the end of his term.^[38]

On January 21, 2021, President Joe Biden invoked the Defense Production act on his second day in office to increase production of supplies related to the pandemic, such as protective equipment.^[39] On March 2, President Biden invoked the DPA again to supply equipment to Merck facilities needed to safely manufacture Johnson & Johnson vaccines.^[40]

See also

• Nationalization

References

Bibliography

Library resources about Defense Production Act of 1950

Resources in your library Resources in other libraries

• Bell, Douglas, "'A Little-known Bill of Great National Significance': The Uses and Evolution of the Defense Production Act, 1950-2020." US Army Heritage and Education Center Historical Services Division. Carlisle, PA. July 2020. https://ahec.armywarcollege.edu/documents/Defense_Production_Act_1950-2020.pdf.
• "The Defense Production Act: Choice as to Allocations." Columbia Law Review. 51:3 (March 1951).
• Lockwood, David E. Defense Production Act: Purpose and Scope. Washington, D.C.: Congressional Research Service. June 22, 2001.
• Mirsky, Rich. "Trekking Through That Valley of Death—The Defense Production Act." Innovation. June/July 2005.
• National Research Council. Defense Manufacturing in 2010 and Beyond: Meeting the Changing Needs of National Defense. Washington, D.C.: National Academy Press, 1999. ISBN 0-309-06376-0
• Nibley, Stuart B. "Defense Production Act: The Government's Old but Powerful Procurement Tool." Legal Times. April 1, 2002.
• Nibley, Stuart. "Defense Production Act Speeds Up Wartime Purchases." National Defense. June 2006.
• Pierpaoli Jr., Paul G. "Truman's Other War: The Battle for the American Homefront." The Organization of American Historians' Magazine of History. Spring 2000.
• Pierpaoli Jr., Paul G. Truman and Korea: The Political Culture of the Early Cold War. Columbia, Mo.: University of Missouri Press, 1999. ISBN 0-8262-1206-9
• Pierpaoli Jr., Paul G. "Mobilizing for the Cold War: The Korean Conflict and the Birth of the National Security State." Essays in Economic and Business History. June 1994.

External links

"50 USC Ch. 55: DEFENSE PRODUCTION". United States House of Representatives. (text of the law in the current edition of the United States Code)