Government Contracts President Invokes Defense Production Act for COVID-19 Response
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Monday, April 13, 2020

President Invokes Defense Production Act for COVID-19 Response

By Government Contracts Editorial Staff

President Trump has issued Executive Order 13909, Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of COVID-19. The March 18, 2020, order follows the declaration of a national emergency recognizing the threat that the novel coronavirus poses to national security and the World Health Organization’s announcement that the COVID-19 outbreak can be characterized as a pandemic. According to the order, to ensure the nation’s healthcare system is able to surge capacity and capability to respond to the spread of COVID-19, it is critical that all health and medical resources are properly distributed to the nation’s healthcare system and others that need them most. The order finds that health and medical resources needed to respond to the spread of the virus, including personal protective equipment and ventilators, meet the criteria specified in section 101(b) of the Defense Production Act (50 USC 4511(b)).

Delegation of Authority. The order delegates to the Secretary of Health and Human Services the President’s authority under section 101 of the Act to require performance of contracts or orders to promote the national defense over performance of any other contracts or orders and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense with respect to all health and medical resources needed to respond to the spread of COVID-19 within the U.S. The HHS Secretary may use this authority to determine the proper nationwide priorities and allocation of all health and medical resources, including the control of the distribution of these materials and applicable services in the civilian market. The order also allows the HHS Secretary to adopt and revise appropriate rules and regulations as may be necessary to implement the order.

Priorities and Allocations. A Congressional Research Service report, updated March 2, 2020, notes that the DPA gives the President a broad set of authorities to influence domestic industry in the interest of national defense. The Act was historically based on the World War II war powers acts, and it focused on shaping U.S. military preparedness and capabilities. However, Congress has expanded its scope to include enhancement and support of domestic preparedness, response, and recovery from natural hazards, terrorist attacks, and other national emergencies. The Act authorizes the President to require businesses to prioritize and accept contracts for materials and services as necessary to promote the national defense, and to offer incentives within the domestic market to enhance the production and supply of critical materials and technologies when necessary for national defense. It also grants the President the ability to allocate or control the general distribution of materials, services, and facilities. Although the Department of Defense has routinely, and other departments and agencies have less frequently, employed the authority to prioritize contracts, no President has taken allocation action since the end of the Cold War.

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