{ "id": "IN11387", "type": "CRS Insight", "typeId": "INSIGHTS", "number": "IN11387", "active": true, "source": "EveryCRSReport.com, CRSReports.Congress.gov", "versions": [ { "source": "EveryCRSReport.com", "id": 624907, "date": "2020-05-15", "retrieved": "2020-05-19T13:37:00.027537", "title": "COVID-19: Defense Production Act (DPA) Developments and Issues for Congress", "summary": "The White House is employing the Defense Production Act of 1950 (DPA) in response to the Coronavirus Disease 2019 (COVID-19) pandemic to facilitate the production and availability of essential goods, supplies, and services. This Insight considers recent DPA actions and associated policy considerations for Congress. It is a companion to CRS Insights IN11337, IN11280, and IN11231. See CRS Report R43767 for a more in-depth discussion of DPA history and authorities. \nNew DPA Actions in Response to COVID-19 \nSince April 15, eight DPA actions have been made public:\nAccording to Federal Procurement Data System (FPDS) COVID-19 records, the Federal Emergency Management Agency (FEMA) issued four DPA priority-rated orders to the 3M company for N95 respirators on April 16, April 21, and April 28, per an April 2 White House memorandum. FEMA announced the DPA priority-rated orders for N95 respirators from 3M on April 14. \nOn April 20, the Department of Defense (DOD) announced it set aside $750 million of $1 billion in new DPA Title III appropriations for health resources, with $250 million reserved for defense industrial base investments.\nOn April 21, DOD announced a $133 million Title III investment in N95 respirator production, per a previous April 11 announcement.\nThe Department of Justice (DOJ) charged a New York resident on April 24, and two individuals on April 28, with violating DPA anti-hoarding/price-gouging provisions. \nOn April 28, President Trump issued Executive Order (E.O.) 13917 directing the Department of Agriculture (USDA) to exercise DPA authorities to address meat processing plant closures, and any other food supply chain issues, due to the pandemic.\nOn April 29, DOD announced $75 million in DPA Title III investments to increase nasal swab production, per the President\u2019s April 19 DPA invocation.\nOn May 5, pursuant to E.O. 13917, the USDA publicized letters to state governors and meat processing plants, directing plants to continue or resume operations utilizing COVID-19 meat processing guidelines developed on April 28 by the Centers for Disease Control and Prevention (CDC) and the Department of Labor\u2019s Occupational Safety and Health Administration (OSHA).\nOn May 14, the President issued a new E.O. delegating DPA Title III authority to the International Development Finance Corporation (DFC) in response to the pandemic.\nThese actions were made publicly available, but may not be exhaustive. There are no statutory reporting requirements for DPA actions.\nDPA Issues for Congress\nThe Administration has employed the DPA selectively, focusing on individual companies (e.g., GM, 3M) or industry sub-sectors (e.g., meat processing). There have been sporadic DPA efforts, and an opaque process, in response to complaints from Congress and some governors regarding ongoing shortages of personal protective equipment, testing supplies, and other such resources. The Administration\u2019s announced actions have primarily framed the DPA as a coercive instrument (the President called the DPA a \u201ctremendous hammer\u201d) with relatively narrow application.\nRecent DPA actions present a number of issues that may be of interest to Congress:\nControl over the statutory DPA Title III account, the DPA Fund, is a potential issue. Currently, Title III appropriations are made to the DPA Purchases (DPAP) account, which serves the DPA Fund\u2019s statutory role\u2014a fund for Title III activities that does not expire (a \u201cno-year\u201d fund), capped at $750 million annually. According to Sec. 304 of the statute, and Sec. 309 of E.O. 13603, DOD manages the DPA Fund, which is available to support Title III activities across government. However, according to some congressional offices, certain DOD officials interpret DPAP appropriations\u2014including the $1 billion appropriated in the Coronavirus Aid, Relief, and Economic Security (CARES) Act\u2014as available at DOD\u2019s sole discretion. Being the fund manager and possessing the only standing Title III program in government, the DPA Fund has functioned as an exclusive DOD account despite being technically available to other agencies. As a result, notwithstanding its statutory and administratively-defined role, DOD may require further guidance to perform its custodial obligations to make DPAP funds available to the government as a whole in emergency situations. \nThe Administration has exercised DPA\u2019s anti-hoarding/price gouging provisions to make arrests and seize goods for redistribution. However, the DPA does not define an \u201cexcess of prevailing market price\u201d or include operational standards on when and how these provisions may be used. \nFEMA announced the existence of DPA rated orders on April 14, but did not include details. While orders matching FEMA\u2019s description were identified in the FPDS, there were discrepancies in the dates. There is no statutory requirement for DPA actions to be reported in FPDS or elsewhere. \nThe USDA\u2019s May 5 letters reference DPA authorities to reopen and ensure production in meat processing facilities, which could be interpreted to supersede more stringent state directives. However, USDA statements do not specify the operative DPA authorities in its policy. The agency also did not state whether CDC/OSHA guidance is intended to \u201cpreempt\u201d state guidance, and what DPA authorities support that interpretation. For a legal analysis of E.O. 13917, see CRS Legal Sidebar LSB10456.\nThe E.O. delegating Title III authorities to DFC was issued as part of the Administration\u2019s broader policy to expand national stockpiles. However, as an international development agency created in 2019, DFC\u2019s capacity for making domestic DPA investments is unknown.\nPolicy Considerations\nGiven these issues, Congress may wish to consider several policy options:\nCongress may conduct oversight or pursue legislation to obtain clarity over differing interpretations of DPA authorities, such as the use of the DPA fund by DOD vs. other federal agencies; congressional authorization for promulgating DPA regulations; the need for increased DPA reporting and transparency; and parameters for anti-hoarding/price gouging actions.\nCongress may consider creating a centralized office for DPA implementation, reporting, and coordination. The Office of Defense Mobilization, created alongside the DPA in 1950, established executive administrative infrastructure to plan and execute DPA authorities. One current proposal provides for an \u201cexecutive officer\u201d to fulfill this function in a limited, temporary fashion. \nCongress may amend the DPA to expand congressional oversight and involvement in DPA actions, and curtail or constrain presidential discretion in employing DPA authorities outside congressional intent.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN11387", "sha1": "eb0665e2ca41bc7e3009a6ccf85c4b0209361c7a", "filename": "files/20200515_IN11387_eb0665e2ca41bc7e3009a6ccf85c4b0209361c7a.html", "images": {} } ], "topics": [] }, { "source_dir": "crsreports.congress.gov", "title": "COVID-19: Defense Production Act (DPA) Developments and Issues for Congress", "retrieved": "2020-09-07T12:23:04.134976", "id": "IN11387_1_2020-05-13", "formats": [ { "filename": "files/2020-05-13_IN11387_9e43c6b499fb5e26abfec67eca2d54f660fcafce.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/IN/IN11387/1", "sha1": "9e43c6b499fb5e26abfec67eca2d54f660fcafce" }, { "format": "HTML", "filename": "files/2020-05-13_IN11387_9e43c6b499fb5e26abfec67eca2d54f660fcafce.html" } ], "date": "2020-05-13", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "IN", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=IN11387", "type": "CRS Insight" } ], "topics": [ "American Law", "Appropriations", "CRS Insights" ] }