Source: SDSupra.com | K&L Gates | March 17, 2020
In response to the rapid expansion of the coronavirus (“COVID-19”), the Government continues to consider all mechanisms available to cope with the expected widespread supply chain and procurement disruptions. As market demand outpaces supply, the Government faces the major challenge of ensuring that sufficient goods and services are available throughout the country to combat COVID-19. One procurement tool available to the Government is the seldom-used Defense Production Act (“DPA”), which the Department of Commerce (“DOC”) administers.
The DPA, along with its implementing regulations, the Defense Priorities and Allocation System (“DPAS”), authorize the Government to accelerate, resequence, or otherwise change certain contractors’ production lines or service orders in response to national emergencies. In relevant part, the DPA permits certain federal agencies to mandate certain changes, including schedule acceleration and/or quantity increases, to existing federal contracts. Federal agencies granted authority to use the DPA to promote the national defense include the Department of Defense (“DOD”), the Department of Homeland Security (“DHS”), the Department of Energy (“DOE”), the Department of Health and Human Services (“HHS”), the Department of Agriculture (“USDA”), and the Department of Transportation (“DOT”).
As of March 15, 2020, the Administration had not yet invoked the DPA. However, given the Administration’s accelerating response to the COVID-19 situation, use of the DPA tool could be just around the corner. At least one Administration official has stated that the President is considering options under the DPA.