In Response to the COVID-19 Pandemic the President of the United States has launched the Defense Production Act. This will dramatically increase the amount of money and resources the government will pump into private industries to ramp up production of vital supplies and services needed to combat COVID-19. The questions and answers below are meant to help educate you on what the Defense Production Act is and how to prepare your company to take advantage of the increased spending during this time.
What is the Defense Production Act?
The Defense Production Act or DPA is the Governments ability under the Presidents authority to mobilize resources and expedite the production of critical items from the private sector. In plain language the DPA gives the president the ability to prioritize medical supply production and other critical items needed to combat COVID-19 by funding private businesses to switch their manufacturing over to critical items.
The Defense Production Act contains THREE major sections:
When was the Defense Production Act created?
The Defense Production Act was originally created in 1950 to establish a large defense mobilization effort for the Korean war but the necessity for it was created even earlier. During World War II the mobilization of civilians at home allowed the Unites States Military to succeed in the war by providing a steady stream of supplies. US Civilians gathered materials, resources, and funds (through buying war bonds) that directly went toward the production of necessary supplies such as Vehicles, Planes, Ships, Tanks, Uniforms, Bullets, Guns, and Equipment. America’s war time production single-handedly lifted millions of Americans out of unemployment, putting them to work in American factories which far outproduced opposing nations. In 1944 alone America produced more airplanes than Japan built in all the war years combined.
How will the Defense Production Act be used to help with the COVID-19 Pandemic?
The Defense Production Act will allow the government to prioritize production of Medical Supplies and Equipment that will prepare our hospitals and medical providers with the tools to fight the pandemic head on. This will allow them to spend money which was previously unavailable with the private sector while simultaneously focusing companies that aren’t generally in the medical supply/equipment industry. The new funds will help companies switch over their equipment and production to help produce the necessary supplies while also funding the hiring of new staff to man these facilities around the clock. This will result in lowering unemployment significantly while also stimulating the economy.
How do I prepare our company for the Defense Production Act?
As this program ramps up the government will begin searching for companies capable of handling these new manufacturing facilities, tasks, and items as well as other contracts that are related to the pandemic such as logistics, shipping, security, janitorial services, cyber security, video production and more. In order to position YOUR company to take advantage of the opportunity, you need to be found when they’re searching. Government officials at the Department of Commerce, Department of Defense, and the Department of Health and Human Services will initially use resources such as the System for Award Management and the Dynamic Small Business Search to identify responsible contractors capable of handling contracts related to the pandemic. They will also use commercial resources such as Google, Bing, and other business focused directories to locate companies for this purpose. Regardless of how they find you, you will need to be registered in the System for Award Management (SAM) to be qualified and paid as a government contractor.
What Departments will oversee the Defense Production Act?
The Department of Commerce is technically in charge of the Defense Production Act. However, the Department of Commerce will likely work hand in hand with not only the Department of Defense but the Department of Health and Human Services due to the nature of the emergency.
The Department of Health and Human Services houses the following agencies that will be vital in the fight to contain and eliminate COVID-19: