Some good news in the midst of the giant bailouts ($50 billion for Warren Buffett and his airline industry), there are some actual productive moves beyond the usual political pork.
Invoking the Defense Production Act is an important prerequisite for actually getting things done.
President Trump announced on Wednesday that he will be invoking the Defense Production Act in an effort to help the private sector ramp-up manufacturing and distribution of emergency medical supplies and equipment amid the coronavirus pandemic.
The act, which was first enacted in 1950 as a response to the Korean War and has since been re-invoked more than 50 times since, will streamline production of medical supplies to help the country battle the coronavirus pandemic and require businesses to sign contracts or fulfill orders deemed necessary for national defense.
Essentially some red tape gets cut. Here’s a deeper dive for contractors.
Although the headline-grabbing authorities in the DPA are those which could be used to control domestic resources and production capabilities, the DPA also provides for several additional authorities which can provide encouragement and funding to develop and promote critical national infrastructure.
Priorities. The executive branch may apply a priority rating to its contracts, which would require them to be prioritized over any competing obligations, including prior commitments to commercial partners.
Essentially, government contracts take priority. There are legitimate concerns to have here.
Allocations. The executive branch may allocate or control materials, services, and facilities in any manner deemed necessary or appropriate to promote the national defense. This authority is quite broad and can even cover technical data that may be necessary for technology transfer.
Loan Guarantees and Direct Loan. The President may issue loan guarantees and direct loans to reduce current or projected shortfalls of industrial resources, critical technology items, or essential materials needed for national defense purposes.
So it’s helpful, but not an overwhelming solution. It’s just a sensible step. The DPA has been invoked on quite a few occasions.