The COVID-19 Pandemic and the Defense Production Act: Government Misuse and Failures

Abstract

The SARS-CoV-2 pandemic, commonly referred to as COVID-19, brought many challenges to the world in 2020, including the acquisition of supplies necessary to respond to the virus, such as ventilators, personal protective equipment (PPE), and N-95 masks. The United States responded by invoking the Defense Production Act (DPA), an act designed to give the executive branch increased control over domestic production during wartime. This Note explores the DPA’s development, history, and usage throughout the COVID-19 pandemic, and assesses ways it can be used more effectively.

I. Introduction

On January 31, 2020, the World Health Organization (WHO) declared the SARS-CoV-2 coronavirus (COVID-19) a public health emergency. On March 13, 2020, President Donald Trump declared a national emergency in response to the pandemic. That same day, members of Congress called on Trump to invoke the Defense Production Act (DPA). On March 18, Trump, through Executive Order 13909, formally invoked the DPA to prioritize and allocate health and medical resources to respond to COVID-19. In a March 24 tweet, Trump clarified that the DPA had not actually been given effect, stating that “[t]he [DPA] is in full force, but [we] haven’t had to use it.” Following mounting political pressure, Trump first utilized the DPA’s powers in a March 27 memorandum, requiring “General Motors Company (GM) to accept, perform, and prioritize contracts or orders” for ventilators. However, analysts have questioned Trump’s use of the DPA throughout the COVID-19 pandemic, noting that he did not use it as expansively as he could have.

Rooted in the War Powers Acts of World War II, the DPA grants the President “a broad set of authorities to influence domestic industry in the interest of national defense.” The scope of “national defense” encompasses the procurement of supplies necessary to fight COVID-19. However, at various periods throughout the pandemic, the federal government failed to obtain personal protective equipment (PPE), ventilators, and other items in a quantity sufficient and in a manner timely enough to effectively combat the spread of the virus. Going forward, the federal government should use the DPA’s Title I allocations power to ensure that pandemic hotspots are receiving more materials than lesser-hit areas, the DPA’s Title III incentives to make companies’ conversion to pandemic production more economical, and the DPA’s Title VII voluntary agreements to encourage industry-wide production. In addition, there should be increased oversight over and transparency into spending under the DPA to truly understand how it is being used.

First, this Note explores the historical context of the DPA by examining its predecessors, the First and Second Wars Powers Act, in Part II.A. After laying the foundation for the DPA, this Note traces the DPA’s evolution from its original iteration to its present form in Part II.B. This Note then proceeds to break down each of the DPA’s titles by their authorizations, examining their respective uses and focusing on their recent invocations in Part II.C. An overall discussion of the deficiencies impacting the effectiveness of the DPA will then be discussed in Part III, including the DPA’s relative inefficiency and the federal government’s unpreparedness for the pandemic, both of which were compounded by the lack of oversight of federal emergency spending. Lastly, in Part IV, this Note will propose how the government can use the DPA’s current incentives and voluntary agreements more effectively.

II. Background

A. History and Context

1. World War II and the Automobile Industry

The DPA has roots in the First and Second War Powers Acts of 1941 and 1942. President Franklin D. Roosevelt noted, in a May 1940 address to Congress, that countries unprepared for war are overrun by the enemy. He challenged the United States to produce almost 50,000 planes in the event that it became involved in the emerging war. Roosevelt requested congressional appropriation to “procure the essential equipment of all kinds for a larger and thoroughly rounded-out Army” as well as to “increase production facilities for everything needed for the Army and Navy for national defense.” Roosevelt also recognized the major role that the automobile industry would play in the war effort. Automobile manufacturers were emerging from a decade that had brought unprecedented technological innovation; the “Big Three” automobile manufacturers—Ford, General Motors (GM), and Chrysler—had enjoyed continued success despite the Great Depression. Accordingly, these businesses would not have much of an incentive to abandon their typical business to convert to wartime production.

On December 18, 1941, Congress approved the First War Powers Act, which enabled the President to “make such redistribution of functions among executive agencies as he may deem necessary . . . for the national security and defense” and to authorize agencies involved in the war effort to “enter into contracts . . . without regard to the provision of law . . . whenever he deems such action would facilitate the prosecution of the war.” In January 1942, the War Production Board, created by Executive Order 9024 to “exercise general direction over the war procurement,” halted production of all non-military vehicles, effectively forcing the automobile industry to convert to war production. GM, for example, was compelled by the Board to begin producing, among other items, shells, aircraft engines, propellers, bombers, and machine guns, becoming the largest military contractor during the war. War production rose from two percent of the gross national product in 1939 to forty-four percent in 1944. This production was a critical component of the war effort, with Joseph Stalin, leader of the Soviet Union, remarking that “without American machines, the United Nations never could have won the war.”

The Second War Powers Act, passed in March 1942, further strengthened the executive branch’s powers granted by the First War Powers Act. Together, the First and Second War Powers Act laid the groundwork for expanded executive authority in times of war.

2. The DPA and President Truman

Following World War II, much of the authority from the War Powers Acts lapsed and production had returned to civilian goods. However, at the start of the Korean War in 1950, the United States once again found itself unprepared to support American combat. President Harry Truman recognized an immediate need to increase military strength and preparedness and advocated for economic measures including increasing the production of goods needed for national defense and the adoption of measures to prevent inflation in order to divert production for defense purposes. Two months after his remarks, Congress passed the DPA, providing the President authority to increase defense production and regulate the civilian economy.

In the following Part of this Note, each title of the DPA will be further explored, including the seven original titles.

B. The Evolution of the DPA

1. Changes in the DPA’s Titles

The DPA had seven titles when adopted in 1950. Title I, Priorities and Allocations, granted the President the authority to demand priority for defense-related products. Title II, Authority to Requisition, granted authority to requisition materials, property, and facilities for national defense. Title III, Expansion of Productive Capacity and Supply, granted authority to provide incentives to develop, modernize, and expand defense productive capacity. Title IV, Price and Wage Stabilization, granted authority to ration consumer goods, solicit voluntary labor and industry cooperation on wage and price stability, and fix wage and price ceilings. Title V, Settlement of Labor Disputes, granted authority to force settlement of disputes affecting national defense. Title VI, Control of Consumer and Real Estate Credit, authorized the exercise of consumer credit controls to regulate real estate construction credit and loans. Title VII, General Provisions, established antitrust protection for voluntary industry agreements serving defense interests.

The DPA contains a sunset provision requiring periodic congressional reauthorization. Over the seventy years since its original passage, Congress has reauthorized the DPA over fifty times. During this period, there have been numerous alterations to the DPA. In 1951, Congress passed three amendments to the DPA, the repeal of which Truman called for repeatedly, without success. In 1953, after President Dwight D. Eisenhower’s election, Titles II, IV, V, and VI were terminated when Congress allowed them to lapse. This pause left only Titles I, III, and VII in effect, which remains the composition of the DPA today. The most recent reauthorization in fiscal year 2019 extended the DPA through September 30, 2025.

2. Expansion of the Scope of “National Defense”

One of the most significant changes in the DPA since its inception has been the expansion of the scope of “national defense.” Originally, “national defense” referred to “the operations and activities of the armed forces, the Atomic Energy Commission, or any other department or agency directly or indirectly and substantially concerned with the national defense . . . .” Essentially, the DPA’s use had been limited to the United States’ military preparedness and capabilities.

Now, “national defense” encompasses “military and energy production or construction, military or critical infrastructure assistance to any foreign nation, homeland security, stockpiling, space . . . emergency preparedness activities . . . and critical infrastructure protection and restoration.” This expansion has allowed the DPA to be used more broadly than Congress originally intended. Rather than being used only in the context of war, the DPA can now be applied to a global health emergency.

C. The DPA’s Titles Today

1. Title I: Priorities and Allocations

a. Authorities

Section 101(a) of Title I has two powers: (1) the priorities power, which authorizes the President to “require that performance under contracts or orders which [s]he deems necessary or appropriate to promote the national defense shall take priority”; and (2) the allocations power, which grants the President an ability “to allocate materials, services, and facilities in such manner, upon such conditions, and to such extent as [s]he shall deem necessary or appropriate to promote the national defense.” The priority power is concerned with timeliness, while the allocations power deals with distribution. Section 101(c) was added to expand the DPA’s power in relation to domestic energy supplies, placing this area under the DPA’s scope of “national defense.” Implementation of Title I authorities is governed by the Federal Priorities and Allocations System (FPAS), a system of regulations that establishes standards and procedures for the Departments of Agriculture, Defense, Energy, Health and Human Services (HHS), and Transportation.

In 2012, President Barack Obama issued an Executive Order onNational Defense Resource Preparedness, which delegated authority under DPA Title I to the Secretaries of Agriculture, Commerce, Defense, Energy, HHS, and Transportation. It is significant to note the delegation of authority to the HHS Secretary with respect to health resources. Health resources have been defined as “drugs, biological products, medical devices, materials, facilities, health supplies, services and equipment required to diagnose, mitigate or prevent the impairment of, improve, treat, cure, or restore the physical or mental health conditions of the population.”

Additionally, section 104 of the Executive Order grants the National Security Council and Homeland Security Council, in conjunction with the National Economic Council, the joint power to “serve as the integrated policymaking forum for consideration and formulation of national defense resource preparedness policy.”

b. Usage

The priority authorization is frequently used by the Department of Defense (DoD), which places approximately 300,000 “rated” orders under the DPA per year. A rated order is one placed in support of a national defense program, pursuant to DPA section 101(a). Rated orders are distinguishable from unrated orders by four traits: (1) a priority rating; (2) specific delivery quantities and dates; (3) a statement that identifies the governing federal regulation; and (4) the signature of a contracting officer certifying the rated order. The Department of Commerce (Commerce) has delegated authority to the DoD to place priority ratings on its contracts in accordance with the Defense Priorities and Allocations System (DPAS). DPAS is a regulation administered by Commerce that implements the priorities and allocations authorities of Title I with respect to industrial resources to ensure their timely availability. For example, rated orders have been used by the DoD to prioritize delivery of ballistic material for body armor for the Army and Marine Corps, and by the Army Corps of Engineers to procure water in advance of or during emergency events.

The Federal Emergency Management Agency (FEMA) has also invoked Title I in the aftermath of disasters to provide disaster relief efforts. Following the 2017 hurricane season, FEMA invoked Title I priority power for “manufactured housing units, food and bottled water, and the restoration of electrical transmission and distribution systems in Puerto Rico.”

Section 101(c) was used during the 2001 California energy crisis, when gas suppliers of Pacific Gas & Electric (PG&E), worried about their credit-worthiness, halted their sale of gas and created the possibility of a gas shortage. On the last day of his presidency, President Bill Clinton declared the situation a natural gas emergency, allowing the invocation of the DPA. Under DPA Title I, the Secretary of Energy ordered each of PG&E’s suppliers to continue selling their gas. The emergency order was extended upon President George W. Bush’s inauguration.

While the priorities power is frequently used, the allocations power has not been used since the end of the Cold War.

2. Title III: Expansion of Productive Capacity and Supply

a. Authorities

Title III authorizes the use of economic incentives to expand production and supply of critical goods. Under Executive Order 13603, Title III authority is delegated to the heads of agencies engaged in procurement for the national defense. Title III also creates a Treasury account, known as the Defense Production Act Fund, which is used for the Secretary of Defense’s Title III actions.

Sections 301 and 302 of Title III authorize the usage of loan guarantees and direct loans for private businesses “to help [private businesses] create, maintain, expedite, expand, protect, or restore production and deliveries or services essential to the national defense.” These powers have unique statutory requirements: the loans must be included in appropriations by Congress and, if a loan is over $50 million, it must be authorized by an act of Congress. Further, the resource must be essential to national defense, meaning that, without presidential action, the industry cannot reasonably be expected to provide the capability for the needed resource in a timely manner. Purchase commitments pursuant to this section are the most cost effective, expedient, and practical.

In practice, only section 303 of the DPA—“Other Presidential Action Authorized”—is ever used, as no mechanisms are currently in place to provide loans or loan guarantees under sections 301 or 302. The President can provide economic incentives to secure industrial capabilities to meet the national defense requirements through direct purchases and purchase commitments.

b. Usage

Generally, the DoD has been the sole user of the DPA’s Title III authority and capabilities. Other departments occasionally partner with the DoD to sponsor individual projects. However, presidential administrations have also been known to utilize Title III, sometimes to further pet projects. In 2012, President Obama invoked Title III to advance the funding of biofuel research as part of a plan to reduce oil imports and develop a domestic industrial capacity and supply of biofuel. From 2017 to 2020, President Trump used Title III twenty-two times, often to “strengthen the domestic industrial base and supply chain for rare earth elements” needed to build lasers, jet engines, and armored vehicles.

3. Title VII: General Provisions

a. Authorities

Title VII is the general provision title; along with including key definitions of DPA terms, it grants the President several distinct authorities. It is important to note that this title includes the powers to accord special preferences for small businesses and to establish voluntary agreements with private industries that would normally be subject to American antitrust laws. The President must first determine that “a condition exists which may pose a direct threat to the national defense” before approving this kind of agreement. Additional powers include the Exon-Florio Amendment, which authorizes the President to suspend or prohibit foreign acquisitions, mergers, or takeovers of U.S. companies that pose a threat to national security. Usage of this title may require extensive information from private industries; therefore, Title VII gives the President authority to obtain information from private industries for the enforcement of the title’s powers.

b. Usage

Title VII’s usage record is not as extensive as those of the other two titles. In 2011, President Obama used the power to obtain information from private industries to compel telecommunication companies to reveal confidential information regarding foreign-made hardware and software on companies’ networks to combat Chinese cyberespionage. This power is most commonly associated with Commerce’s Bureau of Industry and Security “industrial base assessments.”

D. The DPA and COVID-19

Faced with a once-in-a-century pandemic, in 2020, the government turned to the DPA to address production of PPE and other necessities. A lack of oversight has made it difficult to determine exactly how the DPA has been used in response to COVID-19. This issue applies equally to the Trump and Biden administrations, but has been compounded by the Trump administration’s tendency for hyperbole. Regardless, this Note will address how both administrations used the DPA during the COVID-19 pandemic.

1. The Trump Administration’s Use of the DPA

A report by the White House Office of Trade and Manufacturing Policy noted that from March to August 2020, seventy-eight DPA-related actions were taken, including nineteen Title I actions, thirty-five Title III actions, and one Title VII action.

Title I’s priority power was first used in March 2020 to require GM to produce ventilators. It was used again in April 2020 to acquire N-95 masks from 3M. Most of these Title I actions were taken by HHS for an increase in ventilators, and only one action was taken by another agency for priority ratings for PPE. While the volume of DPA actions increased during the pandemic, from April to September 2020, there were no new DPA Title I prioritization orders for health articles.

Trump used Title III to provide financial assistance that would “ensure the timely production” of medical equipment. The DoD first sought the use of such financial assistance in late April 2020 to award $133 million to 3M, O&M Halyard, and Honeywell to produce N-95 masks. The DoD again invoked Title III in May 2020, awarding $138 million to support COVID-19 vaccine supply chain development. Additionally, Title III has been invoked during the pandemic for shipbuilding, aviation, and textile defense industrial bases, as well as other non-COVID-19 procurement purposes. Most direct Title III funding throughout the pandemic has been awarded to the defense industrial base.

In August 2020, FEMA utilized Title VII to enter into a voluntary agreement—titled Manufacture and Distribution of Critical Healthcare Resources—to establish unity of effort between participants and the federal government “for integrated coordination, planning, [and] information sharing.” The agreement was to be implemented through a series of plans of action, with a plan for each aspect of the COVID-19 response. However, as of January 2021, only one plan has been implemented.

Overall, while the Trump administration did use the DPA to respond to the COVID-19 pandemic, including eighteen times in connection to vaccine production, it could have used the Act more efficiently.

2. The Biden Administration’s Use of the DPA

Shortly after his election, President Joe Biden released his administration’s COVID-19 plan. To address the PPE shortage, Biden noted that he would “fully use” the DPA to replenish the Strategic National Stockpile and ensure that its supply exceeds the demands upon it, and to boost vaccine production. President Biden’s “National Strategy for the COVID-19 Response and Pandemic Preparedness” stated a goal of using the DPA to (1) “fill supply shortfalls” for tests, PPE, and vaccines; (2) “address urgent supply gaps by coordinating, monitoring and strengthening supply chains”; (3) “prioritize[e] essential equipment, medications, and protective gear”; and (4) “steer[] the distribution of supplies to areas with the greatest need.” Biden formally invoked the DPA on January 21, 2021, and has consistently stated that he will use the “full” powers of the DPA. The Biden administration also expressed plans to expand the domestic manufacturing of gloves in the U.S. by building plants to make raw materials and the gloves themselves under the DPA.

As of October 2021, most of Biden’s invocations of the DPA have been vaccine related. On February 5, 2021, Tim Manning, the National Supply Chain Coordinator for the U.S. COVID-19 Response, announced the plan to expand the priority ratings on Pfizer’s supply contracts to get Pfizer more equipment. Manning later elaborated on Twitter, noting that “[the federal government has] used the DPA to ensure we have access to all needed supplies with many US companies.” On March 2, 2021, the White House announced a collaboration between Merck and Johnson & Johnson (J&J) to expand vaccine production. The DPA was invoked to provide funding for Merck to equip its facilities to manufacture the J&J vaccine and to expedite materials needed for vaccine production. In September 2021, Biden released the “Path Out of the Pandemic” Action Plan that noted an intent to use the DPA to “accelerate the production of rapid COVID-19 tests,” including at-home tests, with a goal of quadrupling the number of tests available in the United States within two months.

Additionally, in May 2021, the Biden administration announced that the DPA Loan Program, a Title III function, would only be used for direct COVID-19 response going forward, with applications for nonmedical projects being sent to alternative government programs.

III. Recent Ineffective Use of the DPA During Pandemics

Two major and interrelated problems arose during the COVID-19 pandemic: (1) a lack of preparedness; and (2) ineffective DPA usage.

A. Failure to Prepare and Respond

1. Prior Administrations’ Pandemic Preparation

Pandemic preparation has spanned various presidential administrations. In 1998, Clinton, inspired by Richard Preston’s 1997 novel, The Cobra Event, began to think about the United States’ preparation for an infectious disease outbreak. At the time, there were stockpiles of antibiotics for military troops but not for civilians. Clinton directed $51 million to the Centers for Disease Control and Prevention (CDC) to stockpile pharmaceuticals and vaccines. This action eventually became the Strategic National Stockpile (stockpile).

In 2003, President George W. Bush placed the stockpile under the management of the HHS and Department of Homeland Security (DHS) and expanded it to include medical equipment. In addition, President Bush ordered the research and testing of a social distancing plan in case of a pandemic. This plan was developed in a 2007 HHS and CDC document entitled “Interim Pre-Pandemic Planning Guidance: Community Strategy for Pandemic Influenza Mitigation in the U.S.” In 2005, Bush, inspired by John M. Barry’s The Great Influenza, recognized the need for a national strategy to deal with a possible pandemic, stating that, because pandemics occur every one hundred years, a pandemic was highly likely to happen either during or after his administration. President Bush noted the need for medical personnel; supplies such as hospital beds, respirator masks, and protective equipment; and the development of vaccines. Bush set three goals specifically for flu pandemic preparation: (1) increasing the ability to detect outbreaks; (2) stockpiling vaccines; and (3) having emergency plans in place. Achieving these goals would require over $7 billion from Congress. In 2006, the Bush administration issued the National Strategy for Pandemic Influenza Implementation Plan.

During the Obama administration, various viral outbreaks requirred use of the stockpile. The Trump administration oft has claimed that the Obama administration left the stockpile depleted. While the stockpile was used during the swine flu crisis and was not replenished, the stockpile was nonetheless valued at $7 billion dollars. It was intended to serve as a first line of defense against a pandemic, rather than the only resource, with additional resources to be obtained through government procurement. In 2016, the Obama administration created a playbook for future administrations on how to respond to infectious diseases. In 2018, the Trump administration received plans for a new mask-creating machine that were a result of the Obama administration’s efforts.

Even with this prior preparation, however, the United States was still not prepared for the next major pandemic. In a 2015 TED talk, Bill Gates warned that, in the next few decades, a “highly infectious virus” was more likely than war to kill over ten million people and that the United States was “not ready for the next epidemic,” but “if we start [preparing] now, we can be.”

2. The Trump Administration and Pandemic Preparation

Many have noted that actions taken by the Trump administration undermined this history of pandemic preparation. For example, in 2017, amid a dispute over its value, the DHS stopped updating its annual models of how pandemics affect the United States’ critical infrastructure. In 2018, Trump disbanded the National Security Council’s Global Health Security and Biodefense unit, which served as a “smoke alarm” for emergencies, resulting in a “sluggish” response to COVID-19. In 2019, Trump stopped funding PREDICT, a pandemic early-warning program launched in 2009 aimed at training scientists to detect and respond to threats. From the beginning of the COVID-19 pandemic, Trump downplayed its severity, saying that “it’s a very small problem in [the United States],” and that it would “disappear” like a “miracle,” admittedly because “[he did not want to] create a panic.”

This ineffective preparation forced states to acquire supplies on their own. On March 21, 2020, New York’s then-Governor Andrew Cuomo stated that his administration was “literally scouring the globe” for supplies. Critical shortages occurred because of inadequate coordinated efforts, forcing hospitals and state and local governments to compete for medical supplies. As states bid individually for necessary supplies, states with smaller economies were disadvantaged as they were continually outbid by states with larger economies and the federal government, which in turn caused prices for supplies to skyrocket. Meanwhile, medical responders on the front line of the pandemic in hospitals improvised with common items like plastic trash bags due to the lack of adequate PPE.

Discussions about using the DPA began as early as February 2020. By the time that Trump announced his intention to invoke the DPA, there was already a shortage of necessary equipment. Even when Trump did invoke the DPA, his use of the Act was “sporadic and relatively narrow,” and efforts to increase domestic production were “fragmented and uncoordinated.”

B. Lack of Oversight

There is an incomplete record of DPA uses during the COVID-19 pandemic due in part to scattered DPA oversight and insufficient reporting. Reporting on DPA usage “remains dispersed among multiple agency sources and appears incomplete.” It is also “not clear under which authorities agencies are undertaking certain DPA-attributed activities.” Additionally, there exists “substantial uncertainty as to agencies’ actions.” Further, “there is no standing requirement for publishing DPA actions.” Little information about Title III projects is made public, and “there is no data field in FPSD-NG—the federal government’s central repository for procurement actions—that identifies when DPA rated contracts have been awarded in response to COVID-19.” These records are supposed to provide the public with insight on DPA usage, but, because records have not been consistently published, it is difficult to for any member of the public to understand the government’s use of the DPA in full.

This lack of data compromises national interests when accompanied by the urgent need for supplies in a pandemic setting. Procurement is more vulnerable to fraud, corruption, and mismanagement when the government must spend more money. For example, without federal coordination in the early phases of the United States’ pandemic response, states were receiving offers directly from unknown suppliers and, out of desperation, bought fraudulent items, resulting in wasted money and unusable products.

IV. Solution: Using the DPA More Effectively

By using various DPA titles and implementing stronger oversight mechanisms, the government can address the issues caused by insufficient preparedness. However, this Note recognizes the existing tension between companies’ good will and government intervention. During the COVID-19 pandemic, some companies began to shift production on their own, without orders under the DPA, raising the question of whether the DPA was necessary if companies would willingly shift production. Some argue that industries should be encouraged to shift production even if the government is forced to buy the product at a higher price, using market value. While this option might be economically viable, it would require a high level of collaboration and altruism within industry sectors. No company would want to fully convert to defense production because it would want to maintain some output and revenue for when the government orders are completed; this arrangement applies in the opposite scenario as well, when regular orders are completed and only government orders remain. However, it would take a significant shift in industry production for this model of non-government intervention to work—indeed, most companies in an industry would need to be on board with shifting their production. In an emergency such as COVID-19, the lives of millions should not rely on corporations’ good will; instead, the government must take direct action.

A. Effective Uses of the DPA

Poor pandemic preparedness has resulted in a lack of supplies to address the COVID-19 pandemic, which has led to competition between states and the federal government to procure these limited supplies. The lack of a national strategy to handle the COVID-19 pandemic has shown a clear lack of adequate pandemic preparation by the federal government. Future administrations should consider adopting proactive rather than reactive measures to utilize the DPA effectively in combating potential future outbreaks of infectious disease. The DPA’s current titles can assist in this goal.

1. Using the Allocation and Priorities Powers to Their Full Effect

First, the federal government should utilize the full force of Title I. The federal government would benefit from using the priority powers to ensure production of necessary items. Title I’s allocations power, which has not been used since the Cold War, should be used to allocate materials to states and hospitals with the direst needs, thereby mitigating competition problems. The size of a state’s economy would not hinder its ability to respond to COVID-19 because, if a small-economy state were to experience a surge in COVID-19 cases, supplies would be directed that way and the state would not have to compete against larger states. In tandem with the priority power, which would work to increase production, the allocations power would ensure that hard-hit communities would be recognized and prioritized based upon their needs.

2. Expanding Domestic Manufacturing Capacities

Title III should be used to authorize incentives to expand domestic capacity for manufacturing items to meet the needs of the COVID-19 pandemic. Purchase commitments issued pursuant to Title III would allow the government to commit to buying a certain number of supplies, thereby ensuring that companies can produce these supplies without fear that their production supply will become superfluous and find themselves out of the market of their former industry. This guaranteed demand would reduce the risk of industries making their own investments. If the government commits too much, the surplus can go into the stockpile, thereby functioning as proactive preparation for the next health crisis. If the government signals that they will purchase supplies at prices higher than market rates for a certain period of time, production will quickly shift to address the issue of imminent need. Sections 301 and 302 of the DPA can be used to provide loans and loan guarantees to contractors producing necessary medical supplies when credit may be otherwise unavailable in the private market.

3. Working More Collaboratively with the Private Sector

Under Title VII, the President can establish voluntary agreements with the private sector to coordinate industry production, turning a competitive market into a more cooperative one. The government can most effectively mitigate harm resulting from a pandemic if Title VIII is implemented to improve vaccine production. Vaccines can be seen as trade secrets and are thus protected. Companies that own the rights to produce the vaccines, however, can choose to license their trade secrets to enable more companies to have the ability to produce vaccines. The DPA would provide these businesses protection from antitrust liability, thereby staving off legal ramifications for sharing so-called “trade secrets.” Aside from vaccine production, the government can also waive products liability to increase domestic production, encouraging more market entry and allowing businesses to increase production without fear of possible future suits.

B. Increasing DPA Oversight

Due to a lack of oversight and data reporting, the exact extent of the DPA’s use during the COVID-19 pandemic is unclear. To increase oversight, Congress should expand executive branch reporting and notification requirements on the use of DPA authorities, such as requiring formal notification of Congress prior to or after DPA use. This expansion would, in turn, create a more complete record, which should be made publicly available. Because numerous agencies have DPA powers, Congress can broaden oversight responsibilities to include all relevant committees and enhance communication and coordination between these committees. The Government Accountability Office offers two recommendations. First, the Office of Management and Budget can “direct the Office of Federal Procurement Policy to develop appropriate agency reporting guidance to provide greater transparency on the use of DPA Title I authorities for COVID-19 purposes.” Second, the HHS Assistant Secretary for Preparedness and Response “should identify how DPA and similar actions will be used to increase domestic production of medical supplies going forward.” If we have a clearer understanding of how the DPA has been used, we will be able to better assess its effectiveness.

V. Conclusion

The DPA is a powerful tool at the President’s disposal that has been invoked during the COVID-19 pandemic to facilitate the production and distribution of supplies for the national defense. This Note advocates usage of the DPA as an extraordinary measure for extraordinary circumstances and acknowledges that questions will arise as to how the market will respond. However, problems such as a failure to prepare for the pandemic and a lack of oversight have compounded, causing the DPA not to live up to its full potential. This Note has set forth ways in which the various titles of the DPA should be used to incentivize pandemic production and how Congress can implement increased oversight requirements to improve DPA reporting.