From Shortages to Stockpiles: How the Defense Production Act Can Be Used to Save Lives, Make America the Global Arsenal of Public Health, and Address the Security Challenges Ahead

From Shortages to Stockpiles: How the Defense

Production Act Can be Used to Save Lives, Make

America the Global Arsenal of Public Health, and

Address the Security Challenges Ahead

James E. Baker*

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

I. DPA AUTHORITIES AND USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

A. Presidential Pandemic Practice . . . . . . . . . . . . . . . . . . . . . . 162

B. Agency Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

C. Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

1. Reactive Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

2. Episodic Rather than Systemic Use . . . . . . . . . . . . . . . . . 165

3. Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

4. Lingering Federalism Issues . . . . . . . . . . . . . . . . . . . . . . 167

5. Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

6. State Solutions and Workarounds . . . . . . . . . . . . . . . . . . 168

7. Laying the Groundwork for Vaccines . . . . . . . . . . . . . . . 169

II. BOUNDARIES AND SAFEGUARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

III. ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

A. Does Section 101 Require the Acceptance of New Contracts? 172

B. The Scope of the DPA’s Allocation Authority . . . . . . . . . . . . 173

C. Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

D. Does the DPA Provide “Notwithstanding” Authority? . . . . . 175

E. Voluntary Agreements and Plans of Action . . . . . . . . . . . . . . 175

F. Federal Acquisition Regulations and Practice . . . . . . . . . . . . 176

G. Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

H. Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

INTRODUCTION

Decisionmakers often speak of using all the tools of national security to

address a crisis. However, in the context of the COVID-19 pandemic, which as of

* James E. Baker is Director of the Syracuse University Institute for Security Policy and Law and a

Professor at the Syracuse College of Law and the Maxwell School of Citizenship and Public Affairs. He

previously served as a Judge and Chief Judge on the U.S. Court of Appeals for the Armed Forces. As a

career civil servant he served as Legal Adviser and Deputy Legal Adviser to the National Security

Council. Mr. Baker has also served as a Counsel to the President’s Foreign Intelligence Advisory Board

and Oversight Board, an attorney in the State Department, a legislative aide to Sen. Daniel Patrick

Moynihan, and as a Marine Corps infantry off‌icer. © 2020, James E. Baker.

157

June 2020 had taken more than 116,000 American lives and counting, the federal

government has not done so. The Defense Production Act (DPA) is a case in

point. Rather than play to what General Michael Hayden refers to as the edge of

the law (or anywhere near the edge), the federal government has been slow to use

the authority it has to rapidly generate medical supplies at scale. In time, it has

used the Act, but only in an episodic rather than systemic way to replenish the

Strategic National Stockpile (SNS).

1

However, the DPA may yet prove an impor-

tant authority for producing a COVID-19 vaccine at scale, for constructing a

long-term, secure, and independent medical supply chain, and to stimulate the

economy by making America a global arsenal of public health. Moreover, it is

not too soon to identify and incorporate the lessons to learn from how the DPA

was and was not used at the outbreak of the COVID-19 pandemic. These are les-

sons we will need to act upon in preparing for the 21st Century challenges to

come.

The DPA was enacted in 1950 to provide the federal government with author-

ity to systemically mobilize the industrial capacity of the nation to address

national security emergencies. The Act was modeled on World War II laws giv-

ing the president authority to mobilize the industrial might of the nation, making

America “the arsenal of democracy.” With the coming of the Cold War and the

hot war in Korea, Congress renewed many of these authorities addressed to what

was referred to as the Defense Industrial Base (DIB). The 1950 law was written

with Cold War breadth and a 1950s sense of conf‌idence in the institutions of gov-

ernment and the presidency. However, the Act has been reauthorized 53 times, as

recently as 2019. And while initially passed with steel and tanks in mind, the law

now expressly covers “critical infrastructure,” “critical technology,” “national

economic security,” and “national public health and safety.”

2

It also applies to

manmade and natural disasters as well as to wartime contexts.

3

Today, the DPA is primarily used to prioritize Department of Defense (DOD)

contracts and to incentivize the production of defense goods for which there is

otherwise too small a market to generate organic production. However, in the

context of a pandemic, we should not lose sight of the law’s broader purpose to

mobilize the nation’s industrial capacity to meet national security challenges.

This is ref‌lected in the law’s f‌irst congressional policy f‌inding: “the security of

the United States is dependent on the ability of the domestic industrial base to

1. 42 U.S.C. §247d-6b (2018). Originally called the National Pharmaceutical Stockpile, the SNS was

created in 1999 and originally managed by CDC. It was renamed the SNS in 2004 and management over

the SNS was transferred from the CDC to the Department of Health and Human Services (HHS) Off‌ice

of Preparedness and Response in 2018. However, the law states that the Secretary of HHS “shall

maintain a stockpile” in “collaboration” with the Assistant Secretary for Preparedness and Response and

the Director of the CDC and do so in “coordination” with the Secretary of the Department of Homeland

Security (DHS).

2. Defense Production Act of 1950, Pub. L. No. 81-774, §702(2), 64 Stat. 798, 815-16 (1950)

(codif‌ied as amended at 50 U.S.C. §§4501-4568 (2018)). Citations in this article refer to the original

sections of the 1950 DPA.

3. See id. at §702(14).

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