Ramping up production of emergency medical supplies through cajoling is more effective than ordering the private sector to do it, say experts, as the Defense Department begins using Defense Production Act, or DPA, measures to meet emergency medical supply needs.
“The 35,000 contracting officers that the Department of Defense has and relationships they have are allowing us to do this quicker,” National Defense Industrial Association CEO Hawk Carlisle told the Washington Examiner.
Carlisle said many of the association’s 1,700 members are dual-hatted, manufacturing for government and commercial needs, and that the DOD has standing contracts that the Department of Health and Human Services and the Federal Emergency Management Agency don’t have.
“Money is a fairly powerful incentive,” added the Heritage Foundation’s Center for National Defense Director Thomas Spoehr, who called the “self-selecting” process of waiting for companies to step up much more efficient. “These companies, at this point, rather than being directed by a White House order, are doing all they can to ramp up production.”
President Trump reversed course Friday and ordered GM to manufacture ventilators. The president has been facing criticism for not forcing companies to make medical supplies. The DOD, HHS, and FEMA have already used parts of the act’s Title I and Title III effectively, Spoehr and Carlisle said.
“That is a much better strategy than somebody trying to figure this out from an office building in Washington, D.C.,” Spoehr said. “Typically, when we use the Defense Production Act in the Defense Department, it takes them months to figure out exactly what’s the right course of action, what’s the right company, the right amount of money.”
Spoehr explained that Title I gives the administration the ability to prioritize contracts, essentially telling companies they have to fill orders to hard-hit areas first. Title I also lets the government allocate raw materials to the companies that need them most.
“So, you can tell them, ‘Ignore all your other customers. I want you to send it here,’” he said.
Title I authority is not just about ordering companies to produce certain items, Spoehr explained.
Carlisle said Title III allows the government to give money directly to companies so they can increase production capacity or modify it to fit the country’s immediate needs.
“Title III is more about [capital expense] to expand current capability,” he said. “[To] expand a company’s ability to do something or to change to something that’s needed.”
Spoehr said the parts of the DPA already invoked have been critical to meeting the country’s needs quickly.
“Otherwise, there’s no legal mechanism for the government to give money directly to a company like that,” he said.
Spoehr also said just because it’s called the Defense Production Act, that doesn’t mean the DOD has to make the orders.
HHS and FEMA have the authority to sign contracts, but, as Carlisle explained, the DOD already has the relationships and existing contracts.
The coronavirus stimulus package passed by Congress Friday also includes $10 billion for the Pentagon that could be used for purchasing emergency medical supplies.
Jennifer Santos of the DOD’s Office of Industrial Policy said at a briefing Wednesday that the department is already using Title III authorities to inject funding into companies to meet the demand.
“Companies are coming forward,” said Carlisle, who cited 3M and the California-based Cubic Corporation as two examples from his membership.
“There’s a lot that have capability to do defense work but also have the ability to transition with a slight change in their production to a slightly different product,” he added, giving the example of how military uniform makers can transition to make masks and personal protective equipment.
Part of that is through a streamlined process and a popular defense acronym JATF, or joint acquisition task force, that was stood up by Undersecretary of Defense for Acquisition and Sustainment Ellen Lord a week ago to field FEMA and HHS demand signals.
Spoehr said the task force is “super helpful” because it takes the vast military acquisition process and channels it to one office with representatives from all the services.
“The acquisition of stuff in the military is really decentralized,” he said. “By bringing the different services acquisition representatives together, existing contracts for the supplies that are needed can be identified and added to quickly. Rather than have to negotiate a new agreement, you go right to them and just put money on it.”
