The Defense Department has announced its first use of Defense Production Act Title III authorities in the coronavirus response, injecting capital into private industries to ramp up production capacity to produce 39 million N95 masks over the next 90 days.
“The Department of Defense received approval from the White House Task Force to execute the first DPA Title 3 project responding to COVID-19,” Defense Department spokesman Lt. Col. Mike Andrews said in a statement on Saturday.
The $133 million award for undisclosed companies will come from the $1 billion Coronavirus Relief Bill rescue package and has been in the works since at least March 20.
That’s when the Defense Department’s Under Secretary of Defense for Acquisition and Sustainment Ellen Lord set up a “joint acquisition task force” to meet emergency demand signals from the Federal Emergency Management Agency and the Department of Health and Human Services.
At the time, Lord said her office was already negotiating with existing defense contractors to provide loans, grants, and “long-lead funding” to increase the capacity to produce things such as ventilators, masks, swabs, and coronavirus test kits.
Saturday’s action is the first successful implementation of Title III for the coronavirus.
President Trump came under heavy criticism in March for not invoking Title I, which forces industries to produce the goods needed in an emergency response.
On March 27, Trump changed course when he directed General Motors to make ventilators, saying GM was “wasting time.”
Saturday’s Department of Defense move indicates the administration is still willing to leverage powers that cajole rather than command the private sector to act.
“This is the first use of Title III authority in the COVID crisis to beef up U.S. manufacturing capability,” the Heritage Foundation’s Center for National Defense Director Thomas Spoehr told the Washington Examiner.
Spoehr explained that the Defense Department commonly uses Title III to award tens of millions for needed sectors, such as battery technology.
“Title III is an authority in Defense Production Act that the Pentagon has been using for years,” he said.
Spoehr predicts many more contracts will be in the pipeline and channel through the Defense Department thanks to years of long-standing contractual relationships and a mechanism for implementing Title III.
“This is something DoD has been doing all along,” he said. “HHS and FEMA really never do this.”
The National Defense Industrial Association told the Washington Examiner this is part of the duty of its companies.
“These awards do show that the defense industrial base is forever committed the security of our nation,” NDIA CEO and President Hawk Carlisle said in a statement. “The response to COVID-19 is no exception.”
Andrews said the Defense Department’s action is not a one-off purchase but about establishing a long-term stream of N95 masks.
“The increased production will ensure the U.S. government gets dedicated long term industrial capacity to meet the needs of the nation,” he said.
