Federal News Network: New HHS buying authorities among options available under Defense Production Act

“President Donald Trump’s executive order this week invoking the Defense Production Act gave the Department of Health and Human Services legal authorities it normally does not have to reorient domestic supply chains toward critical public health needs.”

“But the DPA itself contains a wide range of authorities, some of which agencies could use prior to the order, and that could come into play during the COVID-19 pandemic. Some are already employed on a semi-routine basis by the Defense Department and other agencies.”

“This week’s order specifically involves Title I of the DPA, which lets the government reprioritize its own contracts with suppliers, and, to the extent those procurements involve competing demands from the private sector, and move itself to the front of the line, said Jerry McGinn, the executive director of the Center for Government Contracting at George Mason University.”

“’That’s done through the Defense Prioritization and Allocation System, which is run by the Department of Commerce. And several agencies — the Defense Department, Homeland Security and others — already had that authority directly delegated to them, so they can essentially do that contract rating themselves,’ said McGinn, who formerly managed DoD’s use of the DPA as a senior official in the Office of Manufacturing and Industrial Base Policy.”

“’HHS did not have that prior to the President’s executive order. So essentially, what the executive order did was give HHS that authority so they can prioritize contracts in this really crazy time that we’re in, instead of having sort of a middleman with the Department of Commerce,’ he said…”

“But another much more commonly-used portion of the DPA — Title III — very well may play a role in the current crisis. That portion of the law is focused primarily on government intervention in the supply chain to make sure critical items can be produced domestically…”

“’For this situation, it would be things like creating incentives to modify existing plants to increase production capabilities,’ McGinn said. ‘That’s where a Title III grant or a loan or purchase commitment could come in. The challenge is those have traditionally taken months to develop, so it’s not an immediate fix, but it allows you to build more capacity. Some of the pharmaceutical industry’s supply chain is now sole-sourced in China. So you can use the Defense Production Act to help rebuild those industrial capacities in the U.S…’” Read the full article here.

Source: New HHS buying authorities among options available under Defense Production Act – By Jared Serbu, March 20, 2020. Federal News Network.



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