Defense Production Act(DPA)
A law authorizing the President to require preferential acceptance of defense contracts, allocate materials, and expand industrial capacity for national defense.
Overview
The Defense Production Act (DPA) of 1950 is a federal law that grants the President broad authorities to ensure the timely availability of critical materials and industrial capacity for national defense. The DPA allows the government to prioritize defense contracts over commercial orders (Title I), provide financial incentives to expand production capacity (Title III), and coordinate voluntary agreements with industry (Title VII).
Why It Matters in GovCon
DPA authorities can directly affect contractors in multiple ways. A DPA-rated order (DO or DX rating) requires contractors to prioritize that order over unrated commercial work. During supply chain disruptions, DPA Title III investments can create new production capacity that reshapes competitive dynamics. Understanding DPA ratings is essential for manufacturers and suppliers who receive rated orders.
Key Details
- Priority Ratings: DO (priority) and DX (highest priority) ratings require contractors to accept and prioritize rated orders ahead of unrated work.
- Title I: Authorizes the President to require preferential acceptance and performance of contracts supporting national defense.
- Title III: Provides loans, loan guarantees, and purchase commitments to expand domestic production capacity for critical materials.
- DPAS: The Defense Priorities and Allocations System (DPAS) implements DPA Title I through regulations in 15 CFR 700.
- Broad Definition: "National defense" under the DPA includes military, energy, homeland security, and critical infrastructure needs.
Related Terms
- Defense Industrial Base (DIB)
- Defense Priorities and Allocations System (DPAS)
- National Security
- Supply Chain
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