Defense Production Act

The Defense Production Act is a United States law enacted on September 8, 1950, in response to the start of the Korean War. It was part of a broad civil defense and war mobilization effort in the context of the Cold War. Its implementing regulations, the Defense Priorities and Allocation System (DPAS), are located at 15 CFR §§700 to 700.93. The Act has been periodically reauthorized and amended, and remains in force as of 2012.

The Act contains three major sections. The first authorizes the President to require businesses to sign contracts or fulfill orders deemed necessary for national defense. The second authorizes the President to establish mechanisms (such as regulations, orders or agencies) to allocate materials, services and facilities to promote national defense. The third section authorizes the President to control the civilian economy so that scarce and/or critical materials necessary to the national defense effort are available for defense needs.

The Act also authorizes the President to requisition property, force industry to expand production and the supply of basic resources, impose wage and price controls, settle labor disputes, control consumer and real estate credit, establish contractual priorities, and allocate raw materials to aid the national defense.

The President's authority to place contracts under the DPA is the part of the Act most often used by the Department of Defense (DOD) since the 1970s. Most of the other functions of the Act are administered by the Office of Strategic Industries and Economic Security (SIES) in the Bureau of Industry and Security in the Department of Commerce.

Korean War-era usage
The DPA was used during the Korean War to establish a large defense mobilization infrastructure and bureaucracy. Under the authority of the Act, President Harry S. Truman established the Office of Defense Mobilization, instituted wage and price controls, strictly regulated production in heavy industries such as steel and mining, and ordered the dispersal of wartime manufacturing plans across the nation.

The Act also played a vital role in the establishment of the domestic aluminum and titanium industries in the 1950s. Using the Act, DOD provided capital and interest-free loans, and directed mining and manufacturing resources as well as skilled laborers to these two processing industries.

Cold War-era usage
The DPA was used sporadically during the Cold War.

21st century usage
In 2011 it was reported that the law was invoked to force telecommunications companies, under criminal penalties, to provide detailed equipment outlines to the Commerce Department’s Bureau of Industry and Security.

Use as innovation tool
Beginning in the 1980s, DOD began using the contracting and spending provisions of the DPA to provide seed money to develop new technologies. Using the Act, DOD has helped to develop a number of new technologies and materials, including silicon carbide ceramics, indium phosphide and gallium arsenide semiconductors, microwave power tubes, radiation-hardened microelectronics, superconducting wire, and metal composites.