The Defense Production Act of 1950 (“DPA”) remains one of the most powerful yet underutilized tools in the federal government’s arsenal for mobilizing private industry during national emergencies. For in-house counsel, understanding the DPA’s scope, implications, and compliance requirements is essential — not only for crisis response but for strategic business planning in an increasingly volatile global environment.
Historical Context and Modern Relevance
Originally enacted during the Korean War, the DPA has evolved far beyond its wartime origins. The COVID-19 pandemic marked a watershed moment for DPA implementation, with the federal government invoking the act over 100 times to prioritize production of medical supplies, vaccines, and critical materials. This unprecedented peacetime usage signals a new reality: the DPA is no longer dormant legislation reserved for military conflicts but an active policy instrument for addressing supply chain vulnerabilities and economic security threats.
Recent geopolitical tensions, climate-related disasters, and cybersecurity incidents have further expanded the government’s willingness to deploy DPA authorities. In-house counsel must recognize that any company involved in critical supply chains — from semiconductors to renewable energy components — could find itself subject to DPA obligations with little advance notice.
Core Authorities and Legal Framework
The DPA grants the president three primary categories of authority, each with distinct legal implications for private companies1:
Title I: Priorities and Allocations empowers the government to require companies to prioritize and accept contracts for materials, services, or facilities deemed necessary for national defense. This authority extends beyond traditional military applications to include energy production, food resources, health resources, transportation, and telecommunications. When a company receives a DPA priority rating, it must accept the rated order and fill it before non-rated orders, potentially disrupting existing commercial relationships and supply chain commitments.
Title III: Production Expansion authorizes government investment in industrial capacity through loans, loan guarantees, direct purchases, and purchase commitments. While this can provide significant business opportunities, it also creates ongoing compliance obligations and potential restrictions on facility use or technology transfer.
Title VII: General Provisions include broad authorities for information gathering, voluntary agreements among competitors, and emergency preparedness measures. The information-gathering provisions are particularly significant, as they can compel companies to provide detailed data about production capabilities, supply chains, and business operations.
Practical Recommendations for Compliance Obligations and Risk Assessment
Companies subject to DPA orders must navigate complex compliance requirements that can conflict with existing contractual obligations, antitrust laws, and international trade regulations. The Federal Acquisition Regulation and Defense Priorities and Allocations System regulations provide the operational framework. Enforcement can be severe — violations carry potential penalties of up to $10,000, one year in prison, or both.
In-house counsel should take several proactive steps to prepare for potential DPA involvement:
Develop Internal Protocols: Establish clear procedures for recognizing, processing, and tracking DPA orders. Designate responsible personnel and ensure they understand the legal requirements and business implications.
Review Contracts: Examine existing supply agreements and customer contracts for force majeure provisions, government compliance clauses, and priority order language. Consider adding specific DPA provisions to standard contract templates.
Assess Supply Chain Vulnerability: Map critical suppliers and identify potential chokepoints where DPA orders could disrupt operations. Develop alternative sourcing strategies where feasible.
Monitor Government Priorities: Stay informed about evolving national security priorities and supply chain concerns. Participate in relevant industry associations and government outreach programs.
Coordinate with Other Legal Areas: Ensure DPA compliance strategies are integrated with export control, antitrust, government contracts, and international trade legal functions.
Looking Forward
For in-house counsel, preparation is key. Companies that develop robust DPA compliance capabilities and strategic frameworks will be better positioned to navigate government requirements while minimizing business disruption. Companies that ignore authorities until an order arrives may find themselves struggling to meet legal obligations while protecting commercial interests.
[1] There were originally seven separate titles in 1950, but four have expired or been repealed.
