Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Aerospace & Defense newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (May 14, 2020, 5:02 PM EDT) -- President Donald Trump signed an executive order Thursday authorizing a development bank to issue loans under the Defense Production Act as part of a strategy to strengthen the national stockpile of medical supplies so that the wartime law won't have to be invoked for the next COVID-19 outbreak.
The order came hours after a senior administration official briefed reporters on Trump's hopes to both replenish the exhausted Strategic National Stockpile while boosting the emergency reserve through a "tremendous expansion" of domestic industry's ability to manufacture items needed to combat the novel coronavirus, such as personal protective equipment and ventilators.
"We're going to have a much more robust, more capable and less vulnerable Strategic National Stockpile, and this is going to require the permanent restructuring of a whole series of relationships using information technology and contracting capabilities very different than anyone has in the past," the official said.
The administration gave a glimpse into how it intends to bolster domestic manufacturing when Trump authorized the U.S. International Development Finance Corp. to lend money to industries producing the essential medical supplies.
Boosting domestic industry would allow the White House to wean itself off the Defense Production Act during future COVID-19 outbreaks, the official said during the press call.
The wartime production law gives the executive branch broad economic powers to boost the private manufacture of goods critical to national defense. Under the law, the president can force businesses to prioritize federal government orders over others and can use loans and other financial tools to provide businesses with an incentive to repurpose production facilities.
Since COVID-19 hit the U.S., the Trump administration has used the wartime law to compel General Motors Inc. to manufacture ventilators, even though the carmaker had agreed hours earlier to retool one of its plants for that purpose. The administration has also relied on the law to force meatpacking plants to stay open and impose restrictions on the export of safety masks and gloves.
But relying on the Defense Production Act to create another facility can take time.
"It's easier to keep production lines warm than it is to build one from new," the official said.
In addition to boosting domestic manufacturing, the White House intends to replenish the National Strategic Stockpile with supplies necessary to sustain the response to COVID-19 for 90 days.
"Ninety days is a buffer while we stand up surge manufacturing," the official said.
Before the pandemic broke out, the national stockpile only contained 28% of the items needed to combat COVID-19, of which there was only one to three weeks' worth of supplies, the official revealed.
For example, the emergency supply lacked many of the critical care drugs needed to keep a patient hooked to a ventilator, the official said. "They will be in the stockpile going forward."
The administration also plans on boosting the inventory's pre-COVID-19 cache of 13 million N95 respirators to 300 million in the fall, with the overall target of 1 billion masks, and increasing its surgical gown numbers to 6 million to 7 million, according to the official.
--Additional reporting by Linda Chiem and Daniel Wilson. Editing by Adam LoBelia.
For a reprint of this article, please contact reprints@law360.com.
