Biden To 'Fully Use' Defense Production Act In COVID-19 Plan

By Daniel Wilson
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Law360 (January 21, 2021, 1:08 PM EST) -- President Joe Biden said Thursday he will "fully use" the Defense Production Act to compel companies to produce protective and medical equipment to address COVID-19 and refill depleted national stockpiles, including speeding up the delivery of vaccines.

Biden signed an executive order that will direct agencies to use any appropriate authorities available, particularly the DPA, to "accelerate manufacturing, delivery, and administration" to address shortfalls in critical supplies needed to respond to the pandemic, part of a broader White House COVID-19 response plan.

The aim of the order is to ensure "that the national supply of personal protective equipment exceeds demand and our stores and stockpiles — especially in hard-hit areas that serve disproportionately vulnerable populations — are fully replenished," the White House said.

"400,000 Americans have died [of COVID-19] — that's more than had died during all of World War II," Biden said in remarks at the White House. "This is a wartime undertaking."

The DPA is a Korean War-era law that gives the president broad authorities related to supporting the national defense, a broad term that includes responding to emergencies.

The covered supplies will include equipment needed to speed up the production, distribution and delivery of vaccines; personal protective equipment, or PPE, such N95 masks and isolation gowns; and supplies used for disease testing, such as collection swabs, reagents and laboratory analysis machines, according to the plan.

The call for increased mask production comes after Biden issued a mandatory mask mandate Wednesday for federal facilities and an order Thursday to require masks during interstate travel, while urging all Americans to wear masks until vaccinations are more widespread. He has also asked governors to issue their own similar mandates.

The DPA will also be used to help procure more COVID-19 tests, and secure more related manufacturing capacity — both through contract purchases and loans for companies to expand production — as part of an effort to increase access to testing and safely reopen businesses and schools, the White House said.

Biden will also take other actions to build additional domestic manufacturing capacity so the U.S. is not dependent on other countries in a similar future crisis, using loan guarantees, purchase agreements and similar mechanisms, according to the White House.

The Federal Emergency Management Agency will be directed to start setting up federally supported community COVID-19 vaccination centers, and in a separate order was told to reimburse 100% of the costs that states and tribal governments incur for deploying the National Guard or buying emergency supplies used to help set up their own vaccination centers, up from the previous 75% reimbursement rate.

FEMA earlier in January had finalized a rule, based on authorities in the DPA, allowing federal agencies to direct companies to prioritize health care and medical contracts above all others, including contracts given a "DX" rating that are otherwise considered to be "of the highest national priority."

President Donald Trump did not issue a comprehensive COVID-19 response plan during his time in office, instead leaving matters largely in the hands of states to decide how to respond to the pandemic.

Although Trump made some use of the authorities in the DPA, for example by compelling manufacturers to make ventilators, he had been criticized by congressional Democrats, among others, for not using those authorities more aggressively to secure medical equipment and PPE or "onshore"-related production capacity.

One of those additional DPA authorities is the ability to bar price-gouging or hoarding, issues the White House said Thursday it will "take a strong stance against," including requiring clauses in DPA contracts allowing those supplies to be available at a "reasonable price."

--Editing by Marygrace Murphy.

Update: This story has been updated with additional information.

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