Defense contractors are unlikely to pivot to coronavirus response
Technically, contractors could shift production toward medical equipment, but it's easier said than done
Defense contractors are unlikely to stop building ships and planes and start making medical equipment, even after President Donald Trump invoked the Defense Production Act on Wednesday.
Technically, defense contractors could shift production toward badly needed medical equipment, said Andrew Hunter, director of the defense-industrial initiatives group at the Center for Strategic and International Studies. But that's easier said than done.
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“I’m not sure they’d be able to obtain the necessary certifications for producing advanced medical equipment quickly if they don’t already have them, so my guess is this will mostly involve existing medical manufacturers,” Hunter said in an email.
Domestic production of the most needed equipment, like masks and ventilators, is already focused on coronavirus response, he noted. So the most likely role the Defense Production Act can play is to provide financial incentives for expanded production, he said.
Passed in 1950, the Defense Production Act authorizes the president to redirect domestic industry and manufacturing priorities to meet the demands of national security. While it was initially envisioned as a way to pivot American manufacturing to help military efforts during the Korean War — with automakers producing tanks, for example — it has since been modified to grant broad authorities to the president in the name of national defense.
Sen. Jack Reed of Rhode Island, the top Democrat on the Armed Services Committee, praised Trump for invoking the Defense Production Act, but said it should have been done much sooner.
“Instead of preparing and mobilizing for this pandemic, President Trump tried to downplay it. As a result, America is not as ready as we should be,” Reed said in a prepared statement. “In France, factories that once manufactured fancy perfumes are starting to churn out needed hand sanitizer instead.”
These kinds of changes don’t happen overnight, but take planning and coordination, Reed added.
Rep. Andy Levin, D-Mich., called on the president to give the CEOs of relevant companies 48 hours to come up with plans to meet certain production goals, and if they could not, use the Defense Production Act to take additional steps to ramp up production.
“He must do this until we see actual results — that we have the testing capacity, respirators, other personal protective equipment, isolation units, and everything we need to protect our first responders, health care workers and the American people,” Levin said in a prepared statement.
Broadly, there are three ways in which the Defense Production Act is used. The first allows the president to redirect industries to prioritize and accept government contracts and control the distribution of materials. The last time this method was invoked was 1974 to increase domestic energy production.
The second, which is regularly used by the Defense Department, allows the president to authorize financial incentives for industry to meet specific needs. In 2019, the Pentagon used this authority to boost domestic production of chemicals needed for specific munitions, sonobuoys, unmanned aerial systems and rare earth materials.
The third gives the president the ability to enter into voluntary arrangements with industry and to employ people with expertise. It also allows the president to block corporate mergers and acquisitions involving foreign companies on the grounds of national security.
Congress appropriated $64.4 million for Defense Production Act activities in fiscal 2020. The White House asked for $182 million in its fiscal 2021 budget request.
Initially, it seems likely that the White House would invoke the Defense Production Act to ramp up production of personal protective equipment, such as the N-95 respirators that are in incredibly high demand.
More than 20 of the National Guard civil support teams, federally funded units specially trained to detect and respond to chemical, biological or nuclear attacks, have been activated to provide training to first responders about how to properly use personal protective equipment, according to the National Guard Bureau.