How to further strengthen the Defense Production Act

The House Financial Services Committee’s hearing this week on the reauthorization of the Defense Production Act is timely and important. The DPA is an essential tool for national security that was little known prior to COVID-19 . Its use during the pandemic helped the U.S. government mobilize its industrial base to allocate and distribute goods as well as make investments to build industrial capacity in critical areas such as ventilators and personal protective equipment during a time of national crisis.

That recent experience, coupled with the daunting national security challenges facing us today, makes it a great time to strengthen the DPA for the future. Here’s how we can do it:

The most essential action is to keep the Defense Production Act strictly focused on national security needs. The DPA became widely known during the COVID-19 pandemic but grew out of the success of World War II’s mobilization efforts. Signed into law in 1950, the DPA has three active titles today used in various manners to shortcut bureaucratic government processes to meet exigent circumstances.

Prior to the pandemic, for example, DPA titles were used to prioritize the production of aluminum for use in the development of lifesaving mine-resistant, ambush-protected vehicles during the Iraq War; to create beryllium factories for defense uses; and to counter Chinese foreign investment that impacts national security.

Today, it is currently used to great effect in reshoring and building industrial base capacity in areas such as rare earth processing, castings, forgings and advanced batteries. The increased use of DPA is welcome, but its popularity has also led to its invocation to support domestic production of solar panels and heat pumps, which has caused political controversy .

This was a focus at an initial House hearing in March. That hearing struck exactly the right tone: It is essential to keep DPA focused exclusively on defense and national security issues, in particular threats from our pacing competitor, China. As I wrote with my co-authors in 2022, using DPA outside of direct national security purposes threatens the viability of this unique tool for rebuilding a robust, resilient and globally competitive American industrial base.

With that national security purpose firmly in mind, there are several ways to strengthen the existing DPA provisions. At the national level under Title I, the DPA is governed by a mishmash of old and overlapping executive orders spanning numerous administrations that need to be refreshed and simplified. While detailed plans are not solutions by themselves, the administration should conduct a thorough review of relevant executive orders and regulations to better orient DPA policies and practices to address future national security challenges.

DPA Title III has been a tremendous tool to address aggressive Chinese industrial policy in areas such as rare earth processing, batteries, magnets and microelectronics. The non-delegable requirement for the president’s signature on each DPA determination, however, has significantly slowed the process by which DPA projects are developed and executed. Allowing the delegation of that determination in the upcoming 2025 reauthorization of the DPA, perhaps to the secretary level of those agencies with Title III authority, would significantly streamline the development of Title III projects.

Another significant improvement would be the use of purchase commitments under Title III. Purchase commitments would allow the Department of Defense to create a guaranteed demand signal for an industrial capability over a mutually agreed upon period of time, thereby reducing risks for industry to make investments in areas such as critical materials.

Purchase-commitment projects, however, are not an option currently because Congress has appropriated DPA funds over the past three years using standard procurement funds, which expire in two years, contrary to traditional DPA appropriations, which do not expire. That needs to change to start using this important authority.

While the Committee on Foreign Investment in the United States continues to do critical national security work evaluating foreign investment under the authority of Title VII, there are important aspects of that title that have been dramatically underused. Title VII, for example, permits the government to establish voluntary agreements or plans of action with industry “to help provide for the national defense.” The administration, for example, could consider establishing voluntary agreements to prepare standby industrial capacity for potential surge use during conflict.

Title VII also permits the president to establish the National Defense Executive Reserve, a volunteer group of industrial executives like WWII’s War Production Board to advise on or support mobilization efforts. Creating an active NDER unit to support industrial preparations for potential major conflicts sounds like an incredibly appropriate action to consider right now.

The DPA is a powerful tool that enables our nation to prepare for or respond to national security emergencies. Let’s build on the strengths of today’s DPA and make it the foundation for America’s arsenal of the future.

Jerry McGinn is the executive director of the Greg and Camille Baroni Center for Government Contracting at George Mason University. He previously served as a senior acquisition official with the U.S. Defense Department.

本周众议院金融服务委员会就《国防生产法》重新授权举行的听证会意义重大，也十分及时。《国防生产法》是维护国家安全的重要工具，但在新冠疫情爆发前却鲜为人知。疫情期间，该法案的运用帮助美国政府调动其工业基础，在国家危机时期分配和分发物资，并投资建设呼吸机和个人防护装备等关键领域的工业产能。

鉴于近期的经验，以及我们今天面临的严峻国家安全挑战，现在正是加强《国防生产法》以应对未来挑战的绝佳时机。以下是我们可以采取的措施：

最关键的措施是确保《国防生产法》严格服务于国家安全需求。该法在新冠疫情期间广为人知，但其起源可追溯至二战动员工作的成功。该法于1950年签署生效，目前有三个现行版本，以各种方式用于简化繁琐的政府程序，以应对紧急情况。

例如，在疫情爆发之前，《国防生产法》的条款被用来优先生产铝，用于在伊拉克战争期间开发救生防地雷、防伏击车辆；建立用于国防用途的铍工厂；以及对抗影响国家安全的中国对外投资。

如今，国防采购法在稀土加工、铸造、锻造和先进电池等领域的产业基地产能回流和建设方面发挥了巨大作用。国防采购法的广泛应用固然值得欢迎，但其普及也导致它被用于支持国内太阳能电池板和热泵的生产，这引发了政治争议。

这正是三月份众议院首次听证会的重点。那次听证会的基调恰到好处：必须确保《国防生产法》始终专注于国防和国家安全问题，特别是来自我们强劲竞争对手——中国的威胁。正如我与合著者在2022年所写，将《国防生产法》用于国家安全以外的用途，会威胁到这一独特工具的有效性，而该工具对于重建一个强大、有韧性且具有全球竞争力的美国工业基础至关重要。

牢记国家安全目标，有多种途径可以加强现有的《国防生产法》条款。在国家层面，根据第一章，《国防生产法》受制于一系列跨越多届政府、内容陈旧且相互重叠的行政命令，这些命令需要更新和简化。虽然详细的计划本身并不能解决问题，但政府应该对相关的行政命令和法规进行全面审查，以便更好地调整《国防生产法》的政策和实践，从而应对未来的国家安全挑战。

《国防生产法》第三章一直是应对中国在稀土加工、电池、磁体和微电子等领域咄咄逼人的产业政策的有力工具。然而，每一项《国防生产法》决定都必须由总统签署，且该项决定权不可下放，这大大延缓了《国防生产法》项目的开发和执行进程。如果在即将到来的2025年《国防生产法》重新授权中允许将该项决定权下放，例如下放至拥有第三章授权的机构的部长级，将显著简化第三章项目的开发流程。

另一项重大改进是利用第三章规定的采购承诺。采购承诺将使国防部能够在双方约定的时间内为工业能力创造有保障的需求信号，从而降低工业界在关键材料等领域进行投资的风险。

然而，由于国会过去三年一直使用标准采购资金拨款国防生产法（DPA）资金，而这些资金的有效期为两年，这与传统的DPA拨款（没有有效期）不同，因此目前采购承诺项目并非可行之策。要开始利用这项重要的授权，这种情况必须改变。

尽管美国外国投资委员会继续根据《民权法案》第七章的授权开展评估外国投资的关键国家安全工作，但该法案的某些重要方面却远未得到充分利用。例如，《民权法案》第七章允许政府与企业达成自愿协议或行动计划，“以帮助保障国防”。例如，政府可以考虑达成自愿协议，为冲突期间可能出现的紧急需求做好准备，储备工业产能。

第七章还授权总统设立国家国防执行后备队（NDER），这是一个由工业界高管组成的志愿者团体，类似于二战时期的战争生产委员会，旨在为动员工作提供建议或支持。组建一支活跃的NDER部队来支持工业界为潜在重大冲突所做的准备，这在当下看来是一个非常恰当的举措。

《国防生产法》是一项强大的工具，它使我国能够为应对国家安全紧急情况做好准备。让我们巩固现有《国防生产法》的优势，并将其打造成为美国未来武器库的基石。

杰里·麦金是乔治·梅森大学格雷格和卡米尔·巴罗尼政府合同中心执行主任。他此前曾在美国国防部担任高级采购官员。