Statement of the Hon. Jared Golden on An Overview of the Dynamics Between the Defense Production Act and Small Contractors.
Washington, June 24, 2020
The Defense Production Act, or DPA, was enacted seventy years ago – after the outbreak of the Korean War – in an effort to spur industrial production to meet wartime needs. At that time, the nation was ill-prepared for another war following World War II. To bolster our country’s defense infrastructure, the President requested authorities to mobilize our domestic industry to increase production of military equipment and much-needed supplies.
Since then, its authorities have been expanded to include a number of purposes, including emergency preparedness and response.
With that said, our country has faced an unprecedented threat to the life and well-being of its citizens: the COVID-19 pandemic.
In response to the pandemic, and at the urging of Congressional leaders, the President invoked the DPA on multiple occasions to compel companies to meet the shortfall of medical equipment and supplies.
And while it has been used mostly as a tool to meet the skyrocketing demand for personal protective equipment and ventilators, one thing is clear: there are still more opportunities to leverage its authorities as part of a coordinated response to this evolving threat to our nation.
And with that, we must look for ways to use the DPA and its authorities to advance our small businesses, an opportunity other members of this committee and I have previously highlighted for the Executive Branch.
Small businesses have been hit especially hard by the pandemic. From cash flow concerns to availability of materials, the economic devastation cannot be underestimated.
In particular, DPA Title III authorities provide a series of economic incentives that seek to maintain, restore and expand domestic industrial capabilities. The CARES Act provided $1 billion to carry out the responsibilities of Title III of the DPA, specifically to prevent, prepare and respond to the COVID-19 pandemic.
It is not only our responsibility but our duty, to ensure that small businesses engaged in the manufacture of medical supplies, as well as those in the defense industrial base, have the maximum opportunity to participate in these Title III programs.
Access and participation in these programs will supplant lost revenues due to COVID-19 and guarantee the livelihood of our small businesses.
Moreover, recognizing the ingenuity and nimbleness of our small businesses, this investment will translate into innovation and the acquisition of much needed resources for the Federal Government.
And so, today’s hearing will serve as an opportunity to examine the DPA and its main authorities, including those provisions in the law that establish a preference for small firms.
Additionally, we hope to discuss potential legislative measures to strengthen the DPA for small businesses.
Finally, we wish to hear more about the challenges that small businesses are facing due to Covid-19 and how leveraging Title III authorities could provide substantial relief.
I look forward to hearing from our distinguished witnesses today about the DPA, its application to the COVID-19 relief and response efforts, and the dynamics between the DPA and small business contractors.