Press Releases

WASHINGTON – Today, the House Committee on Small Business Subcommittee on Contracting and Infrastructure heard from experts and small business owners on the Defense Production Act (DPA) and the impact of its authorities on small contractors.

“The critical role small businesses play applies across the board to all DPA invocations whether it be for military preparedness, natural hazard response, or domestic preparedness,” said Ranking Member Pete Stauber (R-MN).  “[I]t is clear that we depend on a vast network of small business subcontractors and suppliers to generate the essential items needed for the national defense.”

Panel Informs about the DPA, Emphasizes Resilience of Small Firms

“Over a two-month period, we produced a quantity of almost 60,000 [medical ventilator] parts, or twelve times our normal annual volume.  You might be surprised to hear that the DPA was not part of the contract under which we produced these parts,” said Ms. Traci Tapani, Co-President, Wyoming Machine, Inc., in Stacy, MN.  “Our workforce organized and mobilized among themselves to ensure that parts were produced quickly and accurately.  When we were asked to deliver at a faster pace, our workers made it happen. ...Our company passion for manufacturing, combined with our desire to help in a time of need, made our work feel almost effortless. ...There will always be American businesses ready and willing to respond in a time of need and I believe that small businesses have a special role to play due to their agility and ability to quickly mobilize.”

“It is clear that the DPA provides powerful tools for the president to support and advance business, including small businesses,” said Mr. Ian Patterson, Attorney-Senior Associate, Koprince Law, LLC, in Lawrence, KS.  “While prioritization has been at the forefront of recent conversations regarding COVID-19, the DPA also provides substantial investment opportunities that could be leveraged to provide small businesses the tools and resources they need to play their part in producing for America’s defense against COVID-19.”

“While SBA was granted authority to assist small businesses and promote small business participation in federal procurements on a government-wide basis, the DPA retains separate authorities related to small business participation in capacity and production activities related to national defense,” said Mr. David Black, Attorney-Partner, Holland & Knight, LLP, in Tysons, VA.  “However, as noted, in the absence of clear direction and more detailed guidance from the statutory provisions, the authorities of the DPA intended to assist small businesses are largely underutilized.”

“An NDIA survey that was published two months ago in April consisting [of] over 750 members from the small business industrial base found that 60% of the respondents experienced a serious cash flow disruption due to the crisis.  51% reported that shelter-in-place ordered negatively impacted their ability to execute contracts.  60% expected to have long-term financial and cash-flow issues resulting from COVID-19,” said Ms. Mary Lockhart, President & CEO, PEMDAS Technologies & Innovations, in Alexandria, VA.  Ms. Lockhart testified as the Chair of the Small Business Division for the National Defense Industrial Association (NDIA).  “The underlining reasons cited were cuts to billable hours, delays in payments due to government shutdown and telework requirements for both prime contractors and the government, and a lack of telework options or contract schedule flexibility.”