FOOD & AGRICULTURE QUARTERLY | JUNE 2020
continue operations consistent with the guidance issued by
the CDC and OSHA. President Trump further delegated his
authority under the DPA to the Secretary of Agriculture to
“determine the proper nationwide priorities and allocation
of all the materials, services, and facilities necessary to
ensure the continued supply of meat and poultry[.]”
President Trump’s authority under the Act is quite broad.
The Defense Production Act of 1950 (the “DPA”), 50 U.S.C.
4501 et seq., was enacted during the Korean War era
and provides the President “with an array of authorities
to shape national defense preparedness programs and
to take appropriate steps to maintain and enhance the
domestic industrial base[.]” Specifically, the President is
authorized to (1) require that orders from the government
take priority over performance under any other contracts
or orders, and (2) “allocate materials, services, and facilities
in such manner, upon such conditions, and to such extent
as he shall deem necessary or appropriate to promote the
national defense.” Further, the President is authorized to
take measures to prevent hoarding and price-gouging of
scarce materials.
The President is also authorized to offer direct loans or
loan guarantees to private businesses (subject to proper
appropriations) to “maintain…and expand the productive
capacities of domestic sources for critical components…
materials and industrial resources[.]” The President’s
powers to issue such loan guarantees are expanded during
a period of national emergency. Likewise, the President is
authorized to make purchases and purchase commitments
and to install equipment in governmental and private
industrial facilities to “create, maintain, protect, expand, or
restore domestic industrial base capabilities[.]”
that the agreement or plan was created and implemented
in good faith. Nonetheless, such agreements and plans are
subject to ongoing monitoring by the Attorney General and
the Chair of the FTC.
The President’s powers under the DPA are not unlimited,
however. The DPA includes a “sunset” provision which
provides that the vast majority of the President’s DPA
powers outlined in Titles I, III, and VII of the Act will
terminate on Sept. 30, 2025 unless Congress reinstates
them.
While President Trump’s use of the DPA is somewhat novel,
the Defense Department has routinely used the DPA since
its enactment in 1950 in order to prioritize the fulfillment of
necessary contracts, including for Air Force One and other
armored military vehicles. Further, the Pentagon uses the
DPA to place approximately 300,000 orders per year for
military-related equipment. Accordingly, as the COVID-19
crisis continues to develop, Americans can expect
continued and increased usage of the DPA to address
national shortfalls and industrial crises.
Arlene Boruchowitz is an associate
and focuses her practice on complex
commercial litigation. She can be reached
at 614.227.2032 or
[email protected].
Perhaps most notably, under the DPA the President or his
delegate can approve voluntary agreements or plans of
action among representatives of industry, including the
agricultural industry, if such agreements and plans are
designed to help provide for the national defense (which
is defined to include emergency preparedness activities).
Participants in such agreements and plans of action are
provided with a statutory defense to any criminal or civil
antitrust suits arising from the agreement or plan, provided
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