Bradley attorney Aron Beezley was quoted in Supply Chain Dive on Biden's decision to invoke the Defense Protection Act (DPA) to fight the coronavirus pandemic and combat supply shortages across 12 product categories facing deficits. The DPA is a legal tool the federal government uses to ensure suppliers prioritize its orders. It can allow the government to direct expanded manufacturing capacity at particular companies. However, it's not clear how helpful this order was, as this work was taking place prior to the DPA order.
"It can be a very powerful tool," said Beezley, though he also said it's "not the magic cure-all that some think it is."
"The Defense Production Act is the government's ability to direct rated orders," Beezley said, which means its orders are a priority over commercial orders. The DPA's power comes from the fact that a company can be found guilty of a crime and fined up to $10,000 if it doesn't comply with the orders given under the law, he said.
Companies that receive DPA orders from the government will usually get some sort of advanced warning that the formal directive outlining the terms is coming, Beezley said.
"If the order directs the fulfillment of an order by a certain date, and the supplier gets that order and they physically can't do it, it's not possible, then they need to immediately notify the person ... who issued that order that they can't do it by the date specified," Beezley said.
"If a company is fully outside of the United States, and they're an integral part of a supply chain that is subject to a rated order, for instance, and that company has no interest in complying, there's not much the government can do," Beezley said.
The original article, "Biden Invokes DPA to Combat Supply Shortages, but Experts Say it's No 'Magic Wand'," appeared in Supply Chain Dive on January 26, 2021.