The Defense Production Act and COVID-19: What Companies Need to Know

President Donald Trump's executive order on March 18, 2020, invoked the Defense Production Act (DPA) to prioritize and allocate health and medical resources in response to the spread of COVID-19.

Executive Orders 13909 and 13911 have granted the U.S. Department of Health and Human Sources (HHS) and the U.S. Department of Homeland Security (DHS) the authority to place rated orders under the Federal Priorities and Allocations System (FPAS) for all health and medical resources needed to respond to the current pandemic. Other federal agencies have authority to require acceptance and priority performance of contractors or orders for other resources that may be required to protect public health. Contractors may soon be receiving FPAS-rated orders from agencies with priorities and allocation authority under the DPA as well as from prime contractors who are ordering materials and components to fill rated orders.

FPAS-rated orders present both opportunity and risk. Please join Holland & Knight for an in-depth discussion on what contractors need to know about the FPAS program and what their obligations, rights and remedies are when they receive a rated order.

Topics include:

• an overview of the DPA and the tools available to procure and increase production capacity of critical items
• an overview of FPAS, including the limits on the authority of agencies and other businesses to place rated orders
• a step-by-step review of what a contractor should do when it receives a rated order, including information to assess and options for negotiating schedule or rejecting the order
• how a contractor can negotiate price and other terms and conditions
• a contractor's obligation to place rated orders with suppliers and subcontractors
• key liability protections for contractors that are filling FPAS-rated orders as well as penalties for noncompliance
• suggestions for how contractors might organize their resources to receive and respond to FPAS-rated orders

Presenters:

David S. Black | Partner, Tysons
Eric S. Crusius | Partner, Tysons