DEFENSE PRODUCTION ACT: Agencies Lack Policies and Guidance for Use of Key Authorities

Congress enacted the Defense Production Act of 1950 DPA to ensure the availability of industrial resources to meet defense needs. Amendments to the Act allow its use for energy supply, emergency preparedness, and critical infrastructure protection and require agencies to report on foreign offsets, which are incentives to foreign governments to purchase U.S. goods and services. Only Titles I, III, and VII remain in effect. In the National Defense Authorization Act for Fiscal Year 2008, Congress directed GAO to review recent agency efforts to implement the DPA. This report 1 examines the extent to which agencies use DPA authorities and 2 assesses agencies response to reporting requirements on the economic impact of foreign offsets. GAOs work is based on a review of policies and guidance for the use of DPA authorities, instances in which agencies have exercised the authorities, and the analysis used in required reports on foreign offsets. GAOs three recommendations are that agencies develop and implement a priorities and allocations system, consider ratings in advance of emergencies, and that Commerce update regulations to better assess the economic effect of offsets. USDA concurred, while other agencies provided only technical comments. HHS and DOT indicated that they plan to implement our recommendations.