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Defense Production Act (DPA), What Contractors Need to Know

With three Executive Orders and two Presidential Memoranda issued in the last few weeks, Defense Production Act (DPA) policy is developing quickly. EOs invoked the DPA and delegated specific authority to the Health and Human Services (HHS) and the Homeland Security departments (DHS) to prioritize and allocate COVID-19-related health and medical resources. HHS now has the authority to place rated orders under the Federal Priorities & Allocations System (FPAS) for pandemic response.

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. Medical equipment contractors already are receiving rated orders and sorting through confusion about whether these orders are valid, seeing poor execution by companies attempting to issue rated orders, and facing questions about how much latitude they have to negotiate schedule and pricing of a rated orders and how the process differs when companies vs. the government issue rated orders.

DPA FPAS-rated orders present opportunity and risk. In this webinar, we will discuss what contractors need to know about the FPAS program and what their obligations, rights, and remedies are when they receive a rated order. Specifically, we will discuss:

  • Limits on the authority of agencies and other businesses to place rated orders.
  • A contractor’s obligation to accept or reject orders within a specified time period, and the specific limited grounds for mandatory or optional rejection.
  • How a contractor can negotiate price and other terms and conditions.
  • A contractor’s obligation to place rated orders with suppliers and subcontractors.
  • Suggestions for how contractors might organize their resources to receive and respond to FPAS-rated orders.
  • Liability protections for contractors filling FPAS rated orders.
  • Potential penalties and adverse consequences for contractors that do not comply.

CMBOK Competencies: 3.4 Regulatory Compliance, 4.0 Pre-Award and 5.0 Award