EXECUTIVE ORDER
NATIONAL DEFENSE RESOURCES PREPAREDNESS
By the authority vested in me as President by the Constitution and the laws
of the United States of America, including the Defense Production Act of 1950,
as amended (50 U.S.C. App. 2061 et seq.), and section 301 of title 3,
United States Code, and as Commander in Chief of the Armed Forces of the United
States, it is hereby ordered as follows:
PART I - PURPOSE, POLICY, AND IMPLEMENTATION
Section 101. Purpose. This order delegates authorities
and addresses national defense resource policies and programs under the Defense
Production Act of 1950, as amended (the “Act”).
Sec. 102. Policy. The United States must have an
industrial and technological base capable of meeting national defense
requirements and capable of contributing to the technological superiority of its
national defense equipment in peacetime and in times of national emergency. The
domestic industrial and technological base is the foundation for national
defense preparedness. The authorities provided in the Act shall be used to
strengthen this base and to ensure it is capable of responding to the national
defense needs of the United States.
Sec. 103. General Functions. Executive departments and
agencies (agencies) responsible for plans and programs relating to national
defense (as defined in section 801(j) of this order), or for resources and
services needed to support such plans and programs, shall:
(a) identify requirements for the full spectrum of emergencies, including
essential military and civilian demand;
(b) assess on an ongoing basis the capability of the domestic industrial and
technological base to satisfy requirements in peacetime and times of national
emergency, specifically evaluating the availability of the most critical
resource and production sources, including subcontractors and suppliers,
materials, skilled labor, and professional and technical personnel;
(c) be prepared, in the event of a potential threat to the security of the
United States, to take actions necessary to ensure the availability of adequate
resources and production capability, including services and critical technology,
for national defense requirements;
(d) improve the efficiency and responsiveness of the domestic industrial
base to support national defense requirements; and
(e) foster cooperation between the defense and commercial sectors for
research and development and for acquisition of materials, services, components,
and equipment to enhance industrial base efficiency and responsiveness.
Sec. 104. Implementation. (a) The National Security
Council and Homeland Security Council, in conjunction with the National Economic
Council, shall serve as the integrated policymaking forum for consideration and
formulation of national defense resource preparedness policy and shall make
recommendations to the President on the use of authorities under the Act.
(b) The Secretary of Homeland Security shall:
(1) advise the President on issues of national
defense resource preparedness and on the use of the authorities and functions
delegated by this order;
(2) provide for the central coordination of
the plans and programs incident to authorities and functions delegated under
this order, and provide guidance to agencies assigned functions under this
order, developed in consultation with such agencies; and
(3) report to the President periodically
concerning all program activities conducted pursuant to this order.
(c) The Defense Production Act Committee, described in
section 701 of this order, shall:
(1) in a manner consistent with section 2(b)
of the Act, 50 U.S.C. App. 2062(b), advise the President through the Assistant
to the President and National Security Advisor, the Assistant to the President
for Homeland Security and Counterterrorism, and the Assistant to the President
for Economic Policy on the effective use of the authorities under the Act;
and
(2) prepare and coordinate an annual report to
the Congress pursuant to section 722(d) of the Act, 50 U.S.C. App. 2171(d).
(d) The Secretary of Commerce, in cooperation with the
Secretary of Defense, the Secretary of Homeland Security, and other agencies,
shall:
(1) analyze potential effects of national
emergencies on actual production capability, taking into account the entire
production system, including shortages of resources, and develop recommended
preparedness measures to strengthen capabilities for production increases in
national emergencies; and
(2) perform industry analyses to assess
capabilities of the industrial base to support the national defense, and develop
policy recommendations to improve the international competitiveness of specific
domestic industries and their abilities to meet national defense program
needs.
PART II - PRIORITIES AND ALLOCATIONS
Sec. 201. Priorities and Allocations Authorities. (a)
The authority of the President conferred by section 101 of the Act, 50 U.S.C.
App. 2071, to require acceptance and priority performance of contracts or orders
(other than contracts of employment) to promote the national defense over
performance of any other contracts or orders, and to allocate materials,
services, and facilities as deemed necessary or appropriate to promote the
national defense, is delegated to the following agency heads:
(1) the Secretary of Agriculture with respect to food
resources, food resource facilities, livestock resources, veterinary resources,
plant health resources, and the domestic distribution of farm equipment and
commercial fertilizer;
(2) the Secretary of Energy with respect to all forms of
energy;
(3) the Secretary of Health and Human Services with respect
to health resources;
(4) the Secretary of Transportation with respect to all
forms of civil transportation;
(5) the Secretary of Defense with respect to water
resources; and
(6) the Secretary of Commerce with respect to all other
materials, services, and facilities, including construction materials.
(b) The Secretary of each agency delegated authority under subsection (a) of
this section (resource departments) shall plan for and issue regulations to
prioritize and allocate resources and establish standards and procedures by
which the authority shall be used to promote the national defense, under both
emergency and non-emergency conditions. Each Secretary shall authorize the
heads of other agencies, as appropriate, to place priority ratings on contracts
and orders for materials, services, and facilities needed in support of programs
approved under section 202 of this order.
(c) Each resource department shall act, as necessary and appropriate, upon
requests for special priorities assistance, as defined by section 801(l) of this
order, in a time frame consistent with the urgency of the need at hand. In
situations where there are competing program requirements for limited resources,
the resource department shall consult with the Secretary who made the required
determination under section 202 of this order. Such Secretary shall coordinate
with and identify for the resource department which program requirements to
prioritize on the basis of operational urgency. In situations involving more
than one Secretary making such a required determination under section 202 of
this order, the Secretaries shall coordinate with and identify for the resource
department which program requirements should receive priority on the basis of
operational urgency.
(d) If agreement cannot be reached between two such Secretaries, then the
issue shall be referred to the President through the Assistant to the President
and National Security Advisor and the Assistant to the President for Homeland
Security and Counterterrorism.
(e) The Secretary of each resource department, when necessary, shall make
the finding required under section 101(b) of the Act, 50 U.S.C. App. 2071(b).
This finding shall be submitted for the President’s approval through the
Assistant to the President and National Security Advisor and the Assistant to
the President for Homeland Security and Counterterrorism. Upon such approval,
the Secretary of the resource department that made the finding may use the
authority of section 101(a) of the Act, 50 U.S.C. App. 2071(a), to control the
general distribution of any material (including applicable services) in the
civilian market.
Sec. 202. Determinations. Except as provided in
section 201(e) of this order, the authority delegated by section 201 of this
order may be used only to support programs that have been determined in writing
as necessary or appropriate to promote the national defense:
(a) by the Secretary of Defense with respect to military
production and construction, military assistance to foreign nations, military
use of civil transportation, stockpiles managed by the Department of Defense,
space, and directly related activities;
(b) by the Secretary of Energy with respect to energy
production and construction, distribution and use, and directly related
activities; and
(c) by the Secretary of Homeland Security with respect to
all other national defense programs, including civil defense and continuity of
Government.
Sec. 203. Maximizing Domestic Energy Supplies. The
authorities of the President under section 101(c)(1) (2) of the Act, 50 U.S.C.
App. 2071(c)(1) (2), are delegated to the Secretary of Commerce, with the
exception that the authority to make findings that materials (including
equipment), services, and facilities are critical and essential, as described in
section 101(c)(2)(A) of the Act, 50 U.S.C. App. 2071(c)(2)(A), is delegated to
the Secretary of Energy.
Sec. 204. Chemical and Biological Warfare. The
authority of the President conferred by section 104(b) of the Act, 50 U.S.C.
App. 2074(b), is delegated to the Secretary of Defense. This authority may not
be further delegated by the Secretary.
PART III - EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY
Sec. 301. Loan Guarantees. (a) To reduce current or
projected shortfalls of resources, critical technology items, or materials
essential for the national defense, the head of each agency engaged in
procurement for the national defense, as defined in section 801(h) of this
order, is authorized pursuant to section 301 of the Act, 50 U.S.C. App. 2091, to
guarantee loans by private institutions.
(b) Each guaranteeing agency is designated and authorized to: (1) act as
fiscal agent in the making of its own guarantee contracts and in otherwise
carrying out the purposes of section 301 of the Act; and (2) contract with any
Federal Reserve Bank to assist the agency in serving as fiscal agent.
(c) Terms and conditions of guarantees under this authority shall be
determined in consultation with the Secretary of the Treasury and the Director
of the Office of Management and Budget (OMB). The guaranteeing agency is
authorized, following such consultation, to prescribe: (1) either specifically
or by maximum limits or otherwise, rates of interest, guarantee and commitment
fees, and other charges which may be made in connection with such guarantee
contracts; and (2) regulations governing the forms and procedures (which shall
be uniform to the extent practicable) to be utilized in connection
therewith.
Sec. 302. Loans. To reduce current or projected
shortfalls of resources, critical technology items, or materials essential for
the national defense, the head of each agency engaged in procurement for the
national defense is delegated the authority of the President under section 302
of the Act, 50 U.S.C. App. 2092, to make loans thereunder. Terms and conditions
of loans under this authority shall be determined in consultation with the
Secretary of the Treasury and the Director of OMB.
Sec. 303. Additional Authorities. (a) To create,
maintain, protect, expand, or restore domestic industrial base capabilities
essential for the national defense, the head of each agency engaged in
procurement for the national defense is delegated the authority of the President
under section 303 of the Act, 50 U.S.C. App. 2093, to make provision for
purchases of, or commitments to purchase, an industrial resource or a critical
technology item for Government use or resale, and to make provision for the
development of production capabilities, and for the increased use of emerging
technologies in security program applications, and to enable rapid transition of
emerging technologies.
(b) Materials acquired under section 303 of the Act, 50 U.S.C. App. 2093,
that exceed the needs of the programs under the Act may be transferred to the
National Defense Stockpile, if, in the judgment of the Secretary of Defense as
the National Defense Stockpile Manager, such transfers are in the public
interest.
Sec. 304. Subsidy Payments. To ensure the supply of
raw or nonprocessed materials from high cost sources, or to ensure maximum
production or supply in any area at stable prices of any materials in light of a
temporary increase in transportation cost, the head of each agency engaged in
procurement for the national defense is delegated the authority of the President
under section 303(c) of the Act, 50 U.S.C. App. 2093(c), to make subsidy
payments, after consultation with the Secretary of the Treasury and the Director
of OMB.
Sec. 305. Determinations and Findings. (a) Pursuant
to budget authority provided by an appropriations act in advance for credit
assistance under section 301 or 302 of the Act, 50 U.S.C. App. 2091, 2092, and
consistent with the Federal Credit Reform Act of 1990, as amended (FCRA), 2
U.S.C. 661 et seq., the head of each agency engaged in procurement for
the national defense is delegated the authority to make the determinations set
forth in sections 301(a)(2) and 302(b)(2) of the Act, in consultation with the
Secretary making the required determination under section 202 of this order;
provided, that such determinations shall be made after due consideration of the
provisions of OMB Circular A 129 and the credit subsidy score for the relevant
loan or loan guarantee as approved by OMB pursuant to FCRA.
