COVID-19 put the U.S. healthcare system under severe strain, affecting federal agencies’ ability to buy and maintain critical medical supplies to help treat patients and protect health care workers. The federal government’s COVID-19 response included a significant use of Defense Production Act (DPA) authorities, as well as other actions focused on expanding domestic production of medical supplies to help stabilize the medical supply chain. The CARES Act and other supplemental appropriations provided at least $11 billion for DPA purchases and other actions related to COVID-19 or other public health emergencies through September 2025.
A review by the Government Accountability Office (GAO) has found that Federal agencies used DPA and other actions over 100 times to help address COVID-19 medical supply needs through September 2021. Agencies used DPA authorities to prioritize contracts so those orders can get preference over others, fund projects to expand domestic production of supplies, and enter into partnerships with private companies.
Representatives from companies that received DPA awards told GAO that the use of the DPA gave them timely access to raw materials and supplies and helped them expand production faster than they could have on their own.
GAO previously reported that federal agencies faced challenges using DPA authorities. Agencies have taken some steps to address these obstacles as well as one of two recommendations GAO made.
The Department of Health and Human Services (HHS), which had limited DPA experience prior to COVID-19, reported establishing offices to review DPA priority rating requests and to manage industrial base expansion efforts. However, GAO found it has not developed a plan for using DPA and other actions to address future medical supply needs as the watchdog recommended.
The Department of Defense, which has been providing significant contracting support to HHS, documented procedures to facilitate the timely transfer of funds between the two agencies and established a permanent office in October 2020 to support interagency needs.
The Office of Management and Budget established a web page to collect and publish data on DPA priority ratings, which addressed a prior GAO recommendation concerning transparent reporting of these DPA actions.
Additional DPA and other actions are expected through 2025 as agencies use $10 billion appropriated in the American Rescue Plan Act for medical supply investments and implement a September 2021 national strategy to strengthen the domestic medical industrial base. GAO plans to monitor agencies’ efforts.