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Defense Production Act: What Contractors Need to Know (Comp)
On March 18, 2020, President Trump issued an Executive Order invoking the Defense Production Act of 1950 (the “DPA”) to prioritize and allocate health and medical resources in response to the spread of COVID-19. The EO delegated to the Department of Health and Human Sources the authority to issue place rated orders under the Federal Priorities & Allocations System (“FPAS”) all health and medical resources needed to respond to the 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, including the Department of Energy (all forms of energy); Department of Transportation (all forms of civil transportation), the Department of Agriculture (food, livestock, and plant resources), and the Departments of Defense and Homeland Security (all other materials, services, and facilities not specifically delegated to another agency) Department of Energy (all forms of energy). Contractors may soon be receiving “FPAS-rated” orders from agencies with priorities and allocation authority under the DPA and prime contractors who are ordering materials and components to fill rated orders.
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 who do not comply.
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