07-02-2020, 10:44 AM
I have seen many references to using the DPA to procure items that are needed, such as PPE. Can anybody show me an example of a firm that refused to take a contract from the Government to make such an item? I know of at least one manufacturer who accepted such a contract even though it wasn't really in their wheelhouse. Right now, with the economy the way it is, anything that keeps money flowing in is a good contract even if it isn't highly profitable. Unless there are such examples, I think all this repeated citing of the DPA is a read herring.
I also know that there are DOD priority ratings (based on other legislation) that can force a company to build anything they are capable of building. With the correct paperwork, that project becomes the highest priority project in the company, no matter what else is going on. The Government can (and sometimes does) station people in the contractors facility to ensure compliance. It is interesting to watch the government people squabble with each other when you have two or more DX projects going. These projects usually start without an actually negotiated contract in place. You get a "letter contract", and sometimes the job is actually finished before there is a "real" contract. In theory, the profit is limited, but companies usually do pretty well on them. It can really mess up your other customers though, which are often also the government. YMMV.
In point of fact, the arguably greatest use of the DPA during WWII was to STOP companies from doing things. The example most often cited is ALCO wanting to continue building diesel locomotives, but the Government needing to reduce diesel locomotive production because the diesel engines were needed elsewhere. ALCO also built steam engines. EMD didn't, so all the diesel production was at EMD and ALCO was forced to just build steam engines. Many believe that that decision ultimately doomed ALCO, although it took a while. Similarly, the DPA was used to force aircraft manufactures to manufacture planes they didn't design instead of those that they did. It was also used to prevent acceptance of contracts from other nations (like the UK) if production of stuff for the US would be impacted.
I also know that there are DOD priority ratings (based on other legislation) that can force a company to build anything they are capable of building. With the correct paperwork, that project becomes the highest priority project in the company, no matter what else is going on. The Government can (and sometimes does) station people in the contractors facility to ensure compliance. It is interesting to watch the government people squabble with each other when you have two or more DX projects going. These projects usually start without an actually negotiated contract in place. You get a "letter contract", and sometimes the job is actually finished before there is a "real" contract. In theory, the profit is limited, but companies usually do pretty well on them. It can really mess up your other customers though, which are often also the government. YMMV.
In point of fact, the arguably greatest use of the DPA during WWII was to STOP companies from doing things. The example most often cited is ALCO wanting to continue building diesel locomotives, but the Government needing to reduce diesel locomotive production because the diesel engines were needed elsewhere. ALCO also built steam engines. EMD didn't, so all the diesel production was at EMD and ALCO was forced to just build steam engines. Many believe that that decision ultimately doomed ALCO, although it took a while. Similarly, the DPA was used to force aircraft manufactures to manufacture planes they didn't design instead of those that they did. It was also used to prevent acceptance of contracts from other nations (like the UK) if production of stuff for the US would be impacted.