From the U.S. Government Accountability Office, www.gao.gov Transcript for: Using the Defense Production Act to Respond to COVID-19 Description: COVID-19 continues to put severe strains on the U.S. health-care system--causing shortages in medical supplies meant to protect frontline workers and help save lives. In March, the President invoked the Defense Production Act, which authorized federal agencies to take steps to prioritize acquiring much needed medical supplies. However, there remains shortages in critical items such as N95 masks and medical gloves. We talk with GAO's Bill Russell--an expert on defense supply-chain integrity and a director in our Contracting and National Security Acquisition team--about a new report on the government's use of the DPA to respond to COVID-19. Related GAO Work: GAO-21-108, Defense Production Act: Opportunities Exist to Increase Transparency and Identify Future Actions to Mitigate Medical Supply Chain Issues Released: November 2020 [Intro Music] [Bill Russel:] Opportunities exist to further identify where the DPA is going to mitigate the remaining medical supply challenges. [Holly Hobbs:] Hi and welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office--I'm Holly Hobbs. COVID-19 continues to put severe strains on the U.S. health-care system--causing shortages in medical supplies meant to protect frontline workers and help save lives. In March, the President invoked the Defense Production Act, which authorized federal agencies to take steps to prioritize acquiring much needed medical supplies. However, there remains shortages in critical items such as N95 masks and medical gloves. Today we talk with GAO's Bill Russell--an expert on defense supply-chain integrity and a director in our Contracting and National Security Acquisition Team. Thanks for joining us Bill! [Bill Russel:] Thanks so much for having me. [Holly Hobbs:] So Bill, why are there still a shortage despite the ability to use the Defense Production Act? [Bill Russel:] I think the first thing to keep in mind is the scale of the pandemic and the overwhelming needs for all kinds of items. In particular PPE--that's personal protective equipment--so think about the N95 masks, anything that you're going to need to treat so many folks in the hospitals around the country; not to mention some of the key medical equipment like the ventilators that you heard so much about in March and April. So, I think the key is the volume and the fact that very quickly the materials that were in the strategic national stockpile, were dispersed and it still wasn't enough to meet the immediate need. At the same time you had every country around the globe trying to acquire some of the same medical supplies. [Holly Hobbs:] And what exactly does the Defense Production Act allow federal agencies to do that they couldn't already do? [Bill Russel:] The Defense Production Act is really a key tool that can be used to--not only ramp up domestic production for needed medical supplies--but also to put the government orders ahead of the line. So, using Title I authorities under the Defense Production Act, the government's order for, let's say N95 masks, is fulfilled first ahead of that company's other orders. On top of that, different provisions also allow incentives and different aspects of increasing actual production. So, having companies add another shift to the production line, creating an entirely new production line. And that's something that you saw early on especially with ventilators and the N95 masks. There's also Title VII which is a little used authority in the Defense Production Act that allows the government to, through voluntary agreements with private companies, to coordinate and collaborate in other ways that would otherwise be prohibited. [Holly Hobbs:] And how have agencies used it so far? [Bill Russel:] What we found is through the end of September agencies and largely this is Health and Human Services, the Department of Defense, and FEMA have used various parts of the Defense Production Act--or similar authorities that were provided in CARES Act--43 times to acquire all sorts of things valued at about $3.9 billion, at this point. And think about the purchasing of ventilators, N95 masks that you mentioned, different types of goggles, testing equipment, some of the medical gloves that are needed to treat patients, vaccines supplies; so a whole range of items. And of those 43 contracts and arrangements, about 18 of those were dedicated to expanding the domestic industrial base for certain items like N95 masks. [Music:] [Holly Hobbs:] So, it sounds like federal agencies have additional authorities under the Defense Production Act to address critical medical supply shortages, and that money was also provided under the CARES Act to help address this problem. But there are still shortages. Bill, did we make any recommendations to improve agencies' use of the DPA in addressing this problem? [Bill Russel:] We did. And, first of all, I would say that over the course of review we did see that progress has been made. Of the initial orders for ventilators, it is about 180,000 ordered, most of those, a vast majority, have been delivered. There's been progress made on delivery of the N95 respirators. There's more to go on that. But about 166 million of those have been delivered at the end of September. In terms of recommendations one of the things we highlighted is there is an executive order that came out in August that dealt with just reducing reliance on foreign suppliers when it comes to medical supplies. And that is a national security concern. So, we pointed out that HSS has an opportunity to further identify how they plan to use the DPA since that's been a key tool in mitigating the risks thus far in the pandemic. And we think it's important to them to further identify and clarify how the DPA can be used going forward to reduce foreign reliance on some of the key medical supplies. [Holly Hobbs:] And last question, what's the bottom line of this report? [Bill Russel:] The bottom line is that progress has been made certainly the DPA has been used to date to help mitigate some of the supply challenges. But opportunities exist to further identify where the DPA is going to be used to mitigate the remaining supply challenges and to think ahead so that we're better prepared for future challenges. [Holly Hobbs:] That was Bill Russell talking about GAO's recent review of the use of the Defense Production Act in responding to COVID-19. Thank you for your time Bill! [Bill Russel:] Thanks so much, Holly. [Holly Hobbs:] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. And make sure you leave a rating and review to let others know about the work we're doing. For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at GAO.gov.