Priorities and Materials Allocations under Defense Production Act

ID-78-39: Published: Apr 24, 1978. Publicly Released: Apr 24, 1978.

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The Defense Production Act and its implementing regulations and procedures were reviewed to determine the procedures established for priorities and materials allocation support for energy programs. The Department of Commerce's Assistant Secretary for Industry and Trade has advised that it is difficult to estimate the potential demand for domestic steel or other materials under this program. However, he believes that the authority of the statute is intended to be used sparingly and does not anticipate that the impact on steel producers will be great. Since the program is new, it is not possible to judge how well it will work. During past periods of shortages in processed materials, some federal programs of vital national interest have been delayed. During shortages in 1973 and 1974, defense contractors were not as adversely affected as nondefense contractors since the former had priority ratings. The authority of a single agency to administer priority programs prevents creation of a materials priorities and allocation system that would conflict with the Defense Priorities System and the Defense Materials System (DPS/DMS). One of the features of the DPS/DMS system is the Special Priorities Assistance Program which is intended to resolve conflicts when a defense-related contract or order is refused or the delivery date is not met. This program will now be available for energy programs and projects.

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