Contractors Should Prepare for DPAS Rated Orders Due to COVID-19

March 27, 2020

The Defense Priorities and Allocations System (DPAS) is used to prioritize national defense-related contracts and orders throughout the U.S. supply chain in order to support military, energy, homeland security, emergency preparedness, and critical infrastructure requirements. DPAS authorizes the federal government to require preferential acceptance and performance of contracts or orders—other than contracts of employment—that support certain approved national defense and energy programs, and to allocate materials, services, and facilities in such a manner as to promote these approved programs.  Please note DPAS is different from the Defense Production Act, which grants the president more comprehensive power of the market place.

The Department of Commerce administers the DPAS program and has delegated DPAS authority to the Departments of Defense, Energy, and Homeland Security and to the General Services Administration to place, in accordance with the DPAS regulation and the requirements of the Defense Production Act and Executive Order 13603, priority ratings on contracts or orders necessary, or appropriate, to promote the national defense.

If one of these agencies is acquiring items that qualify under the regulations as essential to address the COVID-19 global health crisis—items to fight the pandemic would seem to qualify—the agency may issue a “rated order” using a rating of either DX or DO. Either rating will require the contractor to prioritize that order over any unrated order they are currently performing. An order with a DX rating should be prioritized over an order with a DO rating.

Contractors can decline to accept a rated order if they are unable to fulfill the delivery requirements, but must inform the contracting officer of the date when the delivery can be made and offer to accept the order for that date. If the rated order is accepted, the contractor is required to “flow-down” the rating to subcontractors.

For questions about DPAS, please contact Tom Marcinko at 301.231.6237.