Home US Despite expanded DPA, confusion reigns over coronavirus industrial response

Despite expanded DPA, confusion reigns over coronavirus industrial response


Three weeks after mobilizing against the coronavirus outbreak, chaos is still swirling around the federal government’s response, which has been hobbled by the weak and scattershot application of the powerful emergency law called the Defense Production Act.

On Friday, President Donald Trump invoked the DPA to prevent the hoarding or exporting of critical medical gear needed to combat the coronavirus outbreak, a day after applying the act to compel 3M to stop exporting masks to other countries, along with speeding ventilator production at six medical device companies. And last Friday, Trump moved to compel GM to make more ventilators.

"The ability of wartime profiteers to purchase domestic supplies of scarce and critical materials, hoard them while they engage in profiteering and speculation, and then export them can generate foreign demand, and lead to price gouging," Trump said. "This conduct denies our country and our people the materials they need to win the war against the virus."

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He went on to note that nothing in his order would prevent manufacturers from exporting "when doing so is consistent with United States policy and in the national interest of the United States."

Though the administration is finally beginning to take some steps to corral production of urgently needed medical supplies and devices, Trump is still facing a buzzsaw of criticism for not fully unleashing the might of the federal government to blunt the virus’ spread.


Leaders from hard-hit states say they are still not receiving the ventilators and protective medical gear their hospitals desperately need and are often pitted against each other to procure them, despite the president finally moving to invoke parts of the law designed to coordinate a federal crisis response.

On Friday, Democratic New York Gov. Andrew Cuomo, whose state is the epicenter of the U.S. outbreak, said he would activate the National Guard to transport ventilators to needed areas, after weeks of pleading with the Trump administration to supply more of the devices.

“The states need federal assistance. No state can get all the ventilators they need,” he wrote on Twitter. “We need a national deployment of resources that follows need.”

In Massachusetts, Republican Gov. Charlie Baker said Friday his state would launch a collaborative to track Covid-19 test results, saying, “There’s no nationwide tracking that’s being done.”

On Capitol Hill, Republican Colorado Sen. Cory Gardner and Democratic Rep. Diana DeGette admonished the Department of Health and Human Services about news that it had failed to provide delivery addresses for 2,000 available ventilators, as well as reports that many ventilators in the strategic national stockpile were broken. And Sen. Cory Booker (D-N.J.) called on FEMA to create a national database of ventilators and a distribution program to ship them to impacted areas.

The state leaders say Trump should use the DPA’s broad authority to appoint a single coronavirus czar with a specialized team to coordinate an industrial response to the virus. That, they say, could avoid continued confusion over medical supplies.

Despite resisting weeks of pressure to use the act, the president on Friday insisted that his recent orders showed his administration has used the DPA "very powerfully." But he also said applying it to entire sectors of the economy wasn’t necessary.

“We have used it a number of times, very powerfully,” he said. “And a lot of times you don’t have to exercise the act, you just say, ‘Look, if you don’t do this, we are going to use the act.’ And we have done a great job with it.”

But the state leaders and DPA experts say the president’s actions still fall far short of the full authority of the emergency law. Instead of targeting individual companies, they say the DPA could be used to set up a centralized federal system to track the parts, production and distribution of tests and medical goods nationwide.

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“[The DPA has] been used ad hoc and by impulse … when they find some company they’re annoyed with they invoke it,” said Jeffrey Bialos, a former deputy undersecretary of Defense for industrial affairs, who oversaw the Pentagon’s use of the DPA during the Clinton administration. “What you need to do is bring together a team of people with the right skill sets and combine the DPA contracting authority and funding … but the White House seems to not be interested in being the distributor-in-chief here, which again seems to make no sense.”

Amid a growing crisis and with American lives at stake, the White House’s refusal to use the act’s full authority has created confusion over who actually leads the federal coronavirus industrial response.

After putting Vice President Mike Pence in charge of the coronavirus task force, Trump made trade representative Peter Navarro the point person on the DPA when he invoked it for General Motors last Friday. Then on Tuesday, he said that FEMA would have the leading organizational role, pointing to the agency when asked at a press conference if the administration has a “coronavirus czar.”

Amid the confusion, Senate Minority Leader Chuck Schumer pressed Trump on Thursday to appoint a senior military official to lead the response. Trump shot back in an angry letter that the administration already had one — Rear Adm. John Polowczyk, director of FEMA’s supply chain task force.

Meanwhile, multiple administration officials told POLITICO this week that Trump’s son-in-law Jared Kushner has become the de facto coordinator of emergency response, with his influence outweighing that of HHS Secretary Alex Azar, whom the DPA orders also empowered to direct ventilator efforts.

On Thursday, Kushner appeared at the White House’s coronavirus task force briefing and praised Polowczyk, saying he had compiled a team to oversee the production and distribution of medical goods.

“He joined the task force 13 days ago over at FEMA, and he’s built a team — really, at the direction of the vice president — that includes people from FEMA, OMB, the FDA, HHS, the White House and from everywhere else,” Kushner said of Polowczyk. “What they’ve done over the last 13 days has been really extraordinary … We found a lot of supplies in the country. We’ve been distributing them where we anticipate there will be needs, and also trying to make sure that we’re hitting places where there are needs.”

The explanation did not impress Schumer, the Senate’s top Democrat, who told reporters the next day there’s still confusion over who has ultimate authority.

“There is one person right now, Mr. Navarro, who is supposedly in charge of production. There’s another person, an admiral, who’s nominally responsible for distribution, but he told the media a few days ago he was ‘blind to where all the product is,’” Schumer said on a press call Friday morning. “So, we need one senior military officer who knows logistics, who knows command and control, to oversee both production and distribution.”

Bialos agreed, saying “we still don’t know who’s in charge,” and faulted the administration for not using the DPA to set up an industrial response team outside the White House sooner.

“I would have done this 3 weeks ago or a month ago” said Bialos, now a partner at Eversheds Sutherland. “It’s policy malpractice to not have clarity on who’s in charge, to not have a separate, interdisciplinary team on this.”

At the Thursday briefing, Polowczyk said the Trump administration was working closely with the private sector to obtain more ventilators.

In a normal year, U.S.-based manufacturers, such as General Electric and Vyaire Medical, produce about 30,000 ventilators. The U.S. government, with the help of car companies Ford and GM, hopes to increase production to 100,000 in just the next three months. However, production is expected to ramp up slowly, with a big burst of activity in June.

“We’re on line to receive several thousand ventilators in the month of April and several thousand more ventilators in the month of May, ramping up to a big number in June,” Polowczyk said.

Part of the challenge is making sure that companies have the parts that they need to make the ventilators, which are complex pieces of equipment. In addition, auto manufacturers also need time to retool production lines designed for other purposes.

Trump said Thursday he had issued directions for Azar and acting Secretary of Homeland Security Chad Wolf to use any and all available authority under the DPA to ensure that domestic manufacturers have the supplies they need to produce ventilators for patients with severe cases.

“This action will help General Electric, Hillrom, Medtronic, ResMed, Royal Philips and Vyaire Medical overcome obstacles in the supply chain that threaten the rapid production of ventilators. We have over 100,000 being built right now, or soon to be started. We anticipate issuing more orders under the Defense Production Act in the very near future,” Trump said.

Each ventilator that GM intends to make requires 419 major parts and there are “literally thousands of sub-components that go into those 419 parts, especially given the complexity of several of the individual part designs,” said company spokesperson Jeannine Ginivan.

“Within 72 hours of the project beginning, our teams were able to source 100 percent of the necessary parts. It was an unprecedented effort on the part of GM’s supplier partners. Everyone rallied around a common goal — every ventilator is a life,” Ginivan said.

About 70 percent of the parts to make ventilators are manufactured in the United States and about 80 percent in the North American region. But another 20 percent need to be imported from countries that include France, Italy, South Korea, Thailand, U.K., Japan, China and Taiwan.

Regardless, GM expects its parts to arrive in time for mass production to begin in mid-April, Ginivan said.

Ford spokesperson Michael Levine said the company needs several more weeks because it does not yet have all the parts that it needs.

“We’re ramping up our own supply chain of parts to start producing the Model A-E ventilator by the end of this month,” Levine said.

The federal government is also working with the major health care equipment distributors to replenish depleted supplies and decide where they should be sent.

“We brought them all in, and we said we need to make informed decisions, and we are going to help make informed allocation decisions,” Polowczyk told reporters.

To accomplish that task, the senior logistics officer said he brought in a computer software tool the Defense Department had been using to manage a supply chain “for a very complex weapon system.” The companies’ supply chain information was put into a “data lake” that provides an overall picture of the situation, Polowczyk said.

“I can tell what product is coming in, what their orders are, what they’re filling, what they’re not filling, and see the volume in the supply chain, and understand what they’re doing down to the county level. We’re working to get it potentially down to the hospital level,” Polowczyk said.

He also defended the decision to distribute the supplies through those companies, rather than have the federal government hand out the goods.

“Look, these six distributors — six, seven — they have six to seven hundred warehouses. They have trucks to go to the hospital door every day. We’re bringing product in. They’re filling orders for hospitals, nursing homes like normal. I’m putting volume into that system,” Polowczyk said.

Doug Palmer contributed to this report.

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