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Title III of the D f P d ti A t e ense ro uc on c Matthew Seaford (703) 415‐7107 DPA Background • The Defense Production Act (DPA) is the President’s primary authority to ensure the timely availability of private sector resources for national defense. Title III of the DPA provides unique economic authorities to mitigate industrial base shortfalls/risks and expand U.S. production capabilities to promote the “national defense”. – DoD is the only Federal agency with an in‐place capability to execute Title III authorities – Other Government agencies partner with DoD to address their needs. Provide funding and technical support Th d i i d i l b i i i l l f h i d ili • e omest c n ustr a ase s a cr t ca e ement o t e econom c an m tary power of the United States. • “National defense” includes: f ili d d i i k ili d – Programs or m tary an energy pro uct on or construct on, stoc p ng, space, an any directly related activity – Critical infrastructure protection and restoration – Military or critical infrastructure assistance to foreign nations – Homeland security – Emergency preparedness 2 The Defense Production Act (50 U.S.C. App. § 2061 et seq.) • Enacted in 1950 ― Provides broad authorities to the President to assure the ability of the domestic industrial base ― to supply materials and services for the national defense. DPA authorities delegated to Federal ― agencies via E.O. 12919 Title I – Priorities & Allocations ― Provides the authority to order priority performance (delivery) on defense contracts and allocate materials to meet national security requirements (DO/DX ratings) • Title III – Expansion of Productive Capacity and Supply ― Authorizes appropriate incentives to create, expand or preserve domestic industrial manufacturing capabilities for industrial resources, technologies, and materials needed to meet national security i t (i l d h l d it ) requ remen s nc u es ome an secur y • Title VII – General Provisions ― Exon-Florio (CFIUS) ― Voluntary Agreements – authorizes business competitors to form alliances for disaster planning and response and provides antitrust protection for actions pursuant to voluntary agreements ― National Defense Executive Reserve – provides for employment of private sector experts to support Federal Government preparedness planning and disaster response programs • DPA not permanent law must be periodically reauthorized – ― Expires September 30, 2014 ― Under jurisdiction of Banking Committees 3 Title III of the Defense Production Act • Government‐wide procurement authority. – Provides financial incentives, including credit assistance, to finance the creation or expansion of domestic production capabilities and resources. • Title III actions stimulate private investment in production resources by reducing the risks associated with the capitalization and investments required to establish the needed production capacity. Executes projects ranging from process improvement to production plant construction. • Objectives include: – Expanding/sustaining production capacity – Ensuring U.S. Government access to technology/resources – Ensuring long‐term commercial viability • Title III is not a technology development or R&D program. • Focus is on government‐wide/multi‐platform applications. 4 Title III Authorities Incentives to ensure viable productive capacities • Purchases/Purchase Commitments (Sec. 303a) — Purchases provide direct subsidy to company to assist in establishing production capacity • Purchase and installation of production equipment • Engineering support to improve quality and yield of production facility • Sample quantities for process validation and customer qualification testing • Costs to develop business and marketing plans — Purchase Commitments • Guaranteed market to incentivize companies to establish, expand or maintain production capability • Company may use internal funding or obtain external funding i.e., loan • Government is buyer of last resort. Some or all of funds may not be expended • Installation of Production Equipment in Government or Privately Owned Facilities (Sec. 303e) • Development of Substitutes (Sec. 303g) • Loans/Loan Guarantees (Sec. 301; Sec. 302) 5 Title III Statutory Requirements 1. Obtain “Presidential Determination” • Industrial resource or technology item i i l f i l d f s essent a or nat ona e ense • Industry cannot/will not provide needed capacity in a reasonable time without Title III assistance 2. Notify Congress in writing 3. Wait 30 days to allow for Congressional comment 6 Title III Funds • Title III appropriations are credited to Defense Production Act Fund Special repository in Treasury to support Title III activities – – Usually made in DoD appropriations but can be included in other appropriations bills – By law may only be used for Title III purposes Title III appropriations are “no ear” proc rement f nds and are • ‐y u u valid until expended • Revolving fund permits reuse of unexpended and recovered moneys by Title III Program • DPA contains its own authorization of appropriations – Funds appropriated for Title III are automatically authorized. Title III initiatives are not normally included in authorization bills for this reason. • Annual report to Congress required on transactions from the Fund 8 Title III Organization Under Secretary of Defense Acquisition, Technology and Logistics Dr. Ashton B. Carter OSD Provides top‐level li id d Assistant Secretary of Defense (Acquisition) Mr. Shay Assad Deputy Assistant Secretary of Defense (Manufacturing & Industrial Base Policy) Air Force Manages technical po cy gu ance an oversight of the Title III program Mr. Brett Lambert Director of Manufacturing Mr. Neal Orringer efforts, industrial base analysis, source selection and contracting activities, assisted by technical sponsors from the Defense Production Act Title III Program Program Director Mr. Mark Buffler Services and other Government agencies Title III Program Executive Agent SAF/AQRT Air Force Research Laboratory Materials & Manufacturing Directorate Title III Program Office AFRL/RXM 9 TITLE III BUSINESS PARTNERSHIP Service‐Agency Partnerships Stakeholders provide technical insight in project planning and execution Facilitate insertion of Titl III i d t t e n us ry par ner products into Service systems Stakeholders Essential to Successful Technology Transition & Capability 11 Defense Production Act Title III Initiatives ALON Transparent Armor – Expanded production of ALON transparent armor – ⅓ the thickness and ½ the weight of glass-based transparent armor. – Improved ballistic protection, performance, and reliability for vehicles equipped with ALON. Radiation Hardened Electronics Capital – Stops .50 cal AP. Advanced Explosives Detection Technology – Successfully scaled up production of the Fido IED Detection device – Provides compact, superior detection Expansion Project – Modernized two obsolete semiconductor foundries to maintain a critical technology for defense space & missile systems – 0.15-micron rad hard electronics enable advanced processing & performance biliti Silicon Carbide Substrates – Established viable production base for SiC MMIC devices & accelerating insertion of SiC based technology into DoD systems capabilities against explosives & IED threats – Facilitates new non-military markets – e.g., first responder, customs, homeland security capa es – Preserves a critical domestic industrial resource needed for national security Thermal Battery Project – Establishing domestic manufacturing capacity for advanced thermal batteries for – Enabler for next-generation radar systems, electronic warfare systems & advanced communications systems – Enabled installation of LED lighting in Pentagon & other Federal buildings – Enabled GaN-on-SiC MMICs for next generation CREW C t I i d E l i D i tactical and strategic defense systems – Partnering with domestic providers to expand production capacities – Significant performance advantages over current battery technology oun er mprov se xp os ve ev ce system w/lower maintenance costs Light-Weight Polymer Ammunition – Developing a production capability for light- weight polymer-based ammunition. – ~30% lighter than conventional ammunition. – Drop-in replacement for existing systems – no LED Light Re-establishing Domestic Beryllium Production Capability – Re-establishing domestic manufacturing capability for high- purity Beryllium redesign required. – Reduces soldier burden – Improves battlefield mobility and survivability – Reduces fuel consumption, improves battlefield logistics. – Supports Lighten-the-Load Initiative – Critical enabling material for defense applications including: electro-optic systems; missile guidance systems, satellites, missile defense systems, nuclear weapons, nuclear power plants 14 Summary Title III provides powerful authorities that enable the Government to rectify industrial base shortfalls Synergy of technical and business objectives focused on long‐term economic viability and technology i i nsert on Broad participation enhances leverage Title III Program has proven performance and innovative execution 15 Defense Production Act i l C T t e III ontacts web site: http://www.acq.osd.mil/ott/dpatitle3/ OSD Program Director Mr. Mark Buffler DASD(MIBP) (703) 415‐7106 mark.buffler@osd.mil Air Force Executive Agent Mr. Jeff Smith AFRL/RXM (937) 904‐4591 Jeffrey.smith@wpafb.af.mil 16
