Coronavirus Pandemic: How Does the Defense Priorities and Allocations System (DPAS) Prioritize Spending?

As the Coronavirus continues to surge, federal, state, and local governments are working to respond in a timely manner to reach those most susceptible to the disease and slow the spread. While social distancing is something that we all can do as individuals to respond to the crisis, it’s important to note how federal contractors come into the mix. We’ve mentioned how the General Services Administration can prepare for the pandemic and how contractors can best come to the aid of state and local governments through the Disaster Purchasing Program. Now that the military is starting to be called to contain the coronavirus, it’s crucial to consider how defense contracts will play the situation surrounding COVID-19. Enter DPAS. The Defense Priorities and Allocations System (DPAS) is used to prioritize national defense-related contracts/orders throughout the U.S. supply chain in order to support military, energy, homeland security, emergency preparedness, and critical infrastructure requirements. We’ve broken down DPAS to show you how it applies to you as a defense contractor.

What is DPAS?

The Defense Priorities and Allocations System (DPAS) is administered by the Department of Commerce, Bureau of Industry and Security. The DPAS implements the priorities and authority of the Defense Production Act, including use of that authority to support emergency preparedness activities pursuant to Title VI of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The Stafford Act is how President Trump declared a national emergency this past week regarding the coronavirus. The DPAS establishes procedures for the placement, acceptance, and performance of priority rated contracts and orders and for the allocation of materials, services, and facilities.

The Department of Commerce has delegated authority to place priority ratings on contracts or orders necessary or appropriate to promote the national defense to certain government agencies that issue such contracts or orders. As President Trump has now declared COVID-19 a national emergency, DPAS is how Defense Agencies will rate orders relating to Federal emergency preparedness, mitigation, response, and recovery along with other national priorities to help mitigate the damage done by the coronavirus.

What Are Rated Orders?

A rated order is a prime contract, a subcontract or a purchase order in support of an approved program issued in accordance with the provisions of 15 CFR 700. You will likely start to see more of these as a defense contractor now that the government is trying to act expeditiously to respond to COVID-19.

Rated orders are identified by a priority rating and a program identification symbol. Rated orders take precedence over all unrated orders as necessary to meet required delivery dates. Among rated orders, DX rated orders take precedence over DO rated orders. Program identification symbols indicate which approved program is attributed to the rated order.

Each Rated Order is supported by Four Important Elements:

1. Priority Rating
2. A required delivery date
3. Manual or electronic signature
4. A statement that reads in substance:
   "This is a rated order certified for national defense use, and you are required to follow all provisions of the Defense Priorities and Allocations System regulation (15 CFR 700).“ (FAR 52.211-15)”

The four elements of a rated order are required to appear on every contract, purchase order, or delivery order.

It’s also important to note that if you’re a contractor who has received rated orders, you must in turn place rated orders with your suppliers for the items needed to fill the orders. This provision ensures that suppliers will give priority treatment to rated orders from contractor to subcontractor to suppliers throughout the procurement chain. Utilizing the DPAS rating system, the supply chain will be expedited on all sides to ensure that U.S. citizens are getting the health care they need in light of COVID-19 and government agencies can utilize defense contractor resources to stop the spread.

What Are Priority Ratings?

There are two levels of priority established by DPAS, identified by the rating symbols “DO” and “DX”. DX rated programs and their orders are of the highest national defense urgency and are approved by the Secretary of Defense or Deputy Secretary of Defense. DO rated orders are of lower priority than DX-rated orders but take precedence over unrated orders. All DX rated orders have equal priority with each other and take preference over DO rated orders and unrated orders. A priority rating consists of the rating symbol—DO and DX—and the program identification symbol, such as A1, C2, or N1. For example, a contract for Federal emergency preparedness, mitigation, response, and recovery to fight against Coronavirus will contain a DO-N1 or DX-N1 priority rating. A contract for a Border and transportation security will contain a DO-N4 or DX-N4 priority rating.

What Programs are Approved for Priorities Support?

The programs listed below have been approved for priorities support under DPAS by the Department of Defense, the Department of Energy, or the Department of Homeland Security, in accordance with section 202 of Executive Order 13603. The Department of Commerce has authorized the delegate agencies listed in the third column to use this part in support of those programs assigned to them. There are more agencies and services than are listed below, but these programs give an idea of the breadth of services that can be prioritized under DPAS. With regards to the COVID-19 crisis, the Homeland Security Programs are of special importance as Defense agencies can prioritize Federal, State, and Local Emergency Preparedness while  utilizing DPAS. 

In short, as communities are hunkering down during Coronavirus and the government is getting to work, utilizing the DPAS as a defense contractor can be good for your business, as well as good for the benefit of others during this trying time. Check out this DPAS training course provided by the Department of Commerce to get better acquainted with DPAS. Have more questions? Check out our new Coronavirus resource page for government contractors or reach out to the Winvale team today!