EXECUTIVE
ORDER
EO 12919
Effective Date: June 03, 1994

Responsible Office: Defense Affairs Division
Subject: NATIONAL DEFENSE INDUSTRIAL RESOURCES PREPAREDNESS

				TEXT

By the authority vested in me as President by the Constitution
and the laws of the United States of America, including the
Defense Production Act of 1950, as amended (64 Stat. 798; 50
U.S.C. App. 2061, et. seq.) and section 301 of title 3, United
States Code, and as Commander in Chief of the Armed Forces of the
United States, it is hereby ordered as follows:

     PART 1 -- PURPOSE, POLICY AND IMPLEMENTATION

Section 101.  Purpose.  This order delegates authorities and
addresses national defense industrial resource policies and
programs under the Defense Production Act of 1950, as amended
("the Act"), except for the amendments to Title III of the Act in
the Energy Security Act of 1980 and telecommunication authorities
under Executive Order No. 12472.

Sec. 102. Policy.  The United States must have an industrial and
technology base capable of meeting national defense requirements,
and capable of contributing to the technological superiority of
its defense equipment in peace time and in times of national
emergency.  The domestic industrial and technological base is the
foundation for national defense preparedness.  The authorities
provided in the Act shall be used to strengthen this base and to
ensure it is capable of responding to all threats to the national
security of the United States.

Sec. 103.  General Functions.  Federal departments and agencies
responsible for defense acquisition (or for industrial resources
needed to support defense acquisition) shall:

     (a) Identify requirements for the full spectrum of national
     security emergencies, including military, industrial, and
     essential civilian demand;

     (b) Assess continually the capability of the domestic
     industrial and technological base to satisfy requirements in
     peacetime and times of national emergency, specifically
     evaluating the availability of adequate industrial resource
     and production sources, including subcontractors and
     suppliers materials, skilled labor, and professional and
     technical personnel;
     (c) Be prepared, in the event of a potential threat to the 
     security of the United States, to take actions necessary to
     ensure the availability of adequate industrial resources and
     production capability, including services and critical
     technology for national defense requirements;

     (d) Improve the efficiency and responsiveness to defense 
     requirements of the domestic industrial base; and

     (e) Foster cooperation between the defense and commercial 
     sectors for research and development and for acquisition of
     materials, components and equipment to enhance industrial
     base efficiency and responsiveness

Sec. 104. Implementation. (a) The National Security Council is
the principal forum for consideration and resolution of national
security resource preparedness policy.

     (b) The Director, Federal Emergency Management Agency
     ("Director FEMA") shall:

          (1) Serve as an advisor to the National Security
          Council on issues of national security resource
          preparedness and on the use of the authorities and
          functions delegated by this order.

          (2) Provide for the central coordination of the plans 
          and programs incident to authorities and functions
          delegated under this order, and provide guidance and
          procedures approved by the Assistant to the President
          for National Security Affairs to the Federal
          departments and agencies under this order.

          (3) Establish procedures, in consultation with Federal
          departments and agencies assigned functions under this
          order, to resolve in a timely and effective manner
          conflicts and issues that may arise in implementing the
          authorities and functions delegated under this order;
          and

          (4) Report to the President periodically concerning all
          program activities conducted pursuant to this order.

     (c) The head of every Federal department and agency assigned
     functions under this order shall ensure that the performance
     of these functions is consistent with National Security
     Council policy and guidelines.


     PART II -- PRIORITIES AND ALLOCATIONS

Sec. 201. Delegations of Priorities an Allocations. (a) The
authority of the President conferred by section 101 of the Act to
require acceptance and priority performance of contracts or
orders (other than contracts of employment) to promote the
national defense over performance of any other contracts or
orders, and to allocate materials, services, and facilities as
deemed necessary or appropriate to promote the national defense,
is delegated to the following agency heads:

          (1) The Secretary of Agriculture with respect to food 
          resources, food resource facilities, and the domestic
          distribution of farm equipment and commercial
          fertilizer;

          (2) The Secretary of Energy with respect to all forms 
          of energy;

          (3) The Secretary of Health and Human Services with 
          respect to health resources;

          (4) The Secretary of Transportation with respect to 
          all forms of civil transportation;

          (5) The Secretary of Defense with respect to water
          resources; and

          (6) The Secretary of Commerce for all other materials,
          services, and facilities, including construction
          materials.

     (b) The Secretary of Commerce, in consultation with the 
     heads of those departments and agencies specified in
     subsection 201(a) of this order, shall administer the
     Defense Priorities and Allocations System ("DPAS")
     regulations that will be used to implement the authority of
     the President conferred by section 101 of the Act as
     delegated to the Secretary of Commerce in subsection
     201(a)(6) of this order.  The Secretary of Commerce will
     redelegate to the Secretary of Defense, and the heads of
     other departments and agencies as appropriate, authority for
     the priority rating of contracts and others for all
     materials, services, and facilities needed in support of
     programs approved under section 202 of this order.  The
     Secretary of Commerce shall act as appropriate upon Special
     Priorities Assistance requests in a time frame consistent
     with the urgency of the need at hand.

     (c) The Director, FEMA, shall attempt to resolve issues or 
     disagreements on priorities or allocations between Federal
     departments or agencies in a time frame consistent with the
     urgency of the issue at hand, and if not resolved, such
     issues will be referred to the Assistant to the President
     for National Security Affairs for final determination.

     (d) The head of each Federal department or agency assigned 
     functions under subsection 201(a) of this order, when
     necessary, shall make the finding required under subsection
     101(b) of the Act.  This finding shall be submitted for the
     President's approval through the Assistant to the President
     for National Security Affairs.  Upon such approval the head
     of the Federal department or agency that made the finding
     may use the authority of subsection 101(a) of the Act to
     control the general distribution of any material (including
     applicable services) in the civilian market.

     (e) The Assistant to the President for National Security 
     Affairs is hereby delegated the authority under subsection
     101(c)(3) of the Act, and will be assisted by the Director,
     FEMA, in ensuring the coordinated administration of the Act.

Sec. 202. Determinations.  The authority delegated by section 201
of this order may be used only to support programs that have been
determined in writing as necessary or appropriate to promote the
national defense:

     (a) By the Secretary of Defense with respect to military 
     production and construction, military assistance to foreign
     nations, stockpiling, outer space, and directly related
     activities;

     (b) By the Secretary of Energy with respect to energy
     production and construction, distribution and use, and
     directly related activities; and

     (c) By the Director, FEMA, with respect to essential
     civilian needs supporting national defense, including civil
     defense and continuity of government and directly related
     activities.

Sec. 203. Maximizing Domestic Energy Supplies.  The authority of
the President to perform the functions provided by subsection
101(c) of the Act is delegated to the Secretary of Commerce, who
shall redelegate to the Secretary of Energy the authority to make
the findings described in subsection 101(c)(2)(A) that the
materials (including equipment), services, and facilities are
critical and essential.  The Secretary of Commerce shall make the
finding described in subsection 101(c)(2)(A) of the Act that the
materials (including equipment), services, or facilities are
scarce, and the finding described in subsection 101(c)(2)(B) that
it is necessary to use the authority provided by subsection
101(c)(1).

Sec. 204. Chemical and Biological Warfare. The authority of the
President conferred by subsection 104(b) of the Act is delegated
to the Secretary of Defense.  This authority may not be further
delegated by the Secretary.

     PART III -- EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY

Sec. 301. (a) Financing Institution Guarantees.  To expedite or
expand production and deliveries or services under government
contracts for the procurement of industrial resources or critical
technology items essential to the national defense, the head of
each Federal department or agency engaged in procurement for the
national defense (referred to as "agency head" in this part) and
the President and Chairman of the Export-Import Bank of the
United States (in cases involving capacity expansion,
technological development, or production in foreign countries)
are authorized to guarantee in whole or in part any public or
private financing institution, subject to provisions of section
301 of the Act.  Guarantees shall be made in consultation with
the Department of the Treasury as to the terms and conditions
thereof.  The Director of the Office of Management and Budget
("OMB") shall be informed when such guarantees are to be made.

     (b) Direct Loan Guarantees.  To expedite or expand
     production and deliveries or services under government
     contracts for the procurement of industrial resources or
     critical technology items essential to the national defense,
     each agency head is authorized to make direct loan
     guarantees from funds appropriated to their agency for Title
     III.

     (c) Fiscal Agent.  Each Federal Reserve Bank is designated 
     and authorized to act, on behalf of any guaranteeing agency,
     as fiscal agent in the making of guarantee contracts and in
     otherwise carrying out the purposes of section 301 of the
     Act.

     (d) Regulations.  The Board of Governors of the Federal 
     Reserve System is authorized, after consultation with heads
     of guaranteeing departments and agencies, the Secretary of
     the Treasury, and the Director, OMB, to prescribe
     regulations governing procedures, forms, rates of interest,
     and fees for such guarantee contracts.

Sec. 302. Loans. (a) To expedite production and deliveries or
services to aid in carrying out government contracts for the
procurement of industrial resources or a critical technology item
for the national defense, an agency head is authorized, subject
to the provisions of section 302 of the Act, to submit to the
Secretary of the Treasury or the President and Chairman of the
Export-Import Bank of the United States (in cases involving
capacity expansion, technological development, or production in
foreign countries) applications for loans.

     (b) To expedite or expand production and deliveries or 
     services under government contracts for the procurement of
     industrial resources or critical technology items essential
     to the national defense, each agency head may make direct
     loans from funds appropriated to their agency for Title III.

     (c) After receiving a loan application and determining that
     financial assistance is not otherwise available on
     reasonable terms, the Secretary of the Treasury or the
     President and Chairman of the Export-Import Bank of the
     United States (in cases involving capacity expansion,
     technological development, or production in foreign
     countries) may make loans, subject to provisions of section
     302 of the Act.

Sec. 303. Purchase Commitments. (a) In order to carry out the
objectives of the Act, and subject to the provisions of section
303 thereof, an agency head is authorized to make provision for
purchases of, or commitments to purchase, an industrial resource
or a critical technology item for government use or resale.

     (b) Materials acquired under section 303 of the Act that 
     exceed the needs of the programs under the Act may be
     transferred to the National Defense Stockpile, if such
     transfer is determined by the Secretary of Defense as the
     National Defense Stockpile Manager to be in the public
     interest.

Sec. 304. Subsidy Payments.  In order to ensure the supply of raw
or non-processed materials from high-cost sources, an agency head
is authorized to make subsidy payments, after consultation with
the Secretary of the Treasury and the Director, OMB, and subject
to the provisions of section 303(c) of the Act.

Sec. 305. Determinations and Findings.  When carrying out the
authorities in sections 301 through 303 of this order, an agency
head is authorized to make the required determinations,
judgments, statements, certifications, and findings, in
consultation with the Secretary of Defense, Secretary of Energy
or Director, FEMA, as appropriate.  The agency head shall provide
a copy of the determination, judgment, statement, certification,
or finding to the Director, OMB, to the Director, FEMA, and, when
appropriate, to the Secretary of the Treasury.

Sec. 306. Strategic and Critical Materials.  (a) The Secretary of
the Interior in consultation with the Secretary of Defense as the
National Defense Stockpile Manager and subject to the provisions
of section 303 of the Act, is authorized to encourage the
exploration, development, and mining of critical and strategic
materials and other materials.

     (b) An agency head is authorized, pursuant to section 303(g)
     of the Act, to make provision for the development of
     substitutes for strategic and critical materials, critical
     components, critical technology items, and other industrial
     resources to aid the national defense.

     (c) An agency head is authorized, pursuant to section
     303(a)(1)(B) of the Act, to make provisions to encourage the
     exploration, development and mining of critical and
     strategic materials and other materials.

Sec. 307.  Government-owned Equipment.  An agency head is
authorized, pursuant to section 303(e) of the Act, to install
additional equipment facilities, processes, or improvements to
facilities owned by the government and to install government-
owned equipment in industrial facilities owned by private
persons.

Sec. 308. Identification of Shortfalls.  Except during periods of
national emergency or after a Presidential determination in
accordance with sections 301(e)(1)(D)(ii), 302(c)(4)(B), or
303(a)(7)(B) of the Act, no guarantee, loan or other action
pursuant to sections 301, 302, 303 of the Act to correct an
industrial shortfall shall be taken unless the shortfall has been
identified in the Budget of the United States or amendments
thereto.

Sec.309. Defense Production Act Fund Manager.  The Secretary of
Defense is designated the Defense Production Act Fund Manager, in
accordance with section 304(f) of the Act, and shall carry out
the duties specified in that section, in consultation with the
agency heads having approved Title III projects and appropriated
Title III funds. 

Sec. 310. Critical Items List.  (a) Pursuant to section
107(b)(1)(A) of the Act, the Secretary of Defense shall identify
critical components and critical technology items for each item
on the Critical Items List of the Commanders-in-Chief of the
Unified and Specified Commands and other items within the
inventory of weapon systems and defense equipment.

     (b) Each agency head shall take appropriate action to ensure
     that critical components or critical technology items are
     available from reliable sources when needed to meet defense
     requirements during peacetime, graduated mobilization, and
     national emergency.  "Appropriate action" may include
     restricting contract solicitations to reliable sources,
     restricting contract solicitations to domestic sources
     (pursuant to statutory authority), stockpiling critical
     components, and developing substitutes for critical
     components or critical technology items.

Sec. 311. Strengthening Domestic Capability.  An agency head, in
accordance with section 107(a) of the Act, may utilize the
authority of Title III of the Act or any other provision of law,
in consultation with the Secretary of Defense, to provide
appropriate incentives to develop, maintain, modernize, and
expand the productive capacities of domestic sources for critical
components, critical technology items, and industrial resources
essential for the execution of the national security strategy of
the United States.

Sec. 312. Modernization of Equipment.  An agency head, in
accordance with section 108(b) of the Act, may utilize the
authority of Title III of the Act to guarantee the purchase or
lease of advance manufacturing equipment and any related services
with respect to any such equipment for purposes of the Act.

     PART IV--IMPACT OF OFFSETS

Sec. 401. Offsets.  (a) The responsibilities and authority
conferred upon the President by section 309 of the Act with
respect to offsets are delegated to the Secretary of Commerce,
who shall function as the President's Executive Agency for
carrying out this authority.

     (b) The Secretary of Commerce shall prepare the annual 
     report required by section 309(a) of the Act in consultation
     with the Secretaries of Defense, Treasury, Labor, State, the
     United States Trade Representative, the Arms Control and
     Disarmament Agency, the Director of Central Intelligence,
     and the heads of other departments and agencies as required.

     The heads of Federal departments and agencies shall provide
     the Secretary of Commerce with such information as may be
     necessary for the effective performance of this function.

     (c) The offset report shall be subject to the normal
     interagency clearance process conducted by the Director, OMB
     prior to the report's submission by the President to
     Congress.

     PART V--VOLUNTARY AGREEMENTS AND ADVISORY COMMITTEES

Sec. 501. Appointments.  The authority of the President under
sections 708(c) and (d) of the Act is delegated to the heads of
each Federal department or agency, except that, insofar as that
authority relates to section 101 of the Act, it is delegated only
to the heads of each Federal department or agency assigned
functions under section 201(a) of this order.  The authority
delegated under this section shall be exercised pursuant to the
provisions of section 708 of the Act, and copies and the status
of the use of such delegations shall be furnished to the
Director, FEMA.

Sec. 502. Advisory Committees.  The authority of the President
under section 708(d) of the Act and delegated in section 501 of
this order (relating to establishment of advisory committees)
shall be exercised only after consultation with, and in
accordance with, guidelines and procedures established by the
Administrator of General Services.

     PART VI--EMPLOYMENT OF PERSONNEL

Sec. 601. National Defense Executive Reserve.  (a) In accordance
with section 710(e) of the Act, there is established in the
Executive Branch a National Defense Executive Reserve ("NDER")
composed of persons of recognized expertise from various segments
of the private sector and from government (except full-time
federal employees) for training for employment in executive
positions in the Federal Government in the event of an emergency
that requires such employment.

     (b) The head of any department or agency may establish a 
     unit of the NDER in the department or agency and train
     members of that unit.

     (c) The head of each department or agency with an NDER unit
     is authorized to exercise the President's authority to
     employ civilian personnel in accordance with section 703(a)
     of the Act when activating all or a part of its NDER unit. 
     The exercise of this authority shall be subject to the
     provisions of subsections 601(d) and (e) of this order and
     shall not be redelegated.

     (d) The head of a department or agency may activate an NDER
     unit, in whole or in part, upon the written determination
     that an emergency affecting the national security or defense
     preparedness of the United States exists and that the
     activation of the unit is necessary to carry out the
     emergency program functions of the department or agency.

     (e) At least 72 hours prior to activating the NDER unit, the
     head of the department or agency shall notify, in writing,
     the Assistant to the President for National Security Affairs
     of the impending activation and provide a copy of the
     determination required under subsection 601(d) of this
     order.

     (f) The Director, FEMA, shall coordinate the NDER program 
     activities of departments and agencies in establishing units
     of the Reserve; provide for appropriate guidance for
     recruitment, training, and activation; and issue necessary
     rules and guidance in connection with the program.

     (g) This order suspends any delegated authority, regulation,
     or other requirement or condition with respect to the
     activation of any NDER unit, in whole or in part, or
     appointment of any NDER member that is inconsistent with the
     authorities delegated herein, provided that the aforesaid
     suspension applies only as long as sections 703(a) and
     710(e) of the Act are in effect.

Sec. 602. Consultants.  The head of each department or agency
assigned functions under this order is delegated authority under
sections 710(b) and (c) of the Act of employ persons of
outstanding experience and ability without compensation and to
employ experts, consultants, or organizations, the authority
delegated by this section shall not be  redelegated.

     PART VII--LABOR SUPPLY

Sec. 701. Secretary of Labor.  The Secretary of Labor, identified
in this section as the Secretary, shall:

     (a) Collect, analyze, and maintain data needed to make a 
     continuing appraisal of the nations labor requirements and
     the supply of workers for purposes of national defense.  All
     agencies of the government shall cooperate with the
     Secretary in furnishing information necessary for this
     purpose, to the extent permitted by law;

     (b) In response to requests from the head of a Federal 
     department or agency engaged in the procurement for national
     defense, consult with and advise the department or agency
     with respect to (1) the effect of contemplated actions on
     labor supply and utilization, (2) the relation of labor
     supply to materials and facilities requirements, and (3)
     such other matters as will assist in making the exercise of
     priority and allocations functions consistent with effective
     utilization and distribution of labor;

     (c) Formulate plans, programs, and policies for meeting 
     defense and essential civilian labor requirements;

     (d) Project skill shortages to facilitate meeting defense 
     and essential civilian needs and establish training
     programs;

     (e) Determine the occupations and skills critical to meeting
     the labor requirements of defense and essential civilian
     activities and, with the assistance of the Secretary of
     Defense, the Director of Selective Service, and such other
     persons as the Director, FEMA, may designate, develop
     policies regulating the induction and deferment of personnel
     for the armed services, except for civilian personnel in the
     reserves; and

     (f) Administer an effective labor-management relations 
     policy to support the activities and programs under this
     order with the cooperation of other Federal agencies,
     including the National Labor Relations Board and the Federal
     Mediation and Conciliation Service.

     PART VIII -- DEFENSE INDUSTRIAL BASE INFORMATION AND REPORTS

Sec. 801. Foreign Acquisition of Companies.  The Secretary of the
Treasury, in cooperation with the Department of State, the
Department of Defense, the Department of Commerce, the Department
of Energy, the Department of Agriculture, the Attorney General,
and the Director of Central Intelligence, shall complete and
furnish a report to the President and then to Congress in
accordance with the requirements of section 721(k) of the Act
concerning foreign efforts to acquire United States companies
involved in research, development, or production of critical
technologies and industrial espionage activities directed by
foreign governments against private U.S. companies.

Sec. 802. Defense Industrial Base Information System.  (a) The
Secretary of Defense and the heads of other appropriate Federal
departments and agencies, as determined by the Secretary of
Defense, shall establish an information system on the domestic
defense industrial base in accordance with the requirements of
section 722 of the Act.

     (b) In establishing the information system required by 
     subsection (a) of this order, the Secretary of Defense, the
     Secretary of Commerce, and the heads of other appropriate
     Federal departments and agencies, as determined by the
     Secretary of Defense in consultation with the Secretary of
     Commerce, shall consult with each other for the purposes of
     performing the duties listed in section 722(d)(1) of the
     Act.

     (c) The Secretary of Defense shall convene a task force 
     consisting of the Secretary of Commerce and the Secretary of
     each military department and the heads of other appropriate
     Federal departments and agencies, as determined by the
     Secretary of Defense in consultation with the Secretary of
     Commerce, to carry out the duties under section 722(d)(2) of
     the Act.

     (d) The Secretary of Defense shall report to Congress on a 
     strategic plan for developing a cost-effective,
     comprehensive information system capable of identifying on a
     timely, ongoing basis vulnerability in critical components
     and critical technology items.  The plans shall include an
     assessment of the performance and cost-effectiveness of
     procedures specified in section 722(b) of the Act.

     (e) The Secretary of Commerce, acting through the Bureau of
     the Census, shall consult with the Secretary of Defense and
     the Director, FEMA, to improve the usefulness of information
     derived from the Census of Manufacturers in carrying out
     section 722 of the Act.

     (f) The Secretary of Defense shall perform an analysis of 
     the production base for not more than two major weapons
     systems of each military department in establishing the
     information system under section 722 of the Act.  Each
     analysis shall identify the critical components of each
     system.

     (g) The Secretary of Defense, in consultation with the 
     Secretary of Commerce, and the heads of other Federal
     departments and agencies as appropriate, shall issue a
     biennial report on critical components and technology
     in accordance with section 722(e) of the Act.

     PART IX--GENERAL PROVISIONS

Sec. 901. Definitions.  In addition to the definitions in section
702 of the Act, the following definitions apply throughout this
order:

     (a) "Civil transportation" includes movement of persons and
     property by all modes of transportation in interstate,
     intrastate, or foreign commerce within the United
     States, its territories and possessions, and the
     District of Columbia, and, without limitation, related
     public storage and warehousing, ports, services,
     equipment and facilities, such as transportation
     carrier shop and repair facilities.  However, "civil
     transportation" shall not include transportation owned
     or controlled by the Department of Defense, use of
     petroleum and gas pipelines, and coal slurry pipelines
     used only to supply energy production facilities
     directly.  As applied herein, "civil transportation"
     shall include direction, control, and coordination of
     civil transportation capacity regardless of ownership.

     (b) "Energy" means all forms of energy including petroleum,
     gas (both natural and manufactured), electricity, solid
     fuels (including all forms of coal, coke, coal
     chemicals, coal liquification, and coal gasification),
     and atomic energy, and the production, conservation,
     use, control and distribution (including pipelines) of
     all of these forms of energy.

     (c) "Farm equipment" means equipment, machinery, and repair
     parts manufactured for use on forms in connection with
     the production or preparation for market use of food
     resources.

     (d) "Fertilizer" means any product or combination of 
     products that contain one or more of the elements--
     nitrogen, phosphorus, and potassium--for use as a plant
     nutrient.

     (e) "Food resources" means all commodities and products, 
     simple, mixed, or compound, or complements to such
     commodities or products, that are capable of being
     ingested by either human beings or animals,
     irrespective of other uses to which such commodities or
     product may be put, at all stages of processing from
     the raw commodity to the products thereof in vendible
     form for human or animal consumption.  "Food resources"
     also means all starches, sugars, vegetable and animal
     or marine fats and oils, cotton, tobacco, wool mohair,
     hemp, flax fiber, and naval stores, but does not mean
     any such material after it loses its identify as an
     agricultural commodity or agricultural product.

     (f) "Food resource facilities" mean plants, machinery, 
     vehicles (including on-farm), and other facilities
     required for the production, processing distribution,
     and storage (including cold storage) of food resources,
     livestock and poultry feed and seed, and for the
     domestic distribution of farm equipment and fertilizer
     (excluding transportation thereof).

     (g) "Functions" include powers, duties, authority,
     responsibilities, and discretion.

     (h) "Head of each Federal department or agency engaged in 
     procurement for the National defense" means the heads
     of the Departments of Defense, Energy, and Commerce, as
     well as those departments and agencies listed in
     Executive Order No. 10789.

     (i) "Heads of other appropriate Federal departments and 
     agencies" as used in part VIII of this order means the
     heads of such other Federal agencies and departments
     that acquire information or need information with
     respect to making any determination to exercise any
     authority under the Act.

     (j) "Health resources" means materials, facilities, health 
     supplies, and equipment (including pharmaceutical, blood
     collecting and dispensing supplies, biological, surgical
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