50 U.S.C.
United States Code, 2007 Edition
Title 50 - WAR AND NATIONAL DEFENSE
TITLE 50 - APPENDIX-WAR AND NATIONAL DEFENSE
DEFENSE PRODUCTION ACT OF 1950
ACT SEPT. 8, 1950, CH. 932, 64 STAT. 798
TITLE III - EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY
Sec. 2093 - Purchase of raw materials and installation of equipment
From the U.S. Government Printing Office, www.gpo.gov

§2093. Purchase of raw materials and installation of equipment

(a) Presidential provisions

(1) In general

To assist in carrying out the objectives of this Act [sections 2061 to 2171 of this Appendix], the President may make provision—

(A) for purchases of or commitments to purchase an industrial resource or a critical technology item, for Government use or resale; and

(B) for the encouragement of exploration, development, and mining of critical and strategic materials, and other materials.

(2) Treatment of certain agricultural commodities

Purchases for resale under this subsection shall not include that part of the supply of an agricultural commodity which is domestically produced, except to the extent that such domestically produced supply may be purchased for resale for industrial use or stockpiling.

(3) Terms of sales

No commodity purchased under this subsection shall be sold at less than—

(A) the established ceiling price for such commodity, except that minerals, metals, and materials shall not be sold at less than the established ceiling price, or the current domestic market price, whichever is lower; or

(B) if no ceiling price has been established, the higher of—

(i) the current domestic market price for such commodity; or

(ii) the minimum sale price established for agricultural commodities owned or controlled by the Commodity Credit Corporation, as provided in section 407 of the Agricultural Act of 1949 [7 U.S.C. 1427].

(4) Delivery dates

No purchase or commitment to purchase any imported agricultural commodity shall specify a delivery date which is more than 1 year after the expiration of this section.

(5) Presidential determinations

Except as provided in paragraph (7), the President may not execute a contract under this subsection unless the President determines that—

(A) the industrial resource or critical technology item is essential to the national defense;

(B) without Presidential action under the authority provided for in this section, United States industry cannot reasonably be expected to provide the capability for the needed industrial resource or critical technology item in a timely manner;

(C) purchases, purchase commitments, or other action pursuant to this section are the most cost-effective, expedient, and practical alternative method for meeting the need; and

(D) the combination of the United States national defense demand and foreseeable nondefense demand for the industrial resource or critical technology item is not less than the output of domestic industrial capability, as determined by the President, including the output to be established through the purchase, purchase commitment, or other action.

(6) Identification of shortfall

(A) In general

Except as provided in paragraph (7), the President shall take no action under this section unless the industrial resource shortfall which such action is intended to correct has been identified in the Budget of the United States, or amendments thereto, submitted to the Congress and accompanied by a statement from the President demonstrating that the budget submission is in accordance with the provisions of paragraph (5).

(B) Timing of action

Any such action may be taken only after 60 days have elapsed after such industrial resource shortfall has been identified pursuant to subparagraph (A).

(C) Limitation

If the taking of any action or actions under this section to correct an industrial resource shortfall would cause the aggregate outstanding amount of all such actions for such industrial resource shortfall to exceed $50,000,000, any such action or actions may be taken only if specifically authorized by law.

(7) Waiver

The requirements of paragraphs (1) through (6) may be waived—

(A) during periods of national emergency declared by the Congress or the President; or

(B) upon a determination by the President, on a nondelegable basis, that a specific guarantee is necessary to avert an industrial resource or critical technology item shortfall that would severely impair national defense capability.

(b) Terms and conditions of purchase

Subject to the limitations in subsection (a) of this section, purchases and commitments to purchase and sales under such subsection may be made without regard to the limitations of existing law, for such quantities, and on such terms and conditions, including advance payments, and for such periods, but not extending beyond a date that is not more than 10 years from the date such purchase, purchase commitment, or sale was initially made, as the President deems necessary, except that purchases or commitments to purchase involving higher than established ceiling prices (or if there be no established ceiling prices, currently prevailing market prices) or anticipated loss on resale shall not be made unless it is determined that supply of the materials could not be effectively increased at lower prices or on terms more favorable to the Government or that such purchases are necessary to assure the availability to the United States of overseas supplies.

(c) Subsidy payments on domestically produced materials; exclusion of agricultural products

If the President finds—

(1) that under generally fair and equitable ceiling prices for any raw or nonprocessed material, there will result a decrease in supplies from high-costs sources of such material, and that the continuation of such supplies is necessary to carry out the objectives of the Act [sections 2061 to 2171 of this Appendix]; or

(2) that an increase in cost of transportation is temporary in character and threatens to impair maximum production or supply in any area at stable prices of any materials;


he may make provision for subsidy payments on any such domestically produced material other than an agricultural commodity in such amounts and in such manner (including purchases of such material and its resale at a loss without regard to the limitations of existing law), and on such terms and conditions, as he determines to be necessary to insure that supplies from such high-cost sources are continued, or that maximum production or supply in such area at stable prices of such materials is maintained, as the case may be.

(d) Transportation, storage, and processing

The procurement power granted to the President by this section shall include the power to transport and store and have processed and refined, any materials procured under this section.

(e) Installation of equipment in industrial facilities

When in his judgment it will aid the national defense, the President is authorized to install additional equipment, facilities, processes or improvements to plants, factories, and other industrial facilities owned by the United States Government, and to install government-owned equipment in plants, factories, and other industrial facilities owned by private persons.

(f) Transfer of excess materials to national stockpile

Notwithstanding any other provision of law to the contrary, metals, minerals, and materials acquired pursuant to the provisions of this section which, in the judgment of the President, are excess to the needs of programs under this Act [sections 2061 to 2171 of this Appendix], shall be transferred to the National Defense Stockpile established by the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.), when the President deems such action to be in the public interest. Transfers made pursuant to this subsection shall be made without charge against or reimbursement from funds appropriated for the purposes of such Act, except that costs incident to such transfer other than acquisition costs shall be paid or reimbursed from such funds, and the acquisition costs of such metals, minerals, and materials transferred shall be deemed to be net losses incurred by the transferring agency and the notes payable issued to the Secretary of the Treasury representing the amounts thereof shall be canceled. Upon the cancellation of any such notes the aggregate amount of borrowing which may be outstanding at any one time under section 304(b) 1 of this Act, as amended [section 2094(b) of this Appendix], shall be reduced in an amount equal to the amount of any notes so canceled.

(g) Development of substitutes for strategic and critical materials

When in his judgment it will aid the national defense, the President may make provision for the development of substitutes for strategic and critical materials, critical components, critical technology items, and other industrial resources.

(Sept. 8, 1950, ch. 932, title III, §303, 64 Stat. 801; July 31, 1951, ch. 275, title I, §103(a), 65 Stat. 133; June 30, 1953, ch. 171, §§5, 6, 67 Stat. 130; Aug. 9, 1955, ch. 655, §3, 69 Stat. 580; June 29, 1956, ch. 474, §2, 70 Stat. 408; Pub. L. 88–343, §2, June 30, 1964, 78 Stat. 235; Pub. L. 92–325, §1, June 30, 1972, 86 Stat. 390; Pub. L. 94–273, §2(29), Apr. 21, 1976, 90 Stat. 376; Pub. L. 96–41, §3(c), July 30, 1979, 93 Stat. 325; Pub. L. 96–294, title I, §104(d), June 30, 1980, 94 Stat. 618; Pub. L. 98–265, §§3(c), 4(c), Apr. 17, 1984, 98 Stat. 150, 151; Pub. L. 102–558, title I, §121(c), (d), Oct. 28, 1992, 106 Stat. 4204, 4206; Pub. L. 107–47, §4(3), Oct. 5, 2001, 115 Stat. 260.)

References in Text

For expiration of this section, referred to in subsec. (a)(4), see section 2166(a) of this Appendix.

The Strategic and Critical Materials Stock Piling Act, referred to in subsec. (f), is act June 7, 1939, ch. 190, as revised generally by Pub. L. 96–41, §2, July 30, 1979, 93 Stat. 319, which is classified generally to subchapter III (§98 et seq.) of chapter 5 of Title 50, War and National Defense. For complete classification of this Act to the Code, see section 98 of Title 50 and Tables.

Section 304(b) of this Act, referred to in subsec. (f), is classified to section 2094(b) of this Appendix, and was repealed and a new subsec. (b) was enacted by Pub. L. 93–426, §2, Sept. 30, 1974, 88 Stat. 1166, which does not relate to limiting aggregate amount of borrowing which may be outstanding.

Amendments

2001—Subsec. (a)(7)(B). Pub. L. 107–47 inserted “item” after “critical technology”.

1992—Subsec. (a). Pub. L. 102–558, §121(c)(1), amended subsec. (a) generally, substituting present provisions for provisions relating to purchases for use or resale, development of strategic minerals, metals, and materials, exclusion of certain agricultural commodities, termination of purchase authority, Presidential action, and identification of industrial resource shortfalls.

Subsec. (b). Pub. L. 102–558, §121(c)(2), substituted “a date that is not more than 10 years from the date such purchase, purchase commitment, or sale was initially made” for “September 30, 1995”.

Subsec. (g). Pub. L. 102–558, §121(d), inserted before period at end “, critical components, critical technology items, and other industrial resources”.

1984—Subsec. (a). Pub. L. 98–265, §3(c), inserted provision requiring President, except during periods of national emergency, to make specific determinations before executing a contract under this subsection.

Pub. L. 98–265, §4(c), inserted provision requiring President, except during periods of national emergency, to identify industrial resource shortfall before taking any action under this section.

1980—Subsec. (a). Pub. L. 96–294, §104(d)(1), inserted references to materials after metals wherever appearing.

Subsec. (b). Pub. L. 96–294, §104(d)(2), substituted “1995” for “1985”.

Subsec. (g). Pub. L. 96–294, §104(d)(3), struck out provisions relating to certifications by Secretaries of Agriculture and Interior regarding short supply of a particular strategic or critical material.

1979—Subsec. (f). Pub. L. 96–41 substituted “the National Defense Stockpile established by the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.)” for “the national stockpile established pursuant to the Act of June 7, 1939, as amended (50 U.S.C. 98–98h)” and “from funds appropriated for the purposes of such Act” for “from funds available under such Act of June 7, 1939, as amended”.

1976—Subsec. (b). Pub. L. 94–273 substituted “September” for “June”.

1972—Subsec. (b). Pub. L. 92–325 substituted “June 30, 1985” for “June 30, 1975”.

1964—Subsec. (b). Pub. L. 88–343 substituted “June 30, 1975” for “June 30, 1965”.

1956—Subsec. (b). Act June 29, 1956, substituted “June 30, 1965” for “June 30, 1963”.

1955—Subsec. (g). Act Aug. 9, 1955, added subsec. (g).

1953—Subsec. (b). Act June 30, 1953, §5, substituted “1963” for “1962”.

Subsec. (f). Act June 30, 1953, §6, added subsec. (f).

1951—Act July 31, 1951, amended section generally to broaden authority under this section to include materials generally, to continue prohibition against resale of domestic agricultural commodities except for industrial uses or stockpiling but eliminated it as to imported agricultural commodities, to provide that minerals and metals purchased under subsec. (a) may be sold at less than the established ceiling price, but not less than the current domestic market price, to limit provision barring contracts calling for delivery more than one year after the expiration of this section to imported agricultural commodities, to provide that purchases and commitments to purchase under subsec. (a) may not be made for any period extending beyond June 30, 1952, and to provide for a differential subsidy.

Effective Date of 1992 Amendment

Amendment by Pub. L. 102–558 deemed to have become effective Mar. 1, 1992, see section 304 of Pub. L. 102–558, set out as a note under section 2062 of this Appendix.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–294 effective June 30, 1980, see section 107 of Pub. L. 96–294, set out as a note under section 2062 of this Appendix.

Effective Date of 1955 Amendment

Amendment by act Aug. 9, 1955, effective as of close of July 31, 1955, see section 11 of act Aug. 9, 1955, set out as a note under section 2062 of this Appendix.

Termination Date

Termination of section, see section 2166(a) of this Appendix.

Delegation of Functions

Functions of President under act Sept. 8, 1950 [section 2061 et seq. of this Appendix], relating to production, conservation, use, control, distribution, and allocation of energy, delegated to Secretary of Energy, see section 4 of Ex. Ord. No. 11790, June 25, 1974, 39 F.R. 23185, set out as a note under section 761 of Title 15, Commerce and Trade.

Resource Shortfall for Radiation-Hardened Electronics

Pub. L. 108–195, §3, Dec. 19, 2003, 117 Stat. 2892, provided that:

“(a) In General.—Notwithstanding the limitation contained in section 303(a)(6)(C) of the Defense Production Act of 1950 (50 U.S.C. App. 2093(a)(6)(C)), the President may take actions under section 303 of the Defense Production Act of 1950 to correct the industrial resource shortfall for radiation-hardened electronics, to the extent that such Presidential actions do not cause the aggregate outstanding amount of all such actions to exceed $200,000,000.

“(b) Report by the Secretary.—Before the end of the 6-month period beginning on the date of the enactment of this Act [Dec. 19, 2003], the Secretary of Defense shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing—

“(1) the current state of the domestic industrial base for radiation-hardened electronics;

“(2) the projected requirements of the Department of Defense for radiation-hardened electronics;

“(3) the intentions of the Department of Defense for the industrial base for radiation-hardened electronics; and

“(4) the plans of the Department of Defense for use of providers of radiation-hardened electronics beyond the providers with which the Department had entered into contractual arrangements under the authority of the Defense Production Act of 1950 [sections 2061 to 2071 of this Appendix], as of the date of the enactment of this Act.”

Pub. L. 107–314, div. A, title VIII, §829, Dec. 2, 2002, 116 Stat. 2618, provided that: “Notwithstanding the limitation in section 303(a)(6)(C) of the Defense Production Act of 1950 (50 U.S.C. App. 2093(a)(6)(C)), action or actions may be taken under section 303 of that Act to correct the industrial resource shortfall for radiation-hardened electronics, if such actions do not cause the aggregate outstanding amount of all such actions to exceed $106,000,000.”

Clarification of Stockpile Status of Certain Materials

For provisions that all materials purchased under this section and held in the Defense Production Act inventory as of June 30, 1992, are transferred to the National Defense Stockpile, see section 3315 of Pub. L. 102–484, as amended, set out as a note under section 98c of Title 50, War and National Defense.

Executive Order No. 10219

Ex. Ord. No. 10219, Feb. 28, 1951, 16 F.R. 1983, as amended by Ex. Ord. No. 10461, June 17, 1953, 18 F.R. 3513; Ex. Ord. No. 10537, June 22, 1954, 19 F.R. 3807; Ex. Ord. No. 10773, July 1, 1958, 23 F.R. 5061; Ex. Ord. No. 10782, Sept. 6, 1958, 23 F.R. 6971, which related to the responsibilities of Federal agencies with respect to transportation and storage, was superseded by Ex. Ord. No. 11051, Sept. 27, 1962, 27 F.R. 9683, formerly set out as a note under section 2271 of this Appendix.

1 See References in Text note below.