Overview
FAR Subpart 11.6 implements the Defense Priorities and Allocations System (DPAS), a regulatory framework derived from the Defense Production Act of 1950. Its primary purpose is to ensure the timely availability of industrial resources to support approved national defense, energy, and emergency preparedness programs by mandating that "rated orders" receive priority treatment over commercial and lower-rated government orders.
Key Rules
- Priority Hierarchy: There are two levels of priority:
- DX Ratings: The highest priority, typically reserved for programs of the highest national urgency.
- DO Ratings: Critical to national defense but lower than DX; these take precedence over all unrated orders.
- Mandatory Acceptance: Contractors and subcontractors are generally required to accept rated orders and must provide preferential scheduling to meet required delivery dates.
- Flowdown Requirement: Priority ratings must be extended (flowed down) to subcontractors and suppliers at all tiers to ensure the entire supply chain supports the required delivery date.
- Regulatory Basis: The subpart operates under the authority of the Department of Commerce (15 CFR part 700) and the Defense Production Act.
- Required Provisions: Contracting Officers must include FAR 52.211-14 in solicitations and FAR 52.211-15 in contracts when the resulting award will be a rated order.
Responsibilities
- Secretary of Commerce: Administers the DPAS and possesses enforcement powers, including the authority to issue administrative subpoenas and directives.
- Agency Heads: Responsible for ensuring compliance within their respective agencies and providing specific guidance to contracting activities regarding the issuance of rated orders.
- Contracting Officers (COs):
- Identify and label rated orders in solicitations and contracts.
- Follow agency instructions for the use of DPAS ratings.
- Report any violations of DPAS regulations to the Department of Commerce.
- Contractors/Subcontractors: Must prioritize rated orders over non-rated orders, flow down ratings to suppliers, and seek "special priorities assistance" if they encounter delays or difficulties.
Practical Implications
- "Jumping the Line": In real-world scenarios, a DX-rated order for a critical defense component can legally force a manufacturer to delay a commercial customer’s order (e.g., an airline or private tech firm) to meet the government's deadline.
- Supply Chain Resilience: For contractors, DPAS is a powerful tool to resolve bottlenecks. If a subcontractor is unresponsive, the prime contractor can leverage the DPAS rating to compel performance.
- Emergency Response: This subpart is frequently activated during national emergencies (such as the COVID-19 pandemic) to prioritize the production of medical supplies or during natural disasters under the Stafford Act.
- Compliance Risk: Failure to comply with DPAS is not just a breach of contract but a violation of federal law, which can lead to administrative actions or even criminal penalties under the Defense Production Act.
AI Insights: Strategic Considerations
- Operational Conflict: Contractors must maintain robust internal tracking systems to differentiate between DO, DX, and unrated orders. AI-driven ERP systems are increasingly used to automate the "preferential scheduling" required by 11.603(a).
- Negotiation Power: While a CO cannot use DPAS to force a contractor to perform work outside their normal line of business, the "mandatory acceptance" rule significantly limits a contractor's ability to decline government work during high-demand periods.
- Special Priorities Assistance (SPA): Many contractors underutilize the SPA process (11.603(g)). In complex supply chains, COs should proactively encourage contractors to request SPA when global logistics issues threaten "rated" delivery timelines.